SEA green investments fell 7% YoY to $5.2b in 2022, report shows

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Though climate targets have been set by their governments, Southeast Asian countries are unlikely to reach these by 2023. To meet these goals, Southeast Asia will need to reduce greenhouse gas emissions by 33% in 2030, a report by Bain and Company, Temasek, GenZero, and Amazon Web Services explains.

Green investments continued to fall in the region, dropping by 7% to US$5.2 billion in 2022, despite Singapore, Indonesia, Thailand, and Vietnam recently committing to emission reduction targets. The latter three countries, which are among the highest-emitting countries in Southeast Asia, are at risk of not meeting their targets, the report states.

A cumulative investment of US$1.5 trillion will be needed to meet the 2030 goals, according to the report.

A drop in foreign investments was the main reason for the slump. Investments from outside Southeast Asia fell by 50%, while those across countries in the region doubled. Most of the total funding was channeled into Singapore and Indonesia, with renewable energy bagging up to 75% of funds.

With their heavy reliance on fossil fuels, the energy and nature sectors are the most important aspect of the region’s emission reduction efforts, making up 85% of Southeast Asia’s targets.

However, slow infrastructure approvals and unclear regulations are among the reasons the full potential of renewable energy in the region is not being realized. For nature-based solutions, which include sustainable agriculture, as well as land restoration and protection, the region needs to better support and enforce conservation policies, the report noted.

The green economy has the potential to create up to six million jobs in the operations, maintenance, construction, and planning of clean energy infrastructure and manufacturing by 2030.

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