IDEAS home Printed from https://ideas.repec.org/p/era/wpaper/pb-2025-17.html

Fiscal Pathways to Net Zero: Barriers and Solutions for ASEAN's Green Energy Shift

Author

Listed:
  • Fauziah Zen

    (Economic Research Institute for ASEAN and East Asia (ERIA))

  • Denisa Athallia

    (Economic Research Institute for ASEAN and East Asia (ERIA))

  • Nadira Melia

    (Economic Research Institute for ASEAN and East Asia (ERIA))

Abstract

ASEAN governments spent over US$30 billion on fossil-fuel subsidies in 2023 – around three times public spending on renewable energy (RE). This persistent fiscal bias, despite rising climate risks and net-zero commitments, entrenches dependence on fossil fuels and undermines the competitiveness of clean energy. This Policy Brief examines the fiscal barriers that sustain this dependency, including fossil-fuel subsidies, policy instability, and persistent financing gaps, and proposes policy pathways to accelerate a just energy transition. Focusing on Indonesia, Malaysia, and Thailand, the analysis shows that existing tax incentives, carbon pricing initiatives, and blended finance mechanisms have not yet been sufficient to offset fossil-fuel price advantages or mobilise investment at the scale required. The brief argues that phasing out fossil-fuel subsidies, scaling up green and blended finance, and proactively managing stranded assets are critical to breaking fossil-fuel lock-in and aligning fiscal policy with ASEAN’s climate and development objectives. Latest Articles

Suggested Citation

  • Fauziah Zen & Denisa Athallia & Nadira Melia, 2026. "Fiscal Pathways to Net Zero: Barriers and Solutions for ASEAN's Green Energy Shift," Working Papers PB-2025-17, Economic Research Institute for ASEAN and East Asia (ERIA).
    • Handle: RePEc:era:wpaper:pb-2025-17
    as

    Download full text from publisher

    File URL: https://www.eria.org/uploads/fiscal-pathways-to-net-zero.pdf/
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:era:wpaper:pb-2025-17. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ranti Amelia The email address of this maintainer does not seem to be valid anymore. Please ask Ranti Amelia to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/eriadid.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.