In the heart of South-East Asia, a region known for its vibrant cultures, lush landscapes, and booming economies, there lies a concerning environmental narrative that is unfolding. Despite the global push towards sustainability and reducing carbon footprints, South-East Asia finds itself "woefully off track" in terms of green investments necessary to combat climate change. This revelation, highlighted in a recent report by global consultancy Bain & Co, in collaboration with green investment group GenZero, Standard Chartered Bank, and Temasek, sheds light on the urgent need for the region to recalibrate its approach towards environmental sustainability.
The report paints a stark picture of the current state of green investments in South-East Asia. Despite a 20% growth in green investment last year, the region falls significantly short of the US$1.5 trillion required this decade to meet its climate goals. The energy consumption in South-East Asia is expected to surge by 40% within this decade, yet the reliance on fossil fuels remains steadfast, contributing to the rise in climate-warming carbon dioxide emissions. This dependency not only exacerbates the global climate crisis but also puts the region at risk of overshooting its 2030 pledges by a staggering 32% if the current trajectory continues.
Kimberly Tan, GenZero’s managing director, emphasizes the critical need for an acceleration of efforts by countries, corporates, and investors. "South-East Asia remains woefully off-track," she states, underscoring the imperative for immediate action to steer the region back towards its green commitments. The report identifies a mere 10% of total energy supplies in the region coming from clean energy sources, highlighting a significant area for improvement and investment.
The challenges in transitioning to renewable energy are multifaceted. The report points out the over US$1 trillion of unrecovered capital in young coal plants, predominantly in Asia, which hampers the growth of renewables. Tim Gould, chief energy economist at the International Energy Agency, suggests the need for "creative financing approaches" to navigate this obstacle. Additionally, the report notes that only four of the ten countries in the region – Indonesia, Malaysia, Singapore, and Vietnam – have made strides in putting a price on carbon, a crucial step towards incentivizing green investments.
Despite these challenges, the report offers a glimmer of hope, identifying 13 "investable ideas" that could potentially bring in US$150 billion by 2030. These include sustainable agriculture and utility-scale renewable energy plants, which not only promise environmental benefits but also economic opportunities for the region. The report calls for more policies and incentives, greater regional cooperation, and a sustained focus on deployable technologies to bridge the green investment gap.
The situation in South-East Asia serves as a microcosm of the global struggle against climate change. The region's journey towards decarbonization is still in its infancy, offering a unique opportunity to leverage low-hanging fruits and innovative solutions to reduce emissions. However, this requires a concerted effort from all stakeholders involved – from policymakers to investors, and corporates to communities.
As South-East Asia stands at this environmental crossroads, the path it chooses to follow will have significant implications not just for the region, but for the global community. The call to action is clear: to avert the looming climate crisis, South-East Asia must urgently ramp up its green investment efforts. The time for deliberation is over; the time for decisive action is now.
In the words of Kimberly Tan, "The good news is that South-East Asia is very early on its decarbonisation journey, so it benefits from having many levers to reduce emissions today." This sentiment encapsulates the challenge and the opportunity facing South-East Asia – a region with the potential to transform its environmental narrative and lead by example in the global fight against climate change.
