Finance for achieving low-carbon development in Asia: the past, present, and prospects for the future

• Investment for low carbon development in Asia requires USD125–149 billion annually.
• The actual amount of public funding in Asia today is far from the above estimation.
• More than a half of funding is achievable by public sector if Asian countries could agree.
• Including private sector will meet financial needs for Asian low carbon development.

Finance has become a crucial agenda in climate change negotiations in recent years. Meanwhile, multilateral negotiations on climate change as a whole are making meager progress, and increasingly observed are activities by national governments and transnational non-state actors. The purpose of this paper is to illustrate how investment towards low-carbon development could be materialized in Asia. A thorough review of current financial assistance for developing countries in Asia was conducted, and the amount of funding proved to be relatively modest to achieve the aim. We then examined financial policy instruments that could be implemented in the region. We estimated that USD125–149 billion per year would be needed to reduce greenhouse gas emissions in the region by 2035. We also estimated that more than a half of this amount of funding could be achieved by public sector if several key policy instruments were agreed upon and enacted at regional and national levels in Asia. The role of private sector investment was also found to be indispensable in fulfilling all the long-term investment needs related to climate mitigation in the region.