G20 and Cop26, all Asian illusions about energy
The climate goals of India, China and Southeast Asian countries cannot converge with the US and the EU. Here because. Giuseppe Gagliano's analysis
There are several illusions that have emerged to a careful eye from the recent G20 in Rome, starting with the conviction that the economies of Southeast Asia should follow the path of Europe. Just as India at COP26 has dampened all the enthusiasm at the G20 by saying that it is committed to zero emissions only by 2070.
In fact, if we take a look, albeit brief and necessarily synthetic, at some of them, we will see that the situation is profoundly complex and articulated.
The economies of Southeast Asia are growing rapidly and investments in energy infrastructure to fuel that growth are racing to keep up.
In 2018, the Philippines, Thailand, Vietnam, Malaysia and Indonesia had a combined GDP of $ 2.5 trillion and generated 939,803 GWh of electricity. The Asian Development Bank estimates that the region will absorb $ 14.7 trillion in energy infrastructure investments from 2016 to 2030.
Private investors governments are laying the groundwork now for energy systems that will last for decades, and the choices they make will determine whether these fast-growing economies get stuck in high-carbon footprints or can perfect the transition to more sustainable models of governance. energy. Those looking for a magic wand that can influence this transition, such as a coal tax, are likely to be disappointed. Southeast Asia is a large and diverse region, and the unique approaches will have limited traction.
As long as Southeast Asian states can control their energy fates, market-based solutions such as taxes or subsidies designed to push them towards renewable energy will be a weak motivator. Many countries have spent decades building large and powerful economic sectors around the exploration, extraction, consumption and export of fossil fuels, and this cannot be wiped out overnight.
For example Thailand and Vietnam have led the group in Southeast Asia when it comes to renewable energy, gradually liberalizing the energy markets and trying to give private capital a more important role in the sector. However, these changes did not occur in a vacuum. In Thailand, the political class and other interest groups began to take reform seriously as the domestic supply of fossil fuels began to dry up. Thailand's domestic production of natural gas, its largest fossil fuel resource, peaked in 2014 and subsequently the onboarding of renewables such as solar increased at a much faster rate.
In other words, when the state's ability to determine its energy destiny through the control and extraction of fossil fuels began to decline, that's when Thailand chose renewable energy.
In contrast, Indonesia still has substantial reserves of fossil fuels, which fuel domestic markets, drive exports, provide revenue for the government, and support a web of powerful interests. Indonesian officials are less motivated to change the status quo, and this must be recognized and accounted for in any discussion of a clean energy transition. In fact, if we look at it purely in terms of rational, utility-maximizing self-interest, it makes perfect economic sense for Indonesia to continue building coal-fired power plants because it can ensure an affordable domestic coal supply for many years to come, too. if global market prices start to rise. Oil and gas reserves have declined, but domestic production is still substantial. The door is even wider on coal, as Indonesia produces 563.7 million tons in 2020, 72 percent of which was exported and the rest used for domestic consumption, mostly in power plants. The Ministry of Energy estimates that Indonesia's verified coal reserves are 25.8 billion tons, so if they continue to extract 500 million tons per year, existing reserves will not be depleted for another half century.
But where does this illusion come from? As The National Interest points out , it arises from an interpretation that from a geopolitical point of view is known as the name of international liberalism, according to which through cooperation, mutual benefit and international organizations it is possible to solve the problems of the world by guaranteeing a ' adequate governance of a global nature. NI treaties like the Kyoto Protocol or the Paris Agreement would eloquently demonstrate the legitimacy of this interpretation.
But if we look at the real interests of the powers, things are profoundly different: most of the countries of Southeast Asia, but also China and Russia do not want to decarbonise because they consider the increase in emissions as perfectly congruent with their interest in growth. and economic power. Like it or not, climate change could bring about great benefits not so much for Europe or the United States but for China, where the melting of Arctic ocean ice could open certainly better trade routes; or climate change could favor Russia, or rather its Far East, which could become a real industrial pole. Or Canada, which could be favored by climate change where access to fresh water and fossil fuels could transform it into a real global power.
In short, to assume that countries like Russia, China and the countries of Southeast Asia in general embrace decarbonisation is an illusion. In fact, some of them, thanks to the use of fossil fuels, have managed to pass from poverty to wealth. Precisely this huge gap between the first world and the third world has stopped for twenty years any possibility of really changing the situation in climate choices.
An example: can we realistically expect Russia to stop gas production when it is through gas and oil that it is able to exert enormous influence in Europe and beyond? For Russia, in fact, ditch fuels remain a fundamental resource since they make up over a third of exports and provide almost 90% of their energy capacity. And again: Aren't Egypt, Turkey and Greece in constant search of oil and gas resources? And again: does China not have an inexhaustible hunger for oil and hydroelectric resources through the construction of dams that have a huge environmental impact? And isn't the United States itself in very strong competition with Russia through LNG?
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/cop26-g20-asia/ on Tue, 02 Nov 2021 07:08:20 +0000.