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Dark outlook for green energy growth in Asia

The prospects that Asia’s economic growth will be powered by green energy technologies are decidedly bleak, writes Justin Jacobs

“Green growth is a good model for Asia, but when I look around at what is happening today I see black growth driven by coal,” Fatih Birol, chief economist at the International Energy Agency, told WEC 2013 delegates.

While billions of dollars are being invested in renewable projects across Asia that will bring much new wind, solar and hydro production on stream, it is coal and other fossil fuels that will be relied on for the bulk of new power generation in the region over the coming decades.

A recent report from the Asia Development Bank forecast coal demand rising by nearly 53% by 2035 and oil consumption increasing nearly 60%. As a result, carbon emissions are expected to rise by nearly two-thirds over the same period. The cheap cost of coal will ensure its dominant role in the energy mix. “People will not use gas just because it is cleaner. Gas is twice as clean in terms of carbon emissions than coal, this is true. But it is twice as expensive. Therefore, coal is the default fuel of choice,” said Birol.

It is likely to remain so as governments in Asia continue to prioritise providing energy to the nearly 600 million people in the region who do not have reliable access to electricity. 

With Asia expected to account for two-thirds of the world’s energy demand growth over the next 20 years, that could be disastrous for efforts to mitigate climate change. “Green growth in Asia is essential, or we’re soon going to break or breach all of the parameters that we see as describing a satisfactory future for humankind,” said Howard Bamsey, director general of the Global Green Growth Initiative, an international organisation that advises developing-world governments on green energy policy. “Growth looks like it will be black, but if we don’t change it to green then we’re all in trouble.”

There are concrete policies and technologies that could help governments switch track from black to green growth. But all of them come with serious challenges.

Carbon Capture and Storage (CCS) holds much promise. The technology could allow Asia to add coal-fired power capacity yet still keep a lid on emissions. But development of CCS technology has been painfully slow and has not yet been proven to be economic on an industrial scale. “CCS has to be available, and yet all the prognosis for the moment are that it’s technically available but financially still out of reach,” said Bamsey.

The introduction of a carbon price across Asia, Birol says, could also help push economies away from coal and help limit emissions. Some limited efforts to introduce carbon emission trading schemes have been launched in parts of China as well as South Korea.

But carbon markets are highly complex to establish and have not been as effective as its backers had hoped elsewhere, such as Europe, so they are unlikely to be rolled out widely in Asia anytime soon, said Birol.

Cutting subsidies for fossil fuels would be another way to encourage greener growth, said Seethapathy Chander, director general of the Regional and Sustainable Development Department at the Asian Development Bank. But fuel subsidies have been notoriously difficult to roll back because of their broad popularity with the public.

The best hope for limiting emissions could be efficiency, said Bamsey.

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