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Positive tipping points to place ASEAN as a global center of green growth
Accelerating low-carbon solutions would be central in strengthening ASEAN’s centrality and its role as a global center of green growth.
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Officers exchange electric motorcycle batteries at Public Electric Vehicle Battery Exchange Station (SPBKLU) in Electrification Director General building, Jakarta, on Monday, August 31, 2020. The testing of battery exchange devices was conducted to encourage people to choose electric vehicles than oil-powered motorcycle and it is hoped that many private companies will support the establishment of SPBKLU so it can be installed in many places across the town. (JP/Dhoni Setiawan/Adi/Dyn)
T
he year 2023 is already on track to be the hottest year on record. Across the world, we have seen an increase in climate-related disasters from wildfires in Canada to floodings in China.
For ASEAN, the impacts of climate change are especially relevant as the region is one of the most climate-vulnerable in the world. Myanmar, the Philippines, Thailand and Vietnam are already among the 10 countries in the world that have suffered the most in human and material terms from climate-related weather events over the past 20 years, according to Germanwatch’s Global Climate Risk Index 2019.
In the face of these climate damages, we are now seeing the transition to a low-carbon economy picking up speed. Positive socio-economic tipping points for climate solutions are increasing at a rapid pace - offering an opportunity to rapidly increase the deployment of zero-emission solutions, drastically cut emissions, decouple economies from volatile fossil fuels, and create green industries and jobs in the process.
What is clear from these trends is that for ASEAN to unlock its potential to be the global center of growth, acting on climate will not “just” be an economic cost but rather be an opportunity to unlock new and better forms of growth.
Socioeconomic tipping points arise when a set of conditions are met, allowing new low-carbon technologies or practices to out-compete incumbent, carbon-intensive solutions. After a tipping point is crossed the new solutions start to become adopted at mass market scale, this adoption only drives further improvements, and the incumbent solutions are left behind.
In ASEAN, we have witnessed this exponential adoption occur in everything from infrastructure solutions such as roads and railways to large household purchases such as air conditioning and refrigerators.
A recent report launched at the 2023 World Economic Forum in Davos has identified opportunities in 10 major net-zero solutions to trigger positive socioeconomic tipping points at the global level. As part of the ASEAN Business and Investment Council (ASEAN-BAC) legacy program for sustainable development, the Net Zero Hub and Systemiq is currently engaged in identifying tipping points that are especially relevant to ASEAN.
These tipping points cover opportunities in high-emitting sectors from solar and storage outcompeting natural gas and coal, to electric vehicles being the main technology in road-based urban public transportation, to ships running on green ammonia produced with green hydrogen.
As the world strives toward a net zero economy, ASEAN can play a leading and thriving role in the low-carbon supply chain in the transition to low-carbon solutions. Holding a significant 25 percent of the world's geothermal capacity, our regional prowess doesn't end there. We also encompass around a quarter of the global Nature-based Solutions potential, strategically placing the region to be the global center of green growth.
Moreover, the region is blessed with abundant natural resources including on critical minerals for the energy transition. Indonesia alone accounts for 22 percent of the global nickel reserve while 18 percent of the global rare earths reserves are in Vietnam, according to the US Geological Survey (2023)..Both are critical minerals for electric vehicles (EVs) and battery development, of which the region has one of the largest market potential – accounting for 20 percent of the global two-wheelers fleet (Electric Vehicle Outlook, BNEF, 2020).
Positioned strategically, ASEAN is an attractive destination for global manufacturers, complemented by renewable energy potential and resources, have propellled the region into a key player in the global EV industry.
As the leading private sector forum for ASEAN leaders, we are committed to strengthen ASEAN’s centrality by continuously challenging the status quo through innovation and inclusive collective action.
We hope that through kickstarting dialogues on positive tipping points, we can collectively answer the question where are the opportunities for breakthroughs in net zero solutions for ASEAN – what conditions are that countries, companies and investors should target to unleash accelerated growth and new sources of prosperity for ASEAN to be the next global epicentrum of growth.
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The writer is chair of the ASEAN Business and Advisory Council (ASEAN-BAC) and Indonesian Chambers of Commerce and Industry (Kadin).
