Jakarta. Southeast Asia could lose up to 11 percent of its gross domestic product (GDP) if it fails to address climate change, and this could cause an obstacle for ASEAN chair Indonesia’s dream of escaping the middle-income trap, an analyst said on Tuesday.

ASEAN today is grappling with a climate crisis. For instance, Indonesia's eastern province of Central Papua is struggling with drought and food insecurity, said Fabby Tumiwa, executive director of the energy and environment think tank Institute for Essential Services Reform (IESR). Studies show that ASEAN is among the regions that would be the hardest hit by climate change. Fossil fuel still accounts for 80 percent of Southeast Asia’s energy mix.

“Rising temperatures and the worsening climate crisis can cost Southeast Asia between 6.5 and 11 percent of its GDP. This will stop Indonesia from getting out of the middle-income trap,” Fabby said in Jakarta.

“We are no longer facing global warming, but a 'global boiling' era. Indonesia needs to raise its GDP by at least 6 percent annually to get out of the middle-income trap by 2045. It would be hard to achieve such growth with drought, crop failures, and all,” Fabby said.

Indonesia aims to be a developed nation by its centennial in 2045 and reach net zero by 2060 or sooner. Fellow ASEAN members Malaysia and Vietnam set their net zero targets for 2050, while Thailand’s deadline is much later in 2065.

“I don’t think this is ambitious enough. The pathway to decarbonization in Southeast Asia depends on how committed we are to addressing climate change and slashing greenhouse gas emissions,” the analyst said.

According to Indonesia’s nationally determined contribution (NDC) climate target, the country pledged to slash emissions by 31.89 percent with its own efforts. Indonesia is open to having more ambitious reduction targets at 43.2 percent if it receives international assistance.

“But Indonesia’s NDC commitments are still not compatible with [the climate pact] Paris Agreement. We have time until 2025 to make a new commitment,” Fabby said.

Indonesia is the only ASEAN country that is a member of the G20 which encompasses the world’s largest economies.

“This shows how Indonesia has economic power in this region. As an emitter and economic giant, Indonesia should have led by example to guide other ASEAN members into being more ambitious in their energy transition efforts,” Fabby said.

Finance Minister Sri Mulyani earlier this year said that Indonesia’s economy would need to grow at least 6 percent on average to escape the middle-income trap by 2045. Growth should be nearing 6 percent in 2025-2029, and eventually close to 7 percent from then onwards. Indonesia's economy expanded by 5.17 percent in the second quarter of 2023.

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