Investment Institute
Macroeconomic Research

Asia’s decarbonisation potential

  • 14 September 2022 (5 min read)

Key points

  • Rapidly growing energy demand has seen Asia (excluding China) rank consistently among the top contributors to global CO2 emissions
  • Intensive use of coal, which makes up 60% of the region’s energy mix, by heavy industrial users and a large transportation fleet has been the main culprit of emissions
  • The decarbonisation of Asia’s economies will bring many benefits. Apart from reducing environmental costs and risks, it could also improve energy security and trade balances of Asia’s energy net importers
  • Governments across the region have announced ambitious plans to reduce emissions, with some making explicit pledges to substantially increase the use of renewable energy. But this will take time and require vast investment
  • However, there are multiple challenges along the carbon neutral pathway. Due to fossil fuel dependence, many Asian countries still have policies that continue to encourage high levels of CO2 emissions. Only by phasing out the related subsidies and policies can market distortions be removed
Asia’s decarbonisation potential
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