Kyoto, Japan -- In April 2021 the United States hosted the Leaders Summit on Climate, where many of the world's most powerful countries -- and largest carbon emitters -- committed to net-zero emissions targets. Many also made pledges to divest from fossil fuels and invest in green finance. Since then, the capacity for renewable energy and sales of electric vehicles have increased. Yet progress toward system-level transformations is still moving at a snail's pace.
Meeting these targets will depend on commitments from more than just the wealthiest nations. Given the size of their populations, economies, and greenhouse gas emissions, developing economies in Southeast Asia will also play essential roles in the transition to net-zero.
In a new book, a collaborative team of researchers including Akihisa Mori from Kyoto University, focuses on the net-zero transition in Southeast Asia, applying the lessons from the Leaders Summit on Climate to these countries. The researchers wanted to understand whether financial pledges, such as fossil fuel divestment and green finance, can help financial systems overcome the tradeoff between net-zero transitions and sustainable development in emerging markets and developing economies.
To investigate, the team built novel frameworks for analyzing electricity systems and used scenario analyses with the Global Change Analysis Model , or GCAM . They also performed empirical case studies of Vietnam, the Philippines, the Green Climate Fund -- GCF -- and the Just Energy Transition Partnership , JETP .
Their analysis revealed a realistic approach to advancing net-zero transitions in the energy system: the flexible grid paradigm , which allows vertically integrated utilities to remain and, surprisingly, accept natural gas as flexible energy. This approach gives natural gas a significant role in facilitating net-zero transitions as a bridging energy and technology.
Crucially, the team observed that energy transition alone is not enough to achieve net-zero emissions targets. These require synchronized changes not only in complementary elements of energy systems, but also in the very financial systems that fund and invest in facilitating this transformative shift.
Advancing net-zero transitions will require attracting investments in infrastructure and pursuing institutional evolution. Business model innovations in banks and financial investors, as well as re-optimization of investment and loan portfolios, are other core challenges that must be met to finance these changes.
"We hope that this book facilitates in-depth research on the ways to overcome the tradeoff between net-zero transitions, economic development, and energy security beyond Southeast Asia to other emerging markets and developing economies," says author Akihisa Mori.
Next, the team plans to investigate the impacts of international net-zero transitions on supply chains, and how financial digitalization and technology can facilitate business model innovations in the financial system.
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The book The Net-Zero Transitions in Energy and Finance: Southeast Asia and Beyond was published on 27 February 2026 by Cambridge University Press, with doi: 10.1017/9781009689410
About Kyoto University
Kyoto University is one of Japan and Asia's premier research institutions, founded in 1897 and responsible for producing numerous Nobel laureates and winners of other prestigious international prizes. A broad curriculum across the arts and sciences at undergraduate and graduate levels complements several research centers, facilities, and offices around Japan and the world. For more information, please see: http://www.kyoto-u.ac.jp/en
Meta-analysis
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