The rapid green transition of the Asian region may be key to the rest of the world meeting its climate pledges, according to several experts. The speed at which some of Asia’s largest countries and biggest polluters, such as China and India, achieve net zero could determine the success of other regions around the globe in accomplishing a green transition. And while China is progressing with the acceleration of its shift to green, several other Asian countries may need greater support to achieve this goal.
According to Petronas CEO Tengku Muhammad Taufik, Asia must hit its net-zero targets for the rest of the world to do so. Taufik explained, “The bulk of the emissions [that] are expected to emit will be produced in Asia going forward.” He added, “The world cannot achieve net zero without Asia achieving net zero.” As Asia will contribute around half of the world’s GDP by 2040 and 40 percent of global consumption, its transition to green will be key to the world meeting its climate targets. Taufik also highlighted the importance of world leaders working together to achieve their climate goals, as no one power can meet the goals outlined in the Paris Agreement by working in isolation. This includes the aim of limiting global warming to well below 2°C and pursuing efforts to limit it to 1.5°C.
At present, emissions from Asia’s developing economies and emerging markets are increasing at a faster rate than other regions, rising by 4.2 percent in 2022. This is largely due to the rapid rate of industrialisation across the region, as well as the growing energy demand of several huge populations. Many Asian countries, including China, India and Indonesia, continue to rely heavily on coal to meet their energy demand, which is much more polluting than green alternatives or even other forms of fossil fuel. Related: New Iran Nuclear Deal May Lead To Quick Increase In Oil Production
While Asia is not likely to move away from fossil fuels any time soon, as it depends on coal, oil, and gas for both its industry and consumer energy needs, a lot can be done to develop its renewable energy capacity at a more rapid rate. Greater investment in green energy and related technologies across the region will support efforts to decarbonise, as well as support an eventual shift away from fossil fuels to renewable alternatives. Unlike many European countries, Asia is not yet in a position to drop fossil fuels, but this could allow it to do so within the coming decades. Taufik emphasised the idea that “We’ve always positioned natural gas as a transition fuel,” and this will be key to energy security in Asia for the mid to long term.
Energy experts have previously stated the key role Asia will play in global decarbonisation efforts. In an OECD conference in April on Innovating for a Greener Future in Asia, a group of regional experts discussed the need to combine three key pillars over the next decade: leadership of Asia, the leadership of the business, and opportunities to make the planet much greener. The conference highlighted how Asia has led the world in technology, nature-based solutions, and smart cities, among other sectors. Regional development banks, such as the Asian Infrastructure Investment Bank and the Asian Development Bank, have greatly supported these efforts. The region has also been a leader in finance, with Hong Kong and Singapore competing to be the financial hub of Asia, with a focus on ESG, including green bonds, carbon trading, and other sustainable finance initiatives. However, there are significant opportunities to make Asia greener, thereby mitigating some of the potentially devastating effects of climate change on the region.
The Asian region is well on its way to a green transition, and it’s not just China and India that are progressing, with 8 member states of the Association of Southeast Asian Nations (ASEAN) having committed to achieving net-zero carbon emissions by 2050, with Indonesia aiming for 2060. Only the Philippines is yet to commit to the pledge. ASEAN’s policies are increasingly favouring low-carbon energy sources, with its share of renewable energy reaching 14 percent of the energy mix in 2020. Further, a wide range of energy sources are emerging based on the suitability of the environment of each country, from solar power in Vietnam to hydropower in Laos and geothermal power in Indonesia and the Philippines.
But there is a clear need for Asia to accelerate its shift to green if it hopes to support a global green transition. According to Bain & Company, Temasek, GenZero and Amazon Web Services’ Southeast Asia’s Green Economy 2023 Report: Cracking the Code, while many Southeast Asian governments have set climate targets, not enough action is being taken to meet these targets. The report demonstrated that to achieve emissions reduction commitments and increase the renewable energy capacity, the region must reduce its greenhouse gas emissions by 33 percent from business-as-usual levels by 2030. The Global Head of Carbon Markets at Bain & Company believes, “Regulations and investment should be focused on the deployment of proven and profitable technologies that are here today and can have an impact, while we lay the track to take on hard-to-abate industries with new technologies and innovation in the longer term.”
The speed and success of Asia’s green transition are key to the global accomplishment of the climate aims set out in the Paris Agreement. Although the region continues to rely heavily on fossil fuels to meet its energy needs, there is significant potential for the acceleration of a green transition through investment in Asia’s renewable energy capacity and the deployment of green technologies. While this acceleration has begun, governments worldwide must work together to support the region’s climate aims and ensure the green transition is successful.
By Felicity Bradstock for OIlprice.com
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