ASEAN leads the Indo-Pacific climate response

15 March 2022

Scientific evidence about the urgency of climate action and the subsequent international agreement on national decarbonisation targets have placed pressure on both leading and emerging markets to pursue development in climate compatible ways. The Indo-Pacific region includes several of the world’s largest polluters as well as leaders in renewable energy use and innovative policy solutions to climate and environmental challenges.

The Indo-Pacific’s emerging markets, particularly member states of the Association of Southeast Asian Nations (ASEAN), present great potential for regional responses to the global climate change challenge. With the unfolding Ukraine crisis, pressure on international energy markets, and the need to diversify global reliance on Russian gas, Indo-Pacific leadership in the global energy transition is more important than ever. Southeast Asian countries also offer important lessons for climate progress among emerging markets and driving the Indo-Pacific’s subregional response to competing climate and economic imperatives. What does this subregional progress look like and how does it bode well for the rest of the Indo-Pacific and broader global climate policy? The answer lies in coordinated climate policy.

The ASEAN example

First, as a regional institution, ASEAN offers a crucial framework for approaching climate commitments and modelling one’s neighbours’ successes. ASEAN’s many consultative groups, including ASEAN+3, ASEAN+6, and the East Asian Summit (EAS), offer a regional structure for sharing climate commitments and monitoring progress towards targets, as is currently done in ASEAN. ASEAN’s role in Southeast Asia has long been one of providing a framework for inter-regional stability. By placing itself at the centre of the Indo-Pacific’s regional architecture, ASEAN has an opportunity to provide a valuable network that will aid the region in meeting net-zero and energy transition goals via multilateral cooperation. Emphasising this region-wide role, as opposed to relegating ASEAN to only subregional climate significance, offers additional organisational and thus regional impact.

By placing itself at the centre of the Indo-Pacific’s regional architecture, ASEAN has an opportunity to provide a valuable network that will aid the region in meeting net-zero and energy transition goals via multilateral cooperation.

Second, ASEAN members are working towards balancing and addressing climate and energy concerns while simultaneously managing economic development necessities by addressing national quality of life improvements via electricity and energy access. In 2021, the Asian Development Bank released its new Energy Policy, which highlighted the bank’s revised approach to polluting coal power in the region. The bank has committed to not funding new coal power production and a regional phase-out of coal, while also pledging new financing for electricity access and energy security. ASEAN members have already taken note of these commitments, and their national policies are progressively reflecting similar aims. For example, the Philippines introduced a coal moratorium in late 2020, cancelling several coal-based projects, and Indonesia, Malaysia, and Vietnam have set similarly ambitious phase-out moratoriums on coal-based projects. These national measures with region-wide benefits also reflect COP26 pledges to phase out coal from the power sector (including the Philippines, Singapore and Vietnam) and COP26 announcements to end overseas funding of coal projects (China, Japan, South Korea).

Third, Southeast Asian countries are embracing multi-sector tactics to achieve decarbonisation at both the national and subregional levels, adopting a progressive approach to joint net-zero targets. Alongside coal reductions, ASEAN has set the ambitious target of achieving a 23 per cent share of renewables in total primary energy supply and 35 per cent in total energy supply across the subregion by 2035. Worldwide, while the power sector is responsible for the largest share of global emissions, emissions from heavy industry represent the second-largest share, making up roughly 26 per cent of global emissions. In Southeast Asia, the highest emitting sectors mirror these global statistics with power, industry and transport leading the way in emissions. Here, too, the subregion is taking a progressive approach, with individual carbon capture and storage (CCS) pilot programmes, like in Indonesia, and national industrial decarbonisation targets that include demand reductions through increased efficiency, infrastructure improvements, and direct use of renewables.

Finally, the subregion is tackling industrial decarbonisation and the regional energy transition holistically, targeting not just industrial emissions but system-wide changes. ASEAN is leading in adopting circular economy policies — an approach to economic activity that intends to design out waste and keep materials in use while revitalising nature. In October 2021, ASEAN adopted the Framework for Circular Economy for the ASEAN Economic Community. This framework utilises existing, environmentally focused circularity initiatives within the subregion, but expands the focus of previous initiatives to include financial markets, industries, and trade relationships to accelerate materials and waste management across all sectors.

Individual member state action has been strong in this area already, emphasising the distinct national circumstances. For example, Indonesia and Vietnam are developing innovative financing methods to support circularity through funding at both local and national scales. In Singapore, educational programmes and stakeholder buy-in is thriving. This type of multi-layered support is a key requirement of industrial circularity given the changes in attitude and processes that must occur to break the ‘take, make, waste’ model of traditional economic development in favour of more sustainable methods of manufacturing and waste management.

Coordinating these different techniques to increase efficiency and improve management across ASEAN not only provides best practices and policy/technology sharing, but also allows for multiple economic, industrial, and societal factors to be considered when crafting regional approaches to circularity. This means more likelihood of regional uptake in circularity, where feasibility and sustainability of proposed measures accurately represent both the challenges and successes of local, national, and industrial circularity. Overall, this approach to circular economy also highlights the need for subregional inclusion in regional and global value chains, to maintain ASEAN’s role as a regional production and trade hub while optimising resource allocation and sustainability.

Alongside circularity improvements, ASEAN is including elements of equity and justice in its comprehensive approach to subregional net-zero targets. In this context, the principles of energy justice are being applied to ASEAN’s region-wide energy access and transition targets. A just energy transition provides affordable and reliable access to electricity and energy access, and incorporates 100 per cent renewable energy and local buy-in, allowing communities to choose the energy systems that work best for them, as is being done with distributed energy in ASEAN’s many rural and island communities. Elements of a just energy transition are being realised in the form of region-wide job creation, gender and social inclusion in the renewable energy workforce, interconnected power systems and sub-regional connectivity, and the deployment of distributed energy systems in ASEAN member states.

Beyond COP26

This is not to say that there are no challenges with the ASEAN approach. ASEAN countries with coal moratoriums and ambitious climate pledges also make up some of the largest subregional emitters — Indonesia, Thailand, Malaysia, Vietnam, and the Philippines. The 6th ASEAN Energy Outlook still predicts subregional growth in coal use based on its 2021 analysis. While CCS technologies are one solution to industrial emissions, no existing commercial CCS facilities currently exist within the subregion, leaving individual member economies to develop their own pilot programmes. Additionally, national fossil-fuel subsidies also limit the uptake of renewables. Increases in electricity access amid these fossil-renewable challenges have resulted in electricity surpluses that offer economic, not climate-based, incentives for regional connectivity and electricity trade. This combination of economic imperatives subsequently leaves the potential for continued, slow phase-out of fossil fuels.

In addition, circularity efforts emphasise economic over environmental gains, and industrial processes continue to threaten air and water quality regardless of small steps taken to manage materials and waste. Energy justice considerations are similarly threatened, as the incorporation of justice principles varies both between and within ASEAN member states, and injustice is further perpetuated via business-as-usual. The same environmental challenges that brought on the organised ASEAN approach to global climate and energy transitions continue to persist today.

Looking toward COP27, ASEAN has a role to play in rallying regional climate commitments. Globally, industrial decarbonisation requires financing industry change; ASEAN’s Sustainable Financing Taxonomy provides a subregional guide that can be replicated across the emerging markets of the Indo-Pacific. ASEAN’s progress in increasing the digitisation of industrial sectors and the monitoring of their decarbonisation progress can similarly provide region-wide frameworks of progress. Pushing further on the phasing out of fossil fuel subsidies and leading national commitments to renewable energy integration will also cement ASEAN’s role as a regional — not just subregional — driver of COP26 progress.

The paradoxical climate-economic challenges facing ASEAN member states — whereby the developmental imperatives of economic and industrial growth, electricity access, and quality of life improvements intersect, and often outweigh, climate imperatives — make the progress that has occurred largely aspirational. Simultaneously, this progress also puts pressure on member states to continue phasing out fossil fuels and scaling up renewables amid quality-of-life improvements within local and national communities. The same paradigm shift that must happen in ASEAN is necessary throughout the Indo-Pacific and the rest of the world.

The challenges facing the Southeast Asian region are steeper as industrialised and emerging markets are working together to make major policy changes in favour of a net-zero future while also balancing economic development imperatives. ASEAN’s role as a catalyst within the Indo-Pacific comes not only from its own example but also from the opportunity to drive cross-regional collaboration and dialogue.

DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.

Author biography

Dr Clare Richardson-Barlow is an interdisciplinary social scientist whose research and teaching explores the political economy of energy transitions in Northeast and Southeast Asia. She is a postdoctoral research fellow at the University of Leeds where she examines industrial decarbonisation and teaches on Asia-Pacific political economy topics. She also serves as a non-resident fellow at the National Bureau of Asian-Research where she provides expertise related to climate change, environmental security, and energy transitions. Image credit: Flickr/Asian Development Bank.