COMMENTARY: "All forecasts – and just the sheer practicalities of such a large transition – suggest achieving net zero won’t be easy."

Roberto Bocca is the Head of Shaping the Future of Energy and Materials at the World Economic Forum, and Harsh Vijay Singh is a Platform Curator of Shaping the Future of Energy and Materials at the WEF. Here, they share their thoughts and reflections on the path ASEAN can take to decarbonisation.

We are in the midst of an energy crisis the likes of which we haven’t seen since the 1970s.

The decisions leaders make now about decarbonisation determine our collective future.

Get it right, and short-term upheaval transforms into long-term sustainability.

Get it wrong, and we will struggle to meet our environmental targets – specifically the Paris Agreement target of global carbon emissions reaching net zero by 2050 – casting further doubt over the future of our planet.

ASEAN's energy crisis

ASEAN, South East Asia’s regional trading and political bloc, is vitally important to this outlook, potentially being the deciding factor in the future we ultimately face.

ASEAN is the world’s fourth-largest energy consumer. Its current energy makeup is skewed towards traditional forms of power generation, with fossil fuels making up 83 per cent of its energy mix, and energy demand is expected to increase.

The energy crisis has therefore disproportionately affected the bloc, exposing ASEAN member countries to increasing economic, energy security and geopolitical risks.

The huge conundrum that the bloc’s leaders now face is how to secure energy supplies to develop the region’s economies while also decarbonising them.

The good news is that many of its member states show a strong commitment to achieving net zero by 2050. Of the bloc’s 10 member states, only the Philippines has not yet committed to net zero by 2050, while Indonesia has set a target of 2060.

All forecasts – and just the sheer practicalities of such a large transition – suggest achieving net zero won’t be easy.

There is no one solution, and each country will have to pursue its own policies, depending on their respective priorities.

Capitalising on renewable energy sources

A major shift away from the emissions produced by coal power generation sits at the center of change, the step change in efficiency, and the deployment of low carbon technologies can complement the transition.

The policy environment increasingly favours low-carbon energy, and ASEAN’s share of renewable energy increased to 14 per cent of the energy mix in 2020, continuing to rise even during the pandemic.

Green energy resources have been steadily climbing.

For example, Vietnam’s success in the global solar market shows what’s possible when political will, sectoral reform and market incentives come together.

Laos, the self-declared "battery of Asia", applies hydropower, while Indonesia and the Philippines sit on almost one-quarter of the world’s geothermal generation capacity.

ASEAN is also rich in the raw materials required for clean energy products. These include bauxite, nickel, tin and rare earth elements, which can variously be found throughout the region, particularly Indonesia, Myanmar, the Philippines and Thailand.

In addition, Malaysia and Vietnam are among the world’s largest solar module makers.

Creating a climate for investors

To capitalise on these and other advantages, ASEAN’s leaders will have to show an unwavering commitment to supporting and funding the green agenda.

Investors will be looking for energy sector reform, including the dismantling of fossil fuel subsidies, and a hospitable investment and regulatory climate.

This is important because international support and external investment will reduce some of the financial burden and risk that come with developing and scaling up new technologies.

This is emerging, as evidenced by the tie-ups countries are making with those ASEAN states that are piloting green hydrogen systems for power provision.

As the recent COP27 meeting underlined, those nations that have the means to invest in and support emerging economies in their policies to accelerate the energy transition, should do so.

New energy strategy required

Equity and justice are becoming interwoven into climate action, along with the help to develop and implement clean energy policy and mobilise finance for clean energy schemes.

Reflecting the global need to collaborate in the effort to reach net zero, the World Economic Forum is supporting ASEAN’s energy transition through multiple initiatives.

Among these are country-level work in Indonesia to mobilise finance for clean energy in partnership with the country’s Chamber of Commerce; supporting the development and implementation of Malaysia’s National Energy Policy through a series of roundtables held with the government and private-sector energy companies; and supporting the forthcoming ASEAN Energy Leaders for Just Energy Transition community.

The latter is aimed at strengthening intra-regional and international cooperation to help accelerate a just energy transition.

Out of the 1973 oil shock emerged an energy strategy that relied less on oil, improved energy efficiency and sought a more diversified energy mix.

Out of the current energy crisis, a new energy strategy is required, one that decarbonises economies worldwide.

If ASEAN can achieve this, its countries will enjoy safe, equitable energy systems that support their long-term growth, and we will all be a lot closer to realising the Paris Agreement’s goals.

Top photo from ASEAN / FB and Pexels