Financing the just transition: Powering Asia’s sustainable energy future

The Intergovernmental Panel on Climate Change (IPCC) warns that the world has less than ten years to drastically reduce global greenhouse gas (GHG) emissions in order to avoid a catastrophic climate breakdown. Similarly, the United Nations Environmental Program (UNEP) has concluded that “the world will need to decrease fossil fuel production by roughly 6% per year between 2020 and 2023” to avoid exceeding the 1.5-degree Celsius threshold set by the Paris Agreement.

Despite these cautionary projections, Asian countries still rely heavily on fossil fuels. In 2021, a study by Fair Finance Asia (FFA), “A Future Without Coal: Banking on Asia’s Just Energy Transition,” revealed continued growth in Asia’s coal sector even after the signing of the Paris Agreement in 2015. This is largely due to continued financing by banks and investors operating in the region.

Clearly, financial institutions that fund Asia’s energy sector have a critical role to play in accelerating the realization of a new vision for the region’s energy future, not only by reorienting financing to renewable energy innovations but also by ensuring that the transition leaves no one behind. Just energy transition strategies must respect and protect the rights and active participation of communities and safeguard their health, livelihoods, culture, and heritage.

FFA’s fireside chat, “Financing the Just Transition: Powering Asia’s Sustainable Energy Future,” aims to:

• Review Asia’s readiness to make fossil fuels history by highlighting the opportunities and gaps in existing renewable energy transition initiatives, as well as the critical socio-environmental criteria and conditions that need to be balanced optimally to achieve a truly just energy transition.
• Facilitate a dialogue regarding the key recommendations and next steps in the G20’s agenda, particularly in line with energy transition, and the corresponding sustainable finance policy levers to support its acceleration.
• Identify key priorities for follow up during the Indian G20 Presidency and catalyze multistakeholder coordination, including among civil society actors, to strengthen the progress in monitoring sustainable finance policies that support Asia’s energy transition.