From green to transition finance: Re-gear Asia’s carbon clean-up

livemint.com:

Asia is the economic engine of the world. Population growth, urbanization and industrialization are on the rise. But the region also faces a stark reality: achieving sustained economic development with the least amount of carbon emissions requires a monumental shift in energy production and consumption.

We also cannot forget that we are no longer just chasing a ‘green’ future. We’re striving for a just transition as well. A just transition is not just about replacing coal-fired power plants with windmills and solar panels.

It is about building a resilient future that leaves no one behind and where everyone can live well—with access to food, fresh water, air, education, etc— within planetary constraints. Indeed, a just transition would encapsulate the United Nations’ 17 Sustainable Development Goals which cut across economic, social and environmental objectives and targets. News reports scream “trillions needed"— about $3.5 trillion a year—to achieve the goal of net-zero emissions, painting a picture of a resource-scarce future.

However, the reality is far more nuanced. The challenge is not a lack of capital, but the need for a robust ecosystem to attract and channel investments effectively. Bridging the sustainable financing gap will require innovation on several fronts—through innovative policies, solutions, financing models and partnerships.

Investors need clear long-term policy frameworks that define emission reduction targets and encourage sustainable practices. This clarity creates a degree of predictability to help investors better assess future risks and make more informed investment decisions. Examples of conducive policies include green and transition taxonomies to channel capital in practical and transparent