Asia must quickly reduce fossil fuel subsidies and invest more money in a clean energy transition to avoid catastrophic climate change that puts its own development at risk, according to a new report published on Thursday by the Asian Development Bank.
The region’s economic development is being driven in a carbon-intensive way that is well above the global average, said David Raitzer, an economist at ADB and one of the report’s authors. He urged swift action on an energy transition for higher benefits and lower costs.
“Ambitious action on climate change with well-designed policies can have great rewards,” Raitzer said.
Several countries are developing new coal-fired power plants in Asia, representing 94% of global power pipeline to coal plants under construction, planned or announced, according to the report.
While China, India and Indonesia accounted for a third of all global warming gas emissions in 2019, six of the 10 countries most affected by extreme weather in the first two decades of this century were in Asia, according to previous studies. It is estimated that up to $1.5 trillion in property loss and damage was recorded in the region during that period, including unprecedented flooding in Pakistan that affected 33 million people last year.
The report estimated that 346,000 lives would be saved annually by 2030 if developing countries in Asia meet their targets to switch to clean energy, leading to a reduction in air pollution. And he projected social and economic benefits of the change equivalent to five times the cost of climate change impacts.
But investment in clean energy is lacking. Developing countries in Asia spent $116 billion in 2021 on fossil fuel subsidies, far more than renewable energy subsidies. Raitzer said that international coordination is essential to change that.
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“To reduce emissions efficiently, the perverse fossil fuel subsidies that exist now must be removed and there should be no new coal,” Raitzer said.
Other energy experts agree.
“A lot of the development in Asia is related to fossil fuel systems, which becomes a problem,” said Swati D’Souza, an energy analyst at the New Delhi-based Institute of Energy, Economics and Financial Analysis who has been researching Asia’s energy transition. for the better part of a decade.
Bank: #Asia must move out of #coal faster to stop the worst climate problems. #ClimateCrisis #ClimateChange
New investments in fossil fuels should be avoided, D’Souza said.
“They will become stranded assets and the costs of dealing with them will fall on governments and ultimately local communities and people,” he said.
The report says $397 billion has been invested in the clean energy transition in developing Asia, but an average annual investment of $707 billion is needed in those countries to keep global temperatures from rise of more than 2 degrees Celsius (3.6 degrees Fahrenheit) required in the Paris agreement to avoid the worst effects of climate change.
The report recommends reducing fossil fuel subsidies, putting a price on greenhouse gas emissions and providing more political incentives for clean energy. He said a carbon price of $70 per tonne of carbon dioxide equivalent by 2030 and $153 by 2050 would help meet net-zero targets.
Carbon pricing can take many forms, but usually it is a way to make companies or governments pay for the potential costs of climate change (heat waves, unseasonal rainfall, health effects) made worse by their emissions.
“Kicking the can down the road by waiting until after 2030 to sharply cut emissions is not going to be the best thing for the region or the world,” Raitzer said.
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