Asean carbon neutrality can unlock US$5.3 trillion economic opportunity
20 Aug 2023
Asean economic ministers have endorsed a carbon neutrality strategy aligning with Paris Agreement commitments and could unlock a US$5.3 trillion (RM24.6 trillion) economic opportunity.
The Asean Strategy for Carbon Neutrality aims to foster green industries, set standards and reduce emissions through eight collaborative strategies.
The strategy, supported by the Australia for Asean Futures Initiative, requires urgency in achieving carbon neutrality for a green transformation, the ministers said in a joint statement following their 55th Asean Economic Ministers’ Meeting in Semarang, Indonesia.
The ministers said that addressing Asean’s carbon burden not only mitigates risks but also offers a substantial socioeconomic opportunity.
They said unchecked climate change could lead to an 11% reduction in regional gross domestic product (GDP) by 2100 and displace 87 million people in flood-prone areas across Indonesia, Malaysia, Myanmar, Thailand and Vietnam.
“In contrast, pursuing carbon neutrality could yield a GDP value-add of US$3 trillion to US$5.3 trillion by 2050, attract green investments worth US$3.7 trillion to US$6.7 trillion, and generate 49 to 66 million additional jobs, based on analysis by the Boston Consulting Group.
“The economic benefits will be distributed across Asean countries,” they said.
Cambodia, Laos, Myanmar, and Vietnam might experience GDP growth of 9% to 12%, while Indonesia, Malaysia, the Philippines and Thailand could see growth of 4% to 7%. Singapore and Brunei could improve by 1% to 2%.
The ministers said that in order to achieve the carbon-neutrality goals, Asean must bridge a 2.6 gigatonne carbon dioxide (CO2) gap.
They noted that despite having low per capita emissions, the region’s role as a financial hub is growing, with investments projected to double to over US$2.1 trillion by 2030 from US$962 billion in 2023.
“The region’s diverse economies also offer collaborative prospects for achieving carbon neutrality, with hydropower-rich nations contributing zero-carbon energy, some countries having resources for green-tech nickel batteries, and others excelling in the electric vehicle industries,” they said.
The ministers said the endorsed strategy will now move towards adoption by the Asean Economic Community Council and would be recognised by the Asean leaders at the 23rd Asean Summit next month.
“Afterwards, it will be introduced to relevant Asean stakeholders for ongoing collaboration in realising a carbon-neutral future,” the statement said.
Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz, representing Malaysia at the meeting, said these strategies will shape a more prosperous and sustainable future for the Asean population, which has already reached 672 million.
“Malaysia is committed to achieving net zero carbon status by 2050, and various initiatives are being implemented, including the development of an environmental, social and governance framework for Malaysia’s manufacturing sector,” he said.