The global economy is transitioning towards cleaner and less carbon-intensive forms of growth. Southeast Asia could be at the forefront of this emerging ‘green race.’
How can Indonesia, the Philippines and Vietnam take advantage of growing low-carbon markets? ClimateWorks and Vivid Economics partnered to highlight the opportunities for each country to lead the global transition.
Demand for low-carbon products is expected to grow at 11% per year between 2020 and 2050. Developing economies in Southeast Asia could harness this growth through new and emerging low-carbon opportunities. In doing so these countries can become the major economies of tomorrow.
These discussion papers show that countries are at risk of being left behind if they don’t join the ‘green race’ now.
The Philippines and Vietnam import a lot of coal from Indonesia so they have a high vulnerability to fluctuating coal prices as well as currency fluctuations. For them, energy security is a challenge. In Indonesia, the risk is coal becoming a stranded asset. The message for them is that they are in a tricky position but will hurt more if they don’t move now.Dani Robertson, author (via Devex)
ClimateWorks and Vivid Economics found these countries can build their comparative advantage by capitalising on existing opportunities and industries. And that other countries that have already done this successfully by developing low carbon industrial strategies. Our research highlights:
Indonesia can be competitive by taking advantage of key market opportunities in geothermal, energy storage and industrial efficiency to promote economic diversification and growth.
The Philippines can specialise in green technologies such as solar photovoltaic and lighting. This can support an industrial strategy that is inclusive and innovation-led, propelling growth in green jobs and achieving energy security.
Vietnam stands at a crossroads, primed to take advantage of strong policies and human and natural capital. It can build on existing competitiveness in smart grids components and energy storage, to exploit opportunities in solar PV and wind power.
The authors are seeking input and feedback on these discussion papers, please feel free to contact the authors directly.