Southeast Asia and the Economics of Global Climate Stabilization

Publication | December 2015

Southeast Asia is vulnerable to climate change, yet is also on a carbon intensive development trajectory.

The Asian Development Bank (ADB) has analyzed the potential role the region can play in climate change mitigation, focusing on the five countries of Southeast Asia that collectively account for 90% of regional greenhouse gas (GHG) emissions—Indonesia, Malaysia, the Philippines, Thailand, and Viet Nam.

The study uses global economic models to examine scenarios of regulating GHG emissions through 2050. Within the scenarios, the cost of climate change inaction, changes that achieve mitigation, costs of climate action, co-benefits of mitigation responses, and benefits of avoided climate change are assessed.

Key Points

  • Southeast Asia is vulnerable if no action is taken to address climate change, and may lose up to 11% of gross domestic product (GDP) by 2100.
  • This study modeled various scenarios of emissions mitigation, including a scenario of ambitious mitigation in which Southeast Asia’s emissions are reduced to 30% below 2010 levels by 2050.
  • Ambitious climate stabilization has substantial initial costs, but leads to large co-benefits and even larger benefits from avoided climate damage, which collectively far outweigh costs found under a cooperative global climate solution.
  • The net costs of a low-carbon transition, even without climate benefits considered, are found to be a smaller share of GDP than the region has spent on fossil fuel subsidies.
  • Avoided deforestation can generate more than half of regional mitigation through the mid-2030s, and is the lowest-cost emissions reduction opportunity.
  • Energy efficiency is the largest source of potential emissions reductions through 2050.
  • Advanced energy technologies, such as carbon capture and storage and advanced biofuels, are critical to long-term decarbonization costs.
  • The costs of climate stabilization for the region will rise substantially if a global climate agreement is delayed, and will rise more for Southeast Asia than for the rest of the world.