The circular economy is a central part of Thailand’s growth strategy. The government’s ambition is for the country to leave the middle-income bracket by 2037 but the economy is still developing, and it must balance growth against its environmental targets.
We worked with the International Finance Corporation (IFC), an organisation providing national government with analysis on driving private sector growth, to study the possibilities of the circular economies across three of the country’s most strategic sectors: food and agriculture, electrical and electronic equipment, and construction.
Using the study, we developed a report that contains policy and non-policy recommendations and identifies high impact opportunities through data and stakeholder insights. Our evaluation of these opportunities showed billions of dollars of potential revenue generation and cost savings, and significant positive environmental impact. It also identified the constraints Thailand must overcome to realise these opportunities.
Thailand is now taking a leading regional role in fostering the circular economy and is integrating circular economy-enabling measures into its plans for economic and social development.
15 opportunities for green growth
4%increase forecast for Thailand’s GDP by 2026
26%potential emissions savings
Opportunities for green growth in Thailand
Population growth and a growing middle-class of consumers places unprecedented pressure on Thailand’s natural resources to meet future demand. The circular economy is a way to reinvent the future to create sustainable growth and prosperity.
After reviewing Thailand’s progress and benchmarking it against countries leading the circular economy, countries with economic ties to Thailand, and those countries with similar economies, we identified a host of opportunities Thailand was not yet pursuing.
We then prioritised these opportunities according to economic and environmental potential, what aligns best with Thailand’s ambitions, and applicability to different parts of the target sectors, focusing on those which impacted the full value chain. We also evaluated measures at the individual business level to ensure the benefits and actions were meaningful to business owners as well as government decision-makers.
Our recommendations focused on five opportunities for each strategic sector, with overall potential benefits of US$23.1bn, or four per cent of Thailand’s projected GDP, in 2026.
Arup led this first of a kind circular economy assessment, bringing together quantitative analysis of the economic benefits with qualitative proposals on the policy changes required for a circular economy to thrive. To leverage their experience, we commissioned Arup to write a guidance note on how to undertake these assessments in other countries. ” Etienne Raffi Kechichian Senior Private Sector Specialist, International Finance Corporation
Overcoming circularity barriers
Successfully transitioning to a circular economy will require systemic change in Thailand’s economic model. It is not beneficial to think only about individual sectors in silos. Instead, we examined the different types of factors which can constrain the development of the circular economy by sector as well as across sectors.
We found there was a lack of knowledge and common understanding across public and private sectors and academia, which makes it challenging for governments, investors and the private sector to unify in their circular economy ambitions. There was also a lack of clarity around the circular economy business case.
While this makes sense environmentally, it is important to articulate the business model that underpins private sector growth. This explains why many multinationals and banks have yet to significantly invest in the circular economy yet. The proliferation of circular economy is also limited by the physical and digital infrastructure available, which would support both the practicalities and business case implementing circular economy opportunities.
Our analysis enabled our team to identify the key activities and collaboration required to overcome these barriers and realise the substantial potential gains. Actions ranged from revising inhibitory regulations and standards to incorporating circular economy in public procurement.
This project shone a light on the importance of economic design to drive private sector investment in the circular economy. Thailand is moving in the right direction by considering circular economy as an economic development strategy. It's now about accelerating action by addressing some key challenges in research, knowledge and incentives. ” Devni Acharya Senior Consultant