Toward Green Growth in ASEAN

June 4, 2014

By Erik Solheim

The Association of Southeast Asian Nations (ASEAN) countries have exhibited high growth rates over the past decades, weathering even the worst of the global financial crisis. This impressive growth and accompanying rise in household income has brought great benefits to the ASEAN population of nearly 600 million, including declining poverty and strengthened social safety nets in many countries.

However, as ASEAN countries expand, they are also experiencing greater local and global environmental challenges – a trend that looks likely to continue if not worsen in the coming decades. Vulnerability to climate-related disasters in the ASEAN region is among the highest in the world. Globally in 2013, natural disasters, including the catastrophic typhoon Haiyan in the Philippines, cost more than $192 billion in economic losses, according to research from Aon Benfield Analytics. In addition, coastal flooding is expected to remain a significant threat to a large share of the population of many of Southeast Asia’s biggest cities, including Jakarta, Ho Chi Minh City and Hai Phóng in Vietnam, Yangon, and Bangkok.

Flooding is a significant threat to a large share of the population of many of Southeast Asia’s biggest cities, including Bangkok, which suffered some of the worst flooding in history in 2011. Photo/Arpaporn Winijkulchai

Local pollution levels are also of serious concern. The levels of one of the most dangerous pollutants, microscopic dust known as PM10, in urban areas in Vietnam, Indonesia, Myanmar, and Cambodia is more than four times higher than in Germany and France, according to the World Bank. This is in part a result of the increased use of cars and motorbikes as a larger share of ASEAN’s population achieve greater economic prosperity.

The exploitation of renewable and non-renewable natural resources, such as forests, fisheries, minerals, oil and gas, have contributed to high GDP growth. For instance, Indonesia is the world’s largest exporter of thermal coal, refined tin, and nickel ore. However, such rapid exploitation is quickly depleting the natural capital of ASEAN countries: for example, according to the FAO, between 1990 and 2010, forest cover decreased by about 13 percent in the whole ASEAN region. Vietnam and the Philippines were the only countries bucking this trend, although primary forest cover decreased in the former and was stable in the latter.

To ensure sustainable economic growth in the longterm, ASEAN countries will need to decouple economic growth from the natural resource depletion and environmental degradation. They will need to shift toward a green-growth path, but this transition won’t happen overnight. As part of a 2-year project aiming at promoting green growth in ASEAN countries, the Organisation for Economic Co-operation and Development (OECD) is finalizing a new report, “Toward Green Growth in Southeast Asia,” to be published in the second half of 2014. The report will provide tailored policy advice and recommendations on green growth and development for ASEAN countries. The project, which extends the ongoing OECD work on green growth indicators to Southeast Asian countries, will also include a database of green growth indicators for ASEAN countries.

Our research confirms that Southeast Asian countries recognize the importance of moving toward a greener development path and have already started mainstreaming green growth objectives into their national development plans. These plans already set worthy and ambitious targets, but implementation is often at early stages and governments will need to carefully manage trade-offs with other priorities.

In Cambodia, the National Green Growth Roadmap (NGGR) sets an ambitious series of goals and laws to encourage inclusive green growth. Cambodian authorities are exploring how to use hydroelectric power to increase their electricity supply and reduce the high cost of electricity, as electricity provision in Cambodia is among the most expensive in the world. This development can significantly contribute to greening energy sector, but it can also have negative social and environmental consequences because of the accompanying displacement of the households and destruction of ecological habitats. Cambodian authorities plan to tackle these problems through the construction of micro-hydroelectric plants and comprehensive strategic impact assessments in addition to consultations with local populations. To help reverse deforestation, Cambodia has committed to maintaining forest cover and forest planation at 60 percent of the total land area by 2015 in addition to increasing community forests from the current level of 1 million hectares to 2 million by 2029.

Indonesia’s government is also working toward a goal of zero deforestation. For many years, I have worked with President Yudhoyono on measures to help preserve rainforests while also providing new economic opportunities that do not negatively impact the environment. It was a great sign of progress when Wilmar, the world’s largest producer of palm oil, committed to no deforestation in 2013. Also, the National Action Plan for Reducing Greenhouse Gas Emissions (RAN-GRK) and its implementing regulation have identified forestry and peat land as key to achieving Indonesia’s climate change mitigation objectives consisting of a 26 percent emission cut by 2020 (and up to 41% with international support), compared to business-as-usual (BaU) projections.

Green growth is the only viable path forward for long-term, sustainability, but it’s not an easy or quick task to accomplish. However, there are already many strong examples to learn from, and our hope is that this new report and accompanying database will help strengthen public support for green growth objectives and government resolve and their commitment to achieving them.

Guest contributor Erik Solheim is chair of the OECD Development Assistance Committee (DAC) and can be reached via Twitter @solheimDAC. The views and opinions expressed here are those of the individual author and not necessarily those of The Asia Foundation.

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