Asia’s path to a greener future
• Policy support in the form of subsidies and financial incentives can reduce technology costs. At present, many new technologies are expensive, which is hindering their adoption and development. Government support through subsidies, grants and other financial incentives can help reduce production costs and enable economies of scale. Lower production costs could translate into lower purchase prices for end consumers and foster greater adoption.
With hydrogen vehicles, safety is a key issue, while recycled batteries can be perceived as lower quality. Investigations into safety incidents can help curb concerns. In other cases, public awareness and better communication by businesses and governments can go a long way to address common misperceptions. • Recycling and reuse can present opportunities to overcome supply chain disruptions owing to changing global dynamics. The prices of critical minerals are on the rise because of growth in demand and fluctuations in supply. Recycling products, such as electric vehicle (EV) batteries, could ease the dependence on expensive raw materials, improve affordability and facilitate the transition away from a linear take-make-waste economy.
• Greater public and private investments are needed. While climate technology is attracting
investment, more financial support is needed to scale- up the next wave of innovation. Funding is also needed to help install essential infrastructure to support the uptake of climate technologies such as hydrogen production plants and EV charging stations.
EASTSPRING INVESTMENTS PERSPECTIVE
Growing and scaling the market of decarbonisation technologies is necessary to enable a credible climate transition in Asia. It is also essential for developing an
investable ecosystem that attracts and retains a significant base of domestic and international capital. To attract more private capital, enabling regulations that target the ease of lending and investment as well as industry-level incentives are equally important. Identifying where the investable opportunity exists across private and public equity and debt markets for investors to make the most impact for their capital will also be critical.
Joanne Khew, Director, ESG Specialist, Eastspring Investments
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