Strategies for Rapidly Decoupling Carbon Dioxide Emissions from GDP in Asia and the Pacific

By Jules Hugot, Jesson Pagaduan

Asia and the Pacific, accounting for 60% of global CO2 emissions, face the critical task of decoupling economic growth from carbon emissions amid varied economic statuses, from high-income nations to emerging economies, each grappling with unique challenges.

For over two centuries, economic growth has been driven by burning fossil fuels. But this releases CO2, which is a dominant driver of climate change, with daunting consequences.

This dilemma between carbon-intensive economic growth and climate change is particularly acute in Asia and the Pacific, which generates about 60% of global emissions. The People’s Republic of China (People’s Republic of China) alone generates about half of these emissions. India, Japan, the Republic of Korea, and Indonesia are also among the top ten CO2 emitters globally.

Efforts must be intensified to accelerate the decoupling of CO2 emissions from GDP growth in Asia and the Pacific.

CO2 emissions have declined in only a quarter of economies in Asia and the Pacific since 1990. These economies represent a mere 9% of the region’s emissions. Notably,  emissions fell in most of the Caucasus and Central Asia due to industrial collapses in the 1990s. But they are rising again, though slower than GDP. Emissions have also slightly declined since 1990 in Japan and Singapore. There, the decline has been more recent, driven by moderate demographic growth and cleaner energy sources.

 

In the People’s Republic of China, emissions keep rising, though less rapidly than GDP. Impressive strides have been made in renewable energies and electric vehicle production. Still, coal consumption keeps rising and more building permits for new coal power plants were issued in 2022 than in any year since 2015.

In contrast, staying within 1.5 degrees of warming involves reaching net zero emissions by the 2050s. This requires phasing out coal generation capacity not associated with carbon capture by 2040, much sooner than the lifetime of the plants currently being built.

 CO2 emissions keep rising with GDP in South Asia, Southeast Asia, and the Pacific. Emissions have even increased faster than GDP since the 1990s in countries such as Bangladesh, Fiji, Indonesia, Thailand, and Viet Nam.

The environmental Kuznets curve posits that environmental damages increase in early development phases, before decreasing. For CO2 emissions, this is because early development typically hinges on industrialization, while services account for larger shares of activity in advanced economies, which also have more resources to mitigate their footprint.

But even in high-income Asian economies, emissions are not receding much. Economies with similar income elsewhere have cut emissions per capita by about 20% from their peak, although starting from higher.

Most of Asia’s emissions are from upper-middle income economies, with the People’s Republic of China alone accounting for 61% of the region’s total. And this is where Asia performs the worst. Emissions are now close to 8 tonnes of CO2 per person in the People’s Republic of China and just below 7 tonnes on average in other upper-middle economies in the region. This is about twice the average in countries with similar income outside Asia.

These emissions are partly from producing goods that are ultimately exported. But looking at emissions from consumption rather than production does not change the picture. Asia’s poor performance is thus due to other factors which may include disproportionate consumption of carbon-intensive goods, or suboptimal technology.

Asia’s lower-middle income economies offer more hope as they compare slightly more favorably to other regions. In India, notably, annual emissions are just about 2 tCO2 per person—a tad less than in peer economies outside Asia.

Renewable energies have risen rapidly. Still, global coal consumption has not receded. The intermittent nature of renewable energies demands excess generation capacity. This can be mitigated by storing electricity or enabling transfers from areas with excess production to those in deficit.

Existing fossil fuel power plants also hinder the transition. In most cases, renewable energies are now cheaper when building a new asset. But when power plants already exist, they still often have the edge due to long-term power purchase agreements that guarantee plant owners future income. Switching course also requires adjusting grids and storage capacity. ADB’s Energy Transition Mechanism aims to tackle these issues, by financing the retirement of fossil-fuel power plants and freeing private capital for investing in renewables.

Agriculture accounts for 18% of global greenhouse gas emissions, with livestock generating a third of these emissions. To put things in perspective: beef emits 125 times more greenhouse gases per protein than peas. In Asia, meat consumption remains below the global average, but it is catching up rapidly and already exceeds the global average in some countries.

During COP28, 134 countries called for better integration of agriculture and food systems into climate action. The declaration calls for improved policies and financial support to reduce emissions. This will require new technical solutions and shifting consumption habits, which can be achieved by raising populations’ awareness, incentivizing livestock farmers to switch to crops, and adjusting taxation and regulation on meat.

Lastly, in transport, the rise of electric vehicles brings hope. But their carbon footprint depends on the electricity that powers them. This further highlights that phasing out fossil fuels from electricity production will be decisive.

 With 60% of global CO2 emissions from Asia, the battle against climate change hinges on the region's success to decarbonize. Stronger action is needed particularly in advanced and upper-middle income Asian economies, encompassing clean energy generation, agriculture, and transport.