Financial Needs of ASEAN Carbon Neutrality Target

ASEAN announced the ASEAN Strategy for Carbon Neutrality  in 2023 to provide a foundation for the region towards transition to net zero targets while maintaining economic growth and energy security in the region. The strategy targeted ASEAN to achieve the carbon neutrality from several key sectors and remain a top destination for foreign investment to raise liquidity in low-carbon markets by 2050. Aligning with carbon neutrality target, nearly USD 520 billion is required as annual investment in 2050. In 2022, ASEAN only accounted USD 30 billion clean energy investment. Relying only on public funding will not be adequate, thereby private sector could help bridging the investment gap. But the private funding is insufficient given the inherent challenges of market uncertainties. Half of the clean energy investment sources in ASEAN is coming from public ownership, whereas in successful case of clean energy financing, public sector only holds below 20% of these investments.

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