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ASEAN Needs Pragmatic Approach to Reach Net Zero

ASEAN Needs Pragmatic Approach to Reach Net Zero

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Manage consumption alongside production for long term emissions reduction.

The path to net zero should be an integrated initiative involving governments, industry and consumers, with policymakers taking the lead to create an ecosystem where all economic players can effectively participate.

Speaking at Maybank Kim Eng’s “Decarbonising ASEAN” webinar yesterday, Tan Sri Wan Zulkiflee Wan Ariffin, Chairman, Malaysia Airlines Berhad, Gas Malaysia Berhad and DRBHicom Berhad noted that while there were a lot of commitments by countries as part of the Paris Agreement, there are not many real strategies and implementation plans. “The rhetoric and realities have to be negotiated.”

He believes that meeting emissions targets requires a multi-agency effort not confined to the Ministry of Environment. “For ASEAN countries, the transition to low carbon would impact government revenue, which in turn has economic and social impacts. So the transition has to be managed well. It has to be a just transition,” he said.

This was echoed by Datuk Farid Abdul Alias, Group President & Chief Executive Officer, Maybank Group, who said that “it is not about winners or losers, we are paying for the unintended consequences of the Industrial Revolution. We need to bring everybody in the same direction to make progress. It should be approached pragmatically.”

He added: “It is no surprise that financial services is looked upon to effect change as we are the allocator of capital. Maybank’s mission of Humanising Financial Services goes hand in hand with ESG. It means being mindful of our impact on the community and the environment that they live in.

“Our approach is to look at our own emissions, as well as actively engage with clients and counterparties for Scope 3 emissions. We have also engaged with educators to devise programmes to upskill our people. It is important for us to understand the terminologies and concepts before we start planning and talking to clients,” he continued.

Southeast Asia is expected to invest USD9.8 billion in smart grid infrastructure between 2018 and 2027. Singapore and Malaysia are clear leaders in the region, while Thailand has demonstrated a real commitment through various pilot projects with renewables, according to Maybank Kim Eng Research.

Tan Sri Wan Zulkiflee said: “ASEAN contributes 6% of total global emissions. I see a lot of potential for gas to enable a low carbon transition in ASEAN — it’s the cleanest fossil fuel and we are blessed with proximity of gas reserves in Malaysia, Brunei, Indonesia and Australia.”

Maybank Kim Eng Research says that ASEAN countries’ greenhouse gases (GHG) emissions per capita are relatively low compared to developed economies, but the region’s carbon dioxide emissions growth has been the fastest in the world between 1990 and 2010, due to rapid economic growth and growing demand for energy.

Manish Dabkara, Managing Director & Chief Executive Officer, EKI Energy Services Ltd. opines that, while not a long term solution, carbon offsets can help ASEAN countries to transition, by making finance flows consistent with a pathway towards low emissions and climate-resilient development. “Revenue generated from carbon offsets motivates businesses to increase the use of environmentally friendly equipment and operation,” he said.

Circularity is another way to decarbonise, by reducing waste and limiting consumption. Excesses in consumption of food and fast-fashion, for example, drive up energy use and emissions.

Yash Lohia, Chief Sustainability Officer, Indorama Ventures said: “The linear economy is about make-use-dispose. The circular economy is about make-use-collect-recycle. To scale circularity, we need regulations supporting recycled content, better collection, and infrastructure for recycling and producing recyclables.”

Datuk Farid said: “With UN SDG12 which aims to ensure sustainable consumption and production patterns, there is an opportunity now to review how we consume. We need to know the carbon footprint of what we’re buying, like how we read food labels to know the calories.”

Tan Sri Wan Zulkiflee said: “Climate change awareness is high among youths today; climate science, however, is understood by few. We also need energy literacy. For example, to make batteries for electric vehicles, by 2030 cobalt and nickel extraction will have to be seven times what it is today. As with any energy, there will be environmental implications.”

The webinar was the eighth in the Invest ASEAN 2021 series, Maybank Kim Eng’s flagship annual investor conference that will run till August The next conversation on The Rise of ASEAN EV will take place on 29 July 2021.

Access key takeaways of Invest ASEAN 2021 post-session via the hashtag #InvestASEAN on LinkedIn.

Anand Gupta Editor - EQ Int'l Media Network