Clean-energy investment growth in Asia has outpaced that of many other regions. It is currently averaging US$40 billion per quarter, a large proportion compared to the worldwide figure of about US$70 billion, according to Bloomberg New Energy Finance Data.
The sharp growth has been realized even though climate change concerns have not necessarily been at the top of the region’s agenda. Instead, the push in Asia has been driven by pollution reduction, green jobs creation, technological innovation and energy mix shifts, such as a move away from coal as the primary source of energy in China.
China has led the advance by investing the most, particularly in wind and solar power, because of the sheer size of its energy sector. Other countries, including Japan and Thailand, have also made major strides.
The climate change talks that took place in the last two weeks in Paris, with key leaders from Asia in attendance, may spur further growth, with governments executing policies promoting clean energy more successfully. Some projects that received government support have stalled under the weight of slow bureaucratic processes.
The region’s green projects could benefit from further financing channels such as new money from the Asian Development Bank and the Asia Infrastructure Investment Bank.
Another source could be new financial instruments such as green bonds. The issuance of such bonds in Asia Pacific has reached at least US$3.7 billion this year, compared with US$1.2 billion in 2014.
The views expressed in this article are those of Joseph Jacobelli, an analyst at Bloomberg Intelligence.
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