Asia's most developed nations are far from leading the region's fight against climate change

Japan and South Korea, Asia's richest economies, have made token efforts to boost clean energy investments in the emerging markets of Southeast Asia and South Asia, but are far from leading the region's fight for climate change.

The lack of climate leadership demonstrated by these two nations partly stems from being laggards in climate action in their own domestic markets.

The governments of Japan and South Korea remain some of the most reluctant in fighting climate change, putting a price on carbon or imposing major regulatory restrictions on emissions. Instead, they are opting to wait for clean energy technologies like hydrogen or ammonia to materialize.

The foot-dragging has become increasingly noticeable as rich nations are held accountable for outsized contributions to global emissions, while doing precious little to curb them.

In September, the first report on the global stocktake ahead of the UN Climate Change Conference, or COP28, revealed that the world is not on track to meet long-term goals of the Paris Agreement, and observers expect the Global South to drive intense debate over equity during the summit in November.

In a rapidly evolving (or devolving) geopolitical backdrop, Japan and South Korea are also attempting to rival infrastructure investments under China's Belt and Road Initiative. This pits their resources against Beijing's dominance over clean energy supply chains, but presents few alternatives for poorer nations until Japanese and South Korean industries can form a clear view on decarbonization in their home countries.

Influencing the agenda

In Japan, according to the think tank InfluenceMap, climate and energy policy has been held back by powerful business groups representing heavy industry such as the Japan Iron and Steel Federation (JISF), the Federation of Electric Power Companies (FEPC) and the Japan Automobile Manufacturers Association (JAMA).

The influential Japan Business Federation, or "Keidanren", also dominates the climate agenda and staunchly opposes policies like carbon taxation while supporting thermal fossil power, the think tank said in a November 2022 report.

In South Korea, the economy is dominated by mega corporation "chaebols", or wealth clans, which contributed to the country's post-war industrial resurgence and wielded tremendous influence over economic policy and politics. These family-controlled conglomerates also own and operate much of South Korea's energy-intensive industries including refining, petrochemicals, manufacturing, shipbuilding and car manufacturing, most of which have resisted policies like carbon taxes under successive governments.

For instance, South Korean yards dominate global shipbuilding and accounted for 53% of new oil tanker tonnage and around 76% of new gas shipping tonnage delivered in 2022, according to the United Nations Conference on Trade and Development, or UNCTAD, 2023 review of maritime transport.

Despite a heavy concentration of shipbuilding in a single location, the industry lacked leadership in maritime decarbonization, with the blame shifting between regulators, shipping companies, shipyards, charterers and financiers, all waiting for economics to become feasible. Ironically, UNCTAD's report stated that the cost of climate inaction far outweighed the required investments.

Japanese and South Korean industries have long argued that the high costs of decarbonization would impede economic growth and make them uncompetitive, first when both economies were slowing and later during COVID-19. The Ukraine crisis then gave them ample justification to focus on energy security and cheaper fuels like coal and nuclear.

Japan and South Korea do not appear to view energy transition as their core strategy to de-risk from heavy dependence on oil and gas imports from the Middle East, even as the current violence in the region threatens to derail global energy supply.

On the first day of COP27 in November 2022, Japan received the Fossil of the Day Award from Climate Action Network International, a group of non-governmental organizations that presented the award to countries "best at being the worst and doing the most to do the least" on climate change.

This categorization, which puts Japan in the same bucket as the US, Russia and the United Arab Emirates on climate action, is unfortunate given Tokyo's tremendous potential to impact ASEAN energy policy.

Japanese oil refiners were some of the first companies that helped Singapore's oil refining hub take off more than half a century ago, and Japan has been key to financing new gas projects in countries like Bangladesh via the Asian Development Bank.

Japanese investments were also key to building the supply chain for LNG, which eventually helped backstop Europe when Russian gas supply was cut off. The LNG supply chain in many ways allowed the US to exercise its foreign policy and tighten sanctions against Russia after the invasion of Ukraine.

Clean coal

However, in 2023 when Japan assumed the G7 presidency, its latest gathering failed to set a clear deadline for ending coal-fired power consumption. Instead, it echoed Tokyo's stance on only accelerating the phase-out of "unabated" fossil fuels.

Such policies allow for "clean coal", where coal emissions are negated through carbon capture, an idea shunned by environmentalists because it remains untested, may take years to scale up and viewed as an excuse to prolong coal usage.

The Institute of Energy Economics, Japan, a state-backed think tank, noted that the G7 focused on "various pathways" for each country's energy transition "commensurate with their respective national circumstances" rather than rich nations' condescending imposition of a single pathway on low-income Global South countries.

While both Japan and South Korea are focused on a "pathway" based on fuels of the future like hydrogen and technologies like carbon capture, the same pathways may not necessarily apply to poorer Asian economies that need to rethink energy strategy from scratch.

Most of Asia require immediate action on decarbonization, yet the lack of leadership exhibited by the most resourceful nations will undoubtedly stunt climate action in this region.

A version of this article was first published in The Business Times.