What are the implications of Trump’s election for clean energy in East Asia?

The COP29 conference, held in November 2024, heightened focus and concern on the impact of Trump’s election on the energy transition in East Asia.

Prior to Trump's election to the presidency in 2024, climate change experts, investors, and clean energy organizations have expressed concerns over what his win will mean for decarbonization efforts on East Asia.

Past experience has shown that he is unwilling to spend funds on climate change initiatives, and he expressed similar opinions during his presidential campaign. In fact, one of the first executive orders signed by President Trump was the withdrawal of the U.S. from the Paris Climate Accord.

Trump’s election has created uncertainty for clean energy targets in East Asia

The Trump administration’s position on climate change could mean that countries lose U.S. funding to help them with their energy transition. To meet global emissions targets, East Asia requires significant global funding and investment.

According to the latest International Energy Agency (IEA) report, the region needs to boost average energy investment from $72 billion over the last three years to $130 billion to align with the Announced Pledges Scenario (which outlines how national targets could help reduce emissions to net zero by 2050).^[1] It estimates that coal-fired power plants account for more than 40% of power generation throughout the region.

East Asia is seeing rapid population proliferation and industrialization, which could impact the region’s energy transition targets

Eight out of 10 countries have announced target dates for carbon neutrality – Singapore, Malaysia, and four others by 2050, Indonesia by 2060, and Thailand by 2065. However, the population in the region is predicted to grow by 800 million by 2050, which will have a significant impact on energy demand and usage. This has important implications for whether the region can meet its energy transition targets.

Media analysts have already suggested that Trump will almost certainly withdraw from ongoing Indo-Pacific Economic Framework negotiations, which are aimed at strengthening environmental standards, securing critical mineral supply chains, and introducing new clean energy targets and commitments.

The U.S. is also a major partner in Just Energy Transition Partnership (JETP) programs with Indonesia and Vietnam, as both look to move away from coal power and towards clean energy. It is highly likely that Trump could look to disengage from these schemes, which would mean $2 billion less of the total $20 billion pledged to Indonesia by wealthy nations and $1 billion less of the $15.5 billion allocated for Vietnam.

The loss of U.S. funding will be significant given concerns about the global economy, which will impact other funding sources.

Will the U.S. pull its climate target weight under Trump?

There are also concerns that if the U.S. does not pull its weight, in terms of the green energy transition, under the Trump administration, East Asian countries might be more tempted to align with China, which is advancing its own green energy ambitions.

Statista estimates the Asia Pacific region generated 18.9 billion metric tons of carbon dioxide (GtCO₂) from energy use in 2023, however China was responsible for more than 10 GtCO₂ of that total. In comparison, North America generated 5.9 GtCO₂, making it the second-most polluting region, which could worsen with Trump’s focus on expanding domestic fossil fuel production.^[2]

However, the prospect for clean energy in East Asia may not be so bleak as Trump’s lack of enthusiasm for clean energy may compel North American clean energy companies to increase their investments in East Asia. There is also doubt that one man can significantly affect global climate targets, with many asset owners, banks, and suppliers focused on the region’s potential. There may be enough market momentum to mean that his policies will not have a significant impact.

For those organizations and investors focused on optimizing the potential for clean energy in East Asia, Pamir has decades of providing in-depth advice, analysis, and strategies in order to minimize risks, including trade conflicts and geopolitical tensions, which may impact the development of clean energy.

We offer a unique blend of quantitative and qualitative research, on-the ground networks with regional influencers, and a rich heritage in helping companies to access the region’s potential. To find out more, get in touch.

^[1] https://www.iea.org/reports/world-energy-investment-2024/southeast-asia

^[2] https://www.statista.com/statistics/205966/world-carbon-dioxide-emissions-by-region/