It has long been acknowledged that financing is a hindrance to Southeast Asia's rapid decarbonization.

Two factors will be crucial to a successful shift to a low-carbon economy, particularly in the low- and middle-income nations of the region.


International concessional financing comes first, followed by more aggressive climate targets to pique investor interest.
At COP29, both are anticipated to be decided.


According to the Paris Agreement, nations must revise their Nationally Determined Contributions (NDCs) by February 2025. Leaders will also unveil the New Collective Quantified Goal (NCQG), a new set of financial pledges to help developing nations with their climate efforts after 2025.
The necessary funding may not be available.

Even though the majority of Southeast Asian nations currently have aggressive long-term clean energy goals, the necessary investments are still behind schedule.


Despite making up 9% of the world's population, 6% of its GDP, and 5% of its energy demand, the region only receives 2% of global clean energy investment, according to the International Energy Agency (IEA).
Over the previous three years, the average annual energy investment was $72 billion. According to the IEA's "Net Zero Emissions" (NZE) scenario, $190 billion must be invested annually between 2026 and 2030.

To implement adaptation measures and adopt green technologies on a large scale, developing nations need far more funding than is currently available. Many NDCs from developing nations contain "conditional" climate pledges, which they claim can only be achieved with help from other countries.
A third of the $4.5 trillion that developing nations claim is required is contingent on pledges. The conditional and unconditional targets in the current NDCs that the majority of Southeast Asian nations have submitted to the UNFCCC differ significantly.


A third of the $4.5 trillion that developing nations claim is required is contingent on pledges. The conditional and unconditional targets in the current NDCs that the majority of Southeast Asian nations have submitted to the UNFCCC differ significantly.