A Story in Numbers: The Asia Pacific Energy Transition Readiness Index

Everyone is saying the same thing – things are changing! The energy transition is well-underway! And the once-insurmountable gap between where we are and net-zero is inching closer every day. While the pathways are plenty, it seems like many might be banging to the beat of a different drum.

2 days. 8 panels. And over 2000 live audience members.

At the second installment of the Asia Pacific Energy Week, we gathered a diverse line-up of thought leaders and decision makers across the fields of energy, technology, finance, business and governments to tackle the most pressing issues facing the transformation of the region’s energy landscape in the next 10 years.

Here, we partner with Roland Berger and conduct a joint study of over 2000 energy executives and decision makers across the region to assess Asia Pacific’s readiness for the energy transition.

Based on an aggregate of 11 pre-determined key energy priorities, the study yielded valuable data and key trends, some of which might surprise you.

Perception versus Reality

A seismic shift has upended traditional structures here in Asia Pacific and redefined what it means to create a sustainable world. The momentum of the energy transition is outpacing even the Industrial Revolution of 200 years ago.

Yet, this optimistic picture belies a different truth – the survey of conference participants revealed a significant gap between perception and reality on the level of carbon emissions in the region.

According to the Asia Pacific Energy Transition Readiness Index, most believe regional carbon emissions levels to have fallen by almost a third between the years 2005 to 2020. In reality, it grew by around 50%. And yet, most anticipate 2030 emission levels falling by 39% compared to 2005.

The report places Asia Pacific’s energy transition as still in its infancy, with a score of 25% on the Readiness Index (which indicates how far along a region is in its energy transition).

Several Points of Departure, Where Do We Start?

It’s a commonly known fact that carbon emission levels have been rising. So why do people perceive quite the opposite? Is this a case of an echo chamber of stakeholders all invested in the energy transition, or are we being mollified by the media?

This misguided perception is not without basis: the grounds for such optimism is derived from the clear shift towards the importance of net-zero and is bolstered by support and endorsement from states and corporates.

However, the reasons can be distilled into the following:

1.     The first is that economic and population growth is outpacing emission reductions. Decarbonization is successfully underway in many heavy industries and sectors. However, strong economic and population growth in the region is counteracting this progress, leading to a net increase in emissions overall.

2.     Additionally, we still see varying commitment to the coal phase-out and inconsistent implementation of low carbon technologies. This makes for a case of two steps forwards, one step backwards. For instance, despite there being a lot of interest in Brownfield transformation for legacy systems and assets, coal-fired projects are still being funded and are under construction. Low carbon technology needs to be de rigueur for all new projects.

3.     When we evaluate the current progress and readiness for the energy transition as a region, Asia Pacific is still hampered by the lack of a regional mechanism. This has led to a largely mixed readiness for the energy transition despite several economies being at more advanced stages.

The Magic Word that Starts with ‘P’

In order to transform Asia Pacific’s energy landscape, we must create an ecosystem which goes beyond just energy industry. Policy emerges as the most consistent item on the wish list across the 11 energy priorities.

We stand at this moment in history at the driver’s seat, as one of the most technologically advanced societies unrivalled by any other in history. Asia Pacific would do well to develop and implement a regional mechanism in order to secure the region’s commitment to the energy transition, such as a regional emissions market on par with the International Monetary Fund’s recommendations.

We are thinkers, do-ers and pioneers, and the unchartered road ahead is full of challenges, but also new opportunities. I am hopeful that this overoptimistic interval will be followed by the next chapter of capitalizing on the catalysts for the energy transition, as the world keeps its eye on the prize and strives towards a net-zero future together, as one.