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ADB warns carbon emissions will increase by 65% in Asia

The carbon dioxide emissions are expected to increase to 22 billion tonnes by 2035

The Asian Development Bank (ADB) has warned that carbon dioxide (CO2) emissions in the Asia Pacific region will increase by  65% to 22 billion tonnes by 2035 as fossil fuels continue to dominate the region’s energy mix. This reliance on fossil fuels poses major pricing, security and environmental challenges.

And without cutting its dependence on oil imports, using power more efficiently, and adopting more green energy options, the region will see a widening energy divide between the rich and poor, as well as increasing threats from climate change, said the Manila-based ADB. “Clearly something has to change and we hope countries will take action,” S Chander, a senior advisor at the ADB, said at the launch of its latest energy outlook for the region at WEC 2013.

Otherwise, emissions in the Asia Pacific, which made up 42.8% of world levels in 2010, are projected to reach more than half of world emissions in 2035.

East Asia will contribute the largest share of the increase on the back of strong economic expansion led by China, but its CO2 intensity – CO2 emissions per total primary energy demand – will fall by 0.3% per year as a result of a shift to less carbon-intensive energy, including nuclear, natural gas and renewable energy.

In contrast, CO2 intensities in South Asia and Southeast Asia are projected to expand by 0.4% and 0.8%, respectively, per year, largely because of the expected rise in coal demand, especially for power generation. But the ADB’s alternative scenario, which assumes a shift to low-carbon emitting sources, cuts the share of fossil fuels in the total primary energy demand to 74.3% by 2035, from 83.2% in the business as usual case.

In the alternative projection, CO2 emissions in Asia Pacific will be 27.6% lower, largely driven by improved energy efficiency, as well as lower-carbon emitting energy sources.“This suggests the importance of improving energy efficiency not only to cope with the challenges to energy security, but also to manage the global challenges of climate change,” said the ADB.

Projections from the ADB show the region will consume more than half the world’s energy supply by 2035, with electricity consumption more than doubling as economic growth and rising affluence drive demand, says Chander.

Primary energy demand is estimated to expand by 2.1% per year over the outlook – faster than the projected world average growth rate of 1.5% per year. It is forecast to hit 8.35bn tonnes of oil equivalent (toe) by 2035, up from 4.9bn toe in 2010.

But a mix of efficiency measures, advanced generation technologies, as well as greater use of renewable power, could almost halve the projected yearly rise in energy demand.

More efficient oil refining and gas processing, along with a reduction in demand for electricity, offer the bulk of energy saving potential. However, there will be a huge price tag to meet the region’s energy needs. Based on business-as-usual power use patterns $11.7 trillion will need to be invested through to 2035.

This swells to just under $20bn under the alternative approach as more costly technologies, as well as low-carbon options, such as wind and solar, add to the cost.

One of the biggest challenges is not raising investment capital – Chander believes there is ample cash within the region – but convincing investors to park their money in the energy sector.

The ADB also highlighted opportunities for building on existing cross-border power exchange initiatives with the ultimate goal of establishing a pan-Asia energy market by 2030.

While fossil fuels continue to dominate the primary energy mix, increasing their share from 82.4% to 83.2%, growth trends between fuel type differ.

Demand for coal rises 52.8% over the period hitting 3.5bn tonnes of oil equivalent (toe) by 2035. But the yearly rate of increase will be slower for coal at 1.7% than for total primary energy demand.

Oil demand is forecast to rise 1.9% per year, hitting 1.97bn toe by 2035, or 59.3% higher than the 1.24bn toe in 2010, led by the transport sector, which makes up 60.5% of incremental oil demand.

Demand for natural gas will grow the fastest, at 4% per year, hitting 1.46bn toe by 2035, compared with 567bn toe in 2010.

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