Urges Policy and Financial Transformation to Speed Up Coal Phasing Out Across Asia in Climate Finance Asia
In a groundbreaking development, Climate Finance Asia, a team of seasoned environmental and social development professionals across Asia, has released a policy brief offering a roadmap for policymakers and investors navigating the complex landscape of coal transition in the region. The report, titled "Economic and Financial Drivers of Coal Phase-Out in Asia," identifies major financial and policy barriers hindering the early retirement of coal-fired power plants (CFPPs) in developing Asia and proposes solutions to overcome these challenges.
The report, part of a broader research initiative by Climate Finance Asia, highlights five key barriers: high financial risks and costs associated with stranded assets and early plant retirement, lack of tailored financial instruments and reforms, policy gaps and inconsistencies, limited just transition frameworks, and rising climate risks straining public finances.
Investors and operators face significant losses when coal plants are retired before their economic life due to sunk capital costs and financing challenges. The absence of innovative, Asia-specific financial mechanisms, such as climate-linked bonds or transition financing, further complicates matters. Current policies often lack clear, credible pathways or incentives for accelerated coal retirement, exacerbated by regulatory uncertainty and insufficient government support.
Transitioning coal-dependent regions without causing social disruption is another significant challenge. Policies integrating social inclusion, poverty reduction, and decent work creation are not yet fully developed or implemented. Moreover, increasing costs due to climate-related impacts and higher borrowing costs restrict governments’ fiscal space to support coal phase-out initiatives through subsidies or compensation.
The policy brief emphasizes the need for policy reforms that provide a comprehensive roadmap for just, inclusive, and financially feasible coal phase-out. This includes fostering collaboration among policymakers, financial institutions, and industry stakeholders to develop targeted solutions tailored to country-specific contexts in Asia.
This insight aligns with broader regional efforts, such as the Community of Practice for Just Energy Transition in Asia, which addresses the social and policy dimensions to support a fair transition away from coal.
Climate Finance Asia, a mission-driven business founded in 2008 as Carbon Care Asia, delivers high-quality advisory services on sustainable finance in the region. The roadmap includes tailored country-specific solutions to support an accelerated and just coal phase-out. Climate Finance Asia remains committed to continuing the dialogue and working closely with industry stakeholders, financial institutions, and policymakers to foster collaboration and share practical insights to advocate for and accelerate the phase-out of coal power plants across the region.
For more information or to access the full policy brief and report, visit www.climatefinanceasia.com.
Tags for this press release include coal emissions, financing, investment, power plants, energy, decarbonisation, energy transition. The topics related to this press release include Carbon & Climate, Cities, Energy, Policy & Finance, Regions, Asia Pacific, Bangladesh, Indonesia, Malaysia, Pakistan.
- The policy brief by Climate Finance Asia proposes solutions for overcoming challenges that hinder the early retirement of coal-fired power plants (CFPPs) in Asia.
- Financial risks and costs associated with stranded assets and early plant retirement, lacking tailored financial instruments, policy gaps, limited transition frameworks, and increasing climate risks are major barriers to coal phase-out in Asia.
- Renewable energy and clean energy are crucial for the footing of the energy transition, as the report emphasizes the need for just, inclusive, and financially feasible coal phase-out through policy reforms.
- Aside from the policy brief, regional efforts like the Community of Practice for Just Energy Transition in Asia address social and policy dimensions to support a fair transition away from coal.
- Climate Finance Asia provides high-quality advisory services on sustainable finance in the region and continues to collaborate with industry stakeholders, financial institutions, and policymakers to advocate for the acceleration of coal phase-out.
- Major takeaways from the report include fostering collaboration among stakeholders to develop targeted solutions tailored to country-specific contexts in Asia and addressing social disruption during the transition from coal-dependent regions.
- General news, finance, science, and environmental-science sectors, as well as policy-and-legislation and business sectors, should closely follow the developments regarding climate finance, coal transitions, and renewable energy in developing Asia.
