JAKARTA: Asean economic ministers have endorsed a carbon neutrality strategy aligning with Paris Agreement commitments and could unlock a US$5.3 trillion economic opportunity.

The Asean Strategy for Carbon Neutrality aimed to foster green industries, set standards, and reduce emissions through eight collaborative strategies.

The strategy, supported by the Australia for Asean Futures (AUS4Asean) initiative, required urgency in achieving carbon neutrality for a green transformation, the ministers said in a joint statement following their 55th Asean Economic Ministers' Meeting in Semarang, Indonesia.

The ministers said that addressing Asean's carbon burden not only mitigated risks but also offered a substantial socioeconomic opportunity.

Facing notable climate risks, they said unchecked climate change could lead to an 11 per cent reduction in regional gross domestic product (GDP) by 2100 and displace 87 million people in flood-prone areas across Indonesia, Malaysia, Myanmar, Thailand, and Vietnam.

"In contrast, pursuing carbon neutrality could yield a GDP value-add of US$3.0 to US$5.3 trillion by 2050, attract green investments worth US$3.7 to US$6.7 trillion, and generate 49 to 66 million additional jobs, based on analysis by the Boston Consulting Group.

"The economic benefits would be distributed across Asean countries," they said.

Cambodia, Laos, Myanmar, and Vietnam might experience GDP growth of nine to 12 per cent, while Indonesia, Malaysia, Philippines, and Thailand could see growth of four to seven per cent, and Singapore and Brunei could improve by one to two per cent.

In order to achieve its carbon-neutrality goals, the ministers pointed out that Asean must bridge a 2.6 gigatonne carbon dioxide (CO2) gap.

Despite having low per capita emissions, they noted the region's role as a financial hub is growing, with investments projected to double to over US$2.1 trillion by 2030 from US$962 billion in 2023.

"The region's diverse economies also offer collaborative prospects for achieving carbon neutrality, with hydropower-rich nations contributing zero-carbon energy, some countries having resources for green-tech nickel batteries, and others excelling in the electric vehicle industries," they said.

The ministers said the endorsed strategy would now move towards adoption by the Asean Economic Community Council and would be recognised by the Asean leaders at the 23rd Asean Summit next month.

"Afterwards, it will be introduced to relevant Asean stakeholders for ongoing collaboration in realising a carbon-neutral future," the statement said.

Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz, representing Malaysia at the meeting, said that these strategies would shape a more prosperous and sustainable future for the Asean population, which has already reached 672 million.

"Malaysia is committed to achieving net zero carbon status by 2050, and various initiatives are being implemented, including the development of the Environmental, Social, and Governance (ESG) framework for Malaysia's manufacturing sector," he said.

 - BERNAMA