Energy Sustainability and Climate Change in ASEAN

Climate change has had adverse impacts on agriculture, but only a handful of studies exist on this phenomenon in South-East Asia. To help provide better-informed policy interventions, in this study, the Google Earth Engine (GEE) cloud-computing platform was used to assess the temporal and spatial changes of drought conditions and related impacts on crops in the Association of Southeast Asian Nations (ASEAN) region from 1980 to 2019. To assess drought intensity and to identify its impact on irrigated and rain-fed agriculture land, 47,192 grid points with 10 × 10 km (km) resolution were created. It found that the Monsoon Climate Region had more droughts with higher intensity, while the Equatorial Climate Region experienced more wet conditions with a lower intensity of drought conditions in irrigated and rain-fed agriculture lands. Still, about 19.9 million hectares (ha) of croplands in the ASEAN region faced severe drought conditions, while 3.6 million ha of croplands faced wet conditions and possible flood damage. Accordingly, the loss of production of irrigated and rain-fed croplands in Cambodia, Indonesia, the Lao People’s Democratic Republic, Myanmar, Thailand, and Viet Nam was estimated at about 21.9 million tons during 2015–2019. To address drought impacts, four levels of policy interventions for ASEAN are suggested—low, medium, high, and business-as-usual—depending on the level of drought conditions in a particular country.

The management of tropical forests can achieve multiple purposes. Here, we assessed timber production, bioenergy generation, and emission reductions through the management of production forest for timber and bioenergy production in Southeast Asia between 2000 and 2060 through a comparative study between the conventional and reduced impact logging (RIL) systems. Whilst producing an average of 35.1 million cubic metres per year (m³ year⁻¹) of wood products, the adoption of the RIL can result in emission reductions of 96.6 teragrams of carbon dioxide (TgCO₂) over a 60-year period. Apart from deforestation, emissions from logging operations were the second-highest source of emissions, indicating that attention should be made to improve the efficiency of logging machinery whilst reducing deforestation and forest degradation. When combining all emissions together, total emission reductions were estimated at 229.9 TgCO₂, 215.4 TgCO₂, and 207.9 TgCO₂ annually during the Paris Agreement between 2020 and 2030 if compared to coal, diesel, and natural gas, respectively. Southeast Asia could generate about US$2.1 billion–US$2.3 billion year⁻¹ under the result-based payment of the REDD+ scheme at a carbon price of US$10. Introducing tax exemptions or financial incentives for carbon and environmental taxes and/or energy tax could materialise the RIL-based forest management.

Energy use and carbon dioxide (CO₂) emissions, key impacts of transport sector activities in Indonesia, need to be accurately estimated, as they influence energy security, Indonesia’s commitment to mitigate climate change, and policy development. The Vehicle Technology Impact Assessment Model for Indonesia (VEIA-ID) has the capacity to create a long-term outlook of transport demand, vehicle stock, energy use, and CO₂ emissions of two transport modes (i.e., cars and road freight vehicles) and to measure the impacts of various transport and energy policies. Using economic and demographic assumptions, it endogenously projects transport demand and is able to split it into different transport modes. It uses existing data to project fleet dynamics, fuel consumption, and CO₂ emissions up to 2050. In the baseline scenario, energy consumption from cars and road freight vehicles would grow 4 times from 33 million tons of oil equivalent (Mtoe) in 2020 to 132 Mtoe in 2050, and CO₂ emissions would rise from 95 million tons to 380 million tons during that same period. Policies such as carbon taxing, motorway tolls, and improvement of road freight logistics have the ability to reduce fuel consumption and CO₂ emissions.

Assessment of the carbon balance due to changes in forest land uses could serve as an important benchmark for the Reducing Emissions from Deforestation and Forest Degradation (REDD+) scheme of the United Nations Framework Convention on Climate Change. Here, we assessed the carbon gains and loss due to deforestation and plantation forestry in Southeast Asia during the implementation period of the Paris Climate Agreement between 2020 and 2030. Data on forest cover and carbon stocks were obtained from the most recent forest resources assessment report by the Food and Agriculture Organization. We performed a regression analysis to obtain parameters and initial values for predicting the forest cover change, where logging was assumed to take place in both natural and plantation forests. Between 2000 and 2020, Southeast Asia lost about 0.5%, or 1.1 million hectares, every year, whilst plantation forests gained 1.8%. Carbon stocks in natural forests declined to 15.7 petagrams of carbon (PgC) in 2030 from 19.7 PgC in 2000. On average, Southeast Asia emits about 468.6 teragrams of carbon dioxide per year (TgCO₂ year⁻¹) due to the loss of natural forests and logging, or about 23% of emissions, from tropical forests. Plantation forests gain about 25.9 TgCO₂ year⁻¹ between 2000 and 2030. Between 2020 and 2030, Southeast Asia is likely to emit about 442.7 TgCO₂ year⁻¹. If a retrospective approach is used, the forest reference emission level for this region is 424.2 TgCO₂ year⁻¹ during the implementation period of the Paris Agreement. Carbon revenues under the REDD+ scheme were estimated at US$2.4 billion annually under the Paris Agreement. Our study suggests that plantation forests could play a role in increasing role wood supply to the region, but caution is needed because large-scale plantations can cause environmental destruction.

The Association of Southeast Asian Nations (ASEAN) faces tremendous challenges regarding the future energy landscape and how the energy transition will embrace a new architecture—including sound policies and technologies to ensure energy access together with affordability, energy security, and energy sustainability. Given the high share of fossil fuels in ASEAN’s current energy mix (oil, coal, and natural gas comprise almost 80%), the clean use of fossil fuels through the deployment of clean technologies is indispensable for decarbonising ASEAN’s emissions. The future energy landscape of ASEAN will rely on today’s actions, policies, and investments to change the fossil fuel-based energy system towards a cleaner energy system, but any decisions and energy policy measures to be rolled out during the energy transition need to be weighed against potentially higher energy costs, affordability issues, and energy security risks. This paper employs energy modelling scenarios to seek plausible policy options for ASEAN to achieve more emissions reductions as well as energy savings, and to assess the extent to which the composition of the energy mix will be changed under various energy policy scenarios. The results imply policy recommendations for accelerating the share of renewables, adopting clean technologies and the clean use of fossil fuels, and investing in climate-resilient energy quality infrastructure.

To decarbonise the electricity generation sector under the International Energy Agency’s 2 °C scenario, electricity generation from less efficient subcritical coal plants needs to be completely phased out by 2050. In addition, large potential exists in the Southeast Asia region for the deployment of high-efficiency, low-emission (HELE) electricity generation technologies. A cost–benefit analysis of HELE technologies against the less efficient subcritical electricity generation plants is thus carried out to find a persuasive scenario supporting a quicker transition from subcritical stations towards HELE technologies in the region. A levelised cost of electricity (LCOE) analysis is carried out for both the coal-fired technologies under four potential policy scenarios. To evaluate the LCOEs, scenario 1 does not take into consideration any carbon pricing or costs associated with the desulphurisation (deSO_x) and denitrification (deNO_x) facilities. Scenario 2 (scenario 3) incorporates carbon pricing (costs associated with the deSO_x and deNO_x facilities), while scenario 4 includes both carbon pricing and costs associated with the deSO_x and deNO_x facilities. A novelty of this study is that it includes advanced ultra-supercritical (A-USC) plants, and a sensitivity analysis is performed under each scenario to evaluate the uncertainty affecting the future coal prices on coal plants with 20- and 25-year lifespans. This study demonstrates that HELE technologies are competitive against the subcritical plants under all four scenarios, and both the technologies derive benefit from lifetime extensions and low coal prices. It is revealed that future deployments of HELE technologies can be expedited by factoring in carbon pricing in the LCOE costs of coal-fired power plants under scenario 2. It thus necessitates strengthening the carbon pricing policy for coal-fired power plants in Southeast Asia to support a quicker transition from less efficient subcritical stations towards HELE coal-fired technologies.

With increasing concern over climate change, many see green finance as a solution to fund sustainable projects. In particular, green bonds—a type of debt instrument which aims to finance sustainable infrastructure projects—are growing in popularity. While the literature does not contest their effectiveness in fighting climate change, research highlights the high level of risks and low returns associated with this instrument. This research investigates green bonds’ characteristics, depending on the issuing region, with a special focus on Asia and the Pacific. Our findings prove that green bonds in Asia tend to show higher returns but higher risks and higher heterogeneity. Generally, the Asian green bonds market is dominated by the banking sector, representing 60% of all issuance. Given that bonds issued by this sector tend to show lower returns than average, we recommend policies that could increase the rate of return of bonds issued by the banking sector through the use of tax spillover. Diversification of issuers, with higher participation from the public sector or de-risking policies, could also be considered.

The power generation mix of the Association of Southeast Asian Nations (ASEAN) is dominated by fossil fuels, which accounted for almost 80% in 2017 and are expected to account for 82% in 2050 if the region does not transition to cleaner energy systems. Solar and wind power is the most abundant energy resource but contributes negligibly to the power mix. Scalable electricity production from wind and solar energy faces tremendous challenges due to system integration practices in ASEAN. Investors in solar or wind farms face high risks from electricity curtailment if surplus electricity is not used. Technologies for battery storage (lithium-ion batteries) have been developed to handle surplus electricity production from wind and solar energy but they remain costly. Hydrogen produced from electrolysis using surplus electricity, however, has numerous advantages that complement battery storage, as hydrogen can be stored as liquid gas, which is suitable for many uses and easy to transport. Employing the policy scenario analysis of the energy outlook modelling results, this paper examines the potential scalability of renewable hydrogen production from curtailed electricity in scenarios of high share of variable renewable energy in the power generation mix. The study intensively reviewed potential cost reduction of hydrogen production around the world and its implications for changing the energy landscape. The study found many social and environmental benefits as hydrogen can help increase the share of renewables in decarbonising emissions in ASEAN.

Southeast Asia faces one of the fastest growths in energy demand in the world, driven by increasing incomes, urbanisation, and industrialisation. The development and deployment of green energy technologies offer a natural conduit to meet the growing energy needs in the Association of Southeast Asian Nations (ASEAN). This chapter undertakes a case study approach in reviewing green energy deployment in the context of green growth and energy transition and discusses the current status of renewable energy development in ASEAN. The study aims to formulate policy lessons for the ASEAN economies in facilitating the development and deployment of green technologies and alternative energy options based on a case-study approach for delivering sustainable economic growth and in combating climate change in the region. The review suggests that carbon capture and storage (CCS) technologies will allow ASEAN to continue to use fossil fuels whilst achieving sustainable economic growth as coal demand increases in the region. The deployment of CCS technologies is also an enabler of hydrogen energy as a green energy solution in the region in the longer term. The shorter-to-medium-term policies include boosting public acceptance to nuclear energy, implementing energy efficiency improvement policies, and eliminating fossil fuels consumption subsidies. Increasing both public and private sector energy investments and the development of CCS technologies in the longer-term are necessary complementary policies for maximising the benefits of greater deployment of renewable energy sources in the region.

The high price of fossil fuels and increased demand for more sustainable and environmentally friendly sources of energy have caused firms and consumers to search for alternatives sources, like from biomass. This study examines innovations in biomass-powered and -led products introduced by three firms, Firm A and Firm B, which are based in Malaysia, and Firm C, based in Thailand. Firm A produces pulverised biomass fuel and biomass combustion systems to generate power and heat for heat-treatment factories in the area. Firm B produces lubricants from palm oil and vegetable oil residue. Firm C uses cassava biomass to produce biogas to generate electricity supplied to the grid. The study argues that the three firms have intentionally or unintentionally employed effective innovation management in ensuring sustainability in their business, which is challenged by the volatility in oil prices and competing demands for feedstocks. By developing innovative products and/or services, the three firms differentiate themselves from their competitors and have a competitive advantage in the market.

Solar energy is a renewable source that can help the Association of Southeast Asian Nations (ASEAN) region realise its 23% renewable energy target by 2025. However, its development is slow due to a lack of awareness and funds. Many financial institutions are willing to invest in renewable energy projects, but data reliability has been a concern. Approaches that can be used to gather and to analyse data, therefore, should be identified to attract investors towards renewable energy. Quantitative analyses could also help governments more accurately develop reusable energy plans and integrate the procurement of reliable renewable energy systems into them. This study aims to provide a comprehensive assessment of the environmental and economic impacts of various types of solar photovoltaic (PV) systems (e.g., stand-alone, rooftop, and solar farm) by using sustainable quantitative approaches, such as life-cycle analysis and life-cycle cost analysis. Data normalisation was also conducted to compare the performance of each system. It was found that the solar PV rooftop system has the lowest greenhouse gas emissions, life-cycle cost, and levelised cost of energy. This study then offers policy recommendations to attract high, sustainable green investment to the region.

Many players have supported infrastructure development in the Mekong Subregion, bridging the missing links in Southeast Asia. While the influx of energy-related infrastructure development investments to the region has improved the livelihoods of millions of people on the one hand, it has brought about a myriad of challenges to the wider region in guiding investments for quality infrastructure and for promoting a low-carbon economy, and energy access and affordability, on the other hand. Besides reviewing key regional initiatives for infrastructure investment and development, this paper examines energy demand and supply, and forecasts energy consumption in the subregion during 2017–2050 using energy modelling scenario analysis. The study found that to satisfy growing energy demand in the subregion, huge power generation infrastructure investment, estimated at around $190 billion–$220 billion, is necessary between 2017 and 2050 and that such an investment will need to be guided by appropriate policy. We argue that without redesigning energy policy towards high-quality energy infrastructure, it is very likely that the increasing use of coal upon which the region greatly depends will lead to the widespread construction of coal-fired power plants, which could result in increased greenhouse gas and carbon dioxide emissions.