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By many accounts, Asia has done very well in the past three decades: its major economies have achieved unprecedented economic growth that has underwritten progress in poverty alleviation, job creation, and trade. And the story may be just beginning. Asia accounts for close to 50 per cent of recent global growth, and by 2050 may comprise well over 50 per cent of global GDP. These trends are both driven by, and fuelling, the rise of Asia’s middle class as a key force in global consumption. By mid-century, Asia will house over 60 per cent of the global middle class.
Asia’s increasing wealth and prosperity have not come without costs. Socially, significant poverty still exists, with over 800 million people living below the poverty line of US$1.25 per day, over 360 million still lack access to safe water, and almost a billion lack access to electricity. As the world writes the next chapter of the Millennium Development Goals (which expire in 2015), Asia will, for sure, be both a driver of change as well as a centre of need.
Environmentally, Asia’s faster growth is fuelling an unsustainable consumption of natural resources, while increasing its carbon emissions. Parts of Asia are already suffering from water stress. The region is already responsible for 45 per cent of the world’s emissions, and without decisive action, these emissions will triple by 2050, triggering dangerous climate change risks.
Clearly, Asia needs to balance prosperity and a growing middle class, with environmental and climate responsibility. The “responsibility” refers both to Asia’s responsibility as a member of the global community, but also the responsibility of Asia’s governments and business leaders towards their fellow citizens, future generations and the planet.
Simultaneously tackling poverty and climate change, which will likely impose greater costs on the poor, will be a huge challenge. But there are many actions that we can take today, to push the region towards a safer climate pathway. Low-carbon energy is an obvious first step, but this must be complemented by the right infrastructure, energy efficient buildings, better urban design and planning and widespread consumer education.
All of this will not come without a cost – estimated at 2 to 3 per cent of global GDP per year – from now until 2030. The majority of that amount will likely come from the private sector rather than the public purse. Few doubt whether the financing exists: the world already devotes many times that amount to derivative financing and trading. The challenge is how – using policy and regulation, public incentives, and enlightened leadership – to channel private capital to more productive uses. Public-private partnerships should lead the way.
With that in mind, the Climate Policy Initiative, CLP Holdings, and the Fung Global Institute convened a roundtable to highlight the issues and possible solutions to Asia’s climate finance challenge. Why us? The Climate Policy Initiative brings significant global experience and expertise; CLP, currently one of Asia’s largest investors in clean and renewable energy, contributes an understanding of project and operational finance, with a focus on Asia; and the Fung Global Institute is committed to Asian sustainability and adds an understanding of the Asian financial industry which will be needed as a key channel.
We are pleased to share some of the outcomes of the discussions, in the hope that it will inspire new thinking and pathways to change.
Below are links to videos featuring in-depth discussions.
China’s Green Versus Brown Energy Debate
Thomas Heller, Executive Director of Climate Policy Initiative, discusses the rise of fossil fuel power in China and the right path to a cleaner, economic model.
Taking Risks with Climate Finance
Thomas Heller also discusses why risk-taking is an essential part of financing green technology.
Climate Finance and China
Qi Ye, Director of Climate Policy Initiative Beijing, talks about China’s encouraging investments into renewable energy development on the mainland.
Anita George, Regional Director at the International Finance Corporation, talks about the risks and challenges of green financing and renewable energy.
Solving the Puzzle of Climate Finance
Greater China Director of the Climate Group, Wu Changhua, on why the survival of green financing is dependent on the growth of the private sector. The challenge now is how to nurture the relationship between the different stakeholders involved in this industry.
Navigating the Future of Energy Strategy
CLP Chief Executive Officer, Andrew Brandler, discusses business and decarbonisation, nuclear energy and driving political will.