A new report on Asean’s energy landscape launched at the Asia Clean Energy Summit in Singapore takes a critical look at the barriers and drivers at the heart of the region’s transition to a low carbon economy.
Singapore, 31 October, 2018—A new ground-breaking study launched today by Eco-Business puts a spotlight on Southeast Asia’s transition to the low carbon economy and identifies the top challenges for the region as insufficient regulation and the lack of access to funding.
Southeast Asia is one of the most vulnerable regions in the world to climate change, with coastlines and densely populated low-lying areas that are increasingly threatened by rising sea levels. The Intergovernmental Panel on Climate Change (IPCC) observed earlier this month that humanity is already experiencing the consequences of 1 degree of global warming through more extreme weather events—nowhere is this felt more deeply than in Southeast Asia.
Not only does climate change endanger the environment and human lives, it is also predicted by the Asian Development Bank (ADB) to shave 11 per cent off the region’s GDP by the end of the century if left unchecked.
In response to these challenges, Southeast Asian countries are beginning to transform the way energy is produced and consumed in order to transition to a low carbon, sustainable economy. This includes switching to clean energy sources, reducing emissions, and re-evaluating businesses and assets which may be exposed to the effects of climate change.
This new report, Power Trip: Southeast Asia’s journey to the low carbon economy, outlines the region’s journey in making the energy transition in order to better understand the challenges countries are facing.
The report also forecasts what the Southeast Asia business landscape might look like by 2030 as companies take advantage of the opportunities that arise from the low carbon economy.
Launched at the Asia Clean Energy Summit 2018, this report is the first of its kind in Southeast Asia that outlines the drivers and barriers faced by specific countries in the region in their transition. This report surveyed 562 senior government, business and civic society executives from Indonesia, Malaysia, Thailand, the Philippines, Singapore and Vietnam between August and September 2018.
Here are some key findings from the survey:
- The top three sectors most in need of investment in the region were renewable energy and storage, clean energy public transport systems and energy efficient technologies and innovations.
- The top three drivers in the transition to a low carbon economy were business leadership, local government initiatives, and consumer pressure and purchasing habits.
- The top two barriers to the transition were insufficient policy or regulation and lack of access to funding.
- The top three changes anticipated in this transition were that there would be increased environmental regulations; consumers and businesses would have more clean energy options and services; and investors and fund managers would reduce their investment exposure to high carbon assets and businesses.
Tim Hill, Research Director for Eco-Business who led the white paper, commented: “It was exciting to get a sense of how the transition to a low carbon economy was developing from business leaders and other stakeholders in Southeast Asia. Although we noted some concerns about the pace of uptake of clean energy in some of the countries, it is clear that the technologies underlying the whole transition are enabling a more resilient and less polluted world—and there are going to be a lot of business opportunities in this new era.”
Experts interviewed for this whitepaper recognised that while there has been growing adoption of clean and low carbon technologies in Southeast Asia, the region has been slower to adapt to these changes relative to the rest of the world. Many respondents highlighted the ongoing dependency on coal—particularly in countries such as Indonesia, Vietnam and the Philippines—and the continued entrenchment of large state utilities in fossil-fuel power systems.
Justin Guay, Director Clean Air and Clean Energy at ClimateWorks Foundation observed: “Southeast Asia is the only region in the world where I hear officials from the utilities and energy ministries refer to the concept of ‘clean coal’ with a straight face”.
Jessica Cheam, Managing Editor of Eco-Business added: “Findings from our latest whitepaper reveal the urgent need to address specific barriers in the region’s transition to a low carbon economy. It is critical that we look at practical ways to implement policies that will create a conducive environment for clean energy innovations to proliferate, and how to structure them such that they attract investments. This will help the region avoid building more fossil fuel power plants that are detrimental to the environment and make it even harder for countries to fulfil their climate pledges.”
The Asia Clean Energy Summit is part of the Singapore International Energy Week, a week-long event hosted by the Singapore’s Energy Market Authority from 29 October to 2 November at the Sands Expo and Convention Centre, which gathers global and regional energy leaders to share insights and exchange best practices.