Asia’s trajectory will shape global climate outcomes
I just returned from two weeks in Asia, and the region’s pivotal role in tackling the climate crisis is becoming increasingly evident. While much of the global media remains preoccupied with tariff turbulence sparked by the Trump administration, it was business as usual in the region as it steadily addressed its energy needs for the next four decades. This focus is critical: Asia’s robust growth and thirst for energy, and its ability to decarbonize, will determine whether global efforts to reduce greenhouse gases succeed.
Asia’s coal conundrum
At the core of this challenge lies coal. Despite significant progress in renewable energy, coal still accounts for 82% of electricity generation in Asia. Japan exemplifies this dilemma, attempting to balance its reliance on coal with ambitious greenhouse gas reduction targets. The government is placing bets on “clean coal” technologies, such as blending hydrogen and ammonia with coal and utilizing carbon capture and storage (CCS). However, a recent Asia Research & Engagement report (ARE) reports that these initiatives are economically unsustainable, requiring perpetual government subsidies.
Despite significant progress in renewable energy, coal still accounts for 82% of electricity generation in Asia.
It is a conundrum being confronted by every Asian economy. However, unlike the United States, which has declared war on renewable energy and emissions regulation, Asia, led by China, is deadly serious about accelerating the transition from coal to renewables.
Asian choices
How Asia copes with the energy transition is critical because the region is now an epicenter of economic growth and power consumption driven by rapid industrialization, urbanization, and technological advancements. It will also be our focus, as we look to the future.
Economic growth drives energy transition
Asia’s economic clout is undeniable. By 2025, the region’s real GDP is projected to grow by 4.5%, outpacing most other parts of the world. China, India, Vietnam, and Indonesia are expected to lead with annual growth rates exceeding 5%. Artificial intelligence advancements, automation, and renewable energy technologies underpin this economic transformation.
That growth needs power. The region is responsible for almost half of global electricity consumption, up from just 10% in 2000. China alone consumes 33% of the world’s electricity, with demand driven by its manufacturing sector, as it ramps up production of solar PV modules, batteries, and electric vehicles. India and Southeast Asia are also experiencing above-average increases in power demand due to rapid industrialization, urbanization, and population growth.
China’s clean energy initiatives will meet around 90% of new demand through 2027. As a result, electrification in China has surpassed that in the US and the European Union.
Asia is also at the forefront of renewable energy adoption. The region is on track to triple its renewable capacity by 2030 through substantial investments in solar, wind, and nuclear power projects. China’s clean energy initiatives will meet around 90% of new demand through 2027. As a result, electrification in China has surpassed that in the US and the European Union.
Southeast Asia is also emerging as a major driver of global energy demand, expected to account for 25% of total growth between now and 2030. Electricity consumption is rising at an annual rate of 4%, driven by increased use of air conditioning amid frequent heatwaves and expanding industrial activity.
The global stakes
Asia’s trajectory will shape global climate outcomes. The region accounts for more than half of global primary energy consumption and is responsible for 51% of annual greenhouse gas emissions. Its leadership in clean energy innovation and investment offers immense potential and underscores the urgency of balancing fossil fuel dependence with sustainability goals.
(…) With the US retreating from climate action, Asia’s strong economic growth and surging energy demand make it a critical player in addressing the climate crisis.
More importantly, perhaps, with the US retreating from climate action, Asia’s strong economic growth and surging energy demand make it a critical player in addressing the climate crisis. Asian nations are integrating global initiatives like the Paris Agreement into national policies. Singapore and China have aligned their environmental strategies with global goals, influencing international climate governance. China’s leadership in South-South cooperation also strengthens the role of developing nations in climate decision-making.
But there are a few caveats. Asia’s decidedly commercial approach to climate solutions abandons much of the equity and just transition initiatives you see in the West. The “Asian way” is also brutally competitive, with Europeans increasingly worried that Asia’s prosperity comes at the expense of European jobs. The overwhelming sense in Asia is that the region is well on its way to demonstrating that there is a clear and present alternative to tariff and energy policies coming out of Washington, D.C.
Featured photo: Bac Lieu wind power plant, Vietnam
