Climate and Sustainability at Energy Asia
Asia stands at the heart of the global climate challenge—both a major energy provider and consumer but a region that is acutely vulnerable to climate change. This emphasises the need for strategies that integrate economic growth with climate resilience.
The key sub-theme on Climate and Sustainability will explore national energy policies, regional cooperation and the mobilisation of investments in climate adaptation and mitigation efforts to protect the region’s densely populated and economically critical areas.
The need across the region is clear—the International Monetary Fund (IMF) estimates that Asia’s emerging market and developing economies need investment of at least USD1.1 trillion annually to meet the region’s mitigation and adaptation needs. The wider regional need is expected to be far above that as most of Asia looks to achieve net-zero goals by 2050 as part of a climate-resilient region. So what does that mean for Asia?
Carbon and Collaboration Opportunities
COP28 was a pivotal event where major global players made significant commitments to reduce emissions and enhance measurement and monitoring practices. COP29 helped progress this further with agreement around carbon market dynamics setting the stage for global architecture and mechanisms to enable transparent carbon trading.
However, despite the expansion of compliance carbon markets, there are lingering questions about their effectiveness in emerging economies and the potential for convergence with voluntary carbon markets.
Alongside carbon markets, Asia’s shared climate and sustainability agenda faces challenges around the need to foster collaboration between governments and industries, as well as establish effective funding strategies.
Key issues include securing financing for energy transitions in emerging markets, providing capital for both climate adaptation and mitigation efforts, and ensuring the smooth operation of carbon markets. Achieving global consensus is becoming increasingly difficult in a polarised political and economic environment.
Asia’s Climate Vulnerability and Economic Dynamics
Asia, with its densely populated coastal cities and heavy reliance on agriculture for livelihoods and food security, remains one of the most climate-vulnerable regions globally.
The impacts of climate change could reduce gross domestic product (GDP) in Asia by 26.5% according to assessors Swiss RE—if insufficient action against climate change leads to a high-warming scenario of 3.2°C. Separate analysis by the Asian Development Bank (ADB) shows impacts for developing countries of the region could be even more significant, with projected 41% loss to GDP by 2100 in a high-end greenhouse gas emissions scenario.
These impacts aren’t just hypothetical—in the 50 years from 1970 to 2021, there were 3,612 disasters attributed to weather, climate and water extremes in Asia, with almost a million related deaths and USD1.4 trillion in economic losses. That is the stark reality of why climate change is important to the region.
Finance will be vital to address these significant and growing risks. A report by the ADB highlights that Asian countries will need to invest USD102 billion to as much as USD431 billion a year to cope with climate change—far beyond the USD34 billion spent in the period from 2021-2022.
With pressing needs come equally compelling opportunities. Asia is home to some of the world’s fastest-growing economies, and investing in climate change also provides the potential for significant economic growth.
According to a study by the Boston Consulting Group, ASEAN’s transition to carbon neutrality by 2050 could generate USD3.0 to USD5.3 trillion in GDP, attract USD3.7 to USD6.7 trillion in green investments and create 49 to 66 million jobs. That impact can be amplified across the wider Asia Pacific region.
The challenge for Asia lies in harmonising its rapid economic expansion with the imperative to mitigate environmental risks. This balancing act requires not only continued economic growth but also enhanced climate resilience across the region.
Policy, Partnerships, and Investment
Strengthening Asia’s response to climate challenges necessitates the development of robust policy frameworks, the forging of strategic regional partnerships and the mobilisation of critical investments into climate mitigation and adaptation solutions. Aligning diverse streams of climate finance will be key to delivering a just, equitable and sustainable future for the region.
Effective policies and cooperative efforts are essential for aligning the region’s developmental goals with climate-resilience strategies. In addition, strategic investments are crucial in supporting sustainable practices and technologies that can mitigate the impact of climate change while promoting economic stability and growth.
The path forward for Asia involves a complex interplay of economic considerations and environmental imperatives. The region’s ability to integrate sustainable development with climate resilience strategies will be pivotal in shaping its future.
Energy Asia 2025 will convene energy leaders and stakeholders to explore collaborative solutions for a resilient and sustainable future across Asia.
