Indra Suppiah

Eye on Asia | How blockchain technology can help solve Asia’s need for green finance

A new blockchain-based infrastructure can transform green finance in Asia and restore confidence in it amid complaints over greenwashing and poor transparency

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A worker walks near solar panels, which are one of the sustainable energy options that help olive farmers, in Mosul, Iraq on January 26. Asia is in dire need of green finance to fund its sustainable infrastructure projects. Photo: Reuters

Indra Suppiah

Published: 6:15pm, 6 Feb 2022

As the climate crisis worsens, governments and organisations are increasingly looking to green finance as a way to raise funds for sustainable projects and infrastructure.

Yet despite growing investment in the sector, green finance is stifled by inefficiencies and irregularities, preventing it from bridging the substantial gap in finance needed to address the environmental challenges facing the world. A new blockchain-based infrastructure has the potential to transform the system.

The urgency to channel more investment into green projects is particularly acute in Asia. Within Southeast Asia, the investment gap for sustainable infrastructure projects is estimated at US$200 billion annually until 2030. Mobilising capital investment is critical if the region is to meet its development goals.

In response, leaders in Asia are prioritising green finance in the hopes it can support their sustainable goals while at the same time helping them capitalise on a growing, innovative sector. Hong Kong is moving to leverage its international capital flows to grow into a regional carbon trading centre, while China’s central bank has made green finance a priority for its latest five-year plan.

Commuters in Hong Kong’s Central district on January 27. The Hong Kong government is working with local financial regulators and the mainland Chinese authorities to assess the feasibility and policy support required for developing the city as a carbon trading centre for the Greater Bay Area and Asia as a whole. Photo: Bloomberg

However, after more than a decade of government-backed support and public attention, green finance is still not delivering the seismic changes needed to alter the climate’s trajectory.