Will Greening be Southeast Asian Post-COVID-19 Recovery Strategy?

The COVID-19 pandemic has inflicted unprecedented economic damages across the globe. Amidst rigorous efforts to manage immediate issues like job losses and business displacements, low-carbon proponents have begun to make calls for a green economic recovery. The basic idea is simple. Since countries are going to commit massive investments to revive their economies, why not invest in green alternatives instead of business-as-usual?

Two arguments in support of this idea include decreasing costs of solar and wind technologies that have made them much more competitive than before, and environmental benefits that will accompany job creations. While these may sound promising, this line of reasoning is not new. Quite the contrary, this is a familiar discourse that green growth proponents have been using to convince governments and businesses to switch to low carbon, but with limited success so far. Additionally, global oil price that has plummeted due to low demand and over-supply is likely to pose a stiff competition against renewables. Thus, will the global pandemic reset existing practices and provide a fresh impetus for a green post-COVID-19 recovery strategy?

In Southeast Asia, an intentional shift towards a green recovery seems quite unlikely for several reasons. First, although countries in the region had embarked on various climate initiatives pre-COVID-19, green agenda is yet to be featured centrally in national development plans. This is an important factor because the so-called Green Deals adopted in the European Union (EU) and South Korea were not born out of the pandemic response. Instead, the EU’s €1824.3 billion (US$2.16 trillion) recovery budget, which includes plans to increase climate-related investments, came on the heels of the European Green Deal that was proposed in late 2019 way before the virus hit Europe. Similarly, the US$61 billion Green New Deal that is featured in Korean New Deal recovery plan was originally the ruling Democratic Party’s manifesto ahead of parliamentarian election in April 2020. Meanwhile, in Southeast Asia, since green agenda is less pronounced due to economic growth imperative that still needs the contributions from high-emitting industries, climate action is likely to move ahead with less fanfare.

Second, considering the urgent need to get national economy rebound to its growth trajectory, governments in Southeast Asia are likely to fall back on existing development plans and accelerate sectors that directly contribute to that end. If sustainability was already integrated within the priority sectors, it will tag along. For example, Indonesia has identified B30 bio-diesel production, which was actually planned pre-COVID-19, as part of its recovery strategy. Its prioritisation thus will contribute to Indonesia’s climate mitigation agenda. Similarly, Malaysia opted to continue with its existing Large Scale Solar scheme to assist the country’s economic recovery. Likewise, in Singapore, US$2 billion had been allocated for green financing pre-COVID-19. Since climate solutions are part of Singapore’s current economic expansion plan, the prioritisation of environmental sustainability in the economic recovery will contribute to Singapore’s climate action progress.

In cases where low-carbon transition does not receive explicit support from economic recovery packages, some countries may still be able to stay on track of their existing climate mitigation plans thanks to the presence of big domestic companies like Ayala’s AC Energy in the Philippines and BCPG in Thailand. These enterprises have been in the green business pre-pandemic and are relatively resilient despite the economic turmoil. This may give such countries a better chance to realise their green commitments compared to those that rely more on government support for renewable energy development.

In conclusion, post-COVID-19 Southeast Asia is unlikely to embrace a green recovery strategy that essentially envisions countries making additional investments in greener options while abandoning high-carbon counterparts. Instead, climate action in the region will continue at a moderate pace.