Southeast Asia needs $2 trillion worth of investments over the next decade to build sustainable infrastructure that can help cut down the region’s greenhouse gas emissions, a new report from Bain & Company, Microsoft and Singapore’s Temasek Holdings showed.
That includes investments into areas like renewable energy, electric vehicles and waste management, said the report titled “Southeast Asia’s Green Economy: Opportunities on the Road to Net Zero.”
Last year, investors put only about $9 billion into green businesses and assets, according to the report. To achieve the $2 trillion investment figure, the region’s public, private and philanthropic sectors have to work together to unlock Southeast Asia’s full potential, the report said.
Climate change is a serious concern for Southeast Asia as it experiences a disproportionate number of climate disasters and extreme weather events.
Though fighting Covid-19 currently remains a high priority for most governments, a lot of attention in Southeast Asia last year was devoted to climate actions and thinking about what entails a green economy, according to Dale Hardcastle, co-director of Bain’s global sustainability innovation center.
“We’ve seen multiple green plans launched in Singapore and other countries,” Hardcastle said Wednesday on CNBC’s “Street Signs Asia” as part of the climate conference Ecosperity.
“We’re beginning to see more attempts by governments to look at cross-regional collaboration, whether it’s on new measures around looking at green finance or energy transition or other things,” he added.
The United Nations describes a so-called green economy as one where growth is driven by investments into economic activities, infrastructure and assets that allow reduced carbon emissions and pollution. A green economy also has enhanced energy and resource efficiency, and prevents the loss of biodiversity and ecosystems.
The report found that about 90% of Southeast Asia’s carbon emissions can be addressed by transitioning away from fossil fuels to cleaner energy sources like wind and solar, valuing nature and making the region’s agricultural production of food more efficient.
While agriculture is a big contributor to Southeast Asia’s economy, it is also a major source of carbon emissions, according to the report. Countries must engage with small farmers and provide them incentives to adopt more sustainable farming practices as a way to reduce carbon dioxide released into the atmosphere.
If countries take action today, then by 2030 the region’s green economy could contribute about $1 trillion worth of economic opportunities and create around 5 million to 6 million new jobs, the report said.
Hardcastle tl that many of Southeast Asia’s regional conglomerates and big companies are beginning to think about sustainability, despite being slow on the uptake compared to their U.S. and European counterparts.
“They are beginning to think critically about how do they start to invest in the green economy — whether it is out of self interest to protect the businesses that they have or taking more concerted actions towards climate change, it is great to see that things are beginning to move,” he said.
