China · Japan · Iran · Strait of Hormuz · Fortune Technology
Moody’s head of sustainable finance: Asia is embracing a ‘pragmatic transition’ on energy
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An “erosion of multilateralism” is changing Asia’s push for sustainability, as countries pursue individual goals of energy security and supply chain resilience instead of “virtue signalling,” says Rahul Ghosh, global head of sustainable finance and emerging markets at Moody’s Ratings.
Key facts
- Singapore, too, recently committed 800 million Singapore dollars ($631 million) to supporting research on low-carbon energy generation and decarbonisation technologies, in hopes of slashing national
- On Aug. 25, Japan unveiled detailed plans to accelerate its green transformation, including building up to five nuclear reactors in the 2040s, and 14 in the 2050s
- According to the Institute for Energy Economics and Financial Analysis, China, Japan, South Korea and Indonesia have all increased coal-fired capacity since 2020, despite pledges to decarbonize
- Some Asian countries are also deepening their reliance on fossil fuels
Summary
“Ten years ago, the world was aligning around consistent climate policies, but now we’re starting to see a bit of divergence,” he says, as countries instead pursue what he dubs a “pragmatic transition,” one that balances sustainability with energy security and economic affordability—usually by allowing traditional fossil fuels to play a role. Geopolitical conflict has driven much of the reassessment of the green transition. February’s U.S. strikes on Iran and the resulting closure of the Strait of Hormuz also cut Asia’s supplies of oil and gas, reiterating to the region’s governments how much they relied on energy from a volatile Middle East.