Asia requires a stronger political push to incentivize green financing to reach climate goals, even as rising fossil fuel prices increase the appeal of renewable energy, a sustainability conference has heard South China Morning Post reported. "There is a huge amount of work to be done from a regulatory perspective, trying to drive both supply and demand for green finance," said Miranda Carr, Singapore-based Global Head of Applied ESG and Climate Research at the indices compiler MSCI. “Without a systematic and wider regulatory push to do it, what we are seeing in quite a few markets [in the region] is very little issuance compared to the European market where there are much more incentives in place.”
Green finance in Asia typically funds renewable energy projects to help decarbonize the region's fossil fuel-dependent economies.' The sharp rise in natural gas prices resulting from the Russian invasion of Ukraine has led Asian and European countries to increase their use of more carbon-intensive coal, which will go against their climate goals in the short term. However, the price surge could have a different long-term effect, Carr said. Higher fossil fuel prices may encourage faster development of renewable energy.
Hong Kong financial intermediaries issued or arranged US$56.6 billion worth of green and sustainable debt in the city last year, four times the amount in 2020, Acting Secretary for Financial Services and the Treasury Joseph Chan Ho-lim told the conference on Wednesday. That accounted for a third of the volume in Asia.