Thailand's economy has stagnated at a low growth level up to now. Economic and business experts have increasingly agreed day by day that the country needs a major overhaul or structural reform of its economy. The traditional engines that once spearheaded growth are now outdated and no longer reliable.
One emerging hope many expect to become Thailand's new economic driver is the "green economy," an environmentally friendly economy. The author believes such an economy should not only become mainstream but is now a mandatory path amid a "heated world" where environmental degradation and the severity of climate change increasingly impact economic systems. This situation not only exacerbates social problems like inequality.
(Note: The author observes that many use the term "green economy" with the word "color" in Thai, but personally dislikes this because "green" refers to conservation, restoration, and environmental care, not any specific color.)
However, the author sees that the mindset and framework of many policymakers and numerous executives in large private sector companies remain inconsistent with, or even obstructive to, building a genuine green economy. Particularly prevalent is the attitude that the state's role should be limited to being a "facilitator" only. That is, the government should issue incentive measures—referred to as "carrots" in English—such as tax benefits for producers using green technology or renewable energy. The state should not implement any mandatory measures—referred to as "sticks" in English.
For example, in a statement regardingthree key draft lawsfrom the Joint Committee of the Three Private Sector Institutions (JCCI) on 12 November 2025 GMT+7, the JCCI expressed views on the draft Clean Air Act. They stated, "Addressing pollution problems... should focus on support and fiscal incentives for improving production quality to reduce pollution, helping all sectors adjust, rather than immediately imposing clean air fees from the first emission or economic measures at once." They also said, "While having a law for clean air is necessary, it must adhere to principles of no redundancy, no added burdens, and balance between the environment and the country's competitiveness."
From this statement, the author observes that the JCCI still holds outdated and largely mistaken views. This is because "mandatory measures" are as important as the "incentive measures" the JCCI advocates. Furthermore, the so-called "balance" between the environment and national competitiveness does not exist in today's real world.
The reality is that the longer Thailand delays restoring and caring for the environment amid the heating planet, the more its competitiveness will deteriorate—due both to environmental degradation impacts and increasing pressure from trading partners to incorporate "environmental friendliness" into trade conditions.
New tools like the Clean Air Act are essential to building a true green economy, and mandatory measures (sticks) are just as important as incentive measures (carrots).
First, relying solely on incentives may cause the private sector to adjust too slowly to the changes we want to see (in the case of the Clean Air Act, this means reducing toxic PM2.5 dust emissions below hazardous levels). Overall, companies tend to wait to see which technology will dominate the market or wait for competitors to adapt first. Relying only on market incentives often takes too long or may even fail.
In Thailand, there are many examples where relying mainly on "incentive measures" has failed, such as campaigns encouraging retail stores to voluntarily stop giving plastic bags or government policies paying billions annually for "fresh sugarcane" but still not achieving the targeted reduction in sugarcane burning.
Conversely, using only mandatory measures without incentives tends to provoke resistance from the private sector from the start. They might try to evade laws, lobby for relaxations, and small and medium enterprises (SMEs) may perceive excessive burdens without receiving state support.
Since a "green economy" means an environmentally friendly economy, forcing businesses to "internalize" the costs of environmental damage—which have been "negative externalities" borne by society (such as health damage from excessive PM2.5)—sets a "minimum standard" baseline, creating a level playing field because all operators must comply.
Bans on hazardous chemicals, pollution emission caps, carbon taxes on high-emission activities, or mandates for minimum shares of renewable energy are all examples of necessary "mandatory measures" to build a green economy.
These mandatory measures create a level playing field clearly. When everyone must meet the same standards, responsible businesses that incur higher costs for environmental care are no longer disadvantaged compared to competitors who harm the environment without bearing costs. Clear regulations also reduce uncertainty, enabling businesses to confidently plan long-term investments.
Worldwide, many successful examples of mandatory measures exist, such as the Montreal Protocol's ban on chlorofluorocarbons (CFCs), which effectively protected the Earth's ozone layer.
At the regional level, the European Union's energy performance standard known asthe Ecodesign Directiverequires all electrical appliances sold in Europe to meet minimum energy efficiency. This directive has resulted in refrigerators, washing machines, and electronics using 30-50% less electricity than older models, saving Europe over 120 billion euros annually and reducing greenhouse gas emissions by hundreds of millions of tons per year.
In China, the government implemented mandatory measuresto close 1,000 inefficient small-scale stone mines.In 2016 alone, despite local resistance, this policy successfully reduced air pollution and improved national energy efficiency.
Alongside mandatory measures, economic incentives like tax credits, subsidies, carbon pricing, or tax benefits play a crucial role in encouraging the private sector to move faster than legal requirements, invest in green innovations, and compete to lead the green economy.
In the United States, tax credits known as the Investment Tax Credit (ITC) and Production Tax Credit (PTC) for renewable energy have been pivotal in expanding solar and wind capacity, making them the cheapest energy sources in many states. In 2023, solar and wind accounted for over 70% of all new electricity generation capacity in the U.S.
Moreover, incentives help mitigate social impacts, especially for vulnerable groups, aligning with the principle of a "Just Energy Transition" (JET). Examples include subsidies for electricity costs for households with solar panels or low-interest loans for SMEs to improve energy efficiency, enabling smaller actors to access green technologies without excessive financial burdens.
In summary, a genuine green economy can only emerge when government policies combine both mandatory and incentive measures. Mandatory measures set minimum standards and level the playing field, while incentives stimulate change and promote green innovations beyond minimum requirements.
It is time for the JCCI and all sectors of Thai society to change outdated and mistaken attitudes that believe incentives alone suffice. They should support the draft Clean Air Act and other mechanisms that drive both mandatory and incentive measures in a balanced way, rather than skewing too far in either direction or, worse, offering incentives to large businesses while imposing mandatory measures disproportionately on small operators.
This approach will enable us to build a green economy as Thailand's new economic engine, ensuring no one is left behind or that inequality worsens.