The Association of South East Asians (ASEAN) is committed to formulate measures that are aimed at sustainable development and mitigating the negative effects of climate change. In this respect, a significant recent initiative is the adoption of the ASEAN Strategy for Carbon Neutrality by the ASEAN Economic Council in September 2023.
The Strategy has been adopted considering both the environmental and economic benefits carbon neutrality brings. Carbon neutrality means having a balance between emitting carbon and absorbing carbon from the atmosphere in carbon sinks. ASEAN has estimated that the pursuit towards carbon neutrality is estimated to add up to USD 5.3 trillion to the region’s economy, attract up to USD 6.7 trillion green investment and generate up to 66 million jobs by 2050. According to ASEAN, the economic benefits of carbon neutrality would be accrued across all its Member States. Cambodia, Lao PDR, Myanmar and Vietnam are projected to enjoy the greatest uplift, ranging from 9% to 12% of GDP by the end of the century. Middle-income countries such as Indonesia, Malaysia, Philippines and Thailand would see an increase of 4% to 7%. High-income countries of Singapore and Brunei would enjoy a more modest uplift of 1% to 2%.
Eight targeted strategies, where regional cooperation is most beneficial to complement the ASEAN Member States’ national initiatives, have been identified to deliver ASEAN’s carbon-neutral journey. They are to: (1) accelerate green value chain integration, (2) promote regional circular economy supply chains, (3) connect green infrastructure and markets (4) enhance interoperable carbon markets, (5) foster credible and common standards, (6) attract and deploy green capital, (7) promote green talent development and mobility and (8) offer green best practice sharing. The eight strategies have been detailed out into sixteen initiatives.
The sixteen initiatives detailed out in the ASEAN Strategy for Carbon Neutrality are: 1) Identify & boost opportunities for greenification of the manufacturing value chains regionally, 2) Enable ASEAN feedstocks pathways for biofuels to capture global markets, 3) Coordinate development of regional policies and regulations to support carbon capture utilisation and storage (CCUS) infrastructure, 4) upgrade ASEAN Goods In Trade Agreement (ATIGA) to comprehensively include circular products, 5) Enable regional power trading, physical interconnection, and policy cooperation, 6) Enable interoperability of regional transport & logistics infrastructure, 7) Harmonize measurement, reporting & verification standards and policies to access global liquidity and regional carbon sink potential, 8) Promote regional energy efficiency and conservation, 9) Establish globally credible regional GHG inventory to flow from national reports, 10) Standardize globally credible frameworks for corporate climate reporting, 11) Encourage adherence to ASEAN Taxonomy on Sustainable Finance, 12) Promote de-risking through adoption of innovative sustainable finance instruments, 13) Incentivize green fund managers to locate in ASEAN, and local fund to develop, 14) Incentivize green fund managers to locate in ASEAN, and local fund to develop, 15) Establish green skills taxonomy & facilitate movement of natural persons and 16) Facilitate best practice sharing to support effective just transition at national level.
This transformative Strategy lays out ASEAN’s bold ambition to go beyond business-as-usual for economic integration and strategically position the region favourably for a carbon-neutral future. According to the ASEAN Economic Integration Brief of December 2023, ASEAN Strategy for Carbon Neutrality demonstrates ASEAN’s ambition of a carbon neutral future post-2025, and the determination to provide an enabling environment that will facilitate the transition process. The development of the Strategy employs an impact-led approach to design collective actions at the regional level that could mitigate the challenges to deploy decarbonisation solutions to the source of carbon emissions. Implementing the Strategy will require strong collaboration across key stakeholders, including the private sector.
