South East Asia Lagging Behind in Terms of Green Investment

According to a report by Bain & Company, Southeast Asia is falling significantly short on green investments aimed at reducing emissions, requiring new policies and financial mechanisms to bridge the gap. Despite a projected 40 per cent increase in energy consumption in the region this decade, carbon dioxide emissions, which contribute to climate warming, continue to rise due to the region's heavy reliance on fossil fuels. The report, compiled annually by Bain, green investment group GenZero, and Standard Chartered Bank, highlights this concerning trend.

Although green investment saw a 20 per cent growth last year, it remains far below the $1.5 trillion needed this decade. Without intervention, emissions in the region's ten countries could exceed their 2030 pledges by 32 per cent, the report cautioned.

GenZero's managing director, Kimberly Tan, emphasized the urgency of increased efforts from countries, corporations, and investors, citing the region's significant deviation from necessary targets.

Currently, clean energy constitutes only 10 per cent of total supplies, while fossil fuel subsidies outweigh renewable investments by five times. Challenges such as high capital costs and regulatory uncertainties further hinder the financing of renewable projects.

Additionally, only four out of the ten countries—Indonesia, Malaysia, Singapore, and Vietnam—have made progress in implementing carbon pricing mechanisms.

The report advocates for more robust policies, incentives, and regional cooperation, alongside sustained focus on deployable technologies to drive decarbonization efforts. Tan highlighted the presence of many immediate emission-reduction opportunities in Southeast Asia, emphasizing the importance of seizing these "low-hanging fruit" to kickstart the decarbonization journey effectively.