A new report by the Asian Development Bank (ADB) is pushing for efforts to support green businesses in Asia and the Pacific to address climate change as the environmental market in the region grows.
“With better access to green technologies, goods, and services, it will be less costly for businesses to be less carbon intensive,” the Asian Economic Integration Report 2023 said.
Citing an earlier study, the report said more businesses are adopting systems for environmental management and resource use efficiency and reducing the environmental impact of their production.
To facilitate this trend, the ADB report said policymakers could employ both regulatory measures and market-based mechanisms.
“It is important to consider the advantages and disadvantages of regulatory approaches such as environmental laws, regulations and standards, and market-based mechanisms such as emission trading systems and carbon taxes,” it added.
To facilitate this trend, the report said policy makers could employ both regulatory measures and market-based mechanisms.
“It is important to consider the advantages and disadvantages of regulatory approaches such as environmental laws, regulations and standards, and market-based mechanisms such as emission trading systems and carbon taxes,” it said.
Regulatory measures could often expand trade opportunities and enhance interoperability but can also impose trade barriers at the same time, it added.
The ADB report said important factors in adopting carbon-reducing mechanisms include their flexibility, level of ambition, and comparability with other economic mechanisms.
It said environmental laws and regulations have been effective in regulating pollution and inducing a switch to renewables and other less-polluting inputs.
Renewable energy standards, tax credits, and low-cost financing led to growth in renewable energy use in developed economies, the report said.
“Innovation to design new technologies that lower pollution and increase resource efficiency will be key. Many economies in the region need to catch up with innovation through adoption and adaptation of existing green technologies and indigenous technology development,” it added.
Moreover, it said certification can be critical to make trade greener and inform how products contribute to mitigating environmental or climate change challenges.