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Navigating The Net Zero Transition: Spotlight on Southeast Asia, Japan and the Republic of Korea

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We are fast approaching the first milestone to limit temperature rises under the Paris Agreement and avoid the worst climate impacts: ‘peak emissions’ by 2025.

The reality of the ground we need to cover to reach global decarbonisation targets is driving policies, investment and innovation. To do this effectively and within desired timeframes it’s critical that we embrace collaboration by working together, sharing knowledge and simply connecting people.

In 2022 we paired with the Australian China Business Council (ACBC) to explore the opportunities that could come from cross-border collaboration between Australia and China in our Climate Report.

In 2023 we look to Asia’s east to bring you our guide on Navigating the Net Zero Transition: Spotlight on Southeast Asia, Japan and the Republic of Korea. We share insights from our people across the region, combined with those of pre-eminent local law firms who, like us, are helping clients on their net zero journey.

Specifically, we look at policy settings in Singapore, Indonesia, the Philippines, Vietnam, the Republic of Korea and Japan. All fall within the World Bank’s East Asia & Pacific region and demonstrate the challenge and opportunities seen globally: a mix of developed nations that rank high for climate readiness and are relatively familiar territory for multinationals and investors, and rapidly growing and urbanising nations that are among the most climate-vulnerable in the world.

We look at initiatives to encourage the transition to a net zero economy – across energy, carbon markets, financing, transport, housing and buildings, and agriculture. We look at the international collaborations moving the dial. And we set out the key commitments driving the economic and investment landscape for each of our focus countries.

Our guide is designed for you to absorb in your own way, in your own time. Download in full or explore countries using the navigation buttons below.

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Navigating the Net Zero Transition: Spotlight on Southeast Asia, Japan and the Republic of Korea

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Deeper insights on opportunities and challenges across the region

What are you seeing? The importance of conversations and collaboration

Conversations were key to our 2022 KWM-ACBC Climate Report. We spoke with Chinese investors working with local communities to build solar farms in regional Australia. We talked about sponge cities proliferating across China and how experts leading similar initiatives in Australia were sharing knowledge. We highlighted Australia’s deep research in areas like seaweed-based feed to reduce meat industry emissions. These discussions continue among colleagues and clients.

Similarly, this report is designed for conversations, not bookshelves. We look to Singapore’s incentive scheme to ‘green’ buildings, Indonesia’s offshore floating solar plant, ecotowns in the Philippines, the energy trade opportunities between Vietnam and Australia, the Republic of Korea’s hydrogen cities and how Japan has opened public trading for carbon credits.

The private sector is moving and will play a vital role in accelerating change. Reach out to your local KWM expert for insights on the challenges and opportunities ahead. What are you seeing?

There is no one-size-fits-all for foreign investment, but there are two must-haves to maximise the chance of success. One is bringing global experience. The second is embracing communities and local knowledge.” - Michael Lawson, Partner in Charge, KWM Singapore

Economies demanding, or driving change?

Without change, lower income countries will take more than a century to reach the same level of climate resilience as richer countries according to the University of Notre Dame’s Global Adaptation Initiative data for 2021. Those vulnerable countries are increasingly undertaking mitigation efforts and seeking funding.

Emissions trends over the decade from 2010

Overall emissions remained stubbornly high in the decade to 2020 for countries covered in this guide, before showing signs of a decline. While emissions for some (like the Philippines and Vietnam) rose dramatically with economic growth, elsewhere they fell (as in Japan off the back of increased renewables use and a slowing economy). Key insights include:

  • Indonesia – overall decline in emissions driven by land use and forestry initiatives
  • Japan – the most sustained falls in emissions since 2010 including due to a range of ‘green’ initiatives
  • Republic of Korea – overall emissions steadily rose for much of the decade before starting to dip from 2019, on the back of falling electricity and heat emissions
  • Vietnam – emissions from the electricity and heat sector tripled over the decade with the growing economy; along with prosperity-related increases in industry and manufacturing and construction
  • Philippines – a more than doubling of emissions across industrial activities and electricity & heat and a near doubling in the building sector sent emissions up by almost 40% over the decade; electricity & heat growing to 1/3 of all emissions
  • Singapore – emissions steadily rose for most of the decade largely due to the aviation & shipping sector (generating approximately ¾ of emissions)

Source: https://ourworldindata.org/co2-and-greenhouse-gas-emissions

Source: https://ourworldindata.org/co2-and-greenhouse-gas-emissions

International collaboration in the net zero transition: a snapshot

When global leaders and stakeholders meet for COP28 (the 28th UN Climate Change Conference of Parties) in Dubai, United Arab Emirates, for almost a fortnight from November 30, 2023, they will focus on fast-tracking efforts across four priorities: the energy transition; climate finance; nature, people, lives and livelihoods; and ensuring inclusivity.

Yet regardless of priorities, across every COP there is one constant: collaboration. Working together is key to net zero efforts generally, both at COP and beyond. In our 2022 KWM-ACBC Climate Challenge report, we looked at the opportunities that could come from collaborating across Australia and China.

As we look to other pockets of Asia for this guide, it is worth reflecting on the rise of international collaboration efforts propelling the region towards decarbonisation. In this report we include a snapshot of these efforts.

Nations are increasingly working together to tackle the climate challenge. We are watching cross-border developments, from COP28 and beyond.

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