Southeast Asia’s booming economy presents major environmental challenges: during the past decades, the region’s growth model has relied on intensive resource exploitation. Natural capital accounts for more than 20% of total wealth, well above the 2% average in OECD countries.
Growing rates of pollution threaten productivity and health, while ASEAN countries’ share of global greenhouse gas is expected to surge, albeit from a low base. But pursuing green growth requires substantial investment, in infrastructure, for instance: while Singapore and Malaysia are likely to be able to mobilise domestic and international finance, poorer Southeast Asian countries need to attract resources from official development assistance (ODA) or other forms of official development finance.
Although ODA is already supporting green growth in ASEAN countries, the scope for further increases in the years ahead may be limited, according to the OECD Development Assistance Committee. Between 2003-04 and 2009-10, ODA commitments to environmental objectives in Southeast Asian countries increased from about US$2.5 billion to more than $3.5 billion, to reach more than 35% of total ODA commitments. Yet during 2011-12, ODA commitments, both to the environment and in total, fell markedly, consistent with a trend seen in other regions of the world. However, worldwide ODA reached an all-time record of $135.2 billion in 2014, an encouraging sign.
©OECD Observer No 304, November 2015