International collaboration, particularly within the ASEAN bloc, could significantly contribute to addressing climate change's apparent "easier solutions." however, global finance requires substantial transformation, according to a global affairs expert.
The Investment, Trade and Industry Ministry of Malaysia has confirmed that the revised tariff rate imposed by the US on Malaysia was achieved without compromising the nation's sovereign rights. However, the focus on trade should not overshadow the pressing issue of climate finance.
The Global North, which includes the United States, United Kingdom, European Union, Russia, and Japan, are historically responsible for the majority of greenhouse gas emissions. Yet, as of the end of the decade in 2025, climate finance flows from the Global North to developing countries, including ASEAN, remain significantly below pledged levels. This limitation hinders ASEAN's ability to prioritize sustainable development and effectively tackle climate change.
The insufficient and delayed climate finance is a source of frustration among developing countries. Updated Nationally Determined Contributions (NDCs) submissions are slow and often lack clear quantification of climate finance needs, with only 22 parties submitting updated NDCs by May 2025 and only 15 including quantified finance requirements. This impedes the ability to mobilize targeted investment aligned with the Paris Agreement goals, including in ASEAN countries.
The Global North's financial support is widely perceived as insufficient and delayed, leading to “fatigue” and frustration among developing countries. This negatively affects political will and the capacity of ASEAN nations to implement ambitious climate actions.
However, there are promising initiatives within ASEAN. Under Malaysia's leadership, initiatives like the National Energy Transition Roadmap (NETR) and the Asean Power Grid offer promising pathways to address Southeast Asia's urgent energy transition challenges. Some ASEAN countries like Malaysia and Maldives are pioneering innovative approaches to climate finance domestically and partnering with international organizations to build capacity for sustainable investments.
Recent initiatives such as the UNDP and UNEP-supported Climate Transparency Global Support Programme aim to enhance developing countries' ability to track and report on climate finance and action, which should help improve transparency and potentially unlock more and better-targeted climate investments in the region.
As ASEAN is expected to become the world's fourth largest economy by the end of the decade, it is crucial for the region to prioritize sustainable development. Dr Mohd Faiz Abdullah, chairman and CEO of ISIS Malaysia, stated that ASEAN cannot prioritize sustainable development without adequate climate financing from the Global North.
Dr Faiz also called for ASEan member states to take "more principled stands" when dealing with superpowers. Asean needs to strengthen coordination and policy coherence in responding to shifting geopolitical headwinds, particularly where business and sustainability policy intersect.
Southeast Asia needs over US$200 billion in adaptation investment between now and 2030, according to the Asian Development Bank. Failure to prioritize adaptation could lead to economic losses exceeding US$1 trillion annually across Asia by 2050 due to climate-driven disasters.
Dr Faiz believes that ASEAN, along with the wider Global South, can lead in the climate transition and set the tone for regional clean energy development. Brics member states, including ASEAN countries like Indonesia, Malaysia, Thailand, and Myanmar, are affiliated with Brics. Brics now has its own Development Bank, the New Development Bank (NDB), which gives the bloc its own infrastructure to support cross-border climate projects.
To navigate these challenges, ASEAN should strategically look to diversify their dependencies, as suggested by Dr Faiz. A key recommendation is for ASEAN to develop a framework for climate-resilient infrastructure investment. Every US$1 invested in climate adaptation can yield approximately US$4 in avoided losses or economic savings, according to the Asian Development Bank.
In conclusion, the insufficient and delayed climate finance from the Global North is constraining ASEAN's ability to prioritize sustainable development and fully address climate change. However, ongoing reforms in finance architecture, improved transparency, and emerging regional leadership could enable better outcomes toward the decade's end if matched by increased and more predictable financial commitments.
- The Global North's historical emissions have resulted in a substantial climate change burden, yet climate finance flows from them to developing countries, including ASEAN, are lagging behind pledged levels.
- Lack of adequate climate finance from the Global North impedes ASEAN's ability to prioritize sustainable development and effectively tackle climate change, causing frustration among developing nations.
- The US, UK, European Union, Russia, and Japan are historically responsible for the majority of greenhouse gas emissions, but their financial support for climate-related projects in developing countries, like ASEAN, is often viewed as insufficient and delayed.
- Climate finance is crucial for ASEAN nations to implement ambitious climate actions and transition towards clean energy, but it remains significantly below pledged levels from the Global North.
- ASEAN countries like Malaysia and Maldives are taking innovative approaches to climate finance domestically and partnering with international organizations to build capacity for sustainable investments.
- The insufficient and delayed climate finance from the Global North is leading to political and economic challenges, making it difficult for ASEAN to prioritize sustainable development, especially in light of the region's projected growth as the world's fourth largest economy.
- Climate-adaptation investments in Southeast Asia are essential, with estimates indicating the need for over US$200 billion in adaptation investment between now and 2030. Failure to prioritize adaptation could result in economic losses exceeding US$1 trillion annually across Asia by 2050 due to climate-driven disasters.
- ASEAN countries should consider diversifying their dependencies and developing a framework for climate-resilient infrastructure investment to strategically navigate the challenges posed by insufficient climate finance from the Global North and ensure sustainable development in the face of climate change.
