Governments around the world are injecting money into their respective economies amid the pandemic. In Southeast Asia though, analysis shows little of those funds are being earmarked for green projects.
BANGKOK: Earlier this month, a group of diplomats, politicians and journalists gathered at the Dutch Embassy in Bangkok to discuss an issue of global importance – how to manage a green recovery from COVID-19.
This year was meant to be a critical year, they argued, for tackling climate change, where big decisions would be made and transformative policies imagined to avoid future calamity.
Instead, they noted that major climate conferences had been postponed and a crisis of potentially staggering magnitude had drifted back to being tomorrow’s problem.
The event, hosted by the embassy, looked to discuss the ways Thailand could stay on a green path, despite the impacts of the pandemic. It is an issue countries around the world are grappling with.
The pandemic has brought unforeseeable economic and social stress across the world. Despite that, some experts believe it has also brought a timely opportunity – a big reset button that could recalibrate government action on the environment and climate.
However, pre-pandemic budget constraints and business-as-usual policymaking have been obstacles to making the changes needed to mitigate the temperature increases, sea level rises and unstable, more extreme weather that climate change is already bringing.
In a bid to rescue their economies, funds are being diverted to big businesses, major industries, public sectors and to the hip pockets of consumers. Globally, trillions of dollars are being injected into economies, providing an unprecedented window to lock in climate change resiliency.
“This is a critical window of opportunity,” Dr Leonie Pearson, a senior research fellow at the Stockholm Environment Institute (SEI), told CNA.
“Mainly because with governments investing such large budgets into stimulus, they will have a strain of access to capital and resources in the coming decade. Meaning that if we do not use this government spending effectively to deliver sustainability and climate change issues, there will be less available in the near future,” she said.
Experts say there is limited time to take action against climate change in this region. (Photo: Jack Board)
The massive stimulus into Southeast Asian economies – so far about US$350 billion – has overwhelmingly been focused on protecting jobs and keeping businesses afloat. Asia’s economic performance is expected to flatline in 2020, its worst in 60 years, according to the International Monetary Fund.
But analysts argue that necessary caveats for spending should be the inclusion of green measures to make sure the future is different. This is once-in-a-generation action that will have a profound impact on emissions, whether it is taken into account or not.
“There must be conditions attached to stimulus measures, especially to those designed to bailout state-owned enterprises, or national companies, otherwise these measures turn to blank cheques for these companies to carry on business-as-usual,” said Sharon Seah, Coordinator of the ASEAN Studies Centre and the Climate Change in Southeast Asia Programme at ISEAS – Yusof Ishak Institute.
In Southeast Asia, there are signs that this opportunity is not being seized, according to recent financial and economic analysis by global financial institution ING.
“The evidence so far shows regional governments have failed to take the chance to take mitigation action against this unfolding crisis,” said Rob Carnell, head of research and chief economist at ING Asia-Pacific.
“This pandemic has really provided governments with an opportunity to do the unthinkable, rip up the old play books and make some bold decisions. Sadly, few have done so,” he said.
The Asia-Pacific region contributes about half of global emissions. (Photo: Jack Board)
SCANT SPENDING ON CONCRETE GREEN INITIATIVES
Thailand’s environment minister Varawut Silpa-Archa said the country is taking heed and making the right steps to ensure a cleaner, greener future.
Single use plastics are on the way out, he assured the audience during a speech at the Dutch Embassy. National parks will be closed for periods of the year to allow nature to recuperate and there are plans to try and install electric-vehicle charging stations in Bangkok, he also said.
“It is like Mother Nature is knocking on our door … and saying it’s time for us to do something. Otherwise, human beings may not survive into the next century,” said the minister.
However, within Thailand’s US$60 billion economy-wide stimulus announced in June, ING’s analysis found no concrete green initiatives.
There is little public discussion about Thailand’s coal addiction and with renewables making up just 12 per cent of national power generation, there is little momentum towards a cleaner energy future.
The country’s banks and powerful electricity utility EGAT have heavily-polluting investments in neighbouring countries that, domestically, would face stricter environmental protection assessments. The Hongsa Power Station in Laos, backed by EGAT and generating coal-generated energy for use in Thailand, has prompted a backlash due to its health and environmental impacts.
Despite all the warnings, another similar plant in Laos – backed by a Singaporean firm – is currently being planned.
Southeast Asia’s rivers are highly vulnerable to climate change. (Photo: Jack Board)
In Malaysia, the extent of the government’s green response measures is a plan to accelerate projects to install LED street lights, transmission lines and rooftop solar installations. ING notes the ongoing “painfully slow” transition to fuller renewable energy production and highlights the “brown” measures in the recovery package, notably sales tax cuts on vehicles that will further embed a polluting car culture.
Meanwhile, Vietnam has eight separate China-backed coal plants under construction, and Indonesia continues to prop up its domestic coal industry, while battling a tough task of quenching an insatiable thirst for power and maintaining supply at a cheap price.
Elsewhere in Asia, the South Korean government is keenly promoting change through its green new deal, while at the same time, it continues to prop up heavily polluting and increasingly unviable coal power operations in developing nations like Indonesia and Bangladesh. Japan, likewise, continues to invest heavily in coal.
Both countries have steered recovery funds towards their struggling public utilities and construction firms that rely on coal. This is a short-term tactic that may help industry reignite in difficult times, but carries the risk of locking in not only economically uncompetitive assets for decades to come, but dirty ones too in a time when the world can least afford it.
“These are not one-off decisions that you can reverse the following year, but their impact colours the carbon intensity of the economy for decades to come, and could require more stringent mitigation down the line. We only get one shot at this,” said Carnell of ING.
Indonesia provides huge fossil fuel subsidies, which will have long term impacts on its climate change efforts. (Photo: Jack Board)
URGENCY FOR MORE TRANSFORMATIVE ACTION
There may be some small positives. Singapore’s Unity Budget in February – the government’s first stimulus response to COVD-19 – included the Green Town Programme for HDBs and incentives for the early adoption of green vehicles. And outside of the COVID-19 response, there is industry chatter about plans for a vast solar power pipeline from Australia, to clean up Singapore’s power footprint.
On Thursday (Aug 27), Singapore Minister for Sustainability and the Environment Grace Fu said there will be a push for “green recovery” from COVID-19 as well as support for a “competitive transition” to a low-carbon and climate-resilient future.
“The Ministry of Sustainability and the Environment (MSE) will drive and coordinate public sector efforts to take the lead in sustainable development, and ensure that sustainability is at the heart of the MSE family of agencies’ core functions,” she said.
This includes promoting “green growth”, riding on opportunities from decarbonisation and growing green industries such as carbon services and climate science, the minister added.
But the ING analysis also says more could be done. These green initiatives make up just 2.1 per cent of Singapore’s total stimulus spending, and their long-term nature “dilutes their urgency in avoiding further climate deterioration”, the research says.
“Unfortunately, we are not seeing the type of transformative actions that are required to transition to low-carbon or net-zero GHG economies,” Seah added.
“But we are starting to see positive measures in some governments’ packages that qualify as facilitating a just transition to a low-carbon economy. Malaysia and Singapore’s plans to upskill the workforce in technology and digital skills and Singapore, Vietnam and Malaysia’s drive towards greater digitalisation of their economies are two examples.
“Incentives that encourage greater adoption of renewable energy usage at the industrial and consumer levels and conversely measures to disincentivise use of fossil fuels are good first steps,” she said.
Temperature rises and unstable weather are two features of worsening climate change. (Photo: Jack Board)
Across the whole Southeast Asia region, incentives to adopt eco-friendly solutions or invest in disruptive technologies, on an industrial or consumer-level, are still uncommon.
So too are carbon pricing mechanisms, a major instrument to put a cost on polluting emissions; currently, only Singapore has a carbon pricing regime, while Thailand launched a pilot voluntary emissions trading scheme in 2015.
In some countries, the money to power a green transition already exists in the form of fossil fuel subsidies. Indonesia, as an example, spends more every year on fossil fuel subsidies than its entire COVID-19 stimulus up to May, based on data from the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP).
There are fears that governments choosing stability and reliability are turning back the clock to the systems they know. It means that polluting industry is being kept alive, while it is estimated some 150 gigawatts of renewable projects will be delayed or cancelled across Asia-Pacific over the next five years, according to energy research group, Wood Mackenzie.
“The old playbook attempts to stimulate economic growth by fuelling consumption. (It) is quick, easy and delivers significant political benefits for incumbent governments as well,” said Seah.
Melinda Martinus, Lead Researcher of the ASEAN Studies Centre, ISEAS – Yusof Ishak Institute added: “Such a view is harmful and unsustainable in the long-term, as it would intensify carbon emissions and exacerbate the health crisis.”
Research by Oxford University outlines that climate-friendly initiatives implemented now could have a dual impact: a superior economic recovery and a shift towards a zero emissions pathway. It is evidence that picking the green option does not mean compromising the economy.
Government policy can drive community behaviours and innovation. (Photo: Jack Board)
“Green doesn’t cost more any more, it provides a stronger boost, and the longer-term benefits are also greater. And that is without even taking into account the environmental improvements,” Carnell said.
SEI’s Dr Pearson said: “It’s hard to steer an economy marginally, incrementally away from old industries, polluting sectors and poor standards. It’s much easier to invest in new industries and ‘green’ solutions”.
“This means that governments are now able to invest in the new structures that can deliver clean air, jobs and growth. It seems a win-win.”
The International Energy Agency points to lessons from the 2008 monetary crisis showing that green stimulus was effective when it involved scaling up existing policies, targeting ready technologies and looking at the broader benefits, especially to marginalised or low-income communities.
“Governments could use this momentum to incentivise green infrastructure projects in cities such as improving pedestrian and bike lanes, revamping public transport, and promoting energy-efficient buildings,” Martinus said.
IS THERE CAUSE FOR OPTIMISM?
The Asia-Pacific region contributes nearly half of the world’s emissions. It is also the front line when it comes to impact. Scientists have warned about the consequences for years. Now the impacts are no longer waiting in the future; they are being felt everywhere, already.
Climate change is not slowing down, nor will it be distributed equally or fairly.
Thailand is in the grip of one of its worst droughts on record. Flooding this year has devastated southern China, while the Mekong River runs dry. Malaysia has ongoing water management issues, in July Hong Kong sweated through its hottest month since records began and Bhutan’s glaciers are melting.
In a paper published by McKinsey Global Institute and based on a range of scientific analysis, the climate hazards Asia faces up to 2050 are potentially alarming, especially under a high-emissions future.
At the present rate, most, if not all, Southeast Asian countries are expected to miss their pledged Paris Agreement targets. As a whole, the region is also years behind on reaching its UN Sustainability Goals on climate action.
Thailand has been suffering from a record period of drought. (Photo: Jack Board)
Climate Action Tracker, an independent consortium that tracks government action on climate, rates the efforts of several Southeast Asian countries as insufficient, based on announced government policies to date.
They are precisely the policies being reviewed and reworked amid the upheaval of COVID-19. And for Martinus of ISEAS-Yusof Ishak Institute, there is still optimism that action could still be taken in the next stages of economic recovery from the pandemic.
“We haven’t yet seen a strong commitment from ASEAN governments. We should not lose hope that ASEAN governments will demonstrate a political will to low-carbon economies, because irrespective of COVID-19, all ASEAN governments are committed to the Paris Agreement and have put resources to advance their climate change agenda,” she said.
Pearson concurred, noting that the “ASEAN way” eventually “will steer Southeast Asia to a more holistic view of stimulus expenditure that delivers jobs, reduces poverty and protects the environment”.
“COVID has levelled the playing field so what better time than now to reform the economy for sustainable growth and put the world on the trajectory to keeping well below 1.5 degrees?,” Seah added.
“This is the moment in history to choose both.”