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How Asia Can Achieve a Just Energy Transition in a Post-COVID World

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How Asia Can Achieve a Just Energy Transition in a Post-COVID World

A just transition to renewable energy is not just good for the environment, it’s great for the economy, too.

How Asia Can Achieve a Just Energy Transition in a Post-COVID World
Credit: Depositphotos

Many countries in Asia have been recently battered by the COVID-19 pandemic and its more contagious Delta variant. We are witnessing how gross inequalities in the region have made it difficult for our fragile health care systems to respond to the pandemic, and our economies to recover.

Asian economies are no stranger to crises and economic shocks; we rebounded from the Asian financial crisis and other setbacks. Yet, COVID-19 caused 32 out of 45 economies in the region to suffer from negative growth in 2020. Moreover, emerging economies like Indonesia, the Philippines, Malaysia, and Thailand are not projected to recover their pre-pandemic growth rates until at least 2022 or beyond.

Unemployment is on the rise as 81 million jobs across the Asia-Pacific region were lost in 2020 alone due to the COVID-19 pandemic. Not everyone is affected equally; some may be able to bounce back while others are left behind. The International Labor Organization (ILO)  observed that COVID-driven job losses affected women and young workers most severely. The Asia-Pacific’s travel and tourism sector — where the majority of the workforce is female —  was the hardest hit in the world with a 53.7 percent drop in its contribution to GDP.

Challenges to our economic systems continue to rise and further worsen inequalities in the region. This is especially concerning for a challenge that is already emerging as a clear and present danger to us all: the climate crisis.

Asia Is a Climate Vulnerable Region

Six out of the 10 countries most vulnerable to extreme weather events are in Asia — and the risk and impacts are only going to get worse, the world’s leading climate scientists of the IPCC warned last month.

As a fast-growing region, energy demand in Asia will triple in the next decade, but despite a drastic drop in the cost of clean energy and the technology being widely available, coal continues to rise. Over 80 percent of the growth coming from Asia is fueled by the rapid increase in coal-fired generation projects.

Countries in Southeast Asia today on average draw 43 percent of their electricity from coal-fired generation. A recent report shows that to achieve the goals of the Paris Agreement of limiting global warming to 1.5 degrees Celsius and avoiding the most severe climate impacts scenarios, countries across the region must drastically reduce their coal-powered consumption to only 5-10 percent by 2030, and completely phase out coal use by 2040.

Responses to the climate crisis must utilize a multidimensional approach that includes scientific, technological, political, financial, and social interventions across different sectors. We have to rethink our economic models in line with a “new normal” in a post-COVID-19 world and ensure that our responses leave no one behind, especially the most vulnerable.

There is no vaccine for the climate crisis, but as we learn from the global vaccine inequity, provision must be made to ensure the roll-out of renewable energy and other climate solutions also reach those who need it the most.

A Just Transition

The clean energy transition is imperative not just for achieving our climate goals, but also because it will future-proof our growing economies and provide vast opportunities that can lift millions in Asia out of poverty. Energy transition will allow emerging economies to reduce their reliance on expensive and volatile polluting fossil fuels, but even more than that, a clean and equitable transition allows us to step away from the traditional model of economic growth — and pursue a path of green job-generating growth and sustainable development.

A shift to renewable energy in the Asia-Pacific could generate as many as 14.2 million new green jobs in the next decade, but we need this transition to be just, equitable, and inclusive. How can we ensure that those affected by the phase-out of fossil fuels can also benefit from this green growth?

The concept of a just transition originated in Europe, when coal workers called for compensation and inclusion as their economies began to reduce their reliance on fossil fuels and began shifting to renewables. It has since evolved to become a more comprehensive approach to centering social justice not just in the form of employment for displaced fossil fuel workers but for those impacted by transitions across a range of high-emitting industries. Focus has expanded to ensuring the new energy economy does not repeat many of the negative impacts of the carbon-based economy, considering its implications on low-emitting sectors like health, education, and agriculture, with a strong emphasis on social protection, stakeholder participation, gender justice, and equity.

In the first-ever Just Transition in Asia Forum (JTFA) on September 9, leaders from governments, labor unions, civil society, academia, and think tanks came together to lay the foundations for a just transition pathway in the region. Speakers and participants discussed the opportunities a just transition presented in spite of considerable challenges.

Enabling Policy Environment

To accelerate this transition toward a climate-resilient future, particularly in the energy sector, governments need to create an enabling policy environment that can harness the untapped opportunities and fairly distribute the benefits. A level playing field for renewable energy solutions will spur healthy competition among players in the power generation and distribution sectors and make clean electricity cheaper and more accessible to many people, especially in remote islands and rural areas.

ASEAN has set a target of 23 percent renewables in its energy mix by 2030, but member countries need to implement more ambitious roadmaps to achieve carbon neutrality by 2050 with co-benefits for jobs, health, as well as air and water quality. An ASEAN Green New Deal is also being pushed to create millions of jobs while conserving the forests in the 10-country bloc.

An example of member country action is happening in Vietnam. With support from proactive private sector companies and an active advisory group that includes non-governmental organizations (NGOs) and investors, Vietnam has approved a pilot program for direct power purchase agreements (DPPAs). The DPPA pilot, expected to be finalized in late 2021, will allow large industrial energy users to negotiate directly with renewable energy project developers, and to buy off-site wind and solar energy carried through the grid for the first time in Vietnam. 

In Indonesia, a multi-stakeholder initiative of over 100 organizations — 70 percent of which are from the private sector — are advancing a low-emissions pathway by shifting finances away from fossil fuels to invest in low carbon development to help the country meet its emissions reduction targets.

The private sector’s commitment to producing sustainable products and services is growing globally. It’s no longer enough for governments to build infrastructure and introduce trade and tax policies; governments must also decarbonize their economies and promote green cities, e-mobility, and generation of green jobs to attract both green foreign direct investments searching for markets and top talent.

A just transition is not just good for the environment, it’s great for the economy, too. The clean energy transition will result in a range of economic benefits and co-benefits for local populations while reducing the health and environmental costs associated with burning fossil fuels. The technology is already here: It’s cost-effective and based on resources that are abundant in Asia. We need the political will and commitment of our leaders to send a clear signal by enacting policies that accelerate clean energy to make our vision for a just transition and sustainable, equitable economic recovery a reality. The green investments will surely follow. 

Based on the call to speed up our ability to learn more on just transition, JTFA will be held on an annual basis from next year.

Guest Author

Nithi Nesadurai

Nithi Nesadurai is director and regional coordinator of Climate Action Network Southeast Asia (CANSEA), the regional node of Climate Action Network which represents more than 1,500 civil society organizations in over 130 countries, and President of Environmental Protection Society Malaysia (EPSM).

Guest Author

Hang Dao

Dr. Hang Dao is the Vietnam country representative of the World Resources Institute (WRI) Energy Program. She also co-leads the Clean Energy Investment Accelerator (CEIA) in Vietnam – an innovative public-private partnership initiative addressing barriers to scale up clean energy solutions in emerging markets across Southeast Asia and Latin America.