Strategic Pathways for Achieving Carbon Neutrality in ASEAN-5: The Role of Green Bonds and Their Current Development

Dzul Hadzwan Husaini, Wen Hui Lee and Hooi Hooi Lean

Chapter 4 in Green Finance and Energy Transition in ASEAN, 2026, pp 93-126 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Carbon neutrality remains a strenuous journey for ASEAN-5 because they are net consumers of renewable energy technologies and depend heavily on imports, leading them to low energy sovereignty and heightened vulnerability to external shocks. The energy transition is also constrained by financial limitation and underinvestment in modern renewables, raising concerns about the region’s resilience and sustainability. Green bonds have emerged as an essential enabler for renewable energy investments in ASEAN, facilitating risk-sharing between the public and private sectors, while offering financial solutions for issuers and as arbitrage tools for investors. This chapter offers a critical overview of the role of green bonds and their current development in the ASEAN-5 countries. We discuss how green bonds contribute to climate mitigation efforts, focusing on their theoretical framework and their role in environmental sustainability. We further discuss green bond issuance trends and notable projects, challenges to adopt green bonds, and present key recommendations to strengthen green bond implementation. Ultimately, we underscore the need for robust financial strategies that bolster carbon neutrality and energy security across ASEAN-5 economies.

Keywords: Green Finance; Energy Transition; ASEAN; Carbon Neutrality; Renewable Energy; Sustainable Finance; Climate Finance; Energy Policy; Green Bonds; Net-Zero; Transition Finance; Clean Energy Investment; Sustainable Development; Decarbonization; Climate Change Mitigation; ESG (Environmental; Social; and Governance); Low-Carbon Economy; Energy Markets; Financial Mechanisms for Sustainability; Energy Efficiency; Foreign Direct Investment (FDI) in Energy; Carbon Pricing; Policy and Regulation; Just Transition; Green Sukuk; Sustainable Infrastructure; Public-Private Partnerships (PPP); Institutional Investors in Clean Energy; Green Investment Strategies; Financing Renewable Energy; Southeast Asia Energy Policy; China Energy Investment; ASEAN Climate Goals; Energy Security in ASEAN; COP28 and Energy Transition; COP29; Economic Growth and Green Energy; Sustainable Power Systems; Carbon Markets in Asia; Green Hydrogen in ASEAN; Electrification and Smart Grids (search for similar items in EconPapers)
JEL-codes: G23 O13 Q01 Q40 Q50 Q56 (search for similar items in EconPapers)
Date: 2026
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