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Asia-Pacific needs $71 trillion to meet UN call for faster decarbonisation - study

Asia-Pacific needs $71 trillion to meet UN call for faster decarbonisation - study
(Saturday, May 6, 2023) 13:21

TEHRAN (NIPNA) -- The Asia-Pacific region will need to invest $71 trillion to achieve net zero greenhouse gas emissions by mid-century, as urged by the United Nations, a modelling study showed on Friday.

The study, conducted by the Asia Society Policy Institute, an international relations think tank based in New York, said the investment was 34% higher than the estimated cost of meeting the region's current net zero emissions targets, excluding those contingent on foreign aid.

The study said the investment and climate commitment would boost the region's economic output by 6.3% above the projected level for the 2030s, create up to 36.5 million jobs by 2030, reduce household energy costs by $270 billion and improve the trade balance by $827 billion by cutting fossil fuel imports.

However, average households would feel poorer due to higher consumer prices from carbon tariffs and higher taxes to fund decarbonisation, the study's authors said.

The study was based on a simulation model developed by economists at Cambridge Econometrics and was commissioned by a high-level policy panel on achieving net zero emissions in Asia-Pacific.

The region accounted for almost half of global carbon emissions in 2020.

Last month, U.N. Secretary-General Antonio Guterres called on countries to "fast track" their commitments to net zero emissions, setting 2040 for developed economies and 2050 for emerging economies as deadlines. He said a "quantum leap" in climate action was needed to limit global warming to 1.5 degrees Celsius by 2100 and prevent the worst effects of climate change.

China and Indonesia have set targets to reach net zero emissions by 2060, while Thailand by 2065 and India by 2070. Most other countries in the region have committed to achieving net zero emissions by 2050.

According to the study, of the total investment of $71 trillion, $53 trillion is related to current net zero emissions commitments and another $18 trillion is needed to accelerate the achievement of net zero emissions for the entire region by 2050.

The study warned that delaying more ambitious climate measures would result in higher costs for Asia-Pacific countries in the long run due to "stranded assets" and higher carbon border taxes imposed by other world economies.

Assets become "stranded" when they become economically unviable due to stricter decarbonisation regulations, causing losses for investors.

Carbon border taxes aim to create equal conditions for domestic and imported products in terms of carbon emissions or carbon footprints. The first such tax will be collected by the European Union from 2026.

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