Ensuring Seamless Green Transition in the Indo-Pacific: Pathways for ASEAN-EU-Malaysia Cooperation
The world is at a critical juncture in addressing the challenges posed by climate change and environmental degradation. The Indo-Pacific region, characterised by its diverse political systems, economies, and socio-cultural milieu, is particularly vulnerable to the impacts of climate change. To ensure a sustainable future and mitigate adverse impacts of climate change, collaboration among key stakeholders is essential. The urgency of making an irreversible transition towards a greener and more sustainable path cannot be overstated. The Indo-Pacific region faces a multitude of environmental challenges, including rising sea levels, extreme weather events, and the fast-depleting biodiversity. Addressing these challenges requires collective efforts that transcend geographical boundaries.
The European Union stands as a global leader in championing climate action and green diplomacy. The European Green Deal, a comprehensive plan to make the EU economy sustainable, is a testament to the EU's commitment to the Sustainable Development Goals (SDG). The Green Transition is also a crucial part of the EU's Indo-Pacific strategy. The Indo-Pacific, with the largest population, determines global climate trends and is also highly vulnerable to the impacts of climate change. Coupled with the region's high dependence on non-renewable resources and widespread lack of green infrastructure and SDG-complaint industries, the stability of the region's economic and political situation depends largely on the stability of the region's climate.
Being one of the region's largest trading partners, the EU's economic interests and climate security are closely linked to the stability and security of the region. Therefore, under the framework of the Indo-Pacific Strategy, the EU actively seeks to cooperate with its Indo-Pacific partners in green transition, to mitigate adverse effects of climate change and environmental degradation, and to safeguard the economic, social, and political stability of the region. Specifically, the EU’s Indo-Pacific Strategy clearly states its commitment to fight climate change, biodiversity loss, and other forms of environmental degradation in the region through the promotion and cooperation of green transition among its Indo-pacific partners.
The EU's commitment to green transition has already been put into action. In terms of inter-regional cooperation, the EU has engaged in a high-level dialogue on the environment and climate change, with a view to reducing greenhouse gas emissions, promoting a circular economy, reducing plastic pollution, and preserving forest biodiversity with ASEAN - one of the most important regional bodies in the Indo-Pacific region. At the same time, the EU has also launched the Green Team Europe Initiative to collaborate in promoting a green transition towards sustainable development and environmental protection through a broad dialogue with ASEAN in the field of climate change and in meeting the sustainable development goals.
The EU has signed the EU-Malaysia Partnership and Cooperation Agreement (PCA), which also highlights the importance of the green transition. Currently, their cooperation on green transition is strengthened mainly through policy dialogues and communication in bilateral or multilateral forums, with a focus in the fields of renewable energy development, research and development of clean energy transition technologies and materials, and sustainable forest governance.
Besides that, the EU also plans to invest at least a third of its development funds in green-related industries in the region. While the EU's push for a green transition in the Indo-Pacific has been inclusive and rapid, some issues remain, not least of which is how to balance the interests of its Indo-Pacific partners. For example, the EU has proposed new rules on deforestation, but given that some Indo-Pacific countries, such as Malaysia and Indonesia, profit from exporting palm oil to the EU, the new rules could negatively affect their interests and may disincentivize them to continue green transition.
ASEAN plays a pivotal role in facilitating cooperation among its member states. ASEAN's commitment to sustainability is evident through initiatives such as the ASEAN Socio-Cultural Community Blueprint and the ASEAN Economic Community Blueprint. While ASEAN has made it clear in the ASEAN Outlook on Indo-Pacific (AOIP) that cooperation on climate change, disaster management, marine pollution, green shipping, etc., are welcome, it has not explicitly singled out green transition as a priority area for cooperation in its Indo-Pacific Outlook document.
Some ASEAN member states, such as Malaysia and Singapore, have clearly expressed their interest in green transition, and have been actively supporting green transition of their local Small and Medium Enterprises (SMEs), which include some of the main sources of industrial pollution, through funding and policies. Some ASEAN member states, such as Myanmar, Laos, and Cambodia, have been ambiguous on the issue and lack clarity on both policies and actions. ASEAN has introduced the ASEAN Comprehensive Recovery Framework (ACRF), which paves a way for a green and circular economy transition in the region in the post-pandemic era. This demonstrates that green transition is also an important issue area for ASEAN, and how to do so is now a key issue for ASEAN to address.
As a member of both ASEAN and a developing nation, Malaysia holds a unique position in driving the green transition agenda. The country's commitment to the United Nations Sustainable Development Goals and its National Renewable Energy Policy showcases Malaysia's dedication to sustainability. By leveraging its experience in sustainable palm oil production, reforestation efforts, and eco-tourism, Malaysia can serve as a model for other countries in the region. Malaysia introduced the Green Investment Projects and Assets Allowance (GITA) and the Green Income Tax Exemption Service (GITE) as early as 2014 to encourage firms to make green production, while at the same time, it also launched the Green Technology Financing Scheme 2.0 (GTFS), through which companies producing green technology can receive up to RM100 million in soft loans from the government. Despite the attractive incentives, Malaysia still heavily relies on non-renewable resources including oil, gas, and coal.
The Indo-Pacific region's green transition is not only necessary but also achievable through meaningful cooperation among ASEAN, the EU, and Malaysia. By leveraging one another’s strengths, sharing experiences, and fostering joint initiatives, these nations can set a precedent for regional and global sustainability. The success of this endeavour relies on the commitment of all stakeholders to work together for a greener, more resilient future in the Indo-Pacific region and beyond.
This dialogue aims to deliberate upon issues concerning green transition and provide targeted solutions for challenges faced in the Indo-pacific region, through perspectives of the EU, ASEAN, and Malaysia.
