this is not energy efficiency

Energy (In)efficient Asian Economies

Will it be difficult to avoid catastrophic climate change? Yes, this will be very difficult, especially in Asia, if we are to believe the newest report by the Asian Development Bank.

The bank’s report „Energy Outlook for Asia and the Pacific” from November 2013 foresees that 48 countries from the region will increase their energy needs by 67% in the years 2010-2035, which amounts to half the world’s energy demand. This wouldn’t be a problem if energy sources were renewable. However, Asia will most probably become the „kingdom of coal”. This natural resource will generate 83% of energy production. This is why demand for coal in the 2010- 2035 time frame will soar by 53% in Asia.

It is quite ironic that while the world (and Asia in particular) demands ever more coal, Poland, to take the country with the largest coal reserves in Europe, keeps reducing its production. For many years Polish coal exports have been dropping – this is the result of decreasing production, growing extraction costs (and also high labour costs) and growing domestic demand. During the last twenty years global coal production rose by 68 percent, while the European Union as a whole has reduced its output by 22 percent. While Germany wants to completely stop consuming coal by 2018, China, Indonesia, Japan and South Korea are increasing both coal production and domestic production. They know that coal is a cost-effective energy course (which shows up in its share of energy demand in the below graph for the years 2000-2035), and ignore its negative externalities.

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Source: ADB report, Energy Outlook for Asia and the Pacific, 2013.

„Some countries from South-East Asia (e.g. Indonesia, the Philippines and Vietnam) will be actively promoting coal use, especially in the energy sector, in order to diversify their energy supply structure and increase energy security” reads the report. And yet the status of energy security will be much more complicated. Thus, the West is spending large sums of money on „fighting global warming” and, notwithstanding the rationale for doing so, undertakes many initiatives aimed at decreasing the CO2 level in the atmosphere. For example, carbon dioxide levels in the US are at their lowest levels since 1964 (see graph below).

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Source: proeconomics.pl, http://www.proeconomics.pl/2013/11/08/stezenie-co2-w-usa-w-przeliczeniu-na-osobe-jest-najnizsze-od-1964-roku/

However, CO2 emissions will keep on growing on a global scale to the year 2035, increasing by 65%, i.e. to a level of 22.113 billion tonnes. If the bank’s forecasts are accurate, up to that time over half of all greenhouse gasses in the atmosphere will come from Asia and the Pacific. Even taking a very „green” scenario considered by the bank which accounts for more efficient use of renewable energy sources (i.e. wind and solar), fossil fuels will still fulfil 75% of energy demand. Thus, coal needs a more in-depth look. The Chinese economy is, in effect, addicted to this energy source.

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Source: Citibank

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Source: ADB report, Energy Outlook for Asia and the Pacific, 2013.

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Source: Reuters

One of the main problems facing efforts to boost the ecological credentials of the region is the forecast increase of serial polluters – cars – in the next two decades. The bank estimates that in India alone in 2035 there will be 118 million cars, 101 million more than in 2010.

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Source: ADB report, Energy Outlook for Asia and the Pacific, 2013.

This is because emerging markets are the customers for more than half of all car sales worldwide, and by 2020 the industry forecasts an even greater share of two thirds. It is not only the Chinese and Indians who are buying more cars, also South-East Asian countries such as Thailand, Indonesia and Malaysia are contributing to rising demand for: a) cars and b) energy.

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Source: Proeconomics.pl, http://www.proeconomics.pl/2013/09/23/sprzedaz-samochodow-w-azji-poludniowo/

There is only one factor which could stop the coal-powered boom – money (from the EU? The US?). The Asian region in question would have to find 11.7 billion USD in order to meet the forecast increase in energy demand, according to the report. On the other hand, taking the „green” alternative is even pricier. Investment in energy efficiency and energy sourcing would require almost 20 billion USD in funding. As things stand right now, it seems that the air in Europe and the United States will be clean, with a minimum amount of CO2, while Chinese, Indonesian and Indian air will be extremely polluted and will be a major cause of environmental degradation. But aren’t we really talking about the same air?

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  1. Diane Basedow Whitman
    Nov 17, 2016 - 02:41 PM

    Gentlemen,
    All your articles are ver informstive and great reading!

    Reply

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