Asia faces number of social and environmental challenges

Jakarta is the most threatened city in the world by environmental risks – a combination of air pollution, seismic threats, and floods. Parts of the Indonesian capital have already sunk below sea level due to heavy groundwater usage.

In Vietnam, extreme rainfall and rising sea levels resulting in frequent tidal floods take a toll equivalent of 2% of their GDP[1]!

The extreme heatwave in India in March and April this year destroyed 30% of crops in Punjab and the need to air-condition resulted in power shortages. Power allocated to industry had to be reduced and hundreds of trains cancelled to prevent a blackout[2].

Finally, China was hit by the worst drought in six decades, with severe impacts to food and factory production, affecting millions of people.

Asian governments feel the need for a green transition very clearly. However, they often still have some way to go. Asian electricity is the world’s most carbon intense[3]. One kWh of electricity in India comes at roughly 10 times more CO2 emissions (625g) than in France (58g). Keeping the pace of economic growth while achieving a green transition is one of the difficult dilemmas.

[1] https://asiatimes.com/2021/10/at-cop26-vietnam-must-stress-peril-of-rising-sea-levels/

[2] https://www.reuters.com/world/india/power-hungry-india-halts-passenger-trains-free-up-track-move-coal-2022-04-29/

[3] https://ourworldindata.org/grapher/carbon-intensity-electricity?tab=table

Coordinating green policies in an incredibly diverse landscape is quite a challenge. The ASEAN Taxonomy is one of the recent attempts to find accord. The first green bonds are already being issued under the Common Ground Taxonomy developed by China together with the EU. The initial results can be seen but huge challenges are still ahead.

Another hazard is the growing divide between the Asian rich and poor. In Thailand, for instance the bottom 50% of population share just 1.5% of the country´s wealth, whereas the top 10% possess 74%[1].

India, Bangladesh, and Pakistan rank “extreme” in the civil unrest risk index[2]. Kazakhstan experienced an unprecedented wave of riots this January, after a sharp increase of gas prices. In July, Sri Lankan fuel and food shortages resulted in massive protests leading to resignation of the prime minister. Most recently, Indonesians have taken to the streets due to mounting fuel prices.

[1]https://wid.world/world/#shweal_p90p100_z/US;FR;DE;CN;ZA;GB;WO/2018/eu/k/p/yearly/s/false/38.508/125/curve/false/country

[2]https://www.maplecroft.com/risk-indices/civil-unrest-index/#download

Green technologies and sustainable finance bring hope for healing many of the environmental and social wounds. A “just transition” is a phrase you will hear often in ASEAN sessions. Inclusive green finance[1] can cushion the vulnerabilities of climate disasters. And green disruption may open the space for competition with well-established economies.

[1] https://www.afi-global.org/thematic-areas/inclusive-green-finance/