Asia, seize the chance for a low-carbon future

Strong leadership and smart policymaking will be necessary for Asia to make the transition to this new world, where lives, livelihoods and businesses are transformed.

On Nov 4, the historic Paris Agreement on climate change will enter into force. There are both challenges and opportunities for Asia in taking the ambition of the Paris Agreement to build stronger and more inclusive, cleaner economies - and in doing so, transform lives, livelihoods and businesses across the region.

This transformation depends on the smoothness of the transition to more integrated and decarbonised energy systems that meet everyone's needs. Asia's energy demand is projected to double by 2030, but even so, 445 million of its people continue to lack access to a secure energy supply.

The region is facing multiple challenges on different levels: Countries need to incorporate new distributed-generation capacity that can work alongside the grid for greater resilience.

They also need to shed their dependence on coal; fast-growing cities need clean air, and utilities need to optimise the grid for various energy sources, among others.

The good news is that much of the technology and financing we need is already in the global economy. However, neither the technology nor the financing are available in the forms, in places and at the time when they are needed. Policy can be an accelerant and there is much for every economy in Asia to do.

With universal agreement on the direction towards a global economy - that is, one that is in balance with the needs of the people and for climate change - we can now focus on how to support each community, city and country to get there.

Strong leadership and smart, decisive policymaking will be necessary for a lower-cost, efficient and quicker transition. For Asia, there are three areas of action to prioritise:

Taking an "energy-efficiency-first" approach: Driving energy productivity will be key to Asia's competitiveness in a carbon- and resource-constrained world, where populations continue to grow and where many basic needs and aspirations are still unmet.

Energy-efficiency-first applies to all countries, no matter their stage of development. The Asian Development Bank (ADB) estimates that directing between 1 and 4 per cent of overall energy investment into energy efficiency can meet as much as a quarter of the projected increase in primary energy consumption in developing Asian countries by 2030.

With governments pushing for efficiency standards and benchmarks and driving public-sector procurement towards higher energy productivity, there are significant opportunities for the private sector to innovate, manufacture and finance the design and infrastructure for a lower-carbon future. Some countries in the region are making progress in increasing energy productivity; others have set ambitious goals, and firms are responding.

From Mahindra in India to State Grid Corporation in China and Bronzeoak in the Philippines, business leaders in Asia are seeing energy-efficiency as added value they can give to shareholders, and a way to attain competitiveness and growth.

Addressing the financing gap for low carbon or green infrastructure projects: Countries will need to have a much more detailed view of how much of this will come from the domestic public sector, from international organisations and multilateral development banks, and from international investors and domestic private capital.

Public funds - whether through national development banks, the new regional multilateral development banks or global development banks - need to work harder to leverage the private sector, but the end price to the consumer has to be one that promotes inclusivity.

More flexibility is needed in the system and governments will need to manage a more determined effort to maximise gains against the price of clean development across their infrastructure agendas. The risk of stranded assets is real and the risk to physical assets from more volatile weather from climate change is also real.

At Sustainable Energy for All (SEforALL), we have built up a comprehensive view of the financing on offer and where it is needed across the energy space. We work with Asian leaders to broker partnerships among governments, companies, institutions, financiers and development banks to address barriers and boost investment in smart, modern infrastructure.

If Asia is able to accelerate private and public partnerships to increase financing, it will be able to successfully enhance energy access in an affordable and clean way.

Closing this financing gap: As Asia seeks to do this, its governments have the opportunity to shape a policy environment in which clean technologies can thrive. Doing so will help ensure that the energy mix shifts and energy access increases without interrupting growth or leaving communities behind.

Singapore, for example, is currently home to around 100 local and international clean-energy companies that have benefited from the essential ingredients for innovation, namely, talent, R&D and demonstration capabilities, niche strengths in smart-city solutions enabled by data analytics and a conducive business environment.

Already, we can see progress across all three areas as the low-carbon transition takes root in Asia. Bangladesh is speeding ahead with off-grid solar, and the Philippines, in grid-connected solar. Indonesia is tapping the potential of geothermal energy as it becomes competitive with more traditional energy sources, and as fossil fuel subsidies are reformed.

Cities from Singapore to Tianjin in China are pursuing energy efficiency and green city policies, and Melbourne in Australia has rolled out its climate-control policy. None of this would have been possible without the progress China has made, not only in creating a partnership with the US that made the Paris pact possible, but because of the size of its challenge and the government's determination to meet it; China is an inspiration to others with complex, but not more complex, challenges.

So we have progress, but rarely at scale. The International Solar Alliance put forward by India offers a new innovation in how to bring scale to a much-needed technological revolution. Asia can play a significant role in taking new business models, financial and technological innovation to scale.

As we sit at the tipping point of an energy transition, Asian leaders need to share insights on what is working and why. This is where a platform like the Singapore International Energy Week (SIEW) comes in and where SEforALL can help. At SEforALL, we marshall evidence, benchmark progress and tell stories. We have convening power and reach across a network of governments, private-sector coalitions, firms and civil society all united around the need to achieve sustainable energy for all.

We bring a mix of strategic insight, partnership capability and communications capacity to the table. We are developing "heat maps" as a tool to focus resources for maximum impact, providing a framework for identifying places where most needs to be done, both in terms of energy productivity and closing the energy access gap, and those where successes could be replicated elsewhere. Using already available data, we can help you ask different questions, to get different answers and to focus efforts so that we achieve results in the short term, have success breed success, while the more complex political economy and long-term investment challenges are met.

We have no time to lose, but we are confident that together, we can move further, faster.

The writer is the CEO of Sustainable Energy for All (SEforALL) and special representative of the UN Secretary-General. She will co-deliver the keynote address at Singapore International Energy Week 2016 (Oct 24-28).

This article was first published in The Business Times on 20 October 2016 and is also published on the Singapore International Energy Week (SIEW) site