Carbon Tax The Price to Pay for a Better World 

Thailand will become the second country in ASEAN to implement a carbon tax, following Singapore. As many are now aware, the increasingly severe impacts of climate change stem from the rising levels of greenhouse gases in the atmosphere. These increases are driven by various factors such as economic growth, industrial expansion, and human lifestyle behaviors. The result is a global climate that is changing across all regions, with more frequent and intense natural disasters, as we are currently witnessing. One solution and a step toward reducing greenhouse gas emissions is the implementation of a carbon tax. This article aims to help everyone understand what a carbon tax is, how it is collected, and the benefits and opportunities it may bring to individuals and society in the long term.

Understanding What is a Carbon Tax?

A carbon tax is a policy that requires greenhouse gas emitters to pay for emitting seven types of greenhouse gases: carbon dioxide (CO₂), nitrous oxide (N₂O), methane (CH₄), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF₆), and nitrogen trifluoride (NF₃). These gases are released from processes such as production, transportation, and other related industrial activities. The tax is based on the “Polluter Pays Principle,” meaning that those who cause pollution must bear the costs. The government sets a tax rate per unit of emissions (per one ton of carbon dioxide equivalent). The tax can be collected in different ways—for example, based on the carbon content in fuels (Carbon Tax) or on the net greenhouse gas emissions from emission sources (Emission Tax).

The primary objective is to encourage both producers and consumers to reduce their greenhouse gas emissions. This aims to help slow down and mitigate climate change, while also promoting the use of clean, environmentally friendly energy sources. 

How Are People Affected? – In the Initial Phase 

The Director-General of the Excise Department revealed that in the first phase, carbon tax will be collected from oil and oil products that emit greenhouse gases. In this first phase, the carbon tax will not directly affect the public because it is a conversion of the current oil excise tax into a carbon tax. Currently, the Excise Department collects an excise tax of 6.44 baht per liter for diesel and 6.50 baht per liter for gasoline. The carbon tax is linked to carbon dioxide emissions. For example, 1 liter of diesel emits approximately 0.0026 tons of carbon. Therefore, when calculated, 1 liter of diesel will be subject to a carbon tax of approximately 0.46 baht per liter, while gasoline will be subject to a tax of approximately 0.50 baht per liter (Reference: Institute for Sustainable Development of Natural Resources and Environment,

What are the advantages of Thailand's "initial phase" carbon tax measures?

 At present, Thailand has carbon pricing instruments to reduce greenhouse gas emissions in the form of "voluntary " which results in the carbon price being too low. The implementation of a carbon tax will have positive effects, such as: 

1. A carbon price that be set by the government, which is expected to help increase the effectiveness of reducing greenhouse gas emissions. 

2. In line with the national goal to move toward carbon neutrality by 2050 and advance toward net zero greenhouse gas emissions by 2065.

The benefits of carbon tax collection 

• Helps generate government revenue and reduce resource allocation distortions.
• Promotes the use of clean energy and stimulates the adoption of new technologies.  
• A measure to seriously reduce greenhouse gas emissions and more concretely mitigate global warming. 
• A new opportunity to expand the market for environmentally friendly products.
• Raises awareness across all sectors, with the public gaining a better understanding of the impacts of greenhouse gas emissions. 

By greenhouse gas management experts such as  FDI Accounting and Advisory Have commented that carbon tax collection benefits the public as a whole, as it can reduce and slow the severity of global warming. It also presents new opportunities for all businesses to plan and adapt toward sustainability, providing a competitive advantage in long-term investment by transitioning to clean energy, as well as efforts to reduce greenhouse gas emissions in every production process through monitoring. Carbon Footprint of the organization on a continuous basis to align with tax collection, as well as with consumer behavior trends that are increasingly focused on environmental concerns and place greater importance on ESG (Environment, Social, Governance). 

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