Sustainability Expert Donald Chan on the Future of Carbon Markets, Energy Transition, and Climate Action

Donald Chan, the Chief Operating Officer at Asia Research and Engagement (ARE) and Sustainability Lead at PrimeMovers Equity, is a prominent voice in the sustainability sector, bringing years of expertise in climate policy, energy transitions, and sustainable development.

In an in-depth interview with Carbon Wire, Chan delved into his journey into sustainability, the pressing challenges of transitioning from fossil fuels, the evolution of protein production methods, and the rapidly changing landscape of carbon markets and climate action following COP 29.

Chan offered an optimistic perspective on the future of sustainability. “While challenges remain, the opportunities for innovation, collaboration, and impact in the sustainability sector are immense. The time to act is now.”

Journey into Sustainability Leadership

Chan’s entry into the sustainability arena was marked by his role as an Operating Partner at Temasek in 2020, where he initiated first-generation climate impact actions. He was involved in setting up new ventures from the state investment firm, including Climate Impact X, Singapore’s new global carbon exchange and marketplace. However, his influence expanded significantly during his tenure as Managing Director for Asia Pacific at CDP, a global platform for environmental data disclosure. Reflecting on his accomplishments, Chan stated, “During my time at CDP, we doubled the number of companies disclosing through the platform. By the end of my term, Asia Pacific accounted for a third of global corporate disclosures.”

In this role, Chan managed six regional offices and a team of 100, working closely with regulators like the Monetary Authority of Singapore to promote environmental accountability. These experiences laid the groundwork for his current role at ARE, where he spearheads initiatives aimed at addressing two critical challenges: the energy and protein transitions.

Navigating the Energy Transition

The Energy Transition Programme led by Chan at ARE focuses on phasing out fossil fuels, particularly coal, in Southeast Asia. This shift is essential in countries like Indonesia and the Philippines, where energy demand continues to grow alongside the need to reduce carbon emissions. Chan pointed out the advantages of renewable energy as the most cost-effective and efficient solution for meeting this demand.

“Renewable energy is now the cheapest and fastest option for power generation,” Chan explained. However, the path to adoption is fraught with challenges, such as land constraints, regulatory bottlenecks, and funding hurdles. For instance, Indonesia’s dense rainforests pose limitations on large-scale solar projects. Nevertheless, progress is being made, with the decommissioning of Indonesia’s first coal plant serving as a promising milestone.

Chan emphasized the speed at which renewable energy projects can be implemented. “Constructing a solar plant is significantly quicker than building a coal or gas plant, which can take three to five years,” he noted. This efficiency makes renewables an attractive option for addressing both current and future energy needs.

Transforming Protein Production

ARE’s Protein Transition Programme addresses the inefficiencies and environmental impacts of traditional protein production methods. Collaborating with corporates and investors, the programme promotes sustainable practices, such as deforestation-free soy sourcing, to minimize the environmental footprint of animal farming.

“This year, the world’s largest dairy company formally adopted a deforestation policy we helped develop, marking a significant step forward,” Chan shared. Such initiatives not only enhance environmental sustainability but also improve ethical standards in the farming industry. The programme encourages companies to adopt innovative methods for producing protein, reducing reliance on resource-intensive farming practices.

COP 29 and Carbon Markets

Discussing the outcomes of COP 29, Chan described the event as both a success and a partial shortfall. While the finalisation of Article 6 was a significant achievement, facilitating the transfer of carbon credits between countries, dissatisfaction lingered among developing nations over the $300 billion financial package provided by developed countries.

“The package is seen as a starting point rather than a comprehensive solution,” Chan remarked. However, he praised the progress made under Article 6, noting its importance for countries like Singapore, which lack sufficient renewable energy resources to meet their carbon targets.

Chan also addressed the controversial topic of carbon offsets. “Offsets should only be used to cover emissions that remain after all possible reduction actions,” he cautioned. Without stringent regulation, offsets risk becoming a shortcut that undermines genuine behavioural and systemic change.

Opportunities in Carbon Accounting

With the rise of mandatory carbon disclosures across various jurisdictions, Chan highlighted the burgeoning opportunities in carbon accounting. “Carbon accounting is poised to become a major industry,” he asserted, citing the increasing demand for professionals skilled in data collection and reporting to meet regulatory requirements.

ARE and similar organisations are working to develop foundational systems to help businesses align with these evolving standards. By establishing robust frameworks for environmental accountability, companies can better navigate the complexities of sustainability reporting.

Chan’s reflections underscore the critical intersections of sustainability, strategy, and policy in addressing global climate challenges. His work at ARE exemplifies the power of collaboration among corporates, investors, and regulators in driving impactful solutions.

As the world grapples with the dual challenges of environmental degradation and energy security, leaders like Donald Chan provide a roadmap for actionable change, proving that sustainability and economic growth can go hand in hand.