he transition to green energy in South Asia is a pressing and comprehensive effort, driven by the urgent need to address climate change impacts. This transition demands moving away from fossil fuel dependency and towards sustainable resources such as solar, wind and hydroelectric power.

The region faces a complex set of challenges and opportunities in this green transition, requiring a comprehensive policy approach and dynamic industrial development strategies.

In the context of energy, climate change poses a significant threat to South Asia, a region characterised by its vulnerability to extreme weather events, rising temperatures and shifting precipitation patterns. The ecological footprint from fossil fuel consumption has been growing, leading to severe environmental and health impacts.

Over the past two decades, South Asia has experienced substantial economic growth. This has improved living standards and reduced poverty levels. However, this growth has come at the cost of increased environmental pollution and intensified climate vulnerability.

The concept of a green transition involves shifting from “brown” energy sources like coal and gas to renewable energy alternatives. This transition aims not only to mitigate environmental harm but also to enhance energy security, reduce dependence on imports and stimulate economic growth through job creation in the renewable energy sector.

Policy and strategies

First, incentivising green energy adoption, including innovative policy approaches is crucial. This can include adapted solutions for different sectors and regions, emphasising positive incentives, such as tax credits, grants and preferential tariffs for renewable energy adoption.

Direct financial support through low-interest loans, subsidies and insurance for energy-efficient technologies can help overcome financial barriers. Additionally, non-financial support, such as information dissemination, training, and industry-specific strategic support, is vital for raising awareness and building capacity for sustainable energy practices.

Second, market-based solutions and trade policies include mechanisms like cap-and-trade schemes that can incentivise emissions reduction and promote innovation in clean technologies.

Open trade and investment policies in energy and energy technology can facilitate collaboration, technology transfer and investment inflows, leading to a diversified and secure energy mix.

Regional cooperation in the South Asian energy sector can enhance energy security by employing complementary resources and infrastructure. Nepal and Bhutan, for instance, have significant hydropower potential.

Third, mandating energy efficiency and emissions reductions is essential for driving investments in clean technologies.

Eliminating environmentally harmful subsidies, such as those for fossil fuels, is crucial for levelling the playing field and redirecting resources towards sustainable alternatives. Developing national capabilities for technology adoption, innovation, and monitoring is key to achieving long-term sustainability goals.

Regional cooperation, government commitment and effective governance are key to navigating the complexities of this transition. By addressing these challenges, South Asia can pave the way for a sustainable and resilient energy future.

Governments should invest in research and development, build institutional capacity and provide regulatory support to facilitate this process.

Fourth, financing the energy transition is fundamental to overcoming financial barriers and mobilising investments in clean energy infrastructure.

Innovative financing mechanisms, including public-private partnerships, green bonds and carbon pricing schemes, can help unlock private sector investments. Engaging the private sector and exploring combined finance options can further augment funding for the transition while developing market efficiencies and expertise.

India’s green energy transition exemplifies the challenges and strategies involved in shifting towards sustainable energy. With a total installed power capacity exceeding 400 GW, India aims to transition its energy portfolio to greener sources. However, the country faces significant hurdles, including heavy reliance on coal and the need for an efficient grid system.

Despite investments in green energy plants, coal use remains high, particularly during peak demand periods. Addressing these challenges requires optimising plant load factors and enhancing grid efficiency.

The diverse regional landscape of India adds complexity to the transition process. While some states are highly industrialised, others like Uttar Pradesh and Bihar rely mostly on agriculture, which carries a huge carbon footprint.

Effective green transition strategies must consider regional disparities and historical contexts, recognising that developing countries face different challenges compared to developed nations.

Overcoming challenges in green transition is a dire need of the times. One of the primary challenges in green transition is the inadequate understanding or prioritisation of green policies by government agencies. This results in insufficient support and resource allocation to renewable energy initiatives.

Overcoming this challenge requires a shift in perception and a stronger commitment to integrating green transition policies into national development agendas.

Transition policies often reveal double standards, where national governments and international stakeholders declare emission reduction goals while continuing to rely on fossil fuels. This undermines the credibility of climate commitments. Addressing these contradictions is essential for establishing coherent and effective transition strategies.

The upfront financial burden associated with green technologies is a significant barrier to adoption. Innovative financing mechanisms and supportive infrastructure are necessary to democratise access to green technologies. For instance, providing soft loans or zero-markup financing schemes can help mitigate cost barriers and promote the adoption of green technologies like solar panels and electric vehicles.

Green energy transition in South Asia is a critical step towards achieving environmental sustainability and addressing climate change. It requires comprehensive policy and industrial strategies that incentivise renewable energy adoption, implement market-based solutions, strengthen regulatory frameworks and develop innovative financial mechanisms.

Regional cooperation, government commitment and effective governance are key to navigating the complexities of this transition. By addressing these challenges, South Asia can pave the way for a sustainable and resilient energy future.

The writer is a project assistant at the Centre for Private Sector Engagement, Sustainable Development Policy Institute, Islamabad. She can be reached at maheenrhan1212@gmail.com