Southeast Asia faces challenges to meet net zero emissions
08:48, 21 December 2021
While more Southeast Asian countries are pledging decarbonisation policies after the recent UN Climate Conference the region will face challenges in reaching the goal even by 2060.
Asia is responsible for roughly half of the global carbon emissions and a reliance on coal for generating electricity, particularly in Southeast Asia, means it needs huge investment to get on the path to net-zero.
According to Bank of America (BofA), Asia experienced just 4% growth in transition to renewable energy in 2020.
On average, just 5% of stocks in Asia report metrics on emissions, compared with 66% in the US and 78% in Europe, it said in a note published on 17 December.
Net zero ambitions not universal
Indonesia, Laos, and Vietnam are so far the only Southeast Asian nations that have pledged new net zero emission target, according to the Economic Research Institute for ASEAN and East Asia (ERIA).
Other Southeast Asian countries, including the Philippines and Singapore, have not pledged a net zero emission target.
“Public policies around emissions, waste reductions, emissions trading, partnership with private corporations on environmental issues including restoration initiatives, electrification of transportation, and energy efficiency is important to propel any country towards the aim of achieving net zero,” said BofA in the research.
In the last 10 years, BofA said, Asia has enacted close to 262 policies, compared with just 34 in the Americas and 543 in Europe.
“Given 52% of the world’s emissions emanate from Asia, it needs to raise the bar on policies from both public and private entities,” the bank added.
Coal to challenge decarbonisation
Electricity and heating contribute 50% to carbon emission by activity according to BofA.
The International Energy Agency (IEA) in its 2021 coal report said China and India are forecast to boost global coal consumption to new all-time high in two years. China itself produces and consumes over half of the world’s coal.
IEA estimates coal-fired power generation during 2021-2024 to increase 4.1% in China, 11% in India and 12% in Southeast Asia as coal remain the cornerstone of electricity supplies for these regions.
Weaning from coal
Alloysius Joko Purwanto, energy economist at ERIA says there are several strategies that can be implemented to reduce reliance on coal. To begin with, countries can cut or remove all together subsidies enjoyed by the coal industry and impose carbon tax.
“Revenue from the carbon tax can be used to develop various renewable energy technologies or subsidise development of renewable energy,” Alloysius says.
For electricity generation, he added that a fair feed-in-tariff will enable electricity sourced from renewable energy to compete with electricity generated from fossil fuels.
A feed-in-tariff is a policy aiming to promote investment in renewable energy in the early development stage. The scheme guarantees small renewable energy producers, such as wind and solar energy, can sell their electricity to the grid at above-market price.
According to ERIA forecasts, the share of renewable energies in electricity generation will be 22%, 21% and 18% in 2030, 2040, and 2050 respectively, based on business-as-usual scenario. Shares in coal will be 36% in 2030 to 2050.
Renewable energy investment
According to BofA, Asia needs roughly $435bn investment every year just in renewables to generate 100% carbon-free electricity in 2050.
This is three times the average annual capital expenditure in the Asia Energy sector in the past 10 years.
China leads in Asia this year for its strong implementation of renewable energy projects, robust investment ($170bn in 10 years), and strong innovation, according to BofA Framework for Assessing Carbon Transition (BofA FACT).
BofA FACT, monitors the progress countries in Asia are making towards the IEA guidelines to achieve net zero emissions by 2050. BofA FACT puts more emphasis on the progress countries make rather than the status quo.
“Hence China, despite being the largest emitter of greenhouse gases in the world, ranks at the top among Asian countries because of the progress they are making in addressing climate issues through above average progress made via implementation, investment and innovation,” the bank said.
Read more: China, India set to boost global coal demand to all-time high
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