Neighbourhood watch: what are the other countries in our region doing about carbon?

While the Australian government continues to wrangle with their internal divisions over whether or not to set a target of net zero emissions target for 2050, our nation neighbours to the north are unveiling new policies and goals to tackle their emissions.  

Malaysia has unveiled ambitious climate-reduction targets, Singapore is considering raising the price of its already standing carbon tax and Indonesia has just announced the introduction of its own levy on the coal sector.

Paul Burke, head of the Arndt-Corden Department of Economics at the Australian National University, says the picture for the region is very different to that predicted just a few years ago.

“Countries are taking a much more proactive approach in the region than we have previously seen – net zero emissions goals are in place as stated by the leaders and the introduction of carbon pricing has come in over recent years,” says Burke. “Also the fundamental economics of renewable energy is becoming very compelling in these countries.”

The spirit seems willing, but detail is harder to reach. Caroline Chua, South-East Asia analyst for Bloomberg New Energy Finance, says that while countries have made positive announcements, there aren’t firm roadmaps on how to reach those targets.

“While Singapore and Indonesia have both submitted their long-term low carbon strategies under the United Nations Framework Convention on Climate Change, and countries including Indonesia, Malaysia and Thailand have floated a net-zero target year, there is a lack of firm commitments or action plans from any of the regional governments for these verbally announced targets,” she says.

Indonesia, which by some estimates is the eighth largest CO₂ emitter in the world (though much lower ranked on a per-capita basis) has set a goal to reduce greenhouse gas emissions by 29–41% in 2030 and to reach net zero by 2060, the same year that China aims to reach neutrality.

Arief Wijaya, senior manager for Climate, Forest and the Ocean at the World Resources Institute of Indonesia, says the carbon reduction goals now in place are relatively ambitious for Indonesia, and strong political leadership would be needed to transfer them into action.

“The policy scenarios for Indonesia to achieve its climate target has been growing over time,” he says. “For example, currently the government aims to achieve 23% of renewable energy mix by 2023, and has committed to not issue new licenses for coal power plant establishment.

Countries are taking a much more proactive approach in the region than we have previously seen – net zero emissions goals are in place as stated by the leaders and the introduction of carbon pricing has come in over recent years.

Paul Burke

“This has been a growing momentum, since the government has considered low carbon development pathway in the 2020–2024 national development plan.”

Along with its moratorium on new coal-fired power plants, Indonesia’s parliament passed a bill earlier this month to introduce a carbon tax on the coal-fired power sector, which would come into effect in April next year. At an initial US$2 ($2.71) per tonne of carbon, the price would be one of the lowest carbon taxes in the world.

Tata Mustasya, Regional Climate and Energy Campaign coordinator at Greenpeace Southeast Asia, fears the rate might serve as a revenue-raising measure, rather than an actual disincentive or investment driver.

“We need to be moving to renewable energy quickly and the rate is too low [for the carbon tax] it may do very little to affect emissions from coal,” he says.

Chua is more hopeful for the emerging economy.

“It’s an encouraging first step, albeit a small one, towards the transition to lower emissions,” she says. “At the current level, it is unlikely it will encourage a switch from coal power generation to one of lower emissions.”

But who will pay? “Electricity tariffs in Indonesia are still highly regulated and subsidised by the government, which reduces the impact of the additional carbon tax on electricity consumers,” Chua adds. “There is also a matter of who ultimately bears the cost of the carbon tax. Indonesia’s power market operates on a single-buyer market structure with the state utility. Ultimately, this cost circles back to the government.”

Across the Strait of Malacca, the small island nation of Singapore already has a Sing$5 ($5) per tonne carbon tax, and is considering raising that to an even higher level next year. Their current goal is to reduce their emissions intensity by 36 % from 2005 levels by 2030.

The new prime minister of their nearest neighbour, Malaysia, Ismail Sabri, this month updated the country’s emissions reduction pledge in the lead-up to Glasgow, raising their goal from 35% to 45% based on GDP by 2030. Malaysia also has a net zero emission by 2050 target.

Meena Rahman, legal advisor to the Third World Network, Malaysia, says while the Malaysian targets are a positive sign, they lack detail in how they’ll actually be achieved.

It’s an encouraging first step, albeit a small one, towards the transition to lower emissions. At the current level, it is unlikely it will encourage a switch from coal power generation to one of lower emissions.

Caroline Chua

“For a developing country like Malaysia, what’s important is to also know what the financial needs are, what the technology needs are,” Rahman says. “How do we move from where we are to those targets? The devil will be in the details and that is not there at the moment.

“There are more questions than answers.”

The recent 12^th Malaysia Plan announced an end to new coal-fired power plants, but didn’t discuss the extension of existing ones, or how and when they would be phased out.

While the government is yet to spell out a clear plan for reducing emissions – especially in the energy sector – Rahman questions whether the latest updated announcements ahead of COP26 and the pressure developing countries have been under to reach net zero targets is fair.

“We find the pressure being put on developing countries – net zero! Net zero! Net zero! – is really inequitable,” she says. “Developed countries have no excuse to delay their actions to date: they should have done it many years ago. They are ignoring their historical responsibility and their historical emissions.

“For Malaysia, when we say carbon neutrality by 2050, US has said the same, UK said the same. Putting Malaysia on the same platform as these large rich countries with historical responsibilities and historical emissions is not fair. We cannot be on the same footing.”

Rahman believes expectations on developed nations need to be higher for reaching negative emissions as soon as possible, not just net zero by 2050. Although mitigation is a significant issue for countries in this region, she thinks that it’s crucial COP26 also addresses proper funding commitments to finance climate adaption efforts for developing countries.

“The heart of the problem is that in this narrative – that is coming from even the United Nations – net zero is going to save the planet,” she says. “We can’t just have a mitigation-centric outlook.

“Malaysia is already seeing forest fires, droughts and flooding, loss and damage. We need to look at adaption. The financial needs for that need to be assessed, understood and demanded from the international community.”