The climate crisis is one of the most significant issues we are facing today. It is a threat to humanity and the planet, and impacts all aspects of our life, including the environment, economy, public health, and social well-being.
The focus now is on averting potential future catastrophes while also handling the current impact already being felt by communities around the world. Asia, as a region, lags behind in this fight. While the reasons behind this are nuanced, the primary objective is not: to fight climate change to the best of our region’s ability. Asia is both rapidly developing and is home to some of the most populous countries, and its energy consumption and industrial activities have a significant global impact.
Five of the 10 largest carbon emitters in the world (China, India, Indonesia, Japan, and South Korea) are in Asia, and account for 45 percent of global greenhouse gas emissions because of their large population. Achieving net zero will be extremely challenging and the economic risks high. According to a McKinsey report, countries in Asia Pacific have about 37 percent of their gross domestic product (GDP) in sectors most exposed to the transition to net zero, which is above the world average of some 35 percent.
However, Asia is not one monolithic economy, and there is a wide variation that depends on the specifics of each country. In Singapore, GDP exposure lies at 21 percent, while it is 58 percent in Vietnam. The percentage of jobs in sectors that will be affected also spans a wide range, from 22 percent (Singapore) to 72 percent (India). McKinsey estimates that the net zero transition could be somewhat positive overall, with a global loss of 187 million jobs by 2050 and the creation of 202 million new ones, given the growth of sectors like hydrogen and renewables.
While Asia as a region can and should play a significant role in decarbonization, it is equally imperative to tackle this change with nuance and understanding. Global North countries in Asia, such as Singapore, New Zealand, Australia, Japan, and South Korea will face overall lower exposure to the transition—this means less disruption, less jobs lost, less economic disorder—even though both Japan and South Korea are some of the top emitters of greenhouse gases.
Manufacturing-dependent countries such as Bangladesh, Pakistan, and Vietnam are more exposed to shifts in demand for products than, say, Japan, a predominantly service economy. The transition period to achieve net zero will come at a cost, and the wealth gap between countries in Asia might increase. This disruption will also flow from the top to bottom, affecting residents of the region at the individual level.
For instance, the lower-income population would endure the effects of higher electricity cost during the transition, and many will lose jobs in the fossil fuel industries while new jobs in clean energy sectors are being created. It is in this awkward in-between phase that we must practice teamwork and compassion with a willingness to understand that the road to net zero is not made equal and will be a difficult one for Asia, though it will ultimately reap rewards.
The same McKinsey report indicates that the region is well-placed for renewable energy and abatement efforts: Indonesia, the Philippines, and Thailand have great potential for reforestation; Japan has ambitions to become a major offshore wind energy producer, while the Sarawak region in Malaysia is set to become a leader in hydrogen. Over in Indonesia, the potential for geothermal energy is vast, given its location near the Ring of Fire, though it will need global partners to truly harness its full potential. Markets will expand for low-emissions products and industries, like electric vehicles, human-powered vehicles, and new goods and services to support these changes, such as rare-earth materials, forest management, and better public infrastructure for mass transit.
The industry is already getting a boost with China’s oil giants investing in renewable energy, while Vietnam has embraced renewable sources like solar, wind, hydro, and biomass. As a region that is rich in natural, human, and technological capital, Asia is well poised for a net zero future. But this abundance will be for naught if we do not aim extremely high. Knowing that most countries globally have consistently fallen behind on climate change goals, it is important to do as much as possible, so that we can compensate for the high chance that we do not meet those goals. The Jakarta Post/Asia News Network
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Deborah Giam is managing director for Asia Pacific at Penta Group.
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The Philippine Daily Inquirer is a member of the Asia News Network, an alliance of 22 media titles in the region.