Future Energy Scenario Unfavourable to Asia

Posted on 16 December 2009 by editor

Analysis by Darryl D’Monte

COPENHAGEN (IPS/TerraViva) – Much of the discussion in Copenhagen has revolved around targets and deadlines for cutting carbon emissions. But a weekend seminar in the idyllic Danish island of Samsoe, titled “Future Energy,” helped journalists locate the problem in the context of the world’s biggest emitters.

The Paris-based International Energy Agency (IEA) drew out future scenarios, assuming that all these countries did not exceed 450ppm (parts per million) of carbon dioxide, which is considered the cap to prevent irretrievable climate change. Many developing countries believe 350ppm is a safer option.

One such scenario shows a bias against the Asian region, because it favors the rich nations.

Richard H. Jones, IEA deputy executive director, divided major emitters into three groups, the first being the Organisation for Economic Cooperation and Development (OECD) and other rich countries, including Japan. The second consists of “other major economies,” which include China and Brazil, along with the Middle East, Russia and South Africa. India and the ASEAN (Association of South-east Nations) countries figure in the last category, along with all other developing countries.

Under a phased approach, OECD nations have national emission caps till 2020. Only after this date do the other major economies take on such caps. Till 2030, the last group, which includes most Asian countries, focuses only on national measures – which the United Nations Framework Convention on Climate Change terms “nationally appropriate”.

The findings are contained in the ‘World Energy Outlook 2009’, released last month, which found that for the first time since 1981, global energy demand declined this year because of the economic downturn.

Interestingly, the IEA, which was set up by OECD after the oil price hikes in the 1970s, believes that a precondition for emissions peaking by 2020 is a price of 50 U.S. dollars per tonne of carbon dioxide in power generation and industry for the first group. It also posits investments of 200 U.S. billion dollars in non-OECD countries by 2020.  But the catch is that these are to be supported by OECD+ countries (non-OECD European Union countries) through carbon markets and co-financing while developing countries prefer transfers of public funds.

Of China’s projected abatement of 1.2 gigatonnes (Gt) of carbon dioxide in the 450ppm scenario, as much as 1.0 Gt is from national policies, 0.08 Gt from international carbon trading (a market-based mechanism to control greenhouse gas emissions), and the remainder from international sectoral standards in transport and industry.

India’s contribution in its reduction of 0.25 Gt is mainly from carbon trading, while national policies account for around 0.1 Gt. Japan’s reduction of 0.1 Gt is largely through buying carbon credits.

A redeeming feature of the future energy scenario is that in South Asia, there will be 489 million without electricity in 2030, 125 million less than in 2008. The corresponding figure for East Asia will be 73 million in 2030, down from 195 million last year. The only region where the number goes up is sub-Saharan Africa, by a little over 100 million.

In both China and India, oil imports will drop by 10 percent and 15 percent, respectively, by 2030. The IEA estimates that 2.3 trillion U.S. dollars of investments are required between 2010 and 2030, of which the bulk is on transport, including for India, ASEAN and all other economies. This reveals the bias of the scenario, which reflects the interests of industrial countries. Most Asians do not use motorised transport, so the emphasis on this sector is misplaced.

The energy think-tank Prayas, based in Pune, India, has also come up with scenarios for China, India as well as the U.S. and EU, for 2020, based on current assumptions. China, on President Hu Jintao’s announcement of 40-45 percent emission intensity reduction below its 2005 levels, will emit 10 tonnes per capita of carbon dioxide, 1.7 times the 2005 world average, with total emissions of 13.7 Gt.

India, on Environment Minister Jairam Ramesh’s offer of a 20-25 percent cut in intensity, will have 2.8 tonnes per capita (only a little more than twice the current figure), half the global average.

“Although Indian energy use may be large due to its size, it needs to be seen differently from China,”   says Girish Sant, an analyst with Prayas, who is in Copenhagen. “The clubbing of India with China, since Kyoto, has been a construct useful for Annex-I (industrial countries) to hide behind. This has done sizable harm to climate policies.

“IEA has data on energy prices and renewable energy tariffs, so it should compare these to check which countries are promoting renewable and send good price signals. It should talk about the 50 percent higher gasoline prices in India and EU compared to China and the U.S.”

In a paper submitted in October to the journal ‘Advances in Climate Change Research’ on China’s long-term mitigation targets and carbon permit allocation, He Jiankun and three co-authors from the prestigious Tsinghua University in Beijing argue that in the negotiations, “reasonable rights and interests should be strived for, based on the equity principle, reflected through cumulative emissions per capita”.

Since China’s historical cumulative emissions are only one-tenth of the average in industrial countries and one-twentieth that of the U.S., it “should obtain reasonable room for future development”.

Furthermore, long-term mitigation targets should be related to industrial countries’ commitment of deeper emissions in the near and mid-term.  Long-term global mitigation targets ought to be ensured by commitments of “adequate and quantified” financial and technical support of developed to developing countries”.

“At present, “ they write, “China’s economic development is more and more restricted by domestic resources availability and environmental capacity…. Long-term global target for addressing climate change is not only a great challenge for realising the three-step modernisation goal of China, but also an important opportunity for accelerating the transformation of economic development pattern and achieving sustainable development. Therefore, China must adapt to the world’s transformation trend   of economic society characterised by low carbon development.”

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