Amidst Trump Turmoil: Why ASEAN Must Take Bold Action on Climate Change Now

Since taking office, the second Trump administration has quickly reversed many climate policies established under the Biden administration. This includes cutting climate finance commitments, loosening carbon emissions regulations, and pulling out of the Paris Agreement again. For the Association of Southeast Asian Nations (ASEAN), which is highly vulnerable to climate change and relies on outside funding for green initiatives, these changes pose significant challenges.

Climate action is urgent for ASEAN. Rising temperatures and increased natural disasters are making it more critical to address climate issues. Unfortunately, the region’s climate policies are complicated by growing competition between the U.S. and China, the two biggest carbon emitters in the world.

The reduction of climate policies and financial support from the U.S. makes it harder for ASEAN to pursue clean energy and climate initiatives, especially amid ongoing trade tensions with China. As the U.S. steps back, ASEAN countries need to boost collaboration within the region, seek diverse funding sources, and enhance their clean technology sectors. It’s also essential for them to push for fair trade policies and balance their dealings with both superpowers to safeguard their energy needs.

The lack of climate finance has been a significant barrier for ASEAN. The International Energy Agency highlights that investment in clean energy needs to increase fourfold to $130 billion a year by 2030 to meet climate goals. While international partners have made pledges, these often do not materialize, leaving ASEAN states frustrated and in need of more robust funding.

With the U.S. withdrawing from its role in climate finance, the region will likely suffer more. This could shrink the pool of resources available for climate-related projects in Southeast Asia and weaken international cooperation. The U.S. has also stepped back from initiatives aimed at helping countries like Indonesia and Vietnam transition from coal to cleaner energy. Major banks withdrawing from alliances supporting net-zero emissions further complicate the situation.

On the flip side, as the U.S. retreats, China is making headway in the clean tech sector. While U.S. funding decreases, China is expanding its influence in ASEAN through investments in renewable energy. It already contributes significantly to international renewable finance in the region and is involved in numerous infrastructure projects.

If ASEAN increasingly relies on Chinese investment for green projects, it might create dependencies that can be challenging to manage. For instance, countries like Cambodia are already facing challenges due to overreliance on China. Chinese projects also raise concerns about local environmental impacts and transparency, particularly in the case of hydropower dams in Laos that have harmed local communities.

The competition between the U.S. and China has sometimes benefited ASEAN, pushing for cooperation and initiatives like the Just Energy Transition Partnerships (JETPs). However, with the U.S. cutting back on climate funding, this competition may turn more detrimental.

During Trump’s previous term, tariffs on solar panels and clean energy technology increased costs for renewable energy projects. New tariffs on Chinese imports could raise solar product costs significantly, impacting countries like Vietnam and Malaysia that rely on affordable Chinese solar panels to meet their energy goals.

Yet, there’s a potential upside: tariffs could open opportunities for ASEAN countries to become alternative suppliers for the U.S. market. If Chinese technology firms shift operations to Southeast Asia to avoid tariffs, this could bolster local economies. However, if the focus remains on targeting Chinese ownership instead of location, ASEAN nations may still suffer.

As ASEAN navigates this complicated landscape, it faces both challenges and opportunities. The region must weigh manufacturing benefits against rising import costs. Countries like Vietnam could gain new markets but must manage production expenses carefully. Additionally, aligning on standards for solar panels and clean energy projects could enhance trade and product quality across ASEAN.

A unified approach in international discussions could bolster ASEAN’s influence and help secure fair trade practices and tariff reductions. It’s also vital for the region to reduce dependence on Chinese technology by diversifying supply chains and boosting intra-regional investment.

To enhance resilience, ASEAN should invest in local clean tech production and foster innovation. This involves providing financial support and training to small and medium-sized enterprises, paving the way for a skilled workforce that can propel the region towards clean technology leadership.

While the current U.S. administration’s policies present hurdles for ASEAN, the region’s resilience depends on cooperation, diverse funding strategies, and careful navigation of U.S.-China competition. By strengthening its climate efforts, ASEAN can emerge as an attractive partner for investment and protect its communities most vulnerable to climate change.

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