Last month in New York, 175 countries signed the historic Paris agreement on climate change, with commitments to reduce greenhouse gas emissions. Asia, as the world’s biggest emitter, will be a key player in contributing to turn the accord’s goals into reality.
We at the World Bank Group are determined to help our client countries in Asia work with the global community and lead the way to change the course of climate change, reduce poverty and pave the way for sustainable, inclusive growth. Without action, climate change could push more than 100 million more people into poverty by 2030.
We are already working with governments, private sectors and other development institutions such as the Asian Development Bank (ADB) on a range of innovative solutions that support smarter, greener and cleaner polices.
Those options include changing the energy mix by expanding the adoption of increasingly cheaper renewable energy sources such as solar and wind and improving efficiency through innovations in urban, residential, commercial and industrial sectors and mobilising technical advances.
For example, the International Energy Agency has said that half of the potential for reducing greenhouse gas emissions could come from gains in energy efficiency. Success, however, also requires a change in how businesses and consumers use energy.
In South Asia and Southeast Asia, we are supporting initiatives for an integrated electricity market, where energy shortages could be avoided if countries shared their energy with neighbours. An energy surplus in one country at a specific time of year can offset a shortage across the border in another.
Asia presents both challenges and opportunities involving climate change.
On one hand, the region accounted for 33% of all global emissions in 2014, more than the European Union and the United States combined. China alone burns more coal than the rest of the world and generates more electricity than any other country in Asia.
India’s demand for energy is also set to grow significantly to meet its development needs. India’s per capita consumption is one of the lowest in the world, yet it is already the world’s third-largest electricity user. India’s economic development will demand significant additional energy supply, resulting in it having the world’s largest forecast increase in carbon emissions.
due to steady economic growth and rapid urbanisation. In Indonesia, the share of coal in installed capacity is projected to increase from 50% to more than 70%. Pakistan and Bangladesh, which have almost no coal today, are planning major coal investments.
On the other hand, the region’s biggest players have heeded the urgency to become global leaders in renewable energy.
The government’s energy targets include peaking carbon emissions by 2030, reducing carbon intensity by 60% to 65% from 2005 to 2030, and increasing the use of non-fossil fuel to 20% of the energy mix by 2030.
Indian Prime Minister Narendra Modi has announced plans to generate 175 gigawatts of renewable energy by 2022. He also launched an international solar alliance of more than 120 countries at last year’s climate change agreement in Paris to expand the use of large-scale solar energy. India has also made significant commitments to improve energy efficiency and reduce transmission and distribution losses as part of its drive for cleaner energy supply.
Other countries are working to curb emissions. In Vietnam, leaders want to keep the share of coal in total energy consumption at current levels, and its recently revised power sector development masterplan includes significant increases in renewables in the energy mix. Bangladesh has the world’s fastest growing solar home systems program in the world, with almost 4 million systems already installed, with support from the World Bank and other development partners.
We can bring bold leadership to this important challenge by helping countries improve energy efficiency, adopt low-carbon energy choices, scale up technological innovations, and provide services that lower investors’ risks from innovative green projects.
For example, we provide countries technical assistance on carbon pricing, such as accessing carbon tax options or trading schemes that reduce carbon emissions at the lowest cost. China is among the 18 countries already working with the Bank on carbon pricing scenarios.
We also work closely with multilateral and bilateral development banks such as the ADB, the new Asian Infrastructure Investment Bank and New Development Bank to help countries in Asia adopt climate-smart policies and address gaps in infrastructure financing. In addition, we help countries access other sources of climate financing through the Global Environment Facility, the Climate Investment Funds, various carbon funds, and the Montreal Protocol and are engaging with the Green Climate Fund.
Today, thanks to the Paris accord, we have an unprecedented opportunity to reduce coal dependency. By working together with client governments, the power industry and other stakeholders to encourage the entrepreneurial spirit and support clean energy, we are determined to look closely at all possible ways to help slow down greenhouse gas emissions, create jobs and improve our ability to adapt to climate change.
The authors are respectively the Vice President of the East Asia and Pacific Region and the Vice President of the South Asia Region of the World Bank. This article originally appeared in Emerging Markets.