How Asia’s Banks Can Help Combat Climate Change Through Faster Coal Phase-Out

The Asian Development Bank says that Asia must quickly stop giving money out as subsidies for fossil fuels and invest more in clean energy sources or else climate change could become very dangerous. This could have a huge effect on the development of the region.

David Raitzer, an economist from the ADB and one of the authors of a report about the region, said that the area is using energy in a way that effects the environment more than it should. He believes taking action now will be really beneficial and cost less.

Raitzer said, “If we take big steps to reduce our impact on climate change, it can make a big difference!”

Lots of countries all around Asia are making new power plants that run on coal. It’s so much that 94% of all the coal-powered power plants in the world are found in Asia, according to a report.

China, India, and Indonesia put out a lot of gases that make the planet hotter in 2019. At the same time, six of the top 10 countries that suffered from extreme weather in the past twenty years were located in Asia. Reports say these events caused up to $1.5 trillion worth of damage to property. In 2020, Pakistan experienced flooding that impacted over 33 million people living there.

If Asian countries switch to clean energy sources, it could save 346,000 lives a year by 2030. It also means that we can get five times more benefits than the costs of climate change.

Developing countries in Asia are not investing enough in renewable energy. Instead, they spent $116 billion for fossil fuels subsidies this 2021. Mr. Raitzer said it is essential to join together as a global community to make sure this changes. He also suggested that no new coal be made and the current fossil fuel subsidies should be taken away so we can reduce emissions more efficiently. Other energy experts agree with Mr. Raitzer’s points.

Swati D’Souza, an energy analyst from the Institute for Energy, Economics and Financial Analysis said that a lot of development in Asia is connected to fossil fuel systems which is not good. She says we should not put money into new fossil fuels because they might become useless items that can cost governments and people lots of money.

A report found that over $397 billion has been spent on clean energy in developing countries of Asia. However, to achieve the goals of the Paris agreement (one of which is limiting global warming to only 2 degrees Celsius), more money needs to be invested. Around $707 billion must be given each year in these countries.

The report said we should reduce subsidies for fuels that produce a lot of carbon and create more incentive policies to use clean energy. To help us reach goals like having zero net emissions, they suggest putting a price tag on any type of gas that causes climate change like extreme heat or unseasonable rains. That way, businesses or governments pay the cost their gases are causing.

Raitzer said that it would not be a good idea to wait until after 2030 to reduce emissions because it is bad for the region and the world. Sibi Arasu, who is on Twitter at @sibi123, talks about climate issues with help from some private foundations. The Associated Press has an initiative to help support this cause, but are solely responsible for all the content they provide.