The Indo-Pacific stands at the forefront of climate change impacts, grappling with a myriad of environmental challenges. This is further exacerbated by its heavy reliance on fossil fuels for energy. Consequently, energy plays a crucial role in driving economic growth and reducing poverty levels. However, the dependency on fossil fuels had led to increased carbon emissions, with the region alone contributing 16.75 billion tons of carbon dioxide. Moreover, the region consumes a quarter of global energy, a figure expected to rise to almost half by 2050. Hence, it is critical to address the transition to affordable and clean energy to keep the wheels of the economy moving, as well as addressing the SDGs. Energy demand in the Indo- Pacific is set to increase dramatically, reaching almost half of global demand by 2050.
Also, despite its economic significance, the region faces considerable challenges in achieving the Sustainable Development Goals (SDGs). This is because the region is often looked towards from a strategic or security lens, rather than from a development lens. Addressing the region's energy needs is crucial for sustaining its development trajectory, and financing for this transition is a critical aspect. However, reports also show acceleration in capex in renewable energies and a significant decrease in prices in the costs of solar energy and batteries storage in the region. In this sense, it is interesting to investigate the extent to which certain countries or sectors in the Indo-Pacific will be potentially impacted by this trend, and how finance could add real value in these cases.
Previous G20 summits, particularly those of Indonesia and India, have called for reforming the international financial architecture, including Multilateral Development Banks (MDBs), in the context of aiming to lower the costs of green investments in developing and emerging economies. The Brazil G20 has the opportunity to address the MDBs' role in fulfilling their pledge to scale up financing to USD 100 billion to meet the needs of developing countries to have an inclusive just energy transition. Additionally, there's a pressing need to meet the USD
4 trillion annual requirement, especially for developing nations, to adopt clean energy technologies by 2030, thereby aiming to achieve net-zero emissions by 2050.
In this context, the Sustainable Finance in the Indo-Pacific (SUFIP) Development Network (DN) is organising a virtual side event under the banner of T20 Brazil.
This panel discussion aims to explore how this geographic expanse can work towards addressing the critical facets of climate action, such as an inclusive and equitable energy transition. The panel would also delve into the need of innovative and alternative modes of financing climate action to leverage funds for climate action, especially for the developing nations. The ideas and suggestions from this discussion will contribute to discussions within the T20 Task Force 2 on Sustainable climate action and inclusive just energy transitions, particularly in sub-track 5, which focuses on optimising access to multilateral and climate funds and leveraging private capital for climate finance.
Driving Questions
Expected Outcomes
The ideas discussed during the event aims to contribute towards building the knowledge corpus and joint declarations made by the G20 Brazil Presidency on the issue of inclusive just energy transition and sustainable climate action, complementing discussions under the G20 Sherpa track's Working Groups on "Energy Transitions", "Environment and Climate Sustainability" and “Development”.
