Asia Pacific will not hit net zero by 2050 unless India, Indonesia and Vietnam reach peak emissions 12 to 18 years earlier. This is according to a new report by BloombergNEF and GenZero, released Oct 16.
The report, titled “Asia Pacific’s Energy Transition Outlook”, finds that the window to reach net-zero emissions by 2050 is “rapidly closing”, but immediate and accelerated action could still put Asia Pacific on track. The findings were presented by BloombergNEF’s Ali Izadi-Najafabadi, head of Asia Pacific; and Sahaj Sood, Australia senior associate.
These projections are based on Bloomberg’s economic transition scenario (ETS), which is BloombergNEF's base case scenario. This scenario assumes a 2.6°C warming outcome this century, and it assumes no further policy support for the energy transition beyond existing measures that are currently in place.
However, in order to achieve a goal that is consistent with a 1.75°C warming outcome, which aligns with the Paris Agreement goals of keeping temperature rise well below 2°C, BloombergNEF applied the net-zero scenario (NZS), which describes a “tough but credible” stretch to get on track for net zero by 2050.
Under this, Asia Pacific will need to undergo a full decarbonisation in the power, transport, industry and building sectors through the use of clean power. This includes a diverse source of clean energy sources that “may not be commercially viable today”, such as carbon capture and storage (CCS), hydrogen and bioenergy.
That said, Sood notes that there is much diversity within Asia Pacific markets, and net-zero pathways may differ.
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For instance, China and India will have a lot of emphasis on clean power in getting to net zero — China will see clean power account for about 60% of the emissions abatement. But in Southeast Asia, Japan and South Korea, the mix includes other sources such as electrification and energy efficiency.
In addition, unabated coal power plants will “just have to be phased out” as it is “simply incompatible with a net zero future in Asia Pacific”, the analyst notes.
“It is critical that accelerated progress is made in the short term, and in particular over the period from 2024 to 2030,” says Sood. Under the NZS, US$89 trillion ($116.90 trillion) of investments from companies, financial institutions, governments and consumers is needed, alongside long-term policy signals and willingness to divert investment away from fossil-fuel based pathways.
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On average, the region will require annualised investments in energy transition technologies to triple to US$2.3 trillion over 2024-2030.
“Cross-border collaboration and the ability to catalyse financing from the public, private, and philanthropic sectors globally will be key to accelerate the deployment of cost-effective solutions in the coming years to meet our targets,” says Frederick Teo, CEO of GenZero, Temasek’s decarbonisation-focused investment subsidiary.
