Report: Southeast Asia ‘woefully off track’ on green investment

Southeast Asia is “woefully off track” on green investments to reduce emissions and needs new policies and financial mechanisms to help bridge the gap, said global consultancy Bain & Company yesterday.

With energy consumption in the region expected to grow 40 per cent this decade, climatewarming carbon dioxide emissions remained on the rise, with the region still dependent on fossil fuels, said an annual report compiled by Bain, green investment group GenZero and Standard Chartered Bank.

While green investment grew 20 per cent last year, it was way short of the US$1.5 trillion required this decade, and emissions in the 10 countries in the region could overshoot their 2030 pledges by 32 per cent if they continued on their current trajectory, it warned.

“We believe that an acceleration of effort by countries, corporates and investors is imperative as Southeast Asia remains woefully off track,” said GenZero managing director Kimberly Tan.

Clean energy accounts for just 10 per cent of total supplies, and fossil fuel subsidies are around five times higher than renewable investments.

High capital costs, as well as uncertain grid and tariff regulations, have also made it harder to finance renewable projects.

Meanwhile, only four of the 10 countries in the region — Indonesia, Malaysia, Singapore and Vietnam — have made progress in putting a price on carbon.

The report called for more policies and incentives, greater regional cooperation and a sustained focus on technologies that are already deployable.

“The good news is that Southeast Asia is very early on its decarbonisation journey so benefits from having many levers to reduce emissions today,” said Tan.

The report identified 13 “investable ideas” that could bring in US$150 billion in revenues by 2030.

Southeast Asia is the second worst-performing region when it comes to renewables investment, behind only Sub-Saharan Africa, according to a report by Singapore’s Economic Development Board and the McKinsey consultancy.