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ADB warns Asia: Rethink energy use or pay the price

Unless Asia overhauls its energy use and detours from the dangerous and unsustainable energy path the continent is treading, it will undermine the so-called Asian century growth scenario as it will effectively put a wedge in energy access between the rich and poor, as well as open up the region to environmental disasters of magnitude never seen before.

This grim picture that the Asian Development Bank (ADB) painted for Asia in Chapter 2 (Asia’s Energy Challenge) of the 317-page report Asian Development Outlook 2013, released last month, urged Asian countries to deliver energy to all its citizens while scaling back its reliance on fossil fuels.

According to the report, Asia must change the way it consumes energy and start using clean-energy sources or suffer the human, economic and environmental consequences of its voracious appetite for fossil fuels by 2035.

By that year, the continent’s oil consumption will double, natural gas consumption will triple and  coal consumption will rise to a whopping 81 percent.

“Asia could be consuming more than half the world’s energy supply by 2035, and without radical changes, carbon- dioxide emissions will double,” ADB chief economist Changyong Rhee said.

“Asia must both contain rising demand and explore cleaner energy options, which will require creativity and resolve, with policy-makers having to grapple with politically difficult issues like fuel subsidies and regional energy market integration,” Rhee added. 

The World Bank reported in 2010 that electricity production in the Philippines from coal sources was 26.61 percent compared to other energy sources in 2009. And projections from various data banks only said Philippine coal consumption will go up, especially with the Department of Energy’s push in an effort to solve the reported Mindanao power crisis.

While the Philippines has its Renewable-Energy Law of 2008, it continues to rely on carbon-emitting, climate-changing fossil fuel-based energy plants despite official pronouncements of institutionalizing a proportional ratio of mixed (fossil-based and renewable) energy sources.

“In the Philippines, the contribution of renewables will shrink from 43 percent in 2010 to 14 percent in 2035, by which time proven indigenous gas and coal reserves will be depleted,” the ADB report said.

Since energy “is one of the most basic human needs,” the ADB urged Asian government officials to find the political will and innovation to scrap outdated policies and recalibrate the region’s energy mix.

“Effective government leadership can mobilize behavior change in firms and households. The lesson for Asian governments is that they must take the lead in changing the mindset and culture of their citizens so that they use energy more efficiently and thus do their part to promote Asia’s energy security,” it said.

The Manila-based lender suggested three ways to do this: One, eliminate consumer subsidies and tax greenhouse gas emissions. Two, support green innovation such as smart cities and clean transportation to improve energy efficiency and environmental sustainability. Three, curtail wasteful energy consumption.

But the ADB report said these three strategies are easier said than done. “Demand management strategies are promising but presents various challenges. Tackling outmoded subsidies requires political will, green innovation takes investment in technology, and changing behavior entails instilling fundamentally new attitudes.”

Since Asia has limited indigenous energy resources, with only about 9 percent of proven global oil reserves, it is on track to almost triple oil imports by 2035, making it more vulnerable to external supply shocks, the report said.

But since Asian countries cannot meet all their power requirements on their own, the bank  also suggested that they have to accelerate “cross-border interconnection of power and gas grids to improve efficiency, cut costs and take advantage of surplus power. With increased cooperation, a pan-Asia energy market is achievable by 2030.”

In their effort to meet energy demand for their people, the ADB also urged Asian governments to ensure energy supply adequacy, environmental sustainability and affordable access.

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