The energy transition is reshaping economic structures across Asia and the Pacific. Where it is managed well, it can unlock new economic growth opportunities. Where it is not, it can trigger inflation and political backlash that stalls reform. The difference lies in whether transition policies are designed with socioeconomic development at their core.

The Economic and Social Survey of Asia and the Pacific 2026 argues that the real policy challenge in pursuing energy transition is not a lack of available options, but how to identify and prioritize reforms that simultaneously support macroeconomic stability, sustain economic growth and improve people’s wellbeing. In other words, transition policy must become development policy.

Development and transition are inseparable

Fossil fuel-based energy is not just a source of emissions. It is a core economic variable. Its domestic price influences inflation. Its import costs affect trade balances and foreign exchange pressures. Its subsidies absorb fiscal space that could otherwise support investments in infrastructure, health or social protection. As a production input, energy access determines whether industries remain competitive globally.

When these linkages are overlooked, transition policies risk imposing concentrated costs on those least able to bear them. Measures that appear sound through a narrow energy lens may generate inflationary pressures, weaken fiscal positions, or disrupt employment and........

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