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#AEBF25 | Day 3 - ASEAN Carbon Pricing

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Core Theme

This session discusses the critical need for and implementation strategies of carbon pricing mechanisms, particularly carbon taxes and emissions trading systems (ETS), within the ASEAN region to address climate change and facilitate a clean energy transition.

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Um hello, good morning. Um and uh and

welcome to this uh session on on carbon

pricing in the uh AAN region which is a

session that is co-hosted by uh the

climate policy initiative and the LSE

center for economic transition expertise.

expertise.

Thank you for much uh thank you so much

for for joining us here this morning.

It's much appreciated. It's Friday. It's

early. There are lots of competing

sessions. So we very much appreciate you

and uh and and uh looking forward to to

uh yeah to also discussing with you

later in the session. Um my name is

Simon Do. I'm the global director of uh

of CEX which is a center at LSE that

focuses specifically on providing uh

central bank supervisors and and finance

ministries with technical assistance,

capacity building and and targeted

research. We will have uh two presenters

uh first in the session who will

introduce uh what carbon pricing is and

why it is helpful and and also

specifically what what function carbon

pricing can serve more more broadly. and

then we'll have a panel discussion with

two very distinguished uh speakers here

this morning. Um for the presentation

first I would like to um uh introduce

our two speakers. We have Alberto's um

Siagan who is a senior uh policy analyst

at the climate um policy initiative uh

based in in Indonesia in Jakarta. He's

leading CPI's projects related to to

fiscal um and and broader financial

policy and before joining CPI, Alberta's

worked at the Boston Consulting Group.

We're also very proud from LSE to say

that Albertus is one of our alumni. Uh

he holds an MSE degree in environmental

economics uh and climate change.

Secondly, we will also hear from from my

CEX colleague uh Helina Utamawati

um who is a policy fellow with us at at

CEX at at LSE. Uh before joining CEX a

few months ago, Helina worked for for uh

almost a decade at the tax department uh

of the ministry of finance of of

Indonesia. So we also very much have an

insider view here on on on taxes and and

and tax policy. Helina holds a master's

degree in in public administration from

the Harvard Kennedy School. With this, I

would like to hand over to our two uh

presenters for for an introduction to

>> Thank you very much Simon. I will start

the presentations. So the format of the

presentations is me and Albert we will

uh present back to back. So since we

uh yes the first one we will talk about

the climate finance gap in Asan because

Southeast Asian country face an face an

urgent climate financing gap especially

to speed up clean energy transitions and

climate adaptations.

I would like to show you uh this is the

finding by the independent high level

expert group in the London school of

economics uh as a secretariat uh there

is a need for SDG and also climate

finance in 2030 it expected that will

require around 2.4 4 trillions for

emerging market outside China and we can

see here in the graph that uh the need

is highest for the energy transitions

for about 1.4 4 trillions and despite

energy transitions we also need finance

for adaptations and resil resilience for

coping with the loss and damage and the

natural capital and sustainable

agriculture and also just transitions

but I will also highlight that the

investment need it's based on the

calculations in the 2022 if we don't act

now the need for the adaptations and

resilience will increase over the years

and it will rise sharply as climate and

naturist escalate in the regions all

over the world and I would like to also

show you uh the need of the advanced

economy China and emerging market other

than China in the 2035 the need for the

emerging market outside China is the

highest. So as an Asian regions we need

also to concern about this uh to act now

and also to increase the investment in

the energy transitions in other climate finance.

Uh next looking at the Southeast Asia

Southeast Asia regions by midentury uh

the energy demand is expected to

overtake uh that of the EU and also uh

in this left graph I want to show you

that in the emerging market outside

China the the purple one it's showing

the number for the two 2022 in the

middle one is 2030 and the right one is 2035

2035

The need of investment in energy

transitions for the 2030 it's five times

than the needs in 2022 the current

conditions and in the 2035 it will be

increased we need to increase the

investment in the energy transition six

times and also according to the Asian's

own report that the need for both

mitigations and also adaptations is

among as as much as 422 22 billions by

2030 and Southeast Asians also already

experienced uh disaster most

disasterprone regions where in the 20110

alone more than 29 2,900 disasters

occur. So this is also showing that uh

we need to act now for the climate

climate finance need both for the energy

transitions also for the climate uh resilience

resilience

and we cannot uh we cannot avoid this

anymore. Climate change is already

affecting the regions and this also

shows the urgency of tackling this issue.

issue.

for the next one I will uh offer to my

>> Uh next.

Yes. Uh thank you Helina. As Helina has

mentioned uh Southeast Asia is going to

be a significant driver for global

energy demand growth in the future.

Hence uh if we are to have a cleaner

world in the future and given that the

energy sector is a significant emission

driver, Southeast Asia should take part

in the global energy transition too. Uh

so let us talk a bit about what an

energy transition is. You can see from

the slide uh energy transition has

several features. Uh the first feature

is moving from emission intensive energy

sources like coal, gas and oil to energy

sources that are less emission

intensive. Uh I think you already know

already things like hydro power,

geothermal, solar, wind and others. The

second feature is that we are uh having

uh decentralized uh off-grid power

system in addition to keeping the

traditional centralized on-grid uh power

system. Uh the third feature is uh

having more electrified uh energy and

not just non-electrified uh energy but

uh today we intentionally omit this

Oh, sorry. Uh coming back

Okay. Yeah. Uh at the beginning of this

presentation, we have laid out climate

change as a reason for having an energy

transition. Uh it's true but incomplete.

There are more reasons for energy

transition. They are not related to

climate change. And this is why we

should consider en energy transition

more seriously than people usually

think. Thanks to technological progress,

renewable energy costs keep decreasing.

Energy transition to such energy means

giving this region a chance to be more

cost competitive. Also, uh having a

decentralized off-grid power system

means that the electrification in

Southeast Asia's remote areas can be

made faster. together with the energy

cleanliness reason that people usually

think about. These three reasons are the

building blocks for uh of solving the

energy trilmma. Other reasons include

better health outcomes due to cleaner

air, opportunities for reducing fossil

fuel imports for some countries, opening

new economic sectors and various

interesting things. Next.

Yeah. Next. Okay. Thank you. Um however

as things stand today uh fossil energy

is still dominating the system.

So it is a huge task to make cleaner

energy as the leader in the system. We

need policies and there are two sets of

policies. The first set of policies is

carbon pricing policies. Here we have

carbon tax and carbon trade. Basically

their job is to put a price on carbon.

emitting every ton of carbon has a cost

to pay. Now, the intended impact is to

make the brown sector less profitable

than the green sector and to make

investors move their money out of their

brown investment and reinvest such money

into green investment.

The second set of policies is non-carbon

pricing policies. They set certain

standards in certain industries. They

shift subsidies from brown products to

green products.

Uh they also mobilize money through

issuing green bonds and channel the

money to green projects which are pulled

in through green procurements and

others. Uh those are just some examples.

uh basically they are like an orchestra

to direct where the market should go but

they need government to combine

different policies and to understand in

the first place the specific changes to

be made in the market.

Uh although both uh sets of policies are

needed, uh today we will focus more on

carbon pricing because it is arguably a

more efficient mechanism to move the

market because we believe it it is

changing the underlying uh behavioral

structure uh in the market uh because

carbon is now internalized into their uh

price algorithm and because price is the

core algorithm of the market.

>> uh I will continue the sessions with uh

what is the condition of the global

carbon pricing instrument trend in the

This is the currently carbon pricing

that implemented around the world. In

the map it show that the jurisdictions

that have implemented direct carbon

pricing instrument such as a compliance

instruments emission trading system ETS

and carbon taxes and or domestic carbon

crediting mechanism in 2025.

This is uh maps by the world bank and it

also shows that in 2025 there is around 113

113

instrument uh for the ETS itself it's

around 37 and the carbon tax around 43.

uh so how carbon taxes and carbons trade

works basically uh I'm just also

continuing what Albert mentioned earlier

that this is put price on carbon for the

carbon taxes normally the tax carbon

emission per unit of carbon dioxide or

the carbon dioxide equivalent emitted by

the industry or sectors and for the

carbon emission trading system issue

emissions allowance to cover firms or

sectors with the allowance matching the

emission of these entities needing to be

surrendered at the end of the relevant

period. For ASEAN itself, there is

several countries that already

implemented carbon pricing such as

Indonesia, Singapore, Thailand already

implemented carbon pricing in the

different scheme. In Indonesia, it's

implement uh ETS with currently

currently considering implementing

carbon taxes. In Singapore, it have

carbon taxes and also in Thailand

already implemented carbon taxes earlier

this year, but also considering uh to

implement ETSs. There's also other

countries in the Asan that considering

or planning uh to implement carbon

pricing for the Philippine, Malaysia,

Vietnam and Brun is the carbon uh

several countries that plan to implement

carbon pricing. This is shows that the

issue of carbon pricing is more relevant

and one of policy instrument that can be

used a policy maker in the ASAN to put

Uh now I will also discuss about how to

design carbon tax. So uh I will

highlight that for the carbon tax there

is an importance to build the narrative

to make the carbon tax more acceptable.

Why is that? Because uh when we talk

about tax, no one want to be taxed

in including if it's for a good even for

good reason because carbon tax is taxing

uh high emitting discouraging high

emitting behavior and we want to make

the polluters pay. But in a way there

will be always resistance uh when we

talk about tax anywhere in the world.

And so why why people don't want to be

taxes? Uh this is one of uh research

that also done by the grant research

institute in the LSE. There is several

reason that we identify. Uh first one is

considering the burden of the tax to be

too high both personally and to the

wider economy because if you put uh

price to the carbon it will be also

impacted uh of the other supply chains

especially in the energy prices and then

also there is a concern about the

regressive of the nature such as the dis

dispropenate of the negative impact on

the lowincome household because where If

we increase the price for the energy,

the one that will be impacted the most,

the vulnerable will be the lower income

households. This is will come to the

next when we talk about how to uh design

this carbon tax. There is the importance

to redistributions of the taxes.

And the third one is the disbelief that

the carbon taxes will be effective in

the reducing greenhouse gases. Because

when we put the price on carbon, it's

not directly linked to the carbon

emitted to the atmosphere and also the

reducing of the carbon. Uh so there will

be a maybe a woriness of the this is

this firm paying tax to the government

but what is the impact to the

environment and the last one this is

also really important for the governance

is the distrust to the government. DVB

also hinder uh for policy makers to

implement carbon tax

uh from all of that reasons that we

identify. So we also want to designing

the carbon tax that will uh at least

cover some of the concern. The first one

will be the face in carbon taxes over

the time and this has already been done

in the Singapore because they already

made a regulations and uh to put the

carbon taxes uh the price of the carbon

taxes increase over times. And then the

second one it will be also good to

earmark the carbon tax revenue to

finance additional climate change

mitigation needed. As we see also in the

first uh in the beginning of the

presentations that the needs is quite

high both for the energy transitions and

also for the mitigations.

This is also the third one will be

important to redistributed the taxes

achieve to achieve fairness and revenue

neutrality. What it means to revenue

neutrality? It is that the revenue that

received by the government it will be

allocated to also the household that

impacted and also the last one uh the

government that considering a to tax to

implement a carbon tax need to

communicate their proposal carefully to

the public to address uh the voters's

concerns especially this is for the

political reasons because nobody want to

be taxes so this is the importance of

the communications that will I will also

highlight in the ne in this uh the next presentations.

presentations.

Carbon tax need a smart communication strategy.

strategy.

This is uh five things that we identify

that could be implemented by governments

if want to uh considering carbon tax as

a policy instrument. The first one it's

the expected greenhouse gas reductions

arising from the tax. If the government

can communicate that by implementing

this policy it could reduce greenhouse

gas emissions, it will be also

convincing the public to be taxed and

also other that's not be taxed but

impacted by the rising of the prices

uh because they also contribute to the

environment and also the second one the

expected co- benefits such as the

registar congenions or the air

pollutions health cost because they'll

be there they will be impacted everyone

not only the one who will pay the taxes

and the third one is the expected

variation in cost for goods most likely

to be affected by the tax. It shows that

government already considering uh when

implemented this taxes. It's also also

considering what is the overall impact

to the wider economy. And the fourth one

is the impact on the average household

income and on the economy including

potential competitiveness effect and job

losses. Especially if uh such country in

Asan one country implemented carbon tax

in other country maybe not implemented

carbon pricing. It will also impacted uh

trade within country and also crossber

country. So that will be also a

consideration that government need to

need to

need to design before implementing

carbon tax. And the last one is the

impacts on the low-inccome household

such as by giving a subsidy or a in cash

uh in kind to the low income household

that impacted. there will be another

policy instrument that could be

implemented by the government when

deciding to implement carbon tax. I hope

I didn't take uh too long times. This is

one more presentations about the carbon

trading for Azan.

I will also also show the challenges and

opportunity for the carbon trading. This

is a different instrument rather than

carbon prices but also uh to put to put

in the AAN regions. Uh this is

introduced in the high income juris high

income jurisdictions in the 1990s and

20s starting from the development of the

EU UK emission trading system but

emerging market also start to exploring

this initiative. it shows by the China

uh with its regional ETSs and also

Kazakhstan in the 2020. So this it might

be started in the developed countries

but it's also a policy instrument that

that can be implemented in the emerging

market especially ASAN and especially

right now I will show also why the

opportunity to be implemented right now

because uh economic in emerging market

especially economic policy and climate

policy are deeply interconnected.

uh we can say that for Azan we might be

focused on the economic growth but in a

way to make a strategy for sustainable

growth we need also to think about the

climate policy because we not only think

about now we also need to think about

the future so the carbon trading design

is essential to address to address both

economic challenges and opportunity

for the challenges I think this is also

resonate with the Asan countries that

might the industrial resistance both if

we want to implement carbon tax or

carbon trading the industry is the first

one that they need to pay uh so that it

it must be the one things that uh we

need to address they don't want to be

they don't want to pay more because of

they have a concern the fears of the

economic impact the fears of they need

to reduce their operations job losses

reduce its profitability is the main concern

concern

and also So the second one is the

vulnerable household that will be

impacted by the increase of the price

and we can also uh we need to also

address that there is a complexity in

the implementation of the carbon carbon

trading. So there will be administrative

challenge especially in AEAN when we

have a limited resource limited

knowledge uh about the carbon trading.

So we need to build and trusted exchange institutions

institutions

uh in a way that government resource and

capacity is

enough or also can address this. But

there is an opportunity if we implement

this. The first one if there is the

revenue recycling there will be

additional uh revenue from the

government for the government to address

the climate finance. And the second one

I also want to highlight this the

international synergy is the regional

carbon market or carbon pricing

coalitions. Aan as a regional uh

cooperations have a potential to build

the carbon trading scheme either within

country or between region. As we see

that in the EU it will also implement it

in the regional uh regional area. So

that might be also potential for ASEAN

to synergize or harmonize the carbon

trading system and in the current

development also there is a carbon

pricing uh coalitions uh that the

discussion is already been held for the

emerging market because of the impact of

the next one. I also uh mentioned about

the EU UK carbon border adjustment

mechanism or CBAM. With the

implementation of the CBAM uh for the

firm or firm or industry that want to

export uh their product to the EU or UK,

they need to pay uh they need to pay for

the carbon that they emitted to the

sebam. But in a way if we already

implement it in our countries or in the

regions the money that we pay is is

still within these regions and also will

be used to address the climate finance

gaps needs by its regions itself. So I

see this an is as an opportunity uh to

implement carbon trading now than ever

because uh this EU UKCBAM is also

already implemented uh this year and

also next years and the last one is the

recycling of the carbon pricing revenue

in this way uh it will also require the

new governance structure and the

relaxations of fiscal constraint of the

use of the tax revenue. venue for

redistributions and enhancing government

capacity to build a trusted exchange

institutions. This is to address the

administration administrative challenge

uh that faces by the government

especially in the Asan regions.

Uh I will give this last one to the

Albert. Thank you.

>> Uh yes, thank you. Uh next

so this is a summary of our

presentation. Let us start with the

carbon trade. The downside is that it

requires an exchange institution as the

marketplace and such institution might

be uh complex to build. Hence, carbon

trading may be applicable only in

certain sectors. But this also bring us

to the upside. Uh its limited

applicability may lead to smaller

economic impact and thus smaller

political resistance. Basically, carbon

trading means letting the market

determines the carbon price and seems

pro market. About the carbon tax, the

upside is that if the carbon tax is seen

as just another variant of tax, then

because governments are already

wellversed in taxing people, this should

be easier to implement. But then it

means this might be applicable to a

wider range of economic sectors and may

create a deeper economic impact. As a

result, carbon tax can be politically

more challenging because basically you

let your government, not your market,

decide how much price to put on carbon. Next,

next.

Uh, okay. So, I think this presentation

has been a good prelude to a panel

discussion. Uh, I would like to hand

over to uh Dr. Simon Dau who will be the

moderator of this panel discussion. And

just FYI after this panel discussion

there will be a Q&A time where the

audience can give questions to uh all of

us uh on the stage the panelist the

moderator and the presenters. Thank you.

>> Thank you so much um Albertus and and

and Helina for this for this great

presentation. I think we um we got a

good overview over over what carbon

pricing is and and how it can be

implemented especially differentiating

between the role of the government here

and the role of a of a carbon tax and

and uh the market mechanism that can be

used within with an emissions um trading

scheme. Um so but the fundamental issue

is of course we we need initiatives that

yeah that put an explicit price on on

carbon and greenhouse gas emissions and

I think you also outlined very nicely

why why that is the case and I'm I'm

looking forward to also discussing this

with the panel. So um it captures

essentially the the external costs and

ties them to the to the source via via a

price and that is from an from an uh

economist point of view a very

attractive first best solution. Um in

terms of my background I've worked more

on second best solutions and trying to

find other financial policy instruments

the role of central banks role of uh

role of monetary credential policy but

this is this is of course the the most

beautiful first best solution and this

is this is something we will we will

discuss um in this context I would I

would like to introduce uh our two very

distinguished panelists. First we have

with us Dr. um Ambia Abdullah who's a

senior researcher at the Azan Center for

for Energy and is in the energy modeling

and policy planning department of of

ACE. Um she's an expert in macroeconomic

modeling and climate policy more broadly

and holds a PhD degree in environmental

economics from Nagoya University. Very

importantly, uh Dr. Ambia also launched

two reports at this forum here two days

ago. Um the first one is the Azan

capacity building roadmap on energy

investment and then the Azan energy

investment uh report. Secondly, we have

with us professor Suri Shirai who's a

professor of economics at uh Caillou

University and an advis adviser on

sustainable policies at the Azan

Development Bank Institute in uh in

Tokyo. Her research focuses broadly on

on financial climate policies uh but

also specifically on on yeah um carbon

pricing and and um the broader

supportive policies in this scheme. Uh,

Professor Suri is also a former central

banker who served uh at the Bank of

Japan's um monetary policy board and

therefore also has a has a very special

perspective on on carbon pricing. Of

course, in my experience there's a lot

of emphasis especially in the central

banking space on maybe uh other parts of

the government solving this problem

first before central banks step in. Um

so with this I would like to turn to um

professor Suri actually for my for the

first question that we also have up here

on the screen. There is of course a lot

of emerging experience around carbon

pricing, carbon taxes, some positive,

some negative uh implementation problems

but also opportunities. So I would like

to ask you about um Singapore's

experience with with implementing a

carbon tax as the first country in in

the Azan region to do so and whether

there are any lessons that that you have observed.

observed.

>> So Singapore introduced very clear sort

of um carbon tax and they show very

clear uh path uh in terms of the uh

carbon tax. So over time they are

increasing it. So why Singapore is

introducing carbo tax rather than ETS uh

emission trading system uh which adopted

by uh China uh Indonesia and Korea etc.

The reason is Korea because Indonesia uh

they don't have a lot of emission

intensive manufacturing and electricity

sectors. we need certain uh scale of

industry emission intensive industry in

order to promote this uh uh emission

allowances transactions. So because

Singapore is so small and most of the

goods and services that they are

importing right even electricity so

that's why they decided to introduce

carbon tax. Now technically I think

carbon tax is better uh than emission

trading because if you look at EU, EU is

the first uh region to introduce

emission trading system but you know at

at some point uh their price carbon tax

emission allowance uh trading cost

reached about $100 but now only 70

because the European economy is not

doing well. So there's a lot of

volatility in terms of carbon pricing if

we introduce market system then it's not

very clear cut signal uh to the emission

intensive sectors but if we have a tax

over time you know that uh Singapore try

to increase it so it's a very clear

message that u emission intensive

industry have to do something to reduce

emissions so uh that is one issue I

think problem with regards to market

system uh but I think we can discuss

next but it's not uh uh appealing to the

public. Yeah.

>> Yeah. Thank you so much. Um and very

interesting of course to think about in

a in a also Azanwide um system and and

pricing system um who would be the

buyers and who would be the the the

suppliers of carbon credits who's who's

emitting who's reducing who needs

additional credits who can sell credits

and and maybe I I I jump a little bit

ahead here um to to Dr. Ambia with with

the question well yes who who might be

the suppliers of of carbon credits in a

in a hypothetical aanwide carbon market.

>> Yeah. Okay. It's difficult question

actually. Yes. But um I'm my name is

Ambi Abdullah. So I'm representing the

Asan Center of Energy. If we look on the

ASEAN um current ongoing policy

discussion especially related to the

carbon market and also energy sector I

think um we is really good timing for us

to strengthen the carbon pricing

mechanism in ASEAN particularly in

energy sector. So in uh 2023 I think the

ASEAN already officially announced the

Asan carbon neutrality target and uh

Asan carbon neutrality strategy target

if we look on that uh strategy

uh more than 75%

uh more than 75% of the G emission of

the ASEAN uh come from energy from the

power industry and transport and then

uh we we will on energy sector

especially uh we try to enhance the uh

regional cooperation and also

accelerating the energy transition. Why

we choose this two hot topics? because

uh we we we realize that energy security

is one of the key issue that the region

need to maintain and the second one

energy transition related to the carbon

market is also important because we we

we don't want to see the assean uh key

sector like power industry and also the

transport still producing the GH

emission which may impact the future of

the Asan energy sector. But if we look

on the structure on the current

landscape of the carbon market or we can

say like uh uh policy on the carbon

pricing in in Assean as mentioned by

colleague from CPI and also from LSE

that's um not all the ASEAN uh country

already have the carbon uh pricing

mechanism. Uh so if we look on the

policy document both on NDC and also on

the related key uh policy document on

energy sector most of the of the Asan

country already uh introducing the

concept of or regulation on carbon

pricing policy uh except maybe in

Brunam. Bernard Salam still on

discussion and they are still in um uh

getting the official approval but if we

look on on the I mean uh on the on the

mechanism not all the the asan country

but Indonesia, Malaysia and Thailand uh

Singapore Singapore is one of the

outlier in in in in this topic

discussion. So then uh however if you

look on on the on the discussion in

other term and the regional level in 2024

2024

uh we already also launched the Assean

common carbon uh framework that was lead

by Malaysia and Thailand and Indonesia

and also Singapore. In this context, I

think uh looking on the current progress

of these four countries in in the

leading of the carbon pricing, the the

supplier maybe will be this uh four

country. I mean because they they

already started earlier than than the

other Asan member country although we

cannot compare with the like AU and also

uh Japan uh China and also uh other

already advanced uh carbon market

mechanism. Yeah maybe uh yeah

>> so I don't think uh you know um each

country uh have to pick one. If you look

at Europe, EU, they both apply emission

trading system and carbon tax. So in a

case of EU uh as a region uh they have

this uh emission trading system. So they

pick very emission intensive sector uh

you know like chemical and electricity

etc. and they set aggregate emission

allo uh permitted and over time they try

to reduce it and they allocate this

allowances uh to uh this uh targeted

sectors. Now then each European

countries they have additional carbon

tax uh which are not overlapping with

exchange uh emission rating system and

then they apply uh their own uh country

specific carbon tax to certain industry.

So actually you see both in the case of

Japan we have carbon tax but only $2

very low. Okay. And it's so so unpopular

among public public. So that's why from

next year the Japanese government is

going to you know in introduce emission

trading system. Yeah.

>> Very very interesting to also of course

consider the the political realities of

a of a carbon tax and and the

implications. And uh in the presentation

we heard a little bit about also the um

the arguments for a carbon tax as a

potential source of revenue to also um

well fuel and and and and finance green

green growth in the in the in the

broader sense. But yes, there is of

course a massive communications issue

also carbon taxes um are not necessarily

popular as we as we've seen in Canada

very recently. Um, considering all of

this, maybe maybe a follow-up question

for uh, Professor Sururi. Um, in which

AEAN countries do you think we are we

are getting close to uh, to to very

concrete next steps on on carbon pricing

or even a carbon tax?

>> Um, so I I look at the various Asian

country and I work closely with the

financial regulator in the region. Uh, I

think uh, to be honest uh, Singapore is

really taking the lead. I think it's

partly because they imported a lot of

goods and services very different from

Indonesia where they have mining and a

big industry right so you know to take

the reality uh Singapore is very clear

but at the same time Singapore import a

lot of goods and emission intensive

goods and services so that's why they

have to collaborate with Asan countries

I think overall in Asia we are all

trying to introduce some kind of carbon

pricing but the price is so low for

example if you look at China only $10,

Korea like $7. So you know even we

introduce carbon pricing but the prices

are not very high because uh it's public

still do not really understand why we

needs to reduce emission why we have to

do it by charging higher prices and

public is still not convinced.

>> Yeah. Um um maybe another point to pick

up from the from the presentation is of

course also the the external pressure to

um to to create um a carbon price and

and through an ETSs or or a carbon tax

namely through the European Union's CBAM

which which is of course implemented to

ensure that goods that enter the EU are

correctly priced in terms of in terms of

carbon. Um this of course has has

massive implications for uh for

producing countries for for exporting

countries and can also well is is also

definitely uh debated uh in in in terms

of whether this is this is

implementable. Um but more importantly

in terms of the in terms of the economic

growth implications also for countries

that are heavily exporting to the EU and

um maybe with this I can I can also turn

back to Dr. to Ambia with the question

of how will an Azanwide carbon market or

or carbon price um affect the regional

economic uh disparities.

>> Okay. So uh if we look on ASEAN member

state uh we are now uh have I think

become 11 with timor and then if we look

on the economic uh characteristic and

also the the status of the other

important indicator indeed we have uh

diverse market condition and if we try

to implement like asan uh white carbon

market across the region

uh there is a potential that will uh

increase the regional economic

disparity. There is a risk but there

there also opportunity as mentioned that

if if the government of the uh Asan

member state uh carefully design and uh

the manage how the asan carbon market uh

implementation. It may also uh increase

the economic uh performance of the Asan

member state. Uh a very good example uh

you you may heard the uh a lot of uh

things or discussion going on in in the

first and second day of this year as an

energy business forum is related to the

APG. Yeah. So uh uh I think uh in term

of the APG uh why we we would like to

promote the Asan power grid um uh interconnection

interconnection

because we we would like to strengthen

the regional cooperation and also we

also would like to ensure the energy

security but we also aware that uh

having um implemented the Asan power

grid interconnection is not easy task.

for us. First uh as uh we we have

diverse uh market uh condition in Asan.

And the second one in term of the

technical we also need to think how to

harmonize this um uh technical uh things

of the power system and also electricity

system and electricity price. For

example, if I mean uh it is related with

the carbon market. I mean the same story

will happen with the carbon market.

That's why the the the the Asan member

state need to carefully design how this

asan carbon market will bring more on

economic uh benefit rather than increase

our economic uh disparity in the region

and we we will start with the enhancing

the asan power grid interconnection in

the region as a one of the uh lesson

learned for this upcoming uh asan carbon

market and I would like to add one As I

mentioned, we we announced um Asan

common carbon framework and then I think

it's a very uh good step for the region

because it's uh officially launched and

it also link with the previously uh

regional policy uh launch on the Assean

sustainable uh taxonomy and in 2023 I

think we also already launched the

Assean guidance on energy transition.

And we also have uh one key document on

this on asan energy transition finance.

Yeah. So uh I I I see uh a lot of good

progress that the Assad member state as

a region uh we make u good sign for the

external uh collaborator or in in in the

market. However, if we look on the on

the challenge uh on on the region, we

have uh uh as mentioned in in in term of

the investment, we have a huge

investment gap and and uh one of the

reason why we have this uh investment

gap. Uh there are two uh main reason.

One is uh technical capacity and is

apply not only on the uh investment but

also apply on carbon market uh technical

capacity. Not all the asan member state

have the same capacity to understand how

to implement the carbon pricing

mechanism how to design of the carbon

mechanism. That's why we uh we see this

improving the technique uh capacity

building will help when we uh want to

design the Asan carbon market with the

focus minimizing the uh the risk to

increase the regional economic disparity

and the second one uh uh currently uh

there is uh a need to streng the cross-

sectoral linkage on on the on the

climate and energy

Because up to now uh climate sector and

energy sector are not interlink each

other in it also happen on the on the

energy sector and finance sector. Uh we

we found that uh there is uh slightly

not slightly maybe there's a kind of

room to improve uh the same

understanding between uh the stakeholder

in in energy sector and also in climate

sector and also in the in the finance se

financial sector. So it's also refer to

this uh long-term goal that we would

like to have the asan carbon uh market

with bringing more benefit to the region

rather than increase the economic disparity.

disparity.

>> Uh professor Sori please.

>> Um I think we are talking two issue

which shouldn't be uh confused. So one

is we are talking about carbon tax and

uh uh emission trading system that is a

discussion about which one is more

effective in terms of reducing the

economy's total GHD emissions that the

other one we are talking about is market

trading okay uh uh that is um is what

two issue here when we are talking about

trading uh carbon credit there are two

issue one is uh what I just talked about

emission trading system. So government

or regulator allocate uh um um um

permission uh allowances to permit uh uh

to emit to the emission intensive

sectors and then uh people uh who did

not use all these uh permitted emissions

can sell those allowances to somebody

else. So that is a one trading okay uh

sort of a um ETS related trading there's

another carbon uh carbon market that is

called voluntary carbon market somebody

else maybe Indonesia somebody tries to

reforest create reforestation and then

from reforestation they uh you know they

can increase the ability for forest to

absorb uh carbon dioxide then we can

create um um carbon credit right this is

somebody else third parties uh emission

reduction effort that carbon credit

traded voluntar voluntarily in the

market so when we talk about uh carbon

market we are talking two thing one is

uh transacting uh you know allowances

another one is voluntary carbon market

we had a um um conference this much in

Tokyo inviting a lot of basan countries

and then in terms of this voluntary

carbon market. I see Malaysia is taking

lead uh in addition to Singapore. Uh Ma

Malaysia, Brussa uh they are uh you know

uh stock exchange and then what they do

is these are borant carbon credit

created by somebody else and then you

know certified under certain system. So

it's a uh carbon credit and it's now

increasingly popular among Asan country

the stock exchange uh sort of under

government initiative try to certify

which you know this voluntary carbon

credit uh meet certain target. So not

all the voluntary carbon credit are

permitted under certain condition. For

example, Brussa, they use

internationally accepted beta and the

gold standard approach and then they uh

you know if those are produced uh they

can be transacted on Brussa uh stock

exchange. Uh Indonesia also started to

do it recently. So uh these are uh so

Singapore uh Indonesia, Malaysia are

taking lead in terms of developing this

uh carbon credit especially private

sector voluntary base and the stock

exchange is taking the initiative.

Thank you so much. I think it's it's

very important to uh to to recognize uh

the the complexities of the of the

different pricing mechanisms here and

how you can combine them and and how you

also find a a politically um feasible

solution given given the the dynamics

within within well within any country.

Um, I'm therefore also very interested

in in maybe your views on um on where

carbon taxes as as one specific example

have have failed um or have been have

been removed again. And the Canadian

example is of course a very interesting

one um with with Marney having having

championed to some degree uh the climate

discussion in the in at least the

central banking and and therefore also a

little bit the the financial space uh

starting in 2015 with his with his

speech on the on the tragedy of the

horizon. So very interested in in in

your thoughts on um on also um yeah what

what can we learn from where it has not

worked so well

maybe maybe uh yeah first professor Sir

Yuri please.

So technically carbon tax is clear and

uh much easier to implement right

because carbon uh government just charge

extra uh tax on the you know on the

industry or some production level uh

where emissions are uh you know uh

generated so it's much easier it's just

a general tax like exercise tax right

but the difference is carbon tax uh is

in proportion of carbon dioxide right so

one uh same tax rate but if I emit a lot

of carbon uh carbon emissions then I

have to pay more tax. So it's very

simple. Now what why uh ETSs is very

popular because ETSs gives some room for

the uh for the industry because you know

if I'm a emission intensive electricity

companies I was given allowances from

the government so I can uh you know emit

uh emit only up to this amount. If I

really make effort and generating

renewable energy, I do no needs to use

this you know uh allowances so I can

sell and make money to somebody else

right and if I emit more than that I can

buy from others so there is some room

for the industry uh you know to adjust

but the tax is so is not avoidable it's

very clearcut therefore it's more

effective but uh you know uh the

industry does not like it and also it's

immediately charge higher prices to utility

utility

So public does not want it right now

especially when inflation is very high.

>> Yeah. Thank you. No, I think that's a

very important point to to to recognize

that maybe the easiest solution here is

not necessarily the one that is um that

is well most effective also in terms of

just acceptability within uh within with

w with within a country. However, for a

more complex solution, you of course

also need more advanced institutions

that are able to to um to implement and

to set up, for example, an ETSs. Um uh

Dr. Ambia, very interested also in your

thoughts on on uh the the challenges in

this in this context with regard to uh

to implementing a rather easy tax versus

creating a rather complex ETS.

>> Thank you. I agree with Professor Suri.

Carbon tax is easy target but maybe

challenge if we would like to introduce

like mentioned by because if you look

the Asan region we have different market

structure and when the industry hear

about the tax is uh I mean negative yeah

I mean they feel like burden additional

burden and uh if the government of the

asan member state also would like to

choose the carbon tax we need to

carefully design that's the impact will

not on the on the on the lower income

household in the region and uh in

another one is emission trading systems

uh some of the asan member state already

choose like Indonesia and also other

like Thailand as well because of uh

consideration of the room or that's

professor Suri mentioned when the

government introduced the ETSs is it has

some it gives some room for the industry

to find a way to meet the allowance

target with their own um uh solution for

example and we also have one mechanism

related to this uh to support renewable

energy certificate in in the region. So

this renewable energy certificate uh in

in the concept is similar like ETSs

because we give some room for the

industry player who have the install

renewable energy that they can trade the

renewable energy uh certificate to give

some allowance. I mean in just is kind

of the uh similar like ETS. Yeah. So

ETSs is uh more easier for the

government uh because it kind of give uh

room for the industry player to design

but carbon tax uh maybe Singapore

because the market structure of the

Singapore is compared to other Asan

member state already uh more advanced

and also mentioned by professor

Singapore imported a lot of energy from

other Asan member state so it's easier

for them to to put the tax and get the

revenue and then but

in the long term I think

uh we I mean the member state also need

to see uh in the current moment like

most of the member state seem choose uh

uh ETSs over the carbon tax but probably

in the in the next coming years they

will have a look the examine the

progress of this uh current mechanism

And there is potential also when the

market and industry already ready, the

ecosystem already there, there may be a

carbon tax can be started to introduce. Yeah.

Yeah.

>> No, thank you so much. Um yeah, I would

like to open it also up to the to the

audience for for a few questions in a um

in a few minutes. But I have I have one

final question for for all of our um

four speakers here um regarding the last

question. Uh so should we choose a

carbon tax or or carbon trade or or

both? Um I mean I think we we we heard

compelling arguments that maybe a

combination of both is necessary and

there need a lot of um considerations

need to be taken into account with

regard to political realities,

incentives for for uh for companies to

to reduce emissions and and also u well

revenue um for for government investment

in in green growth strategies and and

projects. But maybe Albertus, if I if I

could first turn to you um with a

question that I have for for all our

speakers because what is what is the

next step from your point of view in in

the Azan region when we when we think

about carbon tax, carbon trade? What

what comes next? What is what is the

next step?

>> Yeah, thank you so thank you so much for

the question. I think this question is

really hard to answer. I think it really

depends on the institutional readiness

of each country. So for example uh for

small countries maybe I don't know this

is just my opinion maybe for small

countries it will be easier to implement

tax carbon tax first rather than carbon

trade but maybe large countries like

Indonesia or Malaysia or Thailand it

will be easy for them to do carbon

market first. It also depends not only

on the institutional readiness or the

population size but also uh we have to

look at the how to say the development

level of the country. I think that's

also one thing that we need to consider

because for example if we implement

carbon tax maybe the impact for the

economy can be larger. Uh so maybe uh we

really have to see the readiness of the

people. Uh meanwhile for the carbon

trade uh if the countries already have

robust exchange institutions maybe it

will be easier for them to uh implement

carbon trade. But again just to resonate

what the panelists have said uh it is

not that we have to choose one. Maybe it

is just about the sequence. Maybe for

example carbon tax first and then carbon

trade or carbon trade then and then

carbon uh trade and then tax and also we

can start from small scale and then we

can upscale that later in the future. So

it really depends on the process I

>> So much Helina very interested in in

your thoughts.

>> Uh thank you. So for me I will also add

that to implement either carbon tax or

carbon trading uh each country could uh

think about three area. The first one is

what is the economic benefit to

implement each of the instrument and is

it administratively phys uh feasible to

be implemented and the third one it's

also like is it politically supportable.

So this is like three dimensions of a

policy instrument that can be

implemented to country. So I also want

to echo both of the panelists and also

Albert uh statement that uh whichever

instrument that country choose it's

important to convince the public that uh

carbon pricing that there is a car uh

emitting carbon to the atmosphere is not

a good thing and you should reduce to

emit carbon. So I think which effort

that we implement we should implement

now uh it's also depends on the

country's need but asan countries should

act now for implementing carbon pricing.

>> Okay. Thank you so much. Um it's good discussion. I think um under the Asan

discussion. I think um under the Asan common common carbot uh framework the

common common carbot uh framework the the region already announced uh three

the region already announced uh three phases to to have this uh carbon market.

phases to to have this uh carbon market. One phase phase one is uh to build the

One phase phase one is uh to build the ecosystem of the carbon market means uh

ecosystem of the carbon market means uh is include like two p uh two speaker

is include like two p uh two speaker mentioned institutional readiness of the

mentioned institutional readiness of the region of the region I mean each asan

region of the region I mean each asan member state and also second the the

member state and also second the the technical capacity knowledge of the uh

technical capacity knowledge of the uh asan member state in uh how to design

asan member state in uh how to design the asen uh carbon market either they

the asen uh carbon market either they will choose carbon tax or carbon trade

will choose carbon tax or carbon trade in the region. So maybe I would like to

in the region. So maybe I would like to add the uh the one thing the next step

add the uh the one thing the next step for the assean uh to choose I mean

for the assean uh to choose I mean carbon trade or carbon is uh having um

carbon trade or carbon is uh having um technical capacity uh for the asan

technical capacity uh for the asan member state on on the carbon market. I

member state on on the carbon market. I think this one is limited because not

think this one is limited because not all the asan member state have the same

all the asan member state have the same uh capacity technical capacity to design

uh capacity technical capacity to design of the carbon one including like

of the carbon one including like mentioned by Mr. Serina uh when we

mentioned by Mr. Serina uh when we choose carbon tax or carbon trade the we

choose carbon tax or carbon trade the we we need to think about the what's will

we need to think about the what's will be the economic benefit what will be the

be the economic benefit what will be the key sector and what will be the

key sector and what will be the political acceptance that's one I think

political acceptance that's one I think not all the asan member state have the

not all the asan member state have the capacity how to design this one so thank

capacity how to design this one so thank you

you >> yeah thank you so much and um yes

>> yeah thank you so much and um yes professor please

professor please >> yes so about carbon tax you know before

>> yes so about carbon tax you know before we talk about carbon tax let's look at

we talk about carbon tax let's look at the each country's tax system For

the each country's tax system For example, in the case of Japan, we have

example, in the case of Japan, we have like oil and gas tax and then you may

like oil and gas tax and then you may have some taxes related to consumption

have some taxes related to consumption of oil and gas. Combating that into

of oil and gas. Combating that into carbon tax is most important before we

carbon tax is most important before we starts to uh introduce completely new

starts to uh introduce completely new one. Just converting existing taxes

one. Just converting existing taxes related to oil production or consumption

related to oil production or consumption into the carbon tax which is uh

into the carbon tax which is uh proportional to carbon dioxide uh

proportional to carbon dioxide uh generated. uh so I think that is a

generated. uh so I think that is a starting point and I'm I think a lot of

starting point and I'm I think a lot of Asian country will try to introduce ETSs

Asian country will try to introduce ETSs but regionally I think we need to agree

but regionally I think we need to agree on you know the path carbon uh carbon

on you know the path carbon uh carbon price uh path because one country have

price uh path because one country have very high you know uh prices another

very high you know uh prices another country so low then you know company

country so low then you know company would try to move to you know yeah to

would try to move to you know yeah to the countries with a low prices so we

the countries with a low prices so we have to discuss internally finally we

have to discuss internally finally we nearly needs to develop voluntary carbon

nearly needs to develop voluntary carbon market private sector initiative

market private sector initiative how to improve the quality is important.

how to improve the quality is important. Uh China is doing a lot and Japan also

Uh China is doing a lot and Japan also have its own initiative. Asan is trying

have its own initiative. Asan is trying to do it but still individual features.

to do it but still individual features. So we needs to have a basic foundation

So we needs to have a basic foundation what is the high quality uh voluntary

what is the high quality uh voluntary carbon credit and so I think we started

carbon credit and so I think we started to discuss but we need to discuss a bit

to discuss but we need to discuss a bit more in the in Asia.

more in the in Asia. >> Thank you so much. Uh yeah, very

>> Thank you so much. Uh yeah, very interesting to um to to see a lot of

interesting to um to to see a lot of agreement here u on the panel, but to

agreement here u on the panel, but to also yeah, of course um hear the

also yeah, of course um hear the emphasis on the on the regional

emphasis on the on the regional differences and the importance to take

differences and the importance to take this into account that is if a region as

this into account that is if a region as diverse as as as the AAN region is

diverse as as as the AAN region is trying to to come up with a with with

trying to to come up with a with with the carbon pricing approach that it's

the carbon pricing approach that it's fundamental to to take into account

fundamental to to take into account these huge differences in terms of who's

these huge differences in terms of who's producing, who's who's emitting the

producing, who's who's emitting the most, um what are what are the different

most, um what are what are the different institutional settings um and and and

institutional settings um and and and what is actually political um feasible

what is actually political um feasible uh in terms of in terms of

uh in terms of in terms of implementation. Um yes, with this uh I

implementation. Um yes, with this uh I would like to open it up and to see if

would like to open it up and to see if there are any questions in the in the

there are any questions in the in the audience on um broadly on carbon pricing

audience on um broadly on carbon pricing and and tax or or an ETS

and and tax or or an ETS for any of our four uh four speakers of

for any of our four uh four speakers of course.

course. Yes, please. here.

Yes, please. here. Uh, is there a microphone?

>> If you also quickly want to introduce yourself, please.

yourself, please. >> Sure.

>> Sure. >> Hi, I'm Ali. Uh, so my question is for

>> Hi, I'm Ali. Uh, so my question is for uh Dr. Ambia and anybody else who uh

uh Dr. Ambia and anybody else who uh might also want to take this on. uh but

might also want to take this on. uh but I'm very interested in the uh ASEAN

I'm very interested in the uh ASEAN common uh common carbon framework. So uh

common uh common carbon framework. So uh many ASEAN carbon projects have been

many ASEAN carbon projects have been said to fail to attract international

said to fail to attract international buyers uh because of uh methodological

buyers uh because of uh methodological or certification gaps. Uh I'm wondering

or certification gaps. Uh I'm wondering uh in your opinion uh what reforms could

uh in your opinion uh what reforms could ensure ASEAN carbon credits uh to meet

ensure ASEAN carbon credits uh to meet these uh global quality benchmarks while

these uh global quality benchmarks while still uh while still remaining

still uh while still remaining accessible to uh local project

accessible to uh local project developers as well. Thank you.

developers as well. Thank you. >> Thank you so much. Um who would Yes,

>> Thank you so much. Um who would Yes, please.

>> So about carbon credit, right? So what they do for example in the case of

they do for example in the case of Brussa uh Malaysia and Singapore they

Brussa uh Malaysia and Singapore they try to first imple uh introduce standard

try to first imple uh introduce standard uh already used internationally such as

uh already used internationally such as beta and gold standard that is good

beta and gold standard that is good starting point. However, in Indonesia

starting point. However, in Indonesia and some Asian country, uh they have you

and some Asian country, uh they have you know some um uh energy industry and uh

know some um uh energy industry and uh those um um um standard are not prepared

those um um um standard are not prepared by this international organization. So

by this international organization. So Asian specific issue so that's why uh

Asian specific issue so that's why uh Indonesia uh and probably Malaysia they

Indonesia uh and probably Malaysia they have to develop their own methodology.

have to develop their own methodology. Then uh here comes the discussion and

Then uh here comes the discussion and then you have to make sure those

then you have to make sure those standard are not like leading to some

standard are not like leading to some greenwashing protection of emission

greenwashing protection of emission intensive industry. So how to promote

intensive industry. So how to promote the standard methodology which convince

the standard methodology which convince uh global investor in company most

uh global investor in company most important after all who buy uh carbon

important after all who buy uh carbon credit actually multinational company

credit actually multinational company like Japanese company you know uh and

like Japanese company you know uh and then because uh they also emitting you

then because uh they also emitting you know a lot of emissions from chemistry

know a lot of emissions from chemistry etc. So they needs to buy uh from carbon

etc. So they needs to buy uh from carbon credit uh a lot of them are created in

credit uh a lot of them are created in Indonesia and Assean. So internationally

Indonesia and Assean. So internationally accepted standard is very important.

accepted standard is very important. >> Yes. Yes. Thank you for your question.

>> Yes. Yes. Thank you for your question. Yeah, I agree. Because if we look on the

Yeah, I agree. Because if we look on the international standard as professor Sori

international standard as professor Sori mentioned uh usually two refer like

mentioned uh usually two refer like either FEA or gold standard and in case

either FEA or gold standard and in case of the asan member state if we look on

of the asan member state if we look on uh each other's assigned member state.

uh each other's assigned member state. For example in Indonesia

For example in Indonesia uh we have a national registry uh

uh we have a national registry uh standard system. National registry

standard system. National registry standard system uh somehow has

standard system uh somehow has discrepancy with the international

discrepancy with the international standard. That one of the reason why the

standard. That one of the reason why the you mentioned why it failed to attract

you mentioned why it failed to attract the international uh buyers because

the international uh buyers because different discrepancy of the standard.

different discrepancy of the standard. The issue of the discrepancy of the

The issue of the discrepancy of the standard when we look on the carbon uh

standard when we look on the carbon uh credit uh it is not something new is is

credit uh it is not something new is is not something that unrecognizable by the

not something that unrecognizable by the the the government of the asan member

the the government of the asan member state that's in the asan common carbon

state that's in the asan common carbon framework it also it's already included

framework it also it's already included in the phase one when we we try to build

in the phase one when we we try to build the regional ecosystem for the carbon

the regional ecosystem for the carbon credit uh it's uh emphasize the

credit uh it's uh emphasize the important of having uh evaluation of the

important of having uh evaluation of the current existing uh available standard

current existing uh available standard apply in each Asan member state and we

apply in each Asan member state and we we need to see how different this

we need to see how different this existing uh standard in the Asan member

existing uh standard in the Asan member state with the international recogn

state with the international recogn recognized standard and the phase two

recognized standard and the phase two will enhance this uh uh will try to

will enhance this uh uh will try to harmonize uh between the existing

harmonize uh between the existing national standard with the international

national standard with the international one to enable uh any carbon uh uh uh

one to enable uh any carbon uh uh uh credit can be sold in the international

credit can be sold in the international market. And the third one uh this is

market. And the third one uh this is more than uh more on the long-term on

more than uh more on the long-term on the phase three because uh uh having the

the phase three because uh uh having the same standard uh with the international

same standard uh with the international one it will easier for us to sell our

one it will easier for us to sell our carbon credit and participate. In

carbon credit and participate. In addition, it also will enable Asan

addition, it also will enable Asan member state to participate in the like

member state to participate in the like article 6.2

article 6.2 when we look on the Paris agreement that

when we look on the Paris agreement that we we have huge potential for our uh

we we have huge potential for our uh carbon emission reduction uh action to

carbon emission reduction uh action to be solved and to bring the additional

be solved and to bring the additional revenue for us to finance uh climate uh

revenue for us to finance uh climate uh mitigation and adaptation in the region.

mitigation and adaptation in the region. Yeah.

Yeah. >> Yeah. Uh thank you so much. I think we

>> Yeah. Uh thank you so much. I think we have a question over there please.

have a question over there please. >> Hi. Uh good good morning. Um so thank

>> Hi. Uh good good morning. Um so thank you for the panelist is a uh is a good

you for the panelist is a uh is a good discussion. So just got a couple

discussion. So just got a couple questions uh that uh I really wanted to

questions uh that uh I really wanted to explore and uh the the first one is uh

explore and uh the the first one is uh with regards to the original

with regards to the original coordination angle how uh

coordination angle how uh given that there is a wide difference

given that there is a wide difference between uh the carbon pricing readiness

between uh the carbon pricing readiness across AEAN right uh and in fact uh only

across AEAN right uh and in fact uh only like three or four countries which uh

like three or four countries which uh ready and only two countries which uh

ready and only two countries which uh one one country is already being

one one country is already being implemented and another one will be

implemented and another one will be implemented next year. So uh how can the

implemented next year. So uh how can the g given that you suggested for uh a

g given that you suggested for uh a common pricing framework? How can the

common pricing framework? How can the region design those carbon uh pricing

region design those carbon uh pricing framework that allows uh for the

framework that allows uh for the flexibility

flexibility uh especially for the less developed

uh especially for the less developed members uh while still moving forwards

members uh while still moving forwards uh to a common market uh or uh or some

uh to a common market uh or uh or some price signal or something like that

price signal or something like that right that's question number one and

right that's question number one and question number two is that um

question number two is that um given like like I say given the assean

given like like I say given the assean diverse economies uh The question is

diverse economies uh The question is that should we as A Assean uh as A asan

that should we as A Assean uh as A asan country or assean region focus on

country or assean region focus on harmonizing the carbon pricing through

harmonizing the carbon pricing through the common framework or can we allow

the common framework or can we allow countries uh say Singapore, Malaysia,

countries uh say Singapore, Malaysia, Vietnam or maybe Philippines maybe to

Vietnam or maybe Philippines maybe to develop their own system first, right?

develop their own system first, right? make sure the the system is is mature

make sure the the system is is mature and then we link up together and when to

and then we link up together and when to link up that's one questions that maybe

link up that's one questions that maybe I can ask uh the panelists to to to you

I can ask uh the panelists to to to you know to give some answers. Thank you.

know to give some answers. Thank you. >> Thank you so much. Um uh great

>> Thank you so much. Um uh great questions. Um maybe first on on uh on

questions. Um maybe first on on uh on the regional um coordination uh question

the regional um coordination uh question and how to build a how to build a common

and how to build a how to build a common framework. Uh very interested in in in

framework. Uh very interested in in in views from the from the panelists. Um

views from the from the panelists. Um not sure who wants to start. Yes, Helina

not sure who wants to start. Yes, Helina any any views from you? Yes, professor

any any views from you? Yes, professor please.

please. So it's very important to have a

So it's very important to have a harmonization in terms of carbon pricing

harmonization in terms of carbon pricing but at the same time some country really

but at the same time some country really um take a lot of initiative. Let me give

um take a lot of initiative. Let me give you example. So for example in the case

you example. So for example in the case of Indonesia uh uh sorry uh in the case

of Indonesia uh uh sorry uh in the case of Singapore led by uh MAS monetary

of Singapore led by uh MAS monetary authority of Singapore they are already

authority of Singapore they are already started to uh prepare for transition

started to uh prepare for transition credit. Are you familiar with transition

credit. Are you familiar with transition credit? So that is related to uh closure

credit? So that is related to uh closure right early closure of coal power plants

right early closure of coal power plants and uh that is uh uh going to be uh some

and uh that is uh uh going to be uh some experimentation in Philippine maybe

experimentation in Philippine maybe Indonesia very soon. So that is very new

Indonesia very soon. So that is very new right? Uh usually coal power plants uh

right? Uh usually coal power plants uh operate for 30 years and then maybe

operate for 30 years and then maybe close 10 years before and then they can

close 10 years before and then they can save uh this you know uh they can avoid

save uh this you know uh they can avoid emissions. So that can be credit. So uh

emissions. So that can be credit. So uh I think uh Singapore worked very closely

I think uh Singapore worked very closely with the rockfeller center and couple of

with the rockfeller center and couple of NGO uh in US and so on and better

NGO uh in US and so on and better already prepared uh this uh methodology.

already prepared uh this uh methodology. So pretty soon I think this called

So pretty soon I think this called transition credit can be uh sold and

transition credit can be uh sold and purchased. So because this is really uh

purchased. So because this is really uh uh Singapore initiative and so I think

uh Singapore initiative and so I think you know it's very important to have a

you know it's very important to have a baseline you know like a taxonomy asan

baseline you know like a taxonomy asan taxonomy baseline but some country will

taxonomy baseline but some country will really take the initiative and move

really take the initiative and move ahead and then you know other country

ahead and then you know other country maybe try to catch up. So I think you

maybe try to catch up. So I think you know how to agree baseline is very

know how to agree baseline is very important.

important. >> Yeah Dr. Colombia.

>> Yeah Dr. Colombia. >> Yeah, thank you professor Suri. Yeah, I

>> Yeah, thank you professor Suri. Yeah, I agree that baseline is one having

agree that baseline is one having baseline that agree by the asan member

baseline that agree by the asan member state is one of the important thing

state is one of the important thing because um it it it will depends on on

because um it it it will depends on on on the many factors including the

on the many factors including the political uh uh acceptance of the of the

political uh uh acceptance of the of the on the on the region. Yeah. And the

on the on the region. Yeah. And the related to the question like second

related to the question like second question probably um uh whether the

question probably um uh whether the assean will uh have the uh freedom or

assean will uh have the uh freedom or room to develop their national standard

room to develop their national standard first then having harmonized one is it

first then having harmonized one is it correct? Yeah. Yeah. I think uh is is

correct? Yeah. Yeah. I think uh is is already uh said by our leaders in in the

already uh said by our leaders in in the ASEAN under the ASEAN common carbon

ASEAN under the ASEAN common carbon framework that uh we will uh uh see the

framework that uh we will uh uh see the existing national standard of the each

existing national standard of the each asan member state while we also try to

asan member state while we also try to develop the the harmonized one. So the

develop the the harmonized one. So the harmonized one will be based on the

harmonized one will be based on the existing one and I think it links with

existing one and I think it links with the first question when we look the asan

the first question when we look the asan region condition that we had different

region condition that we had different state of the carbon uh pricing and also

state of the carbon uh pricing and also economic diversity. Uh it has some

economic diversity. Uh it has some disadvantage I mean not disadvantage

disadvantage I mean not disadvantage maybe challenge but it also has um uh

maybe challenge but it also has um uh advantage. Why I look advantage? Because

advantage. Why I look advantage? Because uh uh in addition to the uh discrepancy

uh uh in addition to the uh discrepancy or disparity of the market, we we also

or disparity of the market, we we also have a forum to monitor uh among the

have a forum to monitor uh among the Asan member states that uh first

Asan member states that uh first internal forum before like every year we

internal forum before like every year we have like uh annual uh ministry meeting

have like uh annual uh ministry meeting of the energy. We also have uh as uh

of the energy. We also have uh as uh other ministry meeting of uh different

other ministry meeting of uh different sector as well. And before that's annual

sector as well. And before that's annual we also have the internal uh monitoring

we also have the internal uh monitoring of the system that's one we we I believe

of the system that's one we we I believe that's a strong uh one of the asan

that's a strong uh one of the asan because uh in addition we have um uh

because uh in addition we have um uh each uh national target its national

each uh national target its national condition we also have uh the same forum

condition we also have uh the same forum to share to to mention the like

to share to to mention the like Singapore what has been done in

Singapore what has been done in Singapore what has been going in in the

Singapore what has been going in in the Indonesia so that will uh our uh our

Indonesia so that will uh our uh our advantage uh to have the the the the

advantage uh to have the the the the harmonized system and also monitoring of

harmonized system and also monitoring of course the allowing the flexibility is

course the allowing the flexibility is also mentioned in in in our uh

also mentioned in in in our uh discussion among the leader. Yeah.

discussion among the leader. Yeah. >> Uh Albertas please.

>> Uh Albertas please. >> Yeah. uh maybe just an idea before

>> Yeah. uh maybe just an idea before having regional coordination or regional

having regional coordination or regional market for carbon credit. Again, this is

market for carbon credit. Again, this is just an idea. Maybe we can have first

just an idea. Maybe we can have first some kind of coordination among stock

some kind of coordination among stock exchange institutions among Asan

exchange institutions among Asan nations, right? It don't it doesn't have

nations, right? It don't it doesn't have to be carbon trading credit that they

to be carbon trading credit that they trade. Maybe as simple as stock, I don't

trade. Maybe as simple as stock, I don't know, uh shares of companies just to get

know, uh shares of companies just to get some experience first before we proceed

some experience first before we proceed with carbon credit. Yeah, just just an

with carbon credit. Yeah, just just an idea.

idea. >> Um Helina, also very interested in your

>> Um Helina, also very interested in your views maybe maybe also specifically on

views maybe maybe also specifically on the on the harmonization aspect. What

the on the harmonization aspect. What are what what are your thoughts? Do we

are what what are your thoughts? Do we start first on the country level uh with

start first on the country level uh with with maybe also independent initiative

with maybe also independent initiative or do we start with an Azan framework?

or do we start with an Azan framework? >> Yes. I also want to answer on that

>> Yes. I also want to answer on that questions that uh for the harmonization

questions that uh for the harmonization part that we have as an forum in here

part that we have as an forum in here it's one thing that we can share uh

it's one thing that we can share uh share common goals that we need to

share common goals that we need to reduce emissions uh also like how for

reduce emissions uh also like how for example for the carbon pricing we have

example for the carbon pricing we have each country have different level of the

each country have different level of the price so this kind of forum is also

price so this kind of forum is also importance because we want to make sure

importance because we want to make sure that uh asen regions And we have each

that uh asen regions And we have each each nationality have their own economic

each nationality have their own economic and climate policy goals. Uh through

and climate policy goals. Uh through this kind of forum in a way we can also

this kind of forum in a way we can also sharing our experience and also we need

sharing our experience and also we need to address that for this to reduce the

to address that for this to reduce the emit emittant carbon between assean

emit emittant carbon between assean regions. Uh for our regulations we have

regions. Uh for our regulations we have country priority but also we have share

country priority but also we have share common goal in the region. So I will

common goal in the region. So I will also add that. Thank you. Um, professor

also add that. Thank you. Um, professor Suri any additional thoughts?

Suri any additional thoughts? >> So, I just want to talk about carbon

>> So, I just want to talk about carbon credit uh including allowances. So, I

credit uh including allowances. So, I think there are international platform

think there are international platform where investors and a company can buy uh

where investors and a company can buy uh those credit. So but to be to to to uh

those credit. So but to be to to to uh to register those carbon credit

to register those carbon credit generated in Asan countries uh on this

generated in Asan countries uh on this international platform I think uh they

international platform I think uh they needs to meet meet certain criteria. So

needs to meet meet certain criteria. So not all you know credit generated in

not all you know credit generated in your Indonesia will be uh placed on

your Indonesia will be uh placed on that. uh so I think still uh you know

that. uh so I think still uh you know international guidelines is important

international guidelines is important and of course you will create a domestic

and of course you will create a domestic guideline for certain sector but make

guideline for certain sector but make sure uh you have a good standard yeah

sure uh you have a good standard yeah one more issue there's a coria uh co sa

one more issue there's a coria uh co sa sia corsia it's a international aviation

sia corsia it's a international aviation uh international organization they set a

uh international organization they set a global uh international aviation company

global uh international aviation company airlines uh to uh meet their emission uh

airlines uh to uh meet their emission uh target there is a growing demand for

target there is a growing demand for carbon credit now uh to be accepted that

carbon credit now uh to be accepted that there those carbon credit to be accepted

there those carbon credit to be accepted under Kushia they they have very

under Kushia they they have very stringent condition okay so not all

stringent condition okay so not all carbon credit generated by ASEAN will be

carbon credit generated by ASEAN will be accepted maybe a few one or two but if

accepted maybe a few one or two but if uh those carbon credit will be accepted

uh those carbon credit will be accepted by uh uh Kia then global airliner uh you

by uh uh Kia then global airliner uh you know want to buy So this will create a

know want to buy So this will create a reputation. So uh I think you also needs

reputation. So uh I think you also needs to pay attention. I mean Assan standard

to pay attention. I mean Assan standard is important but to be accepted by such

is important but to be accepted by such kind of very big customer is very

kind of very big customer is very important.

important. >> Uh thank you so much. Um if there are no

>> Uh thank you so much. Um if there are no more questions in the audience then I

more questions in the audience then I would like to um to to uh pose one last

would like to um to to uh pose one last uh and final question before ending the

uh and final question before ending the session to to all four of our speakers.

session to to all four of our speakers. We of course have have very heavy um

We of course have have very heavy um European presence also at this at this

European presence also at this at this forum uh with a lot of governments and

forum uh with a lot of governments and and and institutions such like LSE um

and and institutions such like LSE um represented here and and something that

represented here and and something that has come up in the presentation is of

has come up in the presentation is of course also the role of of CBAM and uh

course also the role of of CBAM and uh and a mechanism that um essentially um

and a mechanism that um essentially um yeah asks um exporters um companies as

yeah asks um exporters um companies as well as exporting countries um to to

well as exporting countries um to to price their carbon which is something

price their carbon which is something that makes a lot of sense from a from a

that makes a lot of sense from a from a European point of view in terms of

European point of view in terms of creating fairness and and um um yeah

creating fairness and and um um yeah making sure there there is fair

making sure there there is fair competition but uh from an outside

competition but uh from an outside perspective um this is this is a

perspective um this is this is a controversial instrument and and there

controversial instrument and and there are lots of concerns in terms of whether

are lots of concerns in terms of whether also smaller companies are are able to

also smaller companies are are able to comply. So I'm very interested in your

comply. So I'm very interested in your in your views. Is this is this helpful

in your views. Is this is this helpful in terms of also creating uh a little

in terms of also creating uh a little bit of external pressure to to price

bit of external pressure to to price carbon or is this not helpful? What is

carbon or is this not helpful? What is what is your perspective from an from an

what is your perspective from an from an Azan regional uh point of view? Um

Azan regional uh point of view? Um Albertas maybe starting with you and

Albertas maybe starting with you and then doing uh one final round.

then doing uh one final round. >> Yeah. Uh thank you so much. I guess this

>> Yeah. Uh thank you so much. I guess this kind of thing is something that we

kind of thing is something that we cannot avoid uh in this global world. Um

cannot avoid uh in this global world. Um I from Assean perspective maybe it will

I from Assean perspective maybe it will be helpful to have some kind of road map

be helpful to have some kind of road map where it explains the timeline uh of the

where it explains the timeline uh of the graduation of the tax. I guess it will

graduation of the tax. I guess it will give some clarity to the exporters in

give some clarity to the exporters in Asan when they export something to the

Asan when they export something to the EU because I guess again uh it's about

EU because I guess again uh it's about readiness. So when people can see up

readiness. So when people can see up front that okay maybe uh one year from

front that okay maybe uh one year from now the tax rate will be like this if

now the tax rate will be like this if they uh export something that is

they uh export something that is emission intensive and then the next two

emission intensive and then the next two years will be like this or etc. it will

years will be like this or etc. it will give them some kind of time to plan uh

give them some kind of time to plan uh corporate plan how to you know uh

corporate plan how to you know uh respond with this. So I guess um it's

respond with this. So I guess um it's okay let's have CBAM but it's just about

okay let's have CBAM but it's just about the uh how how can we roll out this plan

the uh how how can we roll out this plan I guess.

Thank you. Um I will also mention that currently in the global discussions we

currently in the global discussions we also discussing uh for all emerging

also discussing uh for all emerging markets uh about how to build a climate

markets uh about how to build a climate coalitions aligning carbon pricing trade

coalitions aligning carbon pricing trade and development. So I I see this an

and development. So I I see this an opportunity that Assean should

opportunity that Assean should participate more in this discussions and

participate more in this discussions and also coalitions to to go together not

also coalitions to to go together not only as a asan regions but also all

only as a asan regions but also all emerging market how we response to the

emerging market how we response to the CBAM because in a way for the economic

CBAM because in a way for the economic competitiveness we need to align our

competitiveness we need to align our carbon pricing our trade and development

carbon pricing our trade and development and how we can export between emerging

and how we can export between emerging market and also go to the EU or UK. So I

market and also go to the EU or UK. So I see that uh asan country to not miss out

see that uh asan country to not miss out these discussions that happening in the

these discussions that happening in the global level that's really important.

global level that's really important. Thank you.

Thank you. >> Yeah Dr. Amy very interested in your

>> Yeah Dr. Amy very interested in your views.

views. >> Yeah it's interesting topic. Yeah sam.

>> Yeah it's interesting topic. Yeah sam. Yeah, I think uh for the short term I

Yeah, I think uh for the short term I think it affect yeah the asan because if

think it affect yeah the asan because if as we discussed like not all the asan

as we discussed like not all the asan member state have the same readiness and

member state have the same readiness and this sebum as you mentioned put external

this sebum as you mentioned put external additional pressure to us how to react

additional pressure to us how to react but I also agree with to speaker because

but I also agree with to speaker because we have to look on the long term in the

we have to look on the long term in the long term I think the region already on

long term I think the region already on the track because we we all already see

the track because we we all already see the important of having carbon pricing

the important of having carbon pricing in the region and this external pressure

in the region and this external pressure actually can be viewed as a uh good

actually can be viewed as a uh good pressure for us. how to prepare the Asan

pressure for us. how to prepare the Asan region uh for the long term in line with

region uh for the long term in line with the global uh as also mentioned by her

the global uh as also mentioned by her Herina like to be also actively

Herina like to be also actively participate in in the global discussion

participate in in the global discussion to have uh knowledge and having road map

to have uh knowledge and having road map or uh kind of the strategy every year

or uh kind of the strategy every year how to uh move the uh the readiness

how to uh move the uh the readiness level of the Asan region in responding

level of the Asan region in responding to the sebum and perhap uh global uh

to the sebum and perhap uh global uh carbon pricing mechanism in the near

carbon pricing mechanism in the near future. I think that will be helpful and

future. I think that will be helpful and it also have been being discussed

it also have been being discussed internally. Yeah.

internally. Yeah. >> Uh professor Sori.

>> Uh professor Sori. >> So CBM is very difficult for the

>> So CBM is very difficult for the companies in developing countries. But

companies in developing countries. But let me explain from Japan's point of

let me explain from Japan's point of view. So Japan also you know subject to

view. So Japan also you know subject to this sebam. So they started to report

this sebam. So they started to report the GH emission. I think this is a based

the GH emission. I think this is a based on scope one on emission. So they're

on scope one on emission. So they're already doing it. And then this applied

already doing it. And then this applied to big company. Now big company have to

to big company. Now big company have to do it. So they ask their suppliers the

do it. So they ask their suppliers the Japanese supplier and the supplier in

Japanese supplier and the supplier in ASEAN uh to report it. So it's very

ASEAN uh to report it. So it's very tough but it generates kind of

tough but it generates kind of international you know collaboration in

international you know collaboration in terms of GH emission uh reporting and it

terms of GH emission uh reporting and it will ultimately lead to the greater

will ultimately lead to the greater effort to reduce GH emissions.

effort to reduce GH emissions. >> Yeah thank you so much. Um yeah very

>> Yeah thank you so much. Um yeah very interesting views and of course uh open

interesting views and of course uh open to to continuing discussion over coffee

to to continuing discussion over coffee during during the break. Thank you so

during during the break. Thank you so much for uh for for having attended this

much for uh for for having attended this joint CPI LSE session. Very much

joint CPI LSE session. Very much appreciated that you uh that you came

appreciated that you uh that you came over and joined us here on a on a Friday

over and joined us here on a on a Friday uh morning after after a very busy week.

uh morning after after a very busy week. Um please join me in in thanking um our

Um please join me in in thanking um our our speakers and panelists and thank you

our speakers and panelists and thank you so much again for attending.

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YouTube Transcript:#AEBF25 | Day 3 - ASEAN Carbon Pricing