Alexandra Tracy, Green Finance Advisor of Friends of the Earth (HK)
Government around the region are scrambling to develop plans for recovering from the pandemic. Environmental champions have made much of the opportunities for moving away from business as usual and “building back better”. They point to research recently published by Oxford University, which suggests investment in climate friendly policy initiatives could also offer the best economic returns. Based on surveys of more than 200 senior economic officials, the research finds that interventions with the greatest environmental and economic impacts include investing in clean physical infrastructure, natural capital projects and clean R&D.
But is this all talk and no action ?
To some extent, in Asia, it would seem to be so. Even before the virus, ASEAN was not on track to meet its regional target of sourcing 23% of primary energy from renewables by 2025 – it looks as though that share will stay at around 15%. On top of that, the International Energy Agency predicts that oil will continue to dominate road transport demand in South East Asia.
Now, policy makers urgently need to attend to shocking economic downturns and to generate growth as rapidly as possible, especially in those regions which are struggling to tackle rising poverty. In these circumstances, it is understandable that short term decision making may overtake longer term green aspirations. This is hardly the time, for example, for dramatically rolling back the generous fossil fuel subsidies that allow access to energy and transportation for the poorest.
Most of the huge economic stimulus packages being developed by governments in the region make little mention of green priorities. Indeed, a recent study by ING Bank of these plans described most of their proposals as a “lamentable green response to Covid 19”.
Asia’s largest economies are proposing to make green investments, but are also supporting fossil fuel as part of their economic recovery plans. China has approved plans for new coal power plant capacity at the fastest rate since 2015, while India’s stimulus package contains support for both coal and oil industries, as well as allowing more deforestation for industrial development. And for all the talk of Korea’s Green New Deal, it is hard to find significant environmental measures in its proposals.
But there are reasons to feel positive. In the last two years, Vietnam has made enormous progress on increasing its solar and wind generating capacities, with a combination of well thought out policies and fiscal incentives. It now accounts for over 40% of South East Asia’s total solar capacity. Significant challenges remain for switching away from fossil fuels entirely, but the government is responding with sweeping changes to the power sector and moves to encourage direct corporate purchases of clean energy.
And New Zealand stands out in the Asia Pacific region for including in its economic recovery plans considerable spending on nature based solutions. The government has announced a NZ$1.3 billion programme that will invest in restoring wetlands and riverbanks, removing invasive species and improving tourism and recreation services on public lands. This is expected to create 11,000 new jobs.
Meanwhile, what of Hong Kong? In the Chief Executive’s Policy Address this week, there was mention of a number of environmental initiatives, such as more recycling and subsidies for electric vehicle charging infrastructure. These were somewhat outweighed, however, by ambitious planning for intensive development of the airport and expanded urban areas.
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