TOKYO -- Japan and Singapore will work together to promote investment in decarbonization efforts, from the installation of renewable capacity to more transitional steps like replacing coal with natural gas.

Hiroshi Kajiyama, the Japanese industry minister, and his Singaporean counterpart, Gan Kim Yong, agreed at a recent meeting to set up a dialogue for energy transition, to deepen their ministries' cooperation on securing financing for decarbonization projects.

Drastic changes, like a sudden transition away from fossil fuels, could derail Asia's emerging economies. Japan and Singapore are looking to ensure investors are also interested in more gradual efforts, like the switch from coal power to less carbon-intensive liquefied natural gas.

Last month, Japan's Ministry of Economy, Trade and Industry announced its Basic Guidelines on Climate Transition Finance, created in cooperation with the environment and finance ministries. Under the guidelines, the ministry looks to give companies that articulate their plans for decarbonization easier access to financing, a concept it plans to share with its Singaporean counterpart.

Meanwhile, Singapore is creating a so-called taxonomy to help investors identify environmentally friendly activities: green for sustainable activities, yellow for transition activities, and red for highly carbon-intensive activities. Japan could also cooperate with Singapore in ironing out this framework.