By many accounts, the 29th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP29) was a disappointment. Not only did it fail to reach an agreement on the follow-up on fossil fuels, it also failed to commit to the climate finance needed to reach net zero.
The agri-food industry, one of the largest emitters of global greenhouse gases (GHGs), will be left under-galvanised if regional blocs like Asean do not step up.
The agri-food sector, which contributes a third of GHG emissions, requires urgent action. Southeast Asia’s agri-food systems contributed 5.2 per cent of global emissions in 2021. If the sector is left unchecked globally, achieving global or national climate goals would be impossible, even if all fossil-fuel burning were to stop today.
With global leadership lagging, as seen at COP29, it is time for regional blocs to spearhead pressing actions needed to achieve climate goals. Southeast Asia, being particularly vulnerable to climate change, cannot afford not to do so. The worsening climate is already wreaking havoc in the region. For example, the Philippines has seen an unprecedented six typhoons in a month.
Asean is no small bloc. With a population of 670 million, it has more people than the European Union, with 450 million. Importantly, Asean is on its way to becoming the fourth-largest economic bloc in the world by 2030, so any positive impact will have implications for other regions.
Leveraging climate financing is key to Asean achieving its goals. However, according to the Global Alliance for the Future of Food, food systems receive only 2.5 per cent of global public climate finance. According to the Asian Development Bank (ADB), Southeast Asia has historically received only 5 per cent of climate finance to Asia. Food and agriculture receive only a fraction of the total finance (see Figure 1).
Food and agriculture get a small slice of the pie. Figure 1: Distribution of climate finance in Southeast Asia, 2018-2019 (US$ billion)Source: ADB Note: AFOLU refers to Agriculture, Forestry, and Other Land Uses.
Funds will likely remain tight with considerable global competition in a tepid investment environment. The Food and Agriculture Organisation of the UN (FAO) has calculated that US$1 trillion a year is needed until 2030 to meet net-zero targets. However, in 2022, the sector received only US$29 billion.
According to another report, there is a 45 per cent financing gap for Southeast Asian agricultural small- and medium-sized enterprises annually. Private sector finance tends to focus on technological fixes and not ecosystem-wide improvements.
At the Singapore International Agri-Food Week in mid-November 2024, a common grouse at breakout discussions was the drop in deal flow compared to previous years. Globally, agri-food tech start-up funding in 2023 was down 49.2 per cent compared to 2022, and Asia was particularly badly hit.
Another source of disappointment is that the follow-up from COP28 to use existing climate financing instead of finding new sources has not happened.
The ADB report, Climate Finance Landscape of Asia and the Pacific, identified that Southeast Asia’s major impediment to accessing climate finance is the weak policy and enabling environment for climate action, as well as weak institutional and planning frameworks that support a pipeline of bankable, high-quality climate projects.
ADB recommended more transparency, data availability, monitoring, and reporting. A key step to address this is integrating climate plans into sector plans, including agriculture and food.
This is where Asean’s leadership will be key. Under Malaysia’s chairmanship in 2025, Asean will pursue enhancements in trade and investments, create inclusive and sustainable pathways, promote integrated and connected economies, and grow a digitally resilient Asean.
Aligning with this, Malaysia has prioritised the Vision of Asean Agriculture: Towards 2045 as one of its Priority Economic Deliverables, and is embarking on a new five-year (2026 to 2030) action plan on Food Agriculture and Forestry.
It may be prudent to steer Asean agricultural ministers towards a shortlist of high-impact projects and provide the guidance and tools to develop their investment readiness and bankability. For example, Asean nations could focus on low-carbon rice.
The mitigation potential for rice (48 metric tons of carbon dioxide equivalent or MtCO2e annually) is much higher than that of livestock (9.4 MtCO2e) and croplands (0.8 MtCO2e). Rice constitutes 36 per cent of all emissions, compared to livestock’s 9 per cent and croplands’ 3 per cent. Only Vietnam has pledged to reduce GHG emissions from rice by a quantum of one million hectares by 2030 as part of its National Determined Contributions.
With these in hand, Asean can connect member states to climate finance, including those set up at previous COPs. For example, it can leverage the Green Climate Fund (set up at COP16) or the Agriculture Innovation Mission for Climate (set up at COP28). The latter has increased its funds for climate-smart agriculture to US$29.2 billion from the US$17 billion announced last year.
This year’s COP launched a finance-matching initiative — the Baku Harmoniya Climate Initiative for Farmers. It serves as a platform aggregating over 90 networks and partnerships to help farmers come up with initiatives for climate action in the agri-food system.
With its focus on rural communities and women, it is relevant to Southeast Asia’s 100 million smallholder farmers. Asean can also draw on these options to fund research and development, weather prediction, technological solutions and infrastructure improvements to build a sustainable and resilient agri-food system.
Malaysia plans to present the Asean Joint Statement on Climate Change at COP30, which will be held in Belém, Brazil, at the mouth of the Amazon River. The conference will likely spotlight the pressures of agriculture expansion into the Amazon forest.
This challenge is similar to those faced in Southeast Asia. As the incoming chair, Malaysia could also promote greater inter-bloc climate cooperation before COP30 to minimise any deficiencies expected at the meeting. It would be an opportune moment to highlight and showcase Asean’s strong commitment to food, agriculture, and forestry to attract much-needed financing for the region’s urgent climate challenges.
Elyssa Kaur Ludher is a Visiting Fellow with the Climate Change in Southeast Asia Programme, ISEAS - Yusof Ishak Institute.
Paul Teng is a Visting Senior Fellow in the Climate Change in Southeast Asia Programme of ISEAS – Yusof Ishak Institute. He is also Dean and Managing Director of NIE International, Nanyang Technological University Singapore.
This article was first published in Fulcrum, ISEAS – Yusof Ishak Institute’s blogsite.
