ICAEW: Vietnam leads ASEAN in electricity generated through renewables

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Economic Insight: South East Asia is produced by Cebr, ICAEW’s partner and economic forecaster. Commissioned by ICAEW, the report provides its 144,000 members with a current snapshot of the region’s economic performance. It undertakes a quarterly review of South East Asian economies, with a focus on Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
 
2014 marked a positive turning point in climate change where carbon dioxide emissions remained constant for the first time while world output grew. Environmental degradation generally accompanies economic development up to a point, after which further development relieves environmental pressure. Figures show that globally, the point may have been reached where advanced economies have moved to sustained clean growth.  
 
ICAEW: Vietnam leads ASEAN in electricity generated through renewables
 
The situation is less bright in ASEAN. Within the region, most economies have not reached a stage where the environmental impact of economic activity starts to decrease. With the exception of Singapore, which has seen a sustained drop in emissions since 1994, member countries like Indonesia, Malaysia, and the Philippines are only seeing periodic lower emissions when GDP shrinks. 
 
Scott Corfe, ICAEW Economic Advisor and Cebr Associate Director, said: “Manufacturing activities have a strong effect on emissions, since they produce more than three times the carbon emissions - per $1,000 of output - than service activities. While ASEAN has seen a positive move towards cleaner manufactures, this is undermined by a growing dependence on commodities as China’s expansion has kept demand strong. 
 
“It will be helpful for Vietnam to diversify its exports away from commodities and consider cleaner manufactures. This will reduce its reliance on China as an export market for coal in case the Asian giant’s economy slows and also help reduce Vietnam’s environmental footprint.” 
 
Mark Billington, Regional Director, ICAEW South East Asia, said: “Much more is needed to translate environmental policies into reality, including a stronger regulatory environment, political will and funding. Commodity-rich ASEAN nations like Indonesia and Vietnam may be attracted by the short-term gains in GDP that can be reaped at the expense of natural capital stocks – for example, the natural wealth locked in resources such as forests. 
“One way to ensure more sustainable growth is to consider natural capital accounting. By calculating the value of critical assets, their proper use can be measured and managed to ensure long term sustainability for both organisations and for the environment. ”
 
ICAEW: Vietnam leads ASEAN in electricity generated through renewables
  
An encouraging sign for Vietnam is its high proportion of electricity generated through renewables instead of fossil fuels, with hydropower accounting for almost half of its entire electricity generation. Vietnam is leading in this area, while its ASEAN counterparts still lag behind in renewable generation capacity.
 
Over the last decade, environmental policy across ASEAN has been higher on the agenda, but progress remains difficult. While environmental policy in Singapore has been relatively successful, plans in other ASEAN nations such as the Philippines and Thailand have been more modest. 
 
As the global economy moves towards cleaner growth, ASEAN needs to keep pace. Across the region, lower environmental impact from its development will make it a more desirable place for individuals and firms to move to.  
 
Other findings in the report include:
 
Growth in Indonesia remains strong, with potential for greener growth       
Indonesia’s strong growth is forecast to rise steadily to 6.3% in 2018. However, environmental degradation remains a challenge. Unlocking the potential value of its natural resources through natural capital accounting may encourage greener growth.
 
Malaysia seeing positive signs in country’s slowing emissions     
 
Malaysia has seen slowing emissions growth since 2011 without a slowdown in GDP growth. As it moves towards its aim of becoming a high income nation by 2020, more needs to be done to increase its capacity of electricity generated by renewables, to meet its renewable energy target of 2080 MW by 2020.
 
Singapore sets an example for ASEAN in sustaining lower emissions    
 
Singapore’s transition into an international services hub has resulted in sustained lower emissions since 1994. However, more needs to be done to increase its capacity of electricity generated by renewables by 10% in 2020. 
 
The full report Economic Insight: South East Asia is available at www.icaew.com/economicinsight  and a video summary can be viewed here.
 
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Contact: Mai Anh Do, Account Manager, Pioneer Communications on +84 09833 28785 or email at: maianh.do@pioneervn.com 
 
Contact Jamie Douglass, ICAEW Media Relations Specialist, on +44 (0)207 920 8718, or email james.douglass@icaew.com