Cambodia is making slow-but-sure progress along the road to low-carbon economic growth, according to the Asian Development Bank (ADB). The international lender, which has issued a universal call to end poverty, protect the planet, and ensure peace and prosperity for all, says the government still has some tough decisions to make about how it gets to that destination.

The Kingdom only contributes 0.02 percent to global greenhouse gas emissions but this month’s floods in Sihanoukville and fish-threatening drops in the level of the Mekong river because of low rainfall and upstream damming show how vulnerable Cambodia is to climate change and a lack of sustainable energy alternatives. Cambodia will likely suffer from both increased flooding and severe droughts with associated impacts on food production, especially rice, the ADB said.

“By 2030, loss of forestry and other land use will account for 49 percent of Cambodia’s annual greenhouse gas emissions followed by the energy sector (22 percent) and agriculture (17.5 percent),” said ADB Cambodia Resident Mission Country Director Sunniya Durrani-Jamal and economist Darren Byers.

The ADB said Cambodia needs to stop deforestation, plant more trees, balance the environmental, economic and social factors of natural resource development and adopt cleaner fuels. It said that will cut greenhouse gases, lower flood damage and reduce the need for expensive infrastructure redevelopment.

Responsibility does not just lie with the government, the ADB said.

“Consumers have to demand action locally, regionally and globally. Regulators have to create incentives while the financial sector has to factor in climate risk costs into its financing and pricing decisions,” Durrani-Jamal and Byers said.

They also said Cambodia’s addiction to coal and gas-power need to be scaled back with the incentive of a carbon price or a tax set on every tonne of carbon emissions.

“An emissions trading system, or a carbon market, is one way to determine such a cost. From 2016 to 2020, Cambodia sold $11.6 million worth of carbon credits from three locations: Keo Seima Wildlife Sanctuary, Southern Cardamom National Park and Tatai Wildlife Sanctuary,” the ADB said, calling on Cambodia’s neighbours to work together on developing cleaner energy.

“Since coal production is the most carbon polluting fuel source in the region, unless there is a common approach to carbon pricing, there is a risk that coal generation will simply continue unabated  when there is no carbon price, thereby reducing the effectiveness of this policy instrument by creating a ‘leakage’ of emissions,” Durrani-Jamal and Byers said.

The ADB said feed-in tariffs, which pay producers above the market price for electricity, are no longer needed because the cost of renewable energy such as solar and wind power has dropped significantly.

Cambodia’s rapid pre-Covid economic expansion meant it was essential for the Kingdom to develop new power sources, which led it to set up coal-fired power plants. The country has three thermal power plants in Preah Sihanouk Province, which use fossil fuels, burned to create steam to power generators. At least four more coal plants are in the pipeline, adding 1.63 gigawatts of electricity by 2024, more than double the 675 megawatts of current coal generation capacity in the country.

Since the Coronavirus started to spread from February last year power demand has dropped and the price of renewables has come down.

“Barring contractual obligations of past coal deals, the cost effectiveness of Cambodia’s coal power investments should be seriously reconsidered, especially as more and more investors and manufacturers are shunning coal power, given climate goals and disclosure requirements on socially responsible investors,” the ADB said.

Durrani-Jamal and Byers admit it may be difficult for the government to choose between emission reductions or affordable access to energy. They say if the government took a longer-term view of Cambodia’s energy needs and the falling cost of renewables it could make the switch to green investment without pushing up electricity bills for companies and the public.

• Tags: ADB, coal, renewables