ASIA
26 March 2014
Energy security: one of Asia's top priorities
Energy security, efficiency and sustainability are top priorities for developing Asia, according to Emanuele Schibotto.
Energy security, efficiency and sustainability are top priorities for developing Asia, according to Emanuele Schibotto.
Asia's high growth path is at risk should the region not deal with the huge energy challenge it faces in the coming decades, writes the Asia Development Bank (ADB) in a recent report.
According to the ADB, Asia will account for 44% of global GDP by 2035 but the region’s share of global energy use is projected to increase to 51% . This means that the greatest challenge for Asia countries will come less from keeping a high economic growth than the ability to create a sustainable energy mix.
The ADB report sets out concrete measures that countries need to undertake to cope with the imperative of energy security. Those countries that do not fully understand what is at stake will be risking their future economic prosperity.
(i) Assuring energy independence.
As coal, conventional natural gas and nuclear will not satisfy Asia’s growing thirst for energy, imports of oil will increase exponentially - with volumes tripling by 2035. This will leave the region even more vulnerable to external energy shocks.
(ii) Assuring environmental sustainability.
In 2010 the World Health Organization found 34 of the world’s 57 most polluted are cities in Asia. Now, with Asian economies growing at consistent pace, but failing to overhaul their energy mix, consumption of oil, gas and highly toxic coal will skyrocket and will make Asia the world's largest polluter by 2035 – contributing nearly half of global carbon dioxide (CO2) emissions.
(iii) Ensuring accessible and affordable energy.
Today 628 million Asians do not have access to electricity – nearly half of the world’s population without electricity. Inclusive growth means delivering broader access to electricity and cooking fuels to the poor so as to reduce health and environmental risks and enable the delivery of social services.
(iv) Eliminating consumer subsidies.
Most Asian countries provide some form of energy subsidy to soften the effect of energy prices -- they account more than 2 % of GDP in India, Indonesia and Vietnam, and more than 4% in Pakistan and Bangladesh. However, the very same consumer subsidies end up artificially reducing the price of energy and thus encouraging overconsumption. The problem is, subsidies in developing Asia are on the rise.
(v) Investing on smart urbanization.
Smart cities – cities which combine clever planning and design - can deliver significant environmental and energy savings. Rapid transportation systems like bus mass transit systems in China and subways in India help lower energy use and improve the environment and quality of life whereas well-designed communication and control systems can help consumers to maximize their efficient use. But unfortunately, many Asian cities are not "smart".
(vi) Expanding sustainable energy.
The energy mix must include a much higher share of renewables. But renewable energies find it hard to be cost-competitive with the fuels they seek to replace. In the long run, however, the economic benefits garnered from a large-scale use of renewables is believed to outweigh short-term costs.
(vii) Creating a pan-Asian energy market.
The promotion of regional synergies would lead to two significant results. First, it would be a driver for regional co-operation. Second, it would have a multiplier effect on energy savings. Let's take the Mekong region - it is estimated that the implementation of cooperative programs could bring up to $14 billion of savings in 20 years.
(viii) Developing intellectual capital.
As the report rightly points out, a modern energy sector will come about only if the knowledge base is there to support it. It is of paramount importance for Asia to broaden its intellectual capital to better support its physical investments in energy.
In conclusion, developing Asia has a challenging agenda in oder to have a secure, efficient and sustainable energy future.
He also is Editorial Coordinator of Equilibri.net, an Italian think tank on Geopolitics and International Relations.
Asia's high growth path is at risk should the region not deal with the huge energy challenge it faces in the coming decades, writes the Asia Development Bank (ADB) in a recent report.
According to the ADB, Asia will account for 44% of global GDP by 2035 but the region’s share of global energy use is projected to increase to 51% . This means that the greatest challenge for Asia countries will come less from keeping a high economic growth than the ability to create a sustainable energy mix.
The ADB report sets out concrete measures that countries need to undertake to cope with the imperative of energy security. Those countries that do not fully understand what is at stake will be risking their future economic prosperity.
(i) Assuring energy independence.
As coal, conventional natural gas and nuclear will not satisfy Asia’s growing thirst for energy, imports of oil will increase exponentially - with volumes tripling by 2035. This will leave the region even more vulnerable to external energy shocks.
(ii) Assuring environmental sustainability.
In 2010 the World Health Organization found 34 of the world’s 57 most polluted are cities in Asia. Now, with Asian economies growing at consistent pace, but failing to overhaul their energy mix, consumption of oil, gas and highly toxic coal will skyrocket and will make Asia the world's largest polluter by 2035 – contributing nearly half of global carbon dioxide (CO2) emissions.
(iii) Ensuring accessible and affordable energy.
Today 628 million Asians do not have access to electricity – nearly half of the world’s population without electricity. Inclusive growth means delivering broader access to electricity and cooking fuels to the poor so as to reduce health and environmental risks and enable the delivery of social services.
(iv) Eliminating consumer subsidies.
Most Asian countries provide some form of energy subsidy to soften the effect of energy prices -- they account more than 2 % of GDP in India, Indonesia and Vietnam, and more than 4% in Pakistan and Bangladesh. However, the very same consumer subsidies end up artificially reducing the price of energy and thus encouraging overconsumption. The problem is, subsidies in developing Asia are on the rise.
(v) Investing on smart urbanization.
Smart cities – cities which combine clever planning and design - can deliver significant environmental and energy savings. Rapid transportation systems like bus mass transit systems in China and subways in India help lower energy use and improve the environment and quality of life whereas well-designed communication and control systems can help consumers to maximize their efficient use. But unfortunately, many Asian cities are not "smart".
(vi) Expanding sustainable energy.
The energy mix must include a much higher share of renewables. But renewable energies find it hard to be cost-competitive with the fuels they seek to replace. In the long run, however, the economic benefits garnered from a large-scale use of renewables is believed to outweigh short-term costs.
(vii) Creating a pan-Asian energy market.
The promotion of regional synergies would lead to two significant results. First, it would be a driver for regional co-operation. Second, it would have a multiplier effect on energy savings. Let's take the Mekong region - it is estimated that the implementation of cooperative programs could bring up to $14 billion of savings in 20 years.
(viii) Developing intellectual capital.
As the report rightly points out, a modern energy sector will come about only if the knowledge base is there to support it. It is of paramount importance for Asia to broaden its intellectual capital to better support its physical investments in energy.
In conclusion, developing Asia has a challenging agenda in oder to have a secure, efficient and sustainable energy future.
Acknowledgements
Emanuele Schibotto, the author, is a PhD candidate in Geopolitics at the Guglielmo Marconi University in Rome.He also is Editorial Coordinator of Equilibri.net, an Italian think tank on Geopolitics and International Relations.