Unlocking the Value of a Global Energy Transition
The global energy landscape is rapidly changing, and both businesses and nations are at risk of being left behind as the world continues to wrestle with the climate dilemma. How we mitigate the impacts of manmade climate change while delivering the energy that societies and economies need. Asian companies and countries will be critical in delivering effective solutions with global implications while ensuring energy security and affordability.
There are already encouraging signs of a shifting global landscape. The Science Based Targets initiative (SBTi) notes that in 2019, net-zero pledges covered just 16% of the global economy. Fast forward to today, and that figure is now 90%, framing a remarkable transformation in global attitudes to addressing climate change.
We can already see how that shifting commitment has driven positive change across the sustainable energy ecosystem, with prices of critical zero-carbon energy technologies painting a fascinating picture of this journey. The global average price of solar photovoltaic modules has drastically decreased over the last half-century, from USD115.28 per watt generated in 1975 to just USD0.27 per watt in 2021.
Governments and companies face a critical imperative to respond to this transition if they’re to thrive in a modern, informed energy landscape.
Asia is the beating heart of change
Asia is the beating heart of this vital global transformation. The region is home to approximately 60% of the world’s population, and accounts for half of primary energy consumption.
This dynamic and diverse region is also a fulcrum of global growth. The International Monetary Fund (IMF) projects Asia’s economy will expand by 4.7% in 2023, with major economies India and China contributing to the region being substantially ahead of the global curve. But Asia’s economy must recognise growing global trends if it is to sustain this advantage.
The reality is that Asia will account for more than half (53%) of the improvement needed to reach the International Energy Agency’s (IEA) 2050 Sustainable Development—a pivotal focal point in our joint efforts to enable sustainable growth. This is a fundamental shift in how we live, work, and consume.
While historically, global emissions have been dominated by the economies of North America, Europe, and Russia, Asia’s rapid development and growth now sees it as a major source of global emissions. The region is now responsible for more than half (~58%) of annual global greenhouse gas emissions, with its major powerhouse economies providing the beating heart of global commerce.
Addressing this matters for the region’s future. Based on a severe increase of 3.2°C, Asia is projected to see a 26% dip in GDP. Southeast Asia fares even more poorly, with an expected hit of 37% to GDP. Those top-line figures mean very real challenges to communities and companies across the region.
Growth and green opportunities
Like any period of adversity, however, this remarkable transition could provide a powerful uplift to businesses and economies across the world. The incremental revenue opportunity from activities like the expansion of renewable power, energy efficiency in our buildings, and greater circularity in producing industries is estimated by some to reach USD2,261bil by 2030, with more than half (53%) of that opportunity originating in Asia. That’s a huge opportunity for the region to thrive, and go beyond to lead the world.
Companies are already shifting their own priorities, something we’ve seen in the transition at organisations such as PETRONAS. According to research by Carbon Disclosure, 3,789 companies in the region had disclosed their climate targets as of 2021, a 29% increase on 2020. However, just 8% had genuine net-zero targets.
Energy Asia offers a platform to help businesses, government, and citizens recognise and unlock this remarkable, and necessary, transformation. We’re proud to play a part in promoting that message.
The green future is one of sustainable opportunities, as we seek to mitigate our impacts on the planet, while maximising the potential value to the world.