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Southeast Asia Faces Daunting Climb To Reach Net Zero by 2050

Amid the global climate revolution, research by Imperial College Business Schools shows that a rapid scale-up of clean energy investments are required in Southeast Asia
  • Rapid urbanisation and a growing population are increasing the demand for energy throughout Southeast Asia
  • The great need for energy in the region is projected to increase the region’s oil and gas bill by 5% by 2030
  • All nations in the region have committed to reaching net-zero carbon emissions by 2050, but quite frankly have an uphill battle to neo-industrialisation

“The era of global warming has ended… the era of global boiling has arrived.”

It might sound like the sort of warning delivered in a particularly cheesy Hollywood disaster film – perhaps by a harassed scientist character in a lab coat desperately trying to convince the US President to take action, but instead these words were delivered in real life – just last month in fact, by the United Nations’ Secretary General.

July 2023, like many years preceding it, was the hottest on record, though the extremities were far higher than many experts predicted, with scientists from the World Meteorological Organization and European Commission’s Copernicus Centre stating the temperatures as “rather remarkable and unprecedented.”

Particularly damaging was a three-week record breaking hot spell which brought with it countless wildfires across mainland Europe, and saw ocean temperatures rise at their fastest rates yet.

“We can still stop the worst,” the Secretary General is reported to have said. “But to do so we must turn a year of burning heat into a year of burning ambition.” The global climate change crisis has now reached a tipping point which will require mass cooperation on the global scale to pull back from.

A collective effort

Whilst most of the world has benefitted economically from the industrial revolutions of the 19th and 20th centuries, as time has progressed and more research has taken place into the negative effects that burning fossil fuels has had on our planet, most countries have begun taking steps away towards securing a more renewable and sustainable future.

Some are certainly making greater strides than others. One region of the world has been highlighted as severely lagging behind when it comes to reducing its carbon footprint. Southeast Asia’s proactivity in introducing policies to curb climate change have largely been found to be lacking – especially when compared to the actions elsewhere in the world.

And with a status for being part of one of the regions responsible for contributing to the most to global plastic pollution, one might argue that the responsibility to clean up its ask sits more heavily with this region than elsewhere in the world.

However, comparing the climate-focused activities of Association of Southeast Asian Nations (ASEAN) member states with the West is, perhaps, rather unfair. Not only are they at completely different stages of development when compared to other global nations. but perhaps also stand to suffer the most if we cannot get climate change under control. Southeast Asia has been deemed one of the areas most vulnerable to the consequences of climate change.

So perhaps it is not the desire to act that is lacking – after all, The Paris Accords of 2015 saw all 195 signatories (Including ASEAN and EU member states) agree to reduce carbon emissions by 45% by 2030 and reach net-zero by 2050. Perhaps it is a matter of capability.

ASEAN member states certainly have a tougher job at their hands. According to the International Energy Agency, ASEAN member states are amongst a number of countries across Europe and Asia who have pledged to reach net-zero carbon emissions by 2050. However, the likelihood of this happening remains a pipe dream.

The question then arises: How can these nations balance their development goals, meet the demands of their population, and remain climate-conscious? And, more importantly, how can they be supported in doing so?

Turning the tide

In a bid to try and provide a tangible roadmap to follow, Imperial College Business School and the International Energy Agency (IEA) have conducted a report which demonstrates how South-East Asian nations can reach their lofty climate goals by the deadlines set.

Leader of the study, Mili Fomicov, (a Researcher at Imperial College Business School’s Centre for Climate Finance & Investment) reiterates the need for investment into clean energy in South-East Asia: “The region’s economic development model remains based on fossil fuels, with a high dependence on coal-fired power plants, which account for more than 40% of power generation.”

Blaming Southeast Asian countries for their use of fossil fuels is quite hypocritical as Western nations also underwent a period of hyper-industrialisation to build their strong economies. But, completely disregarding that this is a problem is certainly not the way forward. Instead, better support and structure is needed.

Fomicov explains: “To accelerate the transition to a lower carbon economy in the region, international and domestic policy support, as well as better regulatory frameworks, will be critical. While there are things that individual countries in the region must do – which this paper outlines –there are also clear regional priorities that could help mobilise private capital, globally.”

The region’s dependence on non-renewable energy stems from, she believes, inadequate policies at the governmental level. Southeast Asian governments will have to implement an array of changes to the energy industry to attract pivotal international and domestic investment.

Securing investment

According to the IEA’s Sustainable Development Scenario, the region requires a staggering annual investment of about $180 billion in clean energy by 2030 to maintain a trajectory compatible with the region’s climate goals.

So, how are ASEAN nations supposed to raise such an obscene level of investment? Well, Mili and her team have provided several suggestions to help the region boost investment in clean energy:

  • Greater transparency and the wider availability of data around the financial performance and cost of capital for clean energy projects.
  • Stronger regulatory frameworks concerning remuneration for renewables projects.
  • More robust financial market frameworks for renewables and transition investments.
  • An enhanced role for development finance institutions (DFIs) and blended finance.
  • Greater access to risk hedging tools to address credit and currency risks for private investors.
  • Improved power system connectivity across the region.

Despite this, to say that all environmental policies implemented across Southeast Asia have been failures is a complete falsehood. For example, in Vietnam supportive policy incentives have resulted in an increase of green investment, more specifically in the realms of solar energy. During a global pandemic, Vietnam increased their use of solar energy from 5 GW in 2019 to 16.5 GW in 2020 making them the country with the world’s largest solar boom.

Lessons for the future

This begs the question, maybe we have a lot to learn from the east? As Vietnam, which many would call a developing nation, beat out Britain’s figure which stood at 14.9 GW. Just some food for thought…

According to a Vietnamese Government statement: “From now to 2025, there is no limit to the capacity of rooftop solar power development provided that the prices are reasonable, and the existing transmission network is not overloaded.”

This highlights the significant potential the region has, but Southeast Asia undoubtedly requires substantial changes across the board to get to net-zero.


By, Plamedi Mbungu

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