The level of digital skills and technological readiness of Asia-Pacific Economic Cooperation (APEC) members play a key role in transitioning toward a low-carbon economy given the importance of digitalization in helping address climate change, according to a policy brief.

Authors Glacer Niño Vasquez, a consultant, and Rhea Crisologo Hernando, a senior researcher with the APEC Policy Support Unit, said that across industries, digital technologies can be harnessed to improve energy efficiency and reduce greenhouse gases (GHG) emissions,
such as by harnessing renewable energy and improving power grids to better manage large volumes of variable renewable energy.

“Building information modeling applications, business intelligence and data analytics, technology road mapping, and artificial intelligence applications are some examples of digital skills that support the transition to low carbon,” Vasquez and Hernando said in the policy
brief, Transitioning to a Sustainable Economy while Ensuring Inclusion.

Citing an earlier paper, they said one way to measure the digital skills capacity of economies to achieve sustainable growth is through the use of the Digital Skills Gap Index (DSGI).

The DSGI is a summary measure of key pillars of digital skills, namely digital skills institutions; digital responsiveness; government support; supply, demand and competitiveness; data ethics and integrity; and research intensity.

Vasquez and Hernando said APEC economies collectively have performed well in the digital skills institutions pillar and the supply, demand and competitiveness aspect.

However, many APEC economies have yet to bridge the divide between the demand for digital skills and the capability of educational institutions and corporate trainers to provide the necessary skills as well as the capacity of policymakers to address the talent deficit, they said.

The authors underscored the need to improve in the digital responsiveness pillar wherein only one APEC economy had managed to be part of the world’s top 20 and none in the top 10.

“The responsiveness of skills development and education systems, and science and technology skills are some areas for improvement. There is a need to address these digital skills deficits and inequities to further accelerate the shift toward low carbon,” they added.

Vasquez and Hernando said another key factor to consider in the shift toward a low-carbon economy is the level of readiness of APEC economies to adapt to climate change, as well as the level of vulnerability to extreme weather events that APEC economies face.

“The interaction between these two important factors provides insights on the urgency to address climate change and further advance climate change adaptation efforts,” they said.

Hernando cited the impact of climate change on the economy and society.

“For example, without climate change action, the APEC region could absorb losses of up to 18.3 percent of GDP (gross domestic product) by 2050,” she said.

It is estimated that by 2030, the direct costs of climate change to health could reach around $2 billion to $4 billion per year. The APEC region represented about 60 percent of GHG emissions in 2019.