Summary:
On 17 September 2024, ACI organized a session during the 2024 LKY School of Public Policy Festival of Ideas titled “Greening of the Economy as a Development Paradigm” to explore the ASEAN landscape of green investment, market dynamics, and the emerging policy frameworks and standards catalyzed by countries’ efforts to detach trade and investment from emissions.
The ACI research findings show that though ASEAN has witnessed rapid growth in foreign direct investment (FDI) into the cleantech industries in the recent decade, (1) cleantech sector remains small for both investment and trade––thinking of growth requires thinking beyond the cleantech sector, which is more emission intensive; (2) green technology innovation can help decarbonise the wider economy as countries pursue growth targets––but ASEAN is in no leading position of green tech innovation yet, underscoring the need for international collaboration and technology diffusion.
The webinar also brought together a panel of distinguished experts, including Mr Ching Hu, Head of the Net Zero Transition Programme Office at the Singapore Business Federation; Mr Mike Ng, Group Chief Sustainability Officer at OCBC; Ms Linyun Wei, Head of Strategy for East Asia and Vice President of Sustainability and Development for Singapore at Schneider Electric; and Mr Stéphane Latouche, Chief Representative for Asia-Pacific at Banque de France.
Key Highlights:
1. SMEs make up a large part of ASEAN economy, and their transitions are critical for the region’s decarbonization efforts to materialize. But this requires the government providing support to help SMEs navigate complex regulations and potentially confusing financing environments.
2. Significant investments are needed from both the private and public sector, underscoring the importance of policies by the government and the central bank. But even as green finance is gaining traction, financing schemes and regulatory requirements must remain grounded in reality and align supply with what the regional market demands.
3. Besides supporting the green transition locally and at the regional level, policy design must also be put in the context of an evolving global regulatory environment, to be future-proof and prevent local businesses from losing competitiveness.
4. If the past development paradigm was a one-way street where economic growth impacted the environment, today it goes both ways with environmental risks also impacting economic growth – balancing the two will be challenging for policy makers.
ACI Perspectives 