Articles & stories The climate change investment opportunity in Asia

The climate change investment opportunity in Asia
While Asia is at the frontlines of the war on climate change, the region also offers investors major opportunities in adaptation strategies and the renewable energy sector.

Over the past 10 years, four countries in Asia – Myanmar, the Philippines, Thailand and Vietnam – have borne roughly half the dollar losses from natural disasters worldwide. Global warming of just two or three degrees Celsius could result in as much as a 2.1% GDP loss for China and up to 5% in India by 2030 unless significant adaptation measures are taken, said Elizabeth C. Economy, C.V. Starr Senior Fellow and Director, Asia Studies, at the Council on Foreign Relations during the Asia climate change panel on April 7 at the AIC2016.. Concluded Wandee Khunchornyakong Juljarern, Chairwoman and CEO of SPCG Public Company Ltd. In Thailand: “We have to do something to prevent climate change. It is not any one country’s duty but the duty of all.”

The climate change threat is already having an effect on businesses, said Richard B. Tantoco, President and COO of Energy Development Corporation (EDC), a geothermal, solar and wind energy company in the Philippines. Since the Typhoon Haiyan disaster in 2013, EDC has been upgrading and re-engineering its facilities so they are better able to weather major storms and other disasters. Its insurance claims have risen more than sevenfold over the past five years. With worsening weather patterns in prospect, “we have to be prepared – otherwise we lose revenue and insurance premiums go up,” he explained.

The global warming challenge, however, offers investors major opportunities. Wandee told participants that her company is rapidly expanding solar farms in its home market and pursuing projects elsewhere in Asia including Japan, which decided to shut down nuclear power plants after the Fukushima disaster, and Myanmar. Geothermal energy is a natural alternative for the Philippines because of its location on the Pacific’s volcanic “ring of fire”, Tantoco said. According to Chen Xiaoping, Executive Director and CEO of China Everbright International Ltd., China is quickly embracing biomass -  the use of waste products to generate energy.

The investment opportunities are only just beginning, said environmentalist Christine Loh, Under Secretary for the Environment in the Hong Kong government. Every city generates waste, but many cities have not built up their treatment and disposal systems, she noted. “All cities will be energy producers.”

Hong Kong, for example, is working out how to generate energy from the pumping action of its water and drainage system. It is also building plants to turn waste including food into energy. Said Loh: “Every city will have to go through this. We will have to build infrastructure for a whole range of waste. Governments are spending billions but much of the investment will have to come from the private sector.”