While coal power generation in Asia increased to 80% of the global total in 2019, institutional factors have hindered a transition to renewable energy in South and Southeast Asia. Inflexible contractual obligations with fossil fuel suppliers have locked in government energy expenditures, and outdated electricity grids are often not even equipped to incorporate low-cost renewables.
Delaying modernizing the power sector means greater costs in the future
But delaying the modernization of the power sector now means greater costs for displacement in the future. Renewable energy costs are steadily decreasing while continued use of increasingly expensive fossil fuels endangers the environment and the global economy.
Countries in South and Southeast Asia can help achieve the global 1.5°C target of the Paris Agreement if they accurately assess the long-term risks of fossil fuel subsidies and dismantle barriers to investment in renewables. In a new analysis, Sara Jane Ahmed outlines six concrete tracks that those nations can take to early displacement.
In her analysis, Ahmed makes the case for an accelerated energy transition, illustrates that governments and investors can displace early to reduce exposure to stranded assets, and recommends corrective measures in COVID-19 recovery packages toward a cleaner power system. By accurately factoring risks into energy decisions (and holding those that fail to do so liable), countries in South and Southeast Asia can overcome existing barriers to displacing early and contribute to a more resilient global economy and environment.
This Analysis and New Insights is part of the Playbook for Paradigm Shift paper series, a collaborative effort of the Stanley Center for Peace and Security and E3G to develop bold ideas and practical solutions for faster climate action and a fairer economy out of this crisis.
Sara Jane Ahmed is an Energy Finance Analyst with IEEFA
This article was first published by the Stanley Center for Peace and Security
Download the full report: https://stanleycenter.org/wp-content/uploads/2020/10/CCAI-EarlyFossilFuelDisplacementinSouthSEA1020.pdf