AMRO expects ASEAN+3 to mobilize private capital for a net zero transition

To maximize these multiple benefits, private capital must be mobilized with the help of supports such as comparable standards and frameworks

Jakarta ( – Economist at the ASEAN+3 Macroeconomic Research Office (AMRO) Marthe Hinojales hopes that ASEAN+3 can realize the economic benefits of a net zero transition while minimizing the negative impact of its growth through private capital mobilization.

These benefits range from the adoption of electric vehicles which will help spur investment and bring about the necessary transformation in the auto industry in the region, to carbon capture which can help minimize the risk of asset stranding and carbon offsets which can create new financial assets from natural resources.

“To maximize these various benefits, private capital must be mobilized with supporting assistance such as comparable standards and frameworks,” said Hinojales in a panel discussion titled “ASEAN+3 On the Road to Net Zero” which was monitored online in Jakarta, Thursday.

According to him, comparable standards and frameworks across the region for sustainable finance instruments will be crucial in accessing much-needed finance.

Meanwhile, all ASEAN+3 economies have made a commitment to mitigate climate change. The key to mitigation is setting appropriate prices for carbon emissions.

But with the region relying mostly on fossil fuels, carbon pricing has implications for inflation and export competitiveness in the medium to long term. Some economies also face substantial risks from stranded assets, with potential consequences for regional financial stability.

Therefore, Hinojales emphasized that the sooner a scalable, reliable and affordable low-carbon alternative for ASEAN+3 becomes available, the less painful and costly the transition away from fossil fuels will be. Thus, there are several policy recommendations given for each of the ASEAN+3 economies.

“The region needs to adopt well-tailored policy suites for each economy, which will include fiscal policymakers using climate spending smartly,” he said.

He explained the policy recommendations, namely by utilizing public spending that is based on climate information and fiscal tools for an orderly transition, as well as increasing the ability of the financial system to mobilize green and low-carbon financing.

Then, maintaining market integrity and green instruments through transparency and setting standards, as well as strengthening coordination across government agencies to ensure alignment with a credible long-term economic transition strategy.

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Reporter: Agatha Olivia Victoria
Editor: Faisal Yunianto


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