Asia in the Global Transition to Net Zero: Asian Development Outlook 2023 Thematic Report

ASIA IN THE GLOBAL TRANSITION TO NET ZERO

ASIAN DEVELOPMENT OUTLOOK 2023 THEMATIC REPORT

APRIL 2023

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Publication Stock No. FLS230135-2

DOI: http://dx.doi.org/10.22617/FLS230135-2

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CONTENTS

TABLES, FIGURES, AND BOXES

FOREWORD

Development in Asia and the Pacific depends on effective action to address climate change. The region faces increasing climate shocks that are affecting the livelihoods, food security, and health of millions of people, especially women. At the same time, the region accounts for a growing share of annual global greenhouse gas emissions. Achieving the goals of the 2015 Paris Agreement depends on whether the region can shift from carbon-intensive growth to low-carbon development.

Governments in Asia and the Pacific have joined global efforts to contain the climate threat. All developing Asian economies have submitted nationally determined contributions under the Paris Agreement, which aims to limit global warming to well below 2°C above preindustrial levels. A growing set of regional economies, including the largest emitters, have also made ambitious pledges to achieve net-zero emissions by the mid- to late-21st century.

Asia in the Global Transition to Net Zero explores what a global net-zero transition could mean for developing Asia. It models emission pathways based on commitments and pledges under the Paris Agreement and compares them with more optimal routes to net zero. The pathways considered will require dramatic transformations in energy and land use, with wide-ranging implications.

The report finds that early action and international coordination are critical to ensure a low-cost and equitable net zero transition. With efficient policies, the benefits of the transition from averted climate damages and improved air quality could outweigh climate mitigation costs by five times. Conversely, if policies are not carefully designed, some economies, industries, communities, and populations could be adversely affected. Yet, failure to address the climate crisis would have consequences that would be even more regressive. To avoid these outcomes, deep decarbonization is needed.

To support these crucial actions, the Asian Development Bank has scaled up its ambition to deliver climate financing to its developing member countries to $100 billion over 2019–2030. This is an important contribution but still a fraction of the finance that the report finds will be needed to decarbonize the region. ADB stands ready to support the region’s climate goals through innovative finance, technology, knowledge, and partnerships.

MASATSUGU ASAKAWA

President

Asian Development Bank

PREFACE

With each passing year, the effects of climate change are increasingly visible in developing Asia—from unprecedented floods to extreme droughts and devastating storms. The region is one of the world’s most vulnerable to climate change, and it is the poorest