Removing harmful subsidies in Thailand

The historic Mrigadayavan Palace is located on the Gulf of Thailand and has long been a symbol of cultural and architectural heritage. It was built in 1924 by King Rama VI in Phetchaburi. The palace and the surrounding coastal landscape have withstood the effects of coastal erosion in the past. However, a severe typhoon in 1997 revealed the weak points of the region and prompted the construction of rigid infrastructure such as groins and dams to minimize erosion. Although these measures were well-intentioned, they exacerbated the problem over the following two decades and caused significant damage to the coastal ecosystem.

Recognizing the need for a more sustainable solution, the Mrigadayavan Palace Foundation worked with botanists, marine scientists, and technical experts to solve the problem. In 2023, the foundation began dismantling ineffective grey infrastructure and introduced nature-based solutions, such as restoring beach ecosystems and promoting natural dune formation. These efforts facilitated the return of native plant species, which in turn created important habitats for biodiversity, including the near-threatened Kentish plover.

The United Nations Development Programme’s Biodiversity Finance Initiative (UNDP BIOFIN) played a critical role in this transformation. With the technical expertise of Dr Kitichate Sritdith from Prince of Songkhla University, BIOFIN has supported the shift from harmful practices to sustainable alternatives. This case study not only served as an environmental success story but also highlighted the wider problem of harmful subsidies in Thailand.

A comprehensive BIOFIN study found that around $6.28 billion in national budget spending was allocated to harmful subsidies in fiscal years 2021 to 2023. These funds were used to support rigid infrastructure projects that had a negative impact on river and coastal ecosystems. Such subsidies were often justified as necessary for agricultural irrigation or the promotion of local tourism. However, they have done more harm than good, both ecologically and economically.

In Mrigadayavan Palace, BIOFIN’s analysis revealed that the Marine Department had spent $8.4 million on building grey infrastructure along the beach. After BIOFIN's experts presented scientific evidence, the Ministry of Natural Resources and Environment took the issue to the Thai cabinet. This lobbying led to a landmark decision: The cabinet directed the Marine Department to allocate $285,714 to remove the harmful structures and stop further harmful subsidies for similar projects.

The repurposing of these subsidies reflects a broader paradigm shift towards sustainable development in Thailand. The restoration of the ecosystem at Mrigadayavan Palace beach is a testament to the effectiveness of community-led, evidence-based approaches. By prioritizing nature-based solutions, the initiative has not only restored ecological balance but also set a precedent for addressing similar challenges across the country.

BIOFIN’s efforts in Thailand emphasize the importance of reevaluating and redesigning financial policies to align them with environmental sustainability. The success of the Mrigadayavan Palace project demonstrates how targeted interventions, supported by scientific research and multi-stakeholder collaboration, can transform harmful practices into models of ecological resilience and biodiversity conservation.