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COP27 Output on Supporting ASEAN’s Huge Potential on Reducing Emission

By Muhammad Shidiq
27 March 2023

According to NZE Pathways for the ASEAN energy sector study published by ASEAN Centre for Energy (ACE), rapid economic growth and urbanization caused Association of Southeast Asian Nations (ASEAN)’s electricity demand to increase at an average annual rate of 6.3% between 2008 to 2018. To fulfill the increasing energy demand, fossil fuel is the main source of energy. As a result, the energy sectors of the 10 ASEAN Member States (AMS) contributed 1.4 gigatons of CO2 emissions or 4% of global energy-related CO2 emissions in 2018. The study suggested recommendations for ASEAN to reduce its emission and to achieve the net-zero, among others are ASEAN needs to set net-zero emission (NZE) in place to fulfilling the Paris Agreement goal, and the ASEAN Member States (AMS) needs to halt new commitments for coal power plants at the soonest possible if the region wishes to reach NZE in 2050. The recommendations may become a promising way forward that ASEAN is doable to reduce huge number of tons of CO2 emissions.

Another ACE’s study namely the 7th ASEAN Energy Outlook (AEO7) reported that by applying a Baseline scenario or Business as Usual (BAU) scenario the ASEAN’s Total Final Energy Consumption (TFEC) is projected to reach from 400 Mtoe in 2020 to 1,282 Mtoe by 2050 or three times higher compared to the 2020 level. Oil (47%) is still to continue to dominate the energy demand followed by electricity (20%), coal (15%), bioenergy (9%) and other (9%). Besides baseline scenario, the report outlines three other different scenarios namely AMS (National) Target Scenarios (ATS), the APAEC (Regional) Target Scenario (APS) and the Least-Cost Optimization (LCO) scenario. The ATS uses energy policies and targets of the 10 ASEAN Member States (AMS). The APS is based on the ASEAN Plan of Action for Energy Cooperation (APAEC). The LCO considers cost-effectiveness, affordability and technological maturity to fulfill the growing electricity demands. The study reported that ATS projects to achieve a 39.6% (774 Mtoe) demand reduction versus the baseline scenario by 2050, with APS and LCO scenarios further boosting this demand reduction to 53.7% (593 Mtoe). The savings achievements are due to energy efficiency promotion in electric technologies in the residential and commercial sectors, industrial processes improvements, fuel economy and electric vehicles (EV) in the transportation sector. The energy demand reductions are greatly impacting further emission reduction. The AEO7 study reported that ASEAN’s GHG emissions are projected to reach 6,704 Mt CO2-eq in 2050 or a 3.7-fold increase compared to baseline scenario 1,815 Mt CO2-eq in 2020. Furthermore, the energy sector’s carbon emissions can be controlled by applying the three modelled policy measures. Implementing ATS, APS and LCO would keep emissions at 4,030 Mt CO2-eq; 2,966 Mt CO2-eq, and 3,117 Mt CO2-eq respectively in 2050. From the AEO7 analysis, ASEAN has huge potential to reduce millions of tons of CO2 or around 50% reduction of the 2050 projection.

The emission reduction from the modelled policy measures is in line with the UN’s Intergovernmental Panel on Climate Change’s 2018 where the global CO2 emissions needed to be cut 45% by 2030 compared to 2010 levels. The latest 27th UN Climate Change Conference of the Parties (COP27) resulted also that countries must cut greenhouses gases emission. The 27th UN Climate Change Conference of the Parties (COP27) has also resulted in an output about article 6. Article 6 governs the use of the voluntary carbon market and international carbon credit trading in supporting countries’ energy transition. The carbon market is one of the promising tools for countries to pace the implementation of energy transition as well as to reduce emissions. The existence of article 6 may support the boost implementation of the carbon market and support the countries to implement the carbon market at the soonest.

Article 6 may bring the 10 ASEAN Member States (AMS) energy policymaker’s attention where it seems to be a supporting element for ASEAN to transitioning energy and reducing emission. This article 6 is also related to ASEAN Plan of Action for Energy Cooperation (APAEC) 2016-2025 Phase II: 2021-2025 as regional cooperation plan on energy transition. The document noted that ASEAN continues to work on transitioning energy through achieving 23% share of renewable energy (RE) target in the ASEAN total primary energy supply (TPES) by 2025 and an energy intensity (EI) reduction of 21% by 2018 surpassing its aspirational target of 20% in 2020 over 2005 levels towards low GHG (Greenhouse Gas) emissions through energy transition in ASEAN.

Referring to the information given, the implementation of article 6 could support ASEAN’s huge potential on reducing emission. The huge support for carbon pricing for developing countries like ASEAN is clearly supporting for greater emission reduction in the region. By having the support, the 10 Member States could push forward faster the region’s energy transition process where there will be a faster process for phasing-out coal power plants while increasing the use of renewable energy. It is clearly seen that the implementation of article 6 may bring several benefits for the member states among others are to 1) building stronger cooperation among the member states to implement carbon market through penetrating more renewable energy and energy efficiency technology, 2) speeding up energy transition in the region through fossil fuel reduction including phasing-out coal-power plants, and 3) help policy makers to design an energy transition policy strategy to achieve the emission reduction target. As a result, the huge emission reduction of ASEAN as projected under AEO7 could be potentially achieved in future.