Sep. 17--Thailand should develop a voluntary emissions cap to help establish a local emissions trading scheme, say business leaders.

The Thailand Greenhouse Gas Management Organisation (TGO) is currently studying such a scheme in a bid to spur local emissions reduction activities.

"Developing countries like Thailand need to position themselves properly amid the calls from the European Union and other developed nations for everyone to take on the commitment to address climate change," said Natee Sithiprasasana, chief executive of AT Biopower Co, an alternative power company.

AT Biopower is one of two Thai companies that already trade their credits on the international carbon market. Several schemes under the Clean Development Mechanism (CDM) have been established, such as those in Europe, Australia, Singapore, South Korea, Taiwan and India.

"Thailand should set up a national carbon emissions cap, but on a voluntary basis, if we do not want to have a legal international commitment for CO2 emissions," he said.

The Federation of Thai Industries (FTI) supports the idea of setting up a voluntary local carbon market like the one in Japan, and to allow buyers from other Asean members to trade on it.

"The Thai trading scheme will assure the private sector that they will be able to sell carbon credits locally and help strengthen public awareness for cutting CO2 emissions," said FTI deputy secretary-general Pairat Tangkaseranee."In addition to local buyers, the Thai trading scheme should be opened for other Asean members because there is demand for carbon credits in the neighbouring countries."

MFC Asset Management Plc, which has footholds in the carbon trading business, through its 2.5-billion-baht energy fund, agreed a local carbon market should be established, saying it would increase financial institutions' willingness to invest in emissions reduction projects.

But the central bank's regulations should be amended to facilitate emissions trading, said Sopida Luveeraphan, MFC's first executive vice-president for private equity and financial advisory business.

"If Thailand has the local trading scheme, financial institutions will know the benchmark and reference prices. It will be easier for them to evaluate risks and returns," she said.

The Finance Ministry and the SEC have promoted emissions trading. The ministry also plans to establish a carbon fund as part of its national development plan for the capital market, she said.

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