About 3 trillion USD is needed for green investment in ASEAN between 2016 and 2030, 37 times the size of the global 2016 green bond market (Source: VNA) Singapore (VNA)– ASEAN member states should increase green investment by 400 percent each yearto protect their people and economies from climate change and otherenvironmental shocks, according to a recently-released research.
The Green Finance Needs inASEAN, conducted by Singapore’s DBS Bank and the UN Environment Inquiry intothe Design of a Sustainable Financial System, finds that about 3 trillion USDis needed for green investment between 2016 and 2030, 37 times the size of theglobal 2016 green bond market.
Current annual ASEAN flows ofgreen finance are estimated at 40 billion USD, against an average annual needof roughly 200 billion USD to 2030.
This investment spreadsacross infrastructure (1.8 trillion USD), renewable energy (400 billion USD),energy efficiency (400 billion USD) and food, agriculture and land use (400billion USD).
Indonesia will require thelargest volume of green finance. Substantial investment opportunities alsoexist in Thailand and Vietnam.
Approximately 75 percent ofcurrent flows come from public finance and the remaining 25 percent fromprivate finance, largely in the form of commercial loans. Future publiccontributions are anticipated to drop to around 40 percent. This means thatprivate green finance flows will need to scale up by a factor of over ten tomeet the demand.
Asian Development Bank (ADB)research shows that ASEAN members are more exposed to such risks than theglobal average – down to significant poverty rates, economic dependence onenvironmentally sensitive industries, geographic vulnerability to climateeffects, and rapid population growth.
To reduce its vulnerability,and provide long-term economic stability and prosperity, the ASEAN region needsput itself on a sustainable trajectory. This will require substantial amountsof green investment.
“Green investment in theASEAN region can transform the region into a green economic powerhouse thatsupports a growing population, and provides returns for investors,” said MaJun, UN Environment’s Special Advisor on Sustainable Finance and Co-chair ofG20 Green Finance Study Group. “This report lays out ways in which the ASEANregion can unlock this investment and protect its people, environment andeconomies.”-VNA
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