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A farmer looks at his crop in a dry rice field in southern Vietnam’s Ca Mau province, amid a long heatwave, on February 23. The Asean region is highly vulnerable to climate change. Photo: AFP
Opinion
Stephen Minas
Stephen Minas

Australia summit shows Asean wants climate partners. Hong Kong, step up

  • Melbourne meeting reaffirmed Asean’s carbon neutrality strategy and unveiled partnerships with Australia. Asean’s climate investment gap is a chance for Hong Kong and the Greater Bay Area
Stephen Minas
Stephen Minas
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Newsflash: the Asean-Australia Special Summit which wrapped up in Melbourne recently was not all about China.
News from the summit, held to mark 50 years of relations between the Association of Southeast Asian Nations and Australia, has been predictably dominated by takes on China’s role in the region from leaders past and present. But the summit also confirmed Asean’s commitment to a carbon-neutral economy – and its need for partners to help achieve its climate goals. This is an opportunity for Hong Kong.
Asean is on the front line of climate change. In the Global Climate Risk Index 2021 produced by NGO Germanwatch, Myanmar, the Philippines and Thailand are among the top 10 countries most affected by longer-term climate change. The region’s combination of high poverty levels, dependence on climate-hit sectors such as agriculture, extreme weather and coastline-hugging population makes it highly vulnerable.

Asean is also a rising source of greenhouse gas emissions, with a growing population, an energy mix dominated by fossil fuels, new coal plants planned or under way, and deforestation. With a collective gross domestic product that doubled from 2009 to 2019, the need to decouple economic growth from emissions growth in Asean is clear.

To respond to these challenges, Asean members last year adopted its carbon neutrality strategy, setting out initiatives that cover areas from physical infrastructure to financial markets. At the Melbourne summit, Asean members reaffirmed this strategy.

Asean and Australian leaders pose for photos at Government House in Melbourne during the Asean-Australia special summit on March 6. Photo: dpa
In the Melbourne Declaration, Asean and Australia commit to cooperation in “accelerating efforts towards the phase down of unabated coal power, and transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner”. This language is taken from the final decision of the Dubai Cop28 UN climate conference. Its inclusion shows the hard-won Dubai consensus has traction as a basis for regional planning and cooperation on moving beyond fossil fuels.

The Melbourne declaration also asserts that the “pursuit of renewable and clean energy ambitions across the region, on both land and sea, will create lasting regional security”.

Additionally, Asean and Australia commit to “deepening collaboration on reducing emissions as well as decarbonising our energy systems, establishing renewable energy markets, deploying low emissions technologies and developing our workforces’ skills and capabilities to drive an inclusive energy transition”.

The partnerships announced at the summit highlight Asean’s need for support to achieve its carbon neutrality goals. Meeting the goals will be extremely difficult. Alongside policy uncertainty, finance is a persistent challenge. The clean energy investment gap runs into the tens of billions of US dollars at least and the challenges of matching available finance with investible projects is a constraint.

02:13

Deadly floods in Indonesia kill dozens, with several others still missing

Deadly floods in Indonesia kill dozens, with several others still missing
This investment gap is an opportunity for Hong Kong and the Greater Bay Area. By helping Asean finance its climate goals, Hong Kong can simultaneously contribute to climate action in Asia, pursue its ambition of becoming an international green technology and financial centre, and build market share in Asean, which is projected to become a larger economy than Japan by 2030.
Hong Kong-Asean cooperation is already on the agenda. While Chief Executive John Lee Ka-chiu did not mention climate or renewable energy in his admittedly brief speech at last year’s Hong Kong-Asean summit, climate cooperation was certainly discussed. In his recent budget speech, Finance Secretary Paul Chan Mo-po spoke of facilitating commercial exchanges between the Greater Bay Area and Asean.

Summit spells out key connecting role Hong Kong can play for Asean

What’s needed is a sharper focus on the climate dimensions of the relationship, matched with sustained Hong Kong engagement with Asean members and institutions. For instance, the Hong Kong Monetary Authority recently announced a joint climate finance conference in partnership with Dubai, focused on transition financing in the Middle East and Asia. Why not something similar with an Asean counterpart?

Hong Kong is the host of the largest issuance of ESG (environmental, social and corporate governance) bonds in Asia and is a conduit to mainland technology and finance. That Hong Kong is basing its green finance standards on the “common ground” of Chinese and European Union standards should also create an advantage for Hong Kong-originated financial products.

With the Cop28 consensus on transitioning from fossil fuels, the world has entered a new phase of climate action. New decision points are quickly coming, with countries required to commit to strengthened national climate goals in 2025. As its recent summit showed, Asean has high climate ambitions. Helping to achieve them is in our collective interest.

Dr Stephen Minas is a professor at Peking University School of Transnational Law in Shenzhen and directs its Sustainability Innovation and Law Circle

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