Zero carbon emissions could cost Asia billions of dollars: ING
A rush-hour viaduct in the northern district of Qingdao city, in China’s Shandong province.
Cheungyo | instant | Getty Images
Three of Asia’s largest economies will spend around $ 12 trillion to achieve zero net carbon emissions in their transport industries, according to the Dutch bank ING.
China, Japan and South Korea account for nearly two-thirds of all carbon dioxide emissions in Asia-Pacific, and about one-third of global emissions, the bank said.
Japan and South Korea have pledged to achieve net carbon emissions by 2050, and China by 2060. Net zero emissions refer to the elimination of more than greenhouse gases by the atmosphere it produces.
The estimated cost of $ 12.4 trillion is “the equivalent of over 90% of China’s GDP in 2020,” according to Robert Carnell, ING’s Asia-Pacific research manager and author of the report.
It will cover the power generation capacity needed by countries to supply new fleets of battery electric vehicles, electrified rails, hydrogen trucks, sustainable aircraft powered by aviation and ships burning ammonia, he wrote.
The $ 12.4 trillion price does not include infrastructure spending to replace existing vehicle fleets, install electric vehicle charging points or stock new fuels in the industry, he noted.
With up to 30% of total energy consumption coming from the three countries’ transportation systems, they should act quickly and adopt sustainable solutions to ensure their goals are within reach, said ING.
If China, Japan and South Korea begin their energy transition process today and spread their efforts over the next 30 to 40 years, the cost of achieving zero net carbon emissions in transport will be manageable, the said. Bank.
China is the largest emitter of carbon dioxide in the world and achieving zero net carbon emissions will cost its transport sector $ 11 trillion, or “1.8% of GDP per year until 2060,” according to the report. report.
Quoting the 2020 outlook for renewable energies in China, ING said passenger car transport in China will more than double to 450 million by 2050, compared to 220 million vehicles in 2018.
China has experienced rapid growth in electric vehicles, and ING predicts that if the country fully embraces plug-in electric vehicles by 2060, the total energy demand of passenger vehicles by 2050 could decrease significantly.
China’s shipping industry would need the most investment to achieve net zero carbon, ING said, adding that the demand for ocean freight is expected to reach around 120% of current levels by 2060.
However, it would be impossible to achieve carbon neutrality without substituting diesel and liquefied natural gas with green ammonia, resulting in an additional cost of $ 3.7 billion and an additional 433 gigawatts of power generation capacity.
Japan and South Korea have both set their sights on 2050 and aim to meet their carbon neutrality goals by then.
According to ING forecasts, it will cost Japan $ 1 trillion to switch to a net zero plan for its transmission system, in terms of the required power generation capacity. That’s “around 20% of current Japanese GDP” – but that number can drop to “0.6% of GDP per year when broken down between now and 2050”. ‘
The report says Japan has made little progress in decarbonizing its economy, as fossil fuels still make up more than two-thirds of the country’s primary energy supply. On a positive note, this means that “Japan has a lot of fruit at hand to tap into in the transition process offering the prospect of rapid progress.”
ING estimated that the total cost of green power capacity to transform South Korea’s transport sector towards a zero carbon future would cost around $ 400 billion, or 0.6% of current GDP per year when it is spread over the next 30 years.
While the costs countries will have to spend on transitioning their transportation systems can be “extremely depressing,” it’s important to remember that “all of this spending is going to show up as GDP,” Carnell wrote.