The World Economic Forum (WEF) is calling for Asian nations to revamp their investment strategies in response to the impacts of climate change on people’s health.
Luis Alvarado, head of the WEF’s Giving to Amplify Earth Action (GAEA) initiative, said Asia is currently experiencing a “health crisis due to climate change,” which in turn, was leading to falling productivity and healthcare costs.
He noted estimates that Asian workers endured an average of 25 days each year where high temperatures negatively impacted their health.
Swiss Re Institute, a provider and researcher for risk insurance, also estimates that Asia’s GDP could fall by more than 25 percent over the next 25 years if these health risks are not addressed.
“The rapid acceleration of the climate crisis poses a fundamental threat to human health that impacts billions worldwide,” CEO of Philanthropy Asia Alliance Lim Seok Hui said.
“Tackling this systemic problem requires systems-level change to achieve sustainable impact.”
One tool the WEF says Asian governments could get behind is offering “labelled bonds”—green, sustainable, social, and transition bonds.
Green bonds are used specifically to finance projects that prioritise global climate and sustainability goals.
In 2022, the world issued $2.2 trillion (A$3.4 trillion) worth of green bonds, including $682 million in sustainability bonds.
Meanwhile, between 2020 and 2022, the number of labelled bonds issued in ASEAN—an economic union of 10 south-east Asian countries—made up 2 percent of the global value.
The authors of “Labelled Bonds for the Net-Zero Transition in South-East Asia,” a white paper by the WEF and research university ETH Zurich, said south-east Asia required country-specific development plans to address the unique financing needs of green bonds.
For example, green bonds for Thailand and Vietnam are believed to hold significant investment potential as their appetite for renewable energy increases, while Indonesia, the Philippines, and Malaysia are still reliant on coal.
However, the authors acknowledge that it was “very difficult” to quantify any positive effect on the climate from such investment opportunities due to the lack of consistent reporting.
“Further, not all labelled bonds are of equal quality,” the report said.
Coal Dominated Region
Alvarado notes that countries in the wider Asian region produce half of the world’s greenhouse emissions, and 80 percent of its energy is dependent on coal.“As one of the world’s most climate-vulnerable regions, Asia’s economic stability hinges on proactive measures to curb the impacts of climate-related disasters,” he said.
Despite these calls for climate action, Asian countries continue to open coal-fired power plants at a rapid pace.
In 2023, eight Asian countries topped the charts for the net coal-fired power capacity created, according to the Global Energy Monitor.
Despite China seeing the greatest growth in green bond issuance, it also topped the list for establishing the most coal-fired power stations at 43.7 gigawatts (GW). This was followed by Indonesia (5.9 GW), India (5.5 GW), and Vietnam (2.6 GW).
“This year, India will start operating new coal-fired power plants with a combined capacity of 13.9 gigawatts–the highest annual increase in at least six years,” it said in March.
“Further, private Indian firms have expressed interest in building at least 10 gigawatts of coal-fired power capacity over a decade, ending a six-year drought in significant private involvement in the sector.”
Regarding China, the IER said it both invested $546 billion into renewable energy and hit a record high in coal production in 2023.
“While [China] has the world’s largest solar and wind capacity, it recognizes the need for reliable and affordable energy that coal provides,” the Institute said.
It concluded that despite the push by Western nations to phase out coal, China and India recognise the resource as a cheap, reliable energy source to fuel their economies.
“Rather than invest in costly batteries to store excess power from wind and solar units, they are building coal-fired plants that add much more generating capability and flexibility to their power grids,” it said.
