Resource-efficient and renewable energy transition in the five least developed countries of Asia: a post-COVID-19 assessment

Abstract

Abstract The economic fallout from COVID-19 resulted in an economic slowdown and a contraction in economic output, changed economic structures, and reduced financial inflows in the five least developed countries (LDCs) of Asia – Bangladesh, Cambodia, Lao People’s Democratic Republic (PDR), Myanmar, and Nepal. This policy brief discusses these impacts in light of the LDC-graduation procedures of the United Nations together with the challenges that these countries face meeting their nationally determined contributions (NDCs) and the environment-related Sustainable Development Goals (SDGs 7, 12, and 13). The economic slowdown in Bangladesh, Lao PDR, and Myanmar and a contraction in economic output in Cambodia and Nepal has increased poverty in the five LDCs and is putting pressure on biomass resources in the rural areas of these countries. The change in the structures of their economies, which threatens to reverse processes of economic modernization in these LDCs, is undermining two decades of progress regarding the efficient use of natural resources and the associated reduction in greenhouse-gas (GHG) emissions per unit of gross domestic product (GDP). A decline in financial inflows such as remittances, foreign direct investment, and official development assistance (ODA) is also a risk to both short- and long-term prospects of further investment in renewable energy generation and low GHG-emissions technologies. This policy brief suggests policies that target technical interventions and incentivize small-scale renewable energy technologies that are less susceptible to microeconomic and macroeconomic impacts from external shocks such as COVID-19.