Commentary: Implications for ASEAN’s Transition to Clean Energy
by Wong Hsu-sheng
The war in Ukraine and rising cost of inflation have dominated the main news cycles this year, finally taking over from three years of COVID-19 and multiple lockdowns that seemed at some points to have no end in sight. Concerns about virus mutations and vaccine efficacy have given way to energy and food security crises, as the world struggles to adapt to a changing geopolitical environment as well as an actual changing planetary environment. Many global leaders continue to embrace short-termism in their policies, pointing to inadequate heating during winter and lack of food supply as reasons for scaling back on the Paris Agreement commitments.
These immediate crises ultimately stem from a combination of unsustainable economic practices resulting in a destructive feedback loop of global warming, climate change and biodiversity loss. How will these issues impact the transition to clean, renewable energy in ASEAN?
ASEAN’s Climate and Clean Energy Initiatives
At a recent expert roundtable organised by the Singapore Institute of International Affairs, it was recognised that the pall cast on global energy requirements as a result of the war in Ukraine is already having an impact on the energy transition in ASEAN and Asia. Countries from China to Indonesia were seen to be ramping up their fossil fuel energy output, an implicit acknowledgement that, at least for the present, fossil fuels would not be replaced by renewable energy anytime soon.
The reality is that renewable energy sources take time to be built and require extensive infrastructure investment. All of this requires time, money and some uncertainty. In a world where fossil fuel dependencies are so deeply entrenched, far be it the easier solution to opt to reopen coal-fired power plants or pump even more oil out of the ground, as these energy sources are more certain and readily available.
However, it is also increasingly apparent to all that continued reliance on fossil fuels in the medium to long term would potentially result in surrendering a country’s energy security to foreign interests. Fossil fuels are a finite resource, and the trajectory of civilization’s growth can only mean that the last remaining fossil fuel reserves will be depleted at an ever-faster rate and any country that does not pivot towards a renewable energy strategy will find itself increasingly held hostage to the few fossil fuel producing sources that are left in the world. It therefore becomes imperative for ASEAN to renew its commitment to transition to clean and renewable energy alternatives, as these are the key to preserving a country’s domestic energy security.
Standing in the way of this pivot to renewable energy is a continued lack of funding that is faced by the developing world. Developed countries must honour their commitments made at COP15 to provide US$100 billion every year to developing countries, which are most vulnerable to climate change and lack the funds to develop sustainable energy strategies. This lack of funding is further compounded by the rising costs of inflation and significant interest rate hikes this year, making it even more difficult for sustainable infrastructure projects to raise funds in the face of crippling interest payments and stifling sustainable development. The private sector must also play a greater role in fundraising efforts, as many governments’ resources are already stretched as a result of COVID-19 and the Ukraine war.
Regional Cooperation on Renewable Energy: Challenges and Opportunities
It is the uncomfortable truth that fossil fuels can never be entirely replaced by clean and renewable energy sources. Unfortunately, there is no universally accepted panacea to completely cure society’s fossil fuel dependencies, and indeed a combination of different renewable energy initiatives will be required to even partially replace fossil fuels. This is where ASEAN regional cooperation becomes important, as some countries will be able to more easily access a certain type of renewable energy or technology compared to others, thanks to their natural or human advantages. As renewable energy relies to a large extent on the whims of nature, there will certainly be times when energy drawn from natural sources will wax and wane. ASEAN can play an important collaborative role where countries that are producing excess energy can contribute their extra power to countries that are experiencing shortfalls due to naturally occurring phenomena, in a similar fashion to how smart power grids are currently being deployed in local energy transmission networks.
In any event, the Ukraine experience tells us that diversity of energy sources will now be a paramount policy consideration for many governments, which means that notwithstanding the best efforts of environmentalists, fossil fuels will continue to have a role in global energy production as there are some important industries that cannot easily decouple from such dependencies. It is here that carbon capture, utilisation, and storage (CCUS) technologies serve to at least minimise and mitigate the carbon footprint generated by such energy sources. Governments should however continue to work together to strive to reduce overall greenhouse gas emissions and net zero ambitions, with carbon offsetting and CCUS solutions to be used only as a last resort.
Outlook
The future for renewable energy is looking bright, and the growth trajectory in this space is looking better than it ever has before. However, it will take some time to develop the infrastructure in the current economic climate, and efforts to fund this infrastructure may be further stymied without additional efforts from both the government and private sector. But with climate change and extreme weather events starting to encroach on irreversible “climate tipping points”, time is not something that we have the luxury of having right now.
Wong Hsu-sheng is Chief Operating Officer at GoImpact Capital Partners and a Senior Fellow (Sustainability) at the Singapore Institute of International Affairs (SIIA). The SIIA held a roundtable on the challenges facing the region’s energy transition as part of its ASEAN Climate Community series on 29 September 2022.
