Future Asia

The points of view and challenges relating to climate and energy policies are many and varied across Asia. The exceptional circumstances of 2021 mean that a series of changes can be initiated to support the transition agenda, starting with COP26.

by Margherita Bianchi e Lorenzo Colantoni - IAI
29 July 2021
10 min read
by Margherita Bianchi e Lorenzo Colantoni - IAI
29 July 2021
10 min read

COP26 in Glasgow is an important moment in the fight against climate change; an opportunity to define the latest rules of the Paris Agreement after the slow progress of the past few years, in a year full of events significant for environmental policies, both within and outside The United Nations Framework Convention on Climate Change (UNFCCC). A good part of the results in Glasgow will depend on the ability of states to relaunch their economies with post-pandemic stimulus packages that support the transformation of current development models, the adaptation of infrastructure necessary for the energy transition and green industrial policies.

While in recent times the European Union led by Ursula von der Leyen has significantly accelerated the fight against climate change with the European Green Deal and the Biden administration is slowly trying to rebuild its climate leadership, positive moves by the great and heterogeneous Asian continent remain crucial and current steps taken are uncertain. In 2020, China and India accounted for 36 percent of global emissions. It is estimated that China will generate 40 percent of the increase in emissions between 2020 and 2052 in a business-as-usual scenario, and India 15 percent, figures that clearly demonstrate the need for a sharp climate turnaround in Asia in the short, medium and long term.

Trends and regional contradictions

Asia is at the center of demographic, economic, social, political and energy trends that make sustainable change fundamental for the future of the planet. It is the most populous region in the world, both in absolute terms and in terms of density, with relatively strong growth (+0.92 percent between 2019 and 2020 according to the UN). While this growth remains below that seen in other regions (Sub-Saharan Africa in particular), the growth is combined - differences between countries taken into consideration- with a widespread increase in well-being, consumption and GDP in general (+3.7 percent between 2018 and 2019 according to the World Bank for Asia and Pacific), and that improvement results in an increase in energy demand. This growth is also reflected in emissions, which are rising constantly in the continent (with the exception of the brief pause in the first quarter of 2020), as it is home to some of the “heaviest” emitters in the world in absolute terms: in particular China, India, Japan and South Korea. When compared with the low emissions per capita in some of these countries (still low), these values underline the great potential for increased energy consumption in the future.

Although renewables are now the cheapest option for the greater energy needs in the vast majority of Asian countries, the increase in emissions is exacerbated by the presence of several relatively new coal plants, including some under construction. China, India, Indonesia, Japan and Vietnam alone plan to build 600 coal-fired power plants over the next twenty years, totaling 80 percent of the world's new solid fuel fired capacity, according to Carbon Tracker. Coal is also a strong element of contradiction between the domestic targets that many Asian countries are setting and the consistent flows of foreign investment to the resource. Since 2013, public funding from China, Japan and South Korea has accounted for more than 95 percent of total foreign investment in coal-fired power plants. However, over the course of the year, there have been good signs in this regard: at the Leaders Summit on Climate, South Korea announced its intention to stop investments in coal energy in foreign states and not long after, Japan finally joined the other G7 countries in the pledge to end international coal financing by 2021.

The pandemic also appears to have accelerated long-term efforts in a positive direction, similar to what happened in the United States and, above all, in Europe. In 2020, South Korea launched its own Korean Green New Deal (part of a broader Korean New Deal), proposing a target of climate neutrality by 2050, one similar to the target proposed by Japan in its relaunch of investment in renewables largely focused on wind power, a part of the global boom in this resource, especially offshore.

While further clarifications from Asian countries are awaited in terms of the Nationally Determined Contributions (NDCs) they will present ahead of COP26, their stimulus packages are worrying due to the few environmental constraints and the explicit financing of fossil fuels.  While the Indonesian package, for example, risks further promotion of agricultural-driven deforestation, the Indian recovery plan combines the promotion of solar energy and reforestation with a USD 5.5 billion investment in coal. China is the most worrying case, as post-pandemic support for its industries has so far not introduced many green constraints and the country's inability to curb investment in fossil fuels in many provinces, such as Hebei, is certainly no help in achieving climate neutrality by 2060, the target announced by Xi Jinping in September 2020. However, these actions contrast with the significant involvement of many of these countries in the energy transition. For example, Beijing has for years been the world’s biggest investor in renewables (USD 83 billion in 2019 according to UNEP/Bloomberg, almost double the USD 55.5 billion in the United States and USD 54.6 in Europe) and is also the leading producer of wind infrastructure and solar photovoltaics.

The very strong exposure to extreme weather events, the evident impact of climate change in recent years and the growing risk for the coming decades have resulted in a generally higher awareness of climate risk than in the rest of the world, an awareness revealed in numerous studies, in particular by UN organizations such as ILO and UNDP. This positive outlook in some countries is balanced by climate action that is in some cases lower than that seen in Europe and the United States, due to both a strongly perceived trade-off between growth and sustainability, and the immaturity of environmental movements which are not yet well established in many countries.  Xi Jinping's China is trying to tackle this problem by promoting the ethical and philosophical vision of ecological civilization. Other countries, due to the disproportionate effects of global warming, have become the main global spokespersons of certain aspects of the climate negotiations. Think, for example, of Bangladesh and the battle, within COP26, over compensation for the irreversible effects of climate change, referred to as “loss and damage.” 

For effective multilateral action

The next COP26 will require a considerable effort by the international community to make progress on the remaining details of the Paris Agreement - unresolved by the previous COP25 in Madrid - and on some issues such as climate finance that are of interest to many Asian states. On many fronts, the Asian countries turn up to negotiations with heterogeneous starting positions and interests, starting with the thorny issue of the operationalization of Article 6—seen by some as a source of revenue for adaptation—or the deadlines for presenting the next national targets. In view of the greater long-term commitments presented in recent months by China, Korea and Japan, it is believed that some Asian countries may be more open to discussing issues still on the table, including  higher standards of transparency on climate action, usually a priority for the EU and increasingly also for the US now that it has rejoined the Paris Agreement. Beyond the position on individual negotiations, broad-reaching multilateral climate cooperation action, in particular US-EU-China trilateral cooperation, will be crucial for achieving the major  Paris objectives, even if this will increasingly intersect with the geo-economics of individual objectives, especially in trade and technology. In recent years, the race to develop green technologies has already led to competition between powers, in particular involving the EU-US on the one hand, and China on the other. However, the climate dialog with China is slowly bearing fruit despite tensions on various thorny fronts such as the Chinese repression of the Uyghur Muslim minority. US Secretary of State Antony Blinken and EU High Representative for Foreign Affairs and Security Policy Josep Borrell have renewed the US-EU dialog with China, and the Italian G20 presidency's invitation to China and the US to co-chair the working group on sustainable finance is a further attempt to establish stronger foundations for this trilateral cooperation.

Another common factor in EU and US action is the renewed interest in India; and in May, the EU signed the India-EU Connectivity Partnership with a clear reference to the implementation of the objectives of the 2030 Agenda and the Paris Agreement. The US has also highlighted its desire to collaborate with India in its race for renewables and the decarbonization of the country. In early 2021, the need to improve climate cooperation between the USA and India had been emphasized when in April the US-India Climate and Clean Energy Agenda 2030 Partnership was announced, an agreement which refers explicitly to India’s commitment to install 450 GW of renewable energy by 2030. The points of view and challenges in Asia surrounding climate and energy policies, both before and after the Glasgow Climate Change Conference, are many and varied. While it is clear that the COP will not in itself solve many of the problems and contradictions within and outside the continent, the exceptional circumstances of 2021 mean that a series of fundamental changes can be initiated, including at the tables of COP26, changes that can support the important Asian climate agenda. 

The authors: Margherita Bianchi and Lorenzo Colantoni

Margherita Bianchi is in charge of the “Energy,climate and resources” program at the Istituto Affari International (IAI). Previously she worked at the European Parliament, in the Task Force of the Italian Presidency of the G7 and at UN Environment.

Lorenzo Colantoni is a researcher at the IAI, specializing in energy and environment, with a focus on Europe, Sub-Saharan Africa and Japan, on which he also works as a journalist.