ASEAN-Japan climate ambitions: an underrated Indo-Pacific dynamic

ASEAN and Japan in an increasingly contested Indo-Pacific

As ASEAN assumes an increasingly prominent role in both Indo-Pacific and global climate discussions, it is gravitating toward a more substantial engagement in climate and environmental diplomacy. In tandem with the region's economic expansion and its significance in geo-economic and geopolitical spheres, the call for robust climate and sustainability endeavors from ASEAN has grown stronger.

Among ASEAN's dialogue partners, Japan is displaying a mounting interest in supporting ASEAN's endeavors related to decarbonisation and climate resilience. This alignment finds resonance with Japan's commitment to advancing a Free and Open Indo-Pacific (FOIP). Within this partnership, Japan aspires to construct a pragmatic framework for international collaboration by fostering close cooperation with its regional counterparts. Leveraging its historical, cultural, and economic bonds with Asian nations, along with a proven history of developmental assistance and cooperation, Japan is well-poised to contribute to the regional shift towards sustainable energy.

Existing efforts for climate and sustainability collaboration  

Demonstrations of these efforts have been apparent over the past decade, highlighted by initiatives like the ASEAN-Japan Joint Statement on Environmental Cooperation (2010), the ASEAN-Japan Environmental Cooperation Initiative (2011), and the ASEAN-Japan Joint Statement on Climate Change (2014). However, recent years have seen a notable escalation and emphasis on Japan-ASEAN collaboration in sustainable development. This includes the elevation of ASEAN-Japan relations to a "Comprehensive Strategic Partnership" in 2023, underscoring the growing imperative and potential for both partners to combat climate change and achieve sustainable development goals. 

These endeavours are contextualised within the broader framework of ASEAN-Japan climate cooperation. In January 2022, the Japanese government introduced the "ASEAN-Japan Economic Co-Creation Vision", a document that enhances economic connections and lays the groundwork for fundamental principles governing bilateral economic interactions.

Central to this vision is the propagation of a "global value chain model of development," embedding human rights, sustainability, and Environmental, Social, and Governance (ESG) considerations into their economic interplays. The vision further advocates for an expansion of sustainability endeavours in ASEAN through international entities like the Economic Research Institute for ASEAN and East Asia (ERIA). Notably, it accentuates the augmented role of ERIA's Digital Innovation and Sustainable Economy Centre.

A cornerstone of this vision is sustainable development, encompassing technical and financial backing through initiatives like the "Asia Zero Emission Community" (AZEC), a program aiding ASEAN nations in transitioning away from fossil fuels. Additionally, in February 2021, Japan and the Asian Development Bank (ADB) unveiled a Memorandum of Cooperation (MOC) for the Cleaner Energy Future Initiative for ASEAN (CEFIA), a project focusing on knowledge transfer and financial support for ASEAN's journey towards clean energy.

The Asia Energy Transition Initiative (AETI), launched in May 2021, stands as another pivotal element of this strategy. Its objective is to chart a pragmatic course for decarbonization by harnessing Japanese technology and expertise while carefully balancing Energy security, Environment, and Economic growth ("3Es"). Underpinned by a significant commitment of $10 billion, this initiative reaffirms Japan's determination to propel renewables, energy efficiency, and cleaner fuels. Investments have already been announced for projects in Thailand, Vietnam, Indonesia, and Malaysia, with more in the pipeline. Furthermore, Japan's homegrown technologies spanning renewable energy grids, mobility solutions, storage batteries, ammonia, and hydrogen, funded through the 2 trillion yen ($14.5 billion) Green Innovation Fund, will be disseminated across Asia.

In addition, at the launch of the ETM Southeast Asia Partnership during COP26 in November 2021, Japan unveiled a $25 million grant to the Energy Transition Mechanism (ETM) partnership led by the ADB. ETM's purpose is to hasten the retirement of existing coal-fired power plants and replace them with clean energy capacity. This mechanism encompasses two multibillion-dollar funds: one dedicated to expediting the retirement or repurposing of coal-fired plants and the other concentrated on new clean energy investments. Financing for ETM is projected to originate from multilateral banks, private institutional investors, philanthropic contributions, and long-term investors.

Challenges to overcome 

Amid these positive advancements, some notable challenges have surfaced in the Japan-ASEAN relationship. These include ASEAN's apprehensions about resource competition with Japan, particularly in domains like energy and raw materials, which has led to strategic considerations. Additionally, disparities in ASEAN countries' positions regarding relations with the United States and China, and how Japan's close alignment with the US and its allies could complicate these relations, have also posed challenges.

Moreover, ASEAN itself grapples with its own hurdles in catalysing climate initiatives and sustainable development. These encompass the divergent levels of economic development within ASEAN, giving rise to varying and sometimes conflicting priorities, especially between countries that have already embraced industrialization and service sectors versus those that remain reliant on primary industries like agriculture and logging. Certain ASEAN countries place greater emphasis on economic and social progress over environmental sustainability. These are hurdles Japan will need to reconcile with and address when collaborating with ASEAN on its climate ambitions.

Collaboration between ASEAN and Japan within the realm of climate action underscores a nuanced connection within the intricate policy landscape. Nevertheless, amidst this intricacy, positive breakthroughs are emerging, even if they proceed in incremental steps. Over the course of the next decade, as climate action becomes increasingly important, ASEAN must diligently and comprehensively reduce its emissions, particularly as its economic and political weight grows.

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