Asean’s dilemma: must economic growth cost the Earth?

May 25, 2018

Does Asean have a renewable future?
In a passionate speech, Philippine Senator Loren Legarda said that, as the world’s fifth most vulnerable country to climate change, there is no other recourse for the Philippines “but to usher in green growth and transform our economy towards a low carbon and climate-resilient path.”

I have advocated and ensured that our national budget is a climate budget.
Loren Legarda, Senator, Republic of the Philippines

Legarda, who holds the role of chair of the Philippine Senate Committee on Finance, outlined how policies can spur green, economic growth by budgeting for climate change adaptation and mitigation—but only with strong financial backing.

“Many, if not all, of our plans and strategies for climate action and green growth will remain as ideas if there is no appropriate budget to implement them. This is why, for three budget cycles in a row, I have advocated and ensured that our national budget is a climate budget.”

She asserted that the region’s banks—which have come under scrutiny this year for their role in financing coal-fired power stations across the region—have a “critical role” to play to unlock more green investments to ensure a low-carbon and climate-resilient future for the region.

Legarda, who has pushed for the creation of a Philippine Green Bank explicitly for financing green projects, pointed to the Green Jobs Act as the first initiative of its kind to support industries in their transition to low-carbon sectors.

Local government units have a decisive role in implementing green finance projects, she added. “We abide by the principal that building resilience is local; therefore, in order to sustain green growth it must also be from the bottom-up.”

An exchange between senator Legarda and Goh Swee Chen, country chairperson for oil giant Shell that revealed the biggest challenge of all for green growth in Southeast Asia: the battle between fossil fuels and renewable energy.

Legarda said: “We welcome bold pronouncements from other countries like Singapore and Indonesia in phasing out coal, and personally, the Philippines must also consider fossil fuel as a thing of the past – I’m sorry if I’ve trodden on anybody’s toes.”

Swee said “there must be a smooth transition,” in response to a question from the audience on how to hasten the shift to renewables in Southeast Asia, where clean energy is still very much in its infancy.

Legarda countered by citing Costa Rica, France, and the United Kingdom as countries that had made the switch, and cities and states in the United States that have already committed to decarbonisation.

The green future that the event envisioned contrasts predictions made by the Asean Centre for Energy, which expects renewables to contribute only about 30 per cent of the region’s energy mix by 2040.

According to the International Energy Agency, coal will account for 40 per cent of all electricity generation in Southeast Asia by 2040, and the demand for oil in the region will grow more than 140 per cent over the same time period. Fossil fuels may be around longer than Legarda or many others would hope.

Despite differing views on what kind of energy will fuel Asean’s growth in the future, Singapore’s chairmanship of Asean provides a unifying theme for the region: resilience and innovation, Masagos said.

Brodjonegoro agreed. It will take “new innovation in policies that will lead Asean countries to achieve green growth,” he said.