ASEAN should focus on building up regional power grid, climate finance, and resilience: Grace Fu

ASEAN should focus on building up its regional power grid, boosting climate finance, and increasing its resilience against climate change impacts, said Minister for Sustainability and the Environment Grace Fu on 1 Oct.

Speaking at an event where a survey of Southeast Asian perceptions on climate change was released, she said that Singapore will, during its chairmanship of ASEAN in 2027, prioritise practical cooperation on these issues.

The Southeast Asia Climate Outlook Survey 2026 is a biennial survey that aims to gauge regional attitudes towards climate change.

In its sixth edition, the survey was released by the Climate Change in Southeast Asia Programme at the ISEAS – Yusof Ishak Institute and the Lee Kuan Yew Centre for Innovative Cities at the Singapore University of Technology and Design.

The survey found that the top two concerns faced by people in Southeast Asia were unemployment and economic recession, as well as climate change and extreme weather events.

This comes at a time when the closure of the Strait of Hormuz is sending shockwaves through global energy markets, Fu said.

“Southeast Asia has not been spared. For a region heavily reliant on imported energy, higher fuel prices ripple quickly through everyday life,” she said.

Businesses face rising costs and growing uncertainty, putting jobs and livelihoods at stake. Households also have to grapple with higher electricity bills, while some supermarkets lack food because transportation and logistical support are affected.

At the same time, the region must also respond to impacts already being felt. For example, recent heavy rain in Thailand has led to floods in areas including Bangkok and reportedly affected more than 2.6 million people.

Fu noted that the energy crisis is a good reason for the transition to renewable energy, and that pausing this shift might be the wrong response.

She noted that the rapid deployment of solar energy in countries such as China and Pakistan has reduced their exposure to imported fossil fuels, therefore restricting exposure to volatile fuel prices.

Some headway has been made on this front, she noted, pointing to the Laos-Thailand-Malaysia-Singapore power integration project that showed that multilateral electricity trade is feasible.

The next phase of work on the grid calls for clearer rules on cross-border trade and practical norms for submarine power cables, she added.

Climate finance is also one area that Singapore thinks ASEAN should focus on, Fu added.

Singapore has moved to develop new financial instruments that can raise funds for climate-friendly projects in the region, she said, pointing to its national blended finance initiative Financing Asia’s Transition Partnership (FAST-P) and its work on carbon markets.

The blended finance approach uses public or philanthropic capital to attract risk-averse private capital, which holds most of the world’s wealth, to kick-start investment in sustainable projects. It can fund projects such as those pushing for cleaner sources of electricity to replace coal.

FAST-P has so far raised US$1.14 billion (S$1.5 billion) for various green energy projects in the region, including battery storage, solar plants, and improved power grids to help cleaner sources of electricity gradually replace coal.

Carbon markets can also direct funds to green projects in the developing region.

Governments or heavy emitters elsewhere buy carbon credits from green projects in developing countries to offset a fraction of their planet-warming emissions. This carbon revenue can help to finance projects such as renewable energy or nature restoration projects within the region.

Singapore has already signed agreements with its Southeast Asian neighbours to cooperate on carbon markets, Fu said, pointing to partnerships with Thailand, the Philippines, and Vietnam.

“The priority now is implementation: Align frameworks, ensure robust accounting and environmental integrity, and develop high-quality projects. We hope to establish similar arrangements with other ASEAN member states,” said Fu.

She also emphasised the need to invest in climate resilience to protect economies, communities, and long-term development as climate risks intensify.

Examples of building resilience could include building sea walls to keep out rising sea levels.

Fu said: “The energy crisis and cost-of-living pressures have made the path harder, but they have not changed our destination: a low-carbon, more resilient, and prosperous Southeast Asia.

“That future remains necessary – and achievable – if we manage the transition with equity and resolve."

The latest climate survey had garnered a total of 3,706 responses from all 11 ASEAN countries, including Timor-Leste for the first time, over five weeks in 2026.

Unemployment and economic recession were cited by 55.3 per cent of the respondents as being a concern for them, while 53.6 per cent of them opted for climate change and more extreme weather events.

Attitudes towards these concerns differed among ASEAN nations.

For instance, countries like Indonesia and Brunei found unemployment and economic recession to be the most concerning.

However, others like the Philippines and Vietnam are most concerned about climate change, reflecting their lived experiences with natural disasters like typhoons and floods exacerbated by climate change, said the report.

The Philippines, for one, was hit by two back-to-back typhoons in November 2025. According to the World Bank, the Philippines faces losses of 1.2 per cent of its gross domestic product each year from the impacts of typhoons.

The survey also showed that floods and extreme heat were the top two concerns across the region.

In Brunei and Singapore, extreme heat was ranked the most serious climate change impact they are exposed to as both are highly urbanised countries where the urban heat island effect is prevalent.

Meanwhile, for countries like Malaysia, the Philippines, Timor-Leste, and Indonesia, floods were a top concern.

The survey also found that while respondents viewed the transition to renewable energy as being necessary over the long term, it is still seen as challenging, partly due to the costs involved and fears over energy shortages.

Of the respondents, 44.6 per cent said they were most concerned about rising energy prices and costs of living.

Another 26.1 per cent said they were concerned over energy shortages. This was an increase from the 20.3 per cent of survey respondents who said they were concerned over this in the 2024 study.

“In general, these concerns might reflect the energy shock disruptions caused by geopolitical events in the preceding years,” wrote the report.

However, more than half of the respondents believe that governments should take decisive action against coal, either by halting coal power plants immediately or actively transitioning to alternative fuels while phasing out existing coal facilities.

These sentiments were the strongest in Brunei and Timor-Leste, while support for continued but restricted use of coal plants is more prevalent in Myanmar and coal-dependent countries like Cambodia, Malaysia, and Vietnam.

Acknowledging these concerns about the energy transition, Fu said that climate action has to be managed carefully.

Governments have to keep in mind cost concerns, provide support where costs fall most heavily, and remain clear about the longer-term gains.

ISEAS – Yusof Ishak Institute’s principal fellow and coordinator Sharon Seah, who is one of the authors, said that the latest report has shown that climate action and energy transition require multiple stakeholders, including governments, businesses, and individuals to work together.

“It needs cooperation of all countries and all of the governments in the region to act together... Ultimately, it is political will to want to effect that change.”

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.