Carbon price and cutting subsidies to the most polluting fossil source, which in Asia still has the longest pipeline in the world, are two essential steps if the continent wants to avoid abrupt socio-economic slowdowns
A report by the Asian Development Bank
() – If Asia does not cut coal subsidies soon, it will jeopardize its own development prospects. Investing in clean energy and abandoning fossils is convenient, to make the right accounts: the benefits exceed by 5 times (by 260%) the planned expenses. This is stated by the Asian Development Bank in a report published recently. According to the institute, 346,000 premature deaths per year could be avoided by 2030 if Asian countries meet their transition targets. The major impact of the switch-over depends on reducing air pollution.
The weight of coal subsidies
How? One of the interventions that cannot be renounced, reads the dossier, is the introduction of a carbon price. Without carbon price the transition remains possible but would cost much more. The most efficient price, for the Asian Development Bank beats around $70/t in 2030 and doubles to $150/t for half a century.
Then there is the most important chapter, coal subsidies. “Developing Asia spent $116 billion in 2021 subsidising fossil fuels, and these subsidies are much higher than those for renewable energy. The cost of fossil fuel subsidies, amounting to about 1% of GDP, approaches the political cost of the most ambitious decarbonisation scenario in this dossier,” the authors write.
What are the risks? The report ranks the continent’s exposure to different types of climate risk. It is in Asia that 70% of the world’s population lives threatened by rising sea levels. And agriculture and fisheries – sectors directly impacted by the climate crisis – employ 1 in 3 people in the region. According to estimates, in a CO2-intensive emission scenario, the loss of GDP can reach 24% overall, with one-35% in India and a -30% in Southeast Asia at 2100.
