ASEAN Carbon Neutrality Target and Investment Challenges

ASEAN accounted for nearly 5% of the total global CO₂ emissions in 2020. Most of the GHG emissions generated by the region are from the energy sector, which accounted for almost 95% of total carbon emissions in 2019. It is predicted that the region will lose approximately an 11% decrease in GDP by 2100 if no mitigation measures are applied. In 2023, the region announced the regional commitment to the carbon neutrality (CN) target by 2050 by emphasising several key strategies to gradually reduce GHG emissions and meet the carbon neutrality target in 2050. The investment required to implement several key strategies under the CN target is estimated to be nearly USD 3.7 trillion to USD 6.7 trillion by 2050. As energy sector in ASEAN accounts for nearly 51% of the total ASEAN emissions, the CN target will be emphasised largely on reducing emissions and achieving carbon neutrality in the energy sector. To meet this target, the region still faces a huge investment gap with a high dependency on public finance. In 2021, the annual clean energy investment that came to ASEAN was estimated to be USD 30 billion.

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This op-ed was published in the Business Today Malaysia. The original article can be found here.