2.2.2. Scenario 2 (Climate Change Mitigation Scenario)

Carbon pricing is a tangible and cost-effective way of reducing risks, costs and GHG emissions. It provides a mechanism to account for the environmental, social and economic costs of climate change. In some Southeast Asian countries, a carbon pricing mechanism is fully implemented. Other Southeast Asian countries have planned for carbon pricing and have started to include analyses on the impact of carbon pricing in the electricity mix, while the remaining countries have not yet considered carbon pricing. Carbon pricing approaches in the ASEAN are "country specific", and there is no uniform carbon price across the region due to wide income disparity and poverty in the region. Among the ASEAN member states, Myanmar is the poorest economy. The Energy Master Plan (EMP) of Myanmar (2016) considers sensitivity analyses, based on the inclusion of carbon prices of USD 10/ton and USD 15/ton, for the development of an optimum power strategy for the country under a least-cost plan [31]. This scenario represents a future situation whereby a carbon price for coal power plants is fully implemented in the ASEAN region. Under this scenario, we thus assume a low-end carbon price of USD 10/ton in the ASEAN region to include poor economies, as well as for the achievement of low emissions to help limit global mean temperature under the 2DS. It is expected that the adoption of a carbon price in Southeast Asia under this scenario will accelerate the deployment of HELE coal-fired power plants.
