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.
Michele Leung, Green Finance Advisor of Friends of the Earth (HK)
Impact investing is defined with the
objective to generate measurable social or environmental benefits, alongside
with financial returns. The investors typically with a mindset that want their
investment to make a difference in the world. According to an industry study*,
95% of millennial investors or 85% of individual investors are interested in
There is increasing interest to apply the
principles of impact investing to private and public equities. Particularly for
public equities, the impact can be quantified by defining actionable impact themes
(basic needs, natural capital) and sets of solutions (i.e., major diseases
treatment, sustainable water), then calculating company revenue exposure to
products and services with positive social or environmental impact.
The 17 UN Sustainable Development Goals
(UNSDGs) were agreed by 193 countries in 2015 with a target date for delivery
of 2030. The SDGs aim to foster collaboration within and between international
private and public stakeholders to address critical global challenges such as
poverty, inequality, and climate change.
Companies’ contribution to SDGs can be
analyzed based on their operations, the product, and services they provide,
rather than solely relying on companies self-declared alignment with the goals.
With this type of analysis, investors can identify companies that are better
aligned with the SDGs, measure, and report on the degree of SDG alignment while
also to comply with client mandates around SDG alignment. Most importantly,
they can potentially meet the rising demand to channel capital towards
addressing the objectives by the SDGs.
*Source: Morgan Stanley Institute for Sustainable Investing. Sustainable Signals: Individual Investor Interest Driven by Impact, Conviction and Choice (September 2019)
Green Finance Advisor of Friends of the Earth (HK)
U.S. climate change policy is set for a different approach, following the results of the Presidential election. This article aims to take a look at the President-elect Joe Biden’s plan on the climate change policy and some of his climate action goals.
Electric Cars/ Automobile
mentioned he aims to get the US back on track to reach net-zero carbon
emissions by 2050, in line with the Paris-Agreement. He also plans to implement
a federal procurement program for clean vehicles and set a goal for all new
American-built buses to be zero-emissions by 2030. To achieve this, he plans to
endow US$2 trillion into research and development goals, including creating millions
of construction , skilled trade and engineering jobs to build the new
infrastructure while providing pathways for workers of all ages and people from
He aims to
work to increase demands for American-sourced clean vehicles, especially in
fleets, while encouraging consumers and manufacturers to move to electric
vehicles through programs, one of which is the Clean Cars for America proposal
to replace old automobiles.
With a view to improve the
electric vehicle growth, he also aims to accelerate battery research and plans
to procure US$ 400 billion for batteries, electric vehicles and upgrading of
industrial manufacturing processes over the next four years. This
includes creating a new Advanced Research Projects Agency on Climate that
examines on a variety of low-carbon options and technologies. He eagers
to beef up the supply chains for clean industries, invest in national labs and
Biden would return the US
to a leadership role on climate change, re-entering the US in future climate
negotiations to advance the goals of the 2015 Climate Agreement, the global
pact made five years ago among nearly 200 nations to avoid the worst impacts of
climate change. Biden said he will bring the U.S. back into
the Agreement as early as February 2021.
The Agreement is a
non-binding agreement amongst nations to reduce emissions and keep the increase
in global temperatures well below 2 degree Celsius, or a 3.6 degrees
Fahrenheit, compared with preindustrial levels.
Once the U.S returns, the
agreement requires countries to set voluntary targets to reduce domestic
emissions and create stricter goals in coming years. The Paris Agreement
has also implemented a binding requirement that countries are required to accurately
report their progress.
It is apparent that Biden’s environmental plan and goals will be a huge undertaking, but it will set the U.S. on the right path to being environmental.