Southeast Asia should switch to a greener growth model, OECD says


11/11/2014 - Southeast Asia’s over-reliance on natural resources like oil, gas, minerals and wood for economic growth is unsustainable over the long term and is causing environmental damage that will hurt future prosperity if left unchecked, according to a new OECD report.


Towards Green Growth in Southeast Asia finds that natural resources account for more than 20% of the region’s wealth, compared to an average of 2% in OECD countries, and are being depleted at an increasing rate, especially in Brunei, Indonesia, Thailand and Viet Nam.


A dependence on fossil fuels is also causing rising pollution that could drive up health costs and reverse gains in life expectancy. The region’s vulnerability to climate change should be another incentive for structural reforms to create a greener growth model.


“Southeast Asia’s current growth model is unsustainable. The region has a perfect opportunity as it modernises and builds up its infrastructure to shift to a green growth path,” said OECD Deputy Secretary-General Rintaro Tamaki, presenting the report at the Asia Low Emission Development Strategies Forum in Yogyakarta, Indonesia. “Clear and predictable policies would draw public and private funds to green infrastructure projects that can support long-term growth while preserving the environment.”


OECD modelling shows that climate change could result in a GDP loss for the region of more than 5% by 2060 due to factors like lower agricultural yields and rising sea levels. Coastal flooding in Southeast Asian cities already costs hundreds of millions of dollars in average annual economic losses, and the cost could climb to USD 6 billion a year by 2050.


Estimated drop in economic output from climate change by 2060

 Estimated drop in economic output from climate change by 2060

 Source: OECD


Rapid growth in Southeast Asia has come at the cost of dirtier air and water, depleted forests and topsoil and the loss of mangroves that protect coasts from flooding. Air pollution in many Southeast Asian cities is now well above World Health Organisation guidelines.


The slow uptake of green energy sources in Southeast Asia is due in part to energy policies and subsidies that favour fossil fuels over renewables, the report says. Greener investment in farming, forestry, mining and urban transport would reduce energy use and preserve natural resources.


» Read the report.


For further information, journalists are invited to contact Naoko Kawaguchi on +81 90 8644 3546.


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