Why investing in people matters

ENERGY TRANSITION

- AULIYA FEBRIYANTI RHEA OKTAQIARA ZULFIKAR YURNAIDI

Asean is striving to enhance its competitiveness on the global stage and readiness for a transition under its Carbon Neutrality Strategy.

However, Asean will not be well-positioned to become an important part of the global net-zero economy without a robust human capital development to produce skilled, educated, and healthy individuals to drive the energy transition. Human capital has been a central ingredient in economic development, as evidenced by the bloc's Human Capital Index which ranges from 0.5 to 0.8 which demonstrates a positive correlation with Gross Domestic Products (GDP) per capita.

Studies suggest that better human capital doesn't only affect overall energy consumption, but it also enhances the energy transition process. This is especially relevant as the region aims for a just and inclusive energy transition under its upcoming regional energy blueprint (Asean Plan of Action for Energy Cooperation: 2026-2030). If these are not convincing enough, there are also other reasons which show investing in human capital development must be considered as we transform the energy system.

SUPPORTING THE WORKFORCE

Asean is home to more than 670 million people, over half of which are of working age. With most of the population in its most productive age, energy consumption tends to rise significantly. By 2035, the region is projected to account for 25% of the global energy demand, but only a third of the region's energy demand will be met by renewable energy sources. These projections are an incentive for investment, signalling strong market demand and long-term growth potential.