Download climate change and energy in Mekong

Energy, economy and climate change in the Mekong Region
(A Think Piece for Sumernet Research)
Lailai Li & Tatirose Vijitpan
Stockholm Environment Institute, Asia Centre
Table of Content
1
Challenges and dilemma ............................................................................................................... 1
1.1 POVERTY AND FAST ECONOMIC GROWTH ............................................................................. 1
1.2 LOW EMISSION, FAST GROWTH AND LOW ENERGY EFFICIENCY............................................. 5
1.3 IMPACTS OF CLIMATE CHANGE ............................................................................................. 6
1.4 SUMMARY OF CHALLENGES ................................................................................................. 7
2
Response to the challenge in the region ........................................................................................ 8
2.1 SUSTAINABLE SUPPLY OF CLEANER ENERGY – EXAMPLES OF NATIONAL STRATEGIES .......... 8
2.2 SUSTAINABLE SUPPLY OF CLEANER ENERGY – EXAMPLES OF THE REGIONAL STRATEGIES . 10
3
The way forward – a low carbon economy to meet challenges .................................................. 11
3.1 FRAMEWORK OF A LOW CARBON ECONOMY ....................................................................... 11
4
Issues for thought ........................................................................................................................ 13
5
Literature Cited ........................................................................................................................... 13
This paper aims to (a) analyze the dilemma main challenges to the Mekong region for sustainable
development, with a focus on energy and climate change, (b) review the strategies and policies
adopted by the countries in the region to meet the changes, e.g. goals, objectives and policies, and
(c) identify policy gaps and discuss the opportunities and policy options to achieve the goals and
objectives.
1
Challenges and dilemma
The Great Mekong Sub-region (GMS) is challenged by a self-reinforcing poverty cycle,
characterized by several pair of paradoxes: low income vs. fast economic growth coupled with low
access of energy vs. rapidly increasing energy demands, extremely low carbon dioxide emission
level vs. extremely fast growing emission pace, and the least responsibility for climate change vs.
being hit most by its impacts. In the systemic approach these challenges are forming a positive
feedback loop which often drives the system to collapse (Meadows et al. 2004) if no proper
intervention is made. This section will describe the increasing challenges and dilemma in a systems
approach.
1.1 Poverty and fast economic growth
Economic poverty: In monetary terms, poverty is measured by the proportion of population whose
income or consumption fall below an objectively defined level considered necessary to meet per
capita minimum nutritional requirement, i.e. a poverty line. Prevalently used are the standards set
by the World Bank: daily living n $1, $1.5 or $2 a day. By such standards, 70% of the population of
1
the Greater Mekong Sub-region (GMS) lives on less than $2 a day, i.e. in poverty (UNDP 2006).
The six Mekong countries have defined their respective national poverty lines (Box 1). By these
national standards, 45 million of people in these countries are below the poverty lines, the
distribution being as illustrated the figure below (ADB 2009).
Figure 1: Share of population living below the national poverty line.
Vietnam
20%
Thailand
10%
Myanmar
27%
Lao PDR
33%
PRC: Yunnan
8%
PRC: Guangxi
3%
Cambodia
35%
0%
10%
20%
30%
40%
Box 1: GMS national poverty lines





In Vietnam, the Ministry of Labor, Invalids and Social Affairs (MOLISA) set the national
poverty line. A lower poverty line is based on income per capita (approximately 30,000 VND
per month or 75 USD per year by PPP). The general poverty line in 2002 is 1,906,950 VND,
and the food poverty line is 1,372,774 VND per person per year.
In Laos ($1~ 8,035 kip), the national poverty line is based on (2001) PPA and LECS which was
conducted by NSC/CPI: 85,000/kip/person/month as the national poverty line, where
100,000/kip/person/month is for urban poverty and 82,000/kip/person/month indicates the rural
poverty.
In Cambodia, the national poverty line in 2004 is approximately 1,826 riels (US$0.45) per
person per day or 9,130 riels (US$2.25) per day for a family of five at 2004 exchange rate.
About 80% of this is for food and 20% for non-food basic needs (clothes, housing, etc.).
China in 2009 increased the poverty line to a level of an annual income per capita 1,196 yuan
($176).
Thailand uses the official method for the year 1988-2002, by which poverty lines are equivalent
to an average of 473 baht/person/month in 1988, and 922 baht/person/month in 2002.
Poverty is also indicated by the access to the basic needs of living, e.g. food, clean drinking water,
housing, health care and education. At the regional level, 21% of the population do not have access
to clean water, and some 30% lack access to closed sanitation systems (U.S. Central Intelligence
Agency).
In Cambodia, thirty percent of the total population is below the minimum dietary energy
consumption, and 50% of children under age of 5 are underweight in 2005. In regard to the water
resources, the access to improved water resource is 60% in the urban and 40% in the rural areas;
people manage to have 3 m3 per year which is the minimum water requirement for the human
beings in the world (Yamakushi and Promphakping 2007).
2
In Laos, 40% of children under age 5 are underweight, and 30% of population is below the
minimum dietary energy consumption. The access to the improved water source is 70% in the urban
and 40% in the rural.
In Thailand, the human development index value is quite high above 0.8. However, disparity
crossing income groups and regions is prominent. In Northeast Thailand covering one third of the
country’s population is largest agricultural area with non-irrigated lands in Thailand, and a number
of large population still depend on the river water and natural resources in their livelihood.
In Vietnam, poverty is largely defined geographically and ethnically. Northern Upland, Mekong
Delta, and North Central Coast account for more than 2/3 of the country’s poverty; the ethnic
minority groups making for 15% of total population live in the remote rural area, representing 30%
of the poor. Thirty percent of children under age 5 are underweight; the maternal mortality rate is
10 times higher in the isolated rural areas than the urban area. In HIV epidemic, more than 100
people get infected every day, and the number of people living with HIV more than doubled in
2000-2005 from 122,000 to 263,000 (UNDP Vietnam, 2005).
Energy poverty: Associated closely with economic poverty is inaccessibility to energy of the poor
with which to meet the basic needs of living and economic production. This is described as energy
poverty, “the absence of sufficient choice in accessing adequate, affordable, reliable, high quality,
safe and environmentally benign energy services to support economic and human development.”
(UNECA 2003). In the Mekong region, more than 20% of the population has no access to
electricity. The share of traditional biomass in total energy use is high (e.g. 80% in Lao, 83% in
Cambodia, >50% in Vietnam, 40% of rural household in Yunnan rely on fuel wood), as a result
4000 deaths every day are reported from indoor air pollution, most of the victims being women and
children (ADB 2009). In terms of energy use level, the Mekong Region is lower than the world
average and far below that of the countries in Euro area as indicated in Figure 2 (World Bank 20012010).
Figure 2: Energy use per capita (kg oil equivalent)
4000
3500
3000
2500
2000
1500
1000
500
0
2004
2005
Cambodia
China
2006
Myanmar
Lao
2007
2008
Thailand
World
2009
2010
Vietnam
EURO area
Energy poverty at the national level is also reflected in the energy structure practiced by the
countries, featuring the low access to cleaner energy. More than 20% of the population in the
Mekong area has no access to electricity. In addition to coal, the traditional biomass makes up a
high share of the energy mix, 80% in Laos, 83% in Cambodia, more than 50% in Vietnam, and 40%
of the rural households in Yunnan province of China; in Myanmar, for its rural population of 38
3
million, 64% of the primary energy is being supplied in the form of fuelwood, charcoal and biomass
(ADB 2009). On average, the share of energy from biomass in the Mekong region is far above the
world average and the EURO area.
Figure 3: Energy mix:
Energy from biomass (% of total)
Primary energy demand 2006 (%)
50%
100.0%
40%
80.0%
30%
60.0%
20%
40.0%
10%
20.0%
0%
0.0%
2006
2007
World
2008
EURO area
2009
2010
Mekong
Cambodia
Coal
Oil
Lao
Myanmar
Natural gas
Hydro
Thailand
Nuclear
Vietnam
China
Biomass & other
Heavy dependence on the traditional biomass causes the health problem. Each day 4,000 death
reported from indoor air pollution, most of the victims being women and children – more than half
of the latter being below the age of five (ADB 2009), which worsened the poverty.
Poverty in economic terms and in terms of energy access gives both legitimacy and great potential
for growth to reduce poverty. An outstanding outcome of poverty reduction in the region is its
dynamic economic progress. In the last two decades, economies of the Mekong region are much
faster than that of the world average despite the Asia financial crisis happening in 1997. The
average rate is 7.4%, as indicated by Figure 4. In the last two decades, the growth is twice that of
the world average, over three times that of the major advanced economies (G7) and over four times
that of the Euro area.
Average GDP Growth (1990-2010) in %
8.0
10.0
7.0
8.0
6.0
6.0
5.0
4.0
4.0
7.4
3.0
2.0
GDP Growth in %
2.0
0.0
3.4
1.0
1.6
2.0
Euro area
G7
-2.0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
-4.0
0.0
World
Mekong
World
Euro area
G7
Mekong
Figure 4: Comparison of GDP growths (constant prices)
Source: International Monetary Fund, World Economic Outlook Database, October 2010
In the traditional pattern of growth, economic development drives the demands of energy,
intensifying the energy challenge and energy security of the Mekong countries. Heavy dependence
on import of oil is a common phenomenon. For example, in Laos all the petroleum products are
4
imported largely used in transportation sector; 62% of domestic energy demand is met by import for
Thailand. The other implication is the rapid increase of energy consumption.
1.2 Low emission, fast growth and low energy efficiency
Low energy access and low energy consumption level are coupled by a low carbon dioxide
emission. However, fast growing economies drive up CO2 emission when the energy demands
increase, as indicated by Figure 5.
CO2 emissions per capita (metric tons)
5
CO2 emissions growth (%), 1990–2006
800%
4
803%
600%
3
2
508%
396%
400%
1
200%
0
2003
2004
Cambodia
Thailand
2005
2006
2007
2008
Lao
Vietnam
2009
153%
135%
184%
2010
Myanmar
China
0%
China
Cambodia
Lao
Myanmar Thailand Vietnam
1
Figure 5: CO2 emission per capital (metric tons) and emission growth
Source: World Bank (2001-2010)
In 2010, the average emission of the Mekong region is 1.8 metric tons (mt) per capita, in the EURO
area it is 8.4 mt, and the world average is 4.4 mt. However, CO2 emission has increased very fast in
the last decade. In five years, China emission per capita has gone up from a little over 2 metric tons
to 4.8, surpassing the world level. The chart on the right of Figure 5 shows the emission growth in
15 years. In this period, the emission of the six Mekong countries increased 363%, the growth for
the low income group is 136%; the world average growth is 34%, and in the EURO area this figure
4% (World Bank 2001-2010).
Among others two factors explain well the rapid increase of CO2 emission. One is related to the
pattern of growth that has long been practiced worldwide as BaU, where economic development
drives the energy demand and consumption and in turn CO2 emission. The fastest economic growth
of the region goes hand in hand with the outstanding increase of energy consumption and thus
emission. Another factor is associated with low energy efficiency of the region. This can be
measured by GDP per unit of energy use (PPP$/toe), illustrated by Figure 6. The available data
shows that during 2004-2010, this figure is $4.8 in Thailand, $4.0 in Vietnam and $3.9 in China, in
comparison to $4.8 as the world average and $6.9 in the EURO countries (World Bank 2001-2010).
The other side of the low energy efficiency is a great potential for development of a low carbon
economy featuring improving energy efficiency and substitution of fossil fuels with renewable and
cleaner energy, which will be discussed in this paper later.
Figure 6: GDP per unit of energy use (PPP$/toe)
1
Data for Cambodia is missing for 2003-2007.
5
9 PPP$/toe
Cambodia
8
Myanmar
7
Thailand
6
Vietnam
5
China
4
Lao
3
World
2
2004
2005
2006
2007
2008
2009
2010
EURO area
Source: World Bank (2001-2010)
1.3 Impacts of climate change
Increase of fossil fuel consumption for development purpose directly leads to increase of CO2
emission as the major anthropogenic cause for climate change. Compared to the climate in 19611990, the Intergovernmental Panel on Climate Change (IPCC) projected that average temperature
will increase by +1oC in 2010-2039 and +3oC to +4oC in 2070-2099, average rainfall will decrease
by –20 mm in 2010-2039 but increase by +60 mm in 2070-2099. At the global scale, water has been
projected to be a key indicator that will be influenced by these changes (AR4 2007).
Across the Mekong region, temperatures are rising and have risen by 0.5 to 1.5ºC in the past 50
years ((WWF 2009). According to the Mekong River Basin Water Resources Assessment: Impacts
of Climate Change, by 2030 the basin mean temperature is likely to increase 0.79 oC, with greater
increases for the colder catchments in the north of the basin. In such projection, of all the likely
impacts of climate change in the Mekong basin, it is likely that the impact of flooding in the delta
and other areas will have the most significant negative consequences on the Mekong basin,
((Eastham et al. 2008). The projections conclude that the Mekong is getting hotter.
Figure 7: Average daily minimum temperature compared to the baseline decade of the 1980s
Source: TKK & SEA START RC 2009
The Mekong region is expected to be among the most vulnerable to climate change, which will
amplify the impacts of existing threats to the region’s terrestrial, freshwater, estuarine and marine
ecosystems (WWF 2009). Projected impacts of climate change by 2050 range from low (e.g.,
reduced water availability), to moderate (e.g., increasing temperatures), to potentially high (e.g.,
6
decreasing food production and sea level rise in the Mekong Delta) (R. Edward Grumbine and
Jianchu Xu 2011).
At Kratie, the frequency of ‘extreme wet’ flood events is likely to increase from an annual
probability of 5% under historic conditions to a 76% probability under the future climate. As a
result, the Mekong delta as the most highly productive and densely populated part of the Basin is
prone to flooding in the wet season and to intrusion of seawater during dry months when discharge
is low. The study summarized that the key impacts under future projections for climate and
population in 2030 include increasing flood risk, increases in food scarcity and likely changes in the
productivity of fisheries through hydrological impacts on the ecology of rivers, waterbodies and
floodplains. Another study pointed out a similar result – an increase in mean temperature by
approximately 0.8°C, which will likely increase drought and floods in the region, decrease crop
yields, exacerbate threats to biodiversity, and enhance endemic morbidity and mortality from
disease throughout the region (Cruz et al. 2007).
Under a realistic scenario, sea level will be about 40 cm higher than today by the end of the 21st
century. Changes or impacts are already being felt. Thailand’s temperatures have reportedly
increased 1.0 to 1.8ºC in the past 50 years; average daytime temperatures in the month of April
have been particularly high at 40ºC; Vietnam’s temperatures increased by 0.7°C during this same
period (ADB 2009). Daily maximum and minimum temperatures are also increasing (TKK and
SEA START RC 2009). The city of Bangkok is sinking by 5-10 mm each year. Land subsidence
and groundwater extraction combined with sea level rise could leave Bangkok under 50-100 cm of
water by 2025 (UNEP 2009).
Himalayan glaciers are melting at a rapid rate, threatening the flows of Mekong, Irrawaddy, Red
River and Salween, on which livelihoods of millions of people rely. In the past decade or two,
shifting of rainy seasons coupled with more frequent extreme weather events, floods and other
storm damages is increasingly being experienced in the region.
The Mekong region is one of the most biologically diverse places on Earth. It is home to a diversity
of landscapes such as the Greater Annamites, the Lower Mekong Dry Forests, and the Kayeh Karen
Tenasserim Ecoregions (KKTE); all three areas boast a high diversity of plant and animal species
and are important because they harbor many rare, endemic, and endangered species (WWF 2009).
However, in the complex and connected structures and processes of ecosystems and ecosystem
service provision, the homes of biodiversity will likely shrink under predicted climate change
(Ohlemuller et al. 2008), because the habitats, e.g. forests or wetlands, that support the diversity are
shrinking or disappearing. At the same time other drivers e.g., land use change, invasive species,
unsustainable harvesting practices, and hunting, have reduced the buffering capacity of these
habitats from climate change. Although some species will be able to adapt without dispersing
(Bradshaw and Holzapfel 2006), many will not, potentially resulting in massive extinctions (Stork
et al. 2007).
From all the impacts of climate change, it is the poor suffers the most, because they are the least
prepared for but most exposed to the changes.
1.4 Summary of challenges
In the systems approach, the dilemma or the challenges faced by the Mekong Region can be
depicted as a positive loop that drives the system to collapse if no proper action is taken to intervene.
Figure 8: Energy, climate change & poverty
7
Poverty
Poverty
+
Climate
change
A: Poverty
cycle
Access to
cleaner energy
+
+
Climate
change
B: BaU pattern
of growth
+
+
+
Economic
growth
GHG
emission
GHG
emission
+
Demands
for energy
In this positive loop, the system functions like this. The more poverty the region falls in, the less
access to cleaner energy (-); the less clean energy and higher use of fossil fuel or traditional
biomass, the higher emission (-) and more negative impacts on health which worsens poverty ; the
higher emission, the higher climate change impacts (+); the higher impacts of climate change, the
higher poverty (+) (Figure 8 A). To remove poverty, BaU gives a similar positive loop, driving the
system to collapse: poverty drives economic growth, which increases demands of energy, which
leads to CO2 emission, which intensifies climate change which puts the poor in deeper vulnerability
(Figure 8 B). This poverty loop reinforces itself, unless the structure is changed by removing or
change the link.
2
Response to the challenge in the region
Facing these challenges, the national governments of the Mekong countries and the regional
decision makers have adopted a series of policies, focusing on energy supplies to meet the demands
of economic development to reduce poverty and/or to ensure energy security. In this section some
of such policies are reviewed.
2.1 Sustainable supply of cleaner energy – examples of national strategies
Energy and climate change have become central issues of policy concerns both at the national and
regional levels crossing the Mekong countries. The national governments of all the countries have
adopted policies to cope with challenges of energy and climate change to meet the targets of
economic development and poverty reduction. These policies emphasize a) enhancing energy
access, b) renewable energy development and c) improvement of energy efficiency.
In Thailand, the target has been set in the Alternative Energy Development Plan 2008-2022 to
increase the share of alternative energy to fossil fuels to 20% in the total primary energy demand by
2022 (MoE 2009); in 2005 this figure was 0.5% (Natural Resources Institute 2005). The
government of Thailand formulated the Energy Conservation Plan in 1994, which has been
renewed periodically since then. This plan outlines the time-bounded targets, which are monitored
and measured during each period of enforcement. The Fourth Energy Conservation Plan (20082011) sets the two main targets. The first one is to increase the energy efficiency to reduce energy
consumption by 10.8% in 2011. The second target is to increase the share of renewable energy to
12.2% of total energy demand in 2011 in heat production, transportation and electricity generation
(EPPO 2007). In addition, another significant policy adopted is the Thailand Energy Strategies. The
current Energy Strategies has been effective since 2009. The focus is on energy security, to reduce
imports and increase energy independence of the country. The measures to promote energy
efficiency and renewable energy are outlined with the ultimate purpose to contribute to the
country’s energy security (MoE 2009b).
8
Regarding energy efficiency, the key policy adopted in Thailand is the governmental decision No.
79/2006/QD-TTg on the National Energy Efficiency Programme. Its major target is to save energy
3-5% for the period of 2006-2010 and 5-8% for 2011-2015 (Thai 2008).
Similar to Thailand, energy security is among the foremost concerns for Vietnam. The National
Power Development Master Plan 2006-2015 aims to enable 100% communes to have access to
electricity by 2015. Renewable energy development and improving energy efficiency are prioritized
in this plan (Phong 2010). Specific targets have been set accordingly. In 2007 the government of
Vietnam approved the National Energy Development Strategies for up to 2020, targeting to increase
the share of renewable energy in the total commercial primary energy to 3% by 2010, 5% by 2020
and 11% by 2050 (IEA 2010). In the same year, the government passed the decision No.
177/2007/QD-TTg on Biofuel Development, setting the targets of increasing the share of ethanol
and biodiesel in gasoline and diesel demand to 0.4% by 2010, 1% by 2015 and 5% by 2025 (Phong
2010).
For Cambodia and Lao PDR, the context is a bit different from Thailand and Vietnam. Renewable
energy and energy efficiency are less developed, and the traditional biomass makes the dominating
share in the energy mix of the two countries, 69.4% for Lao PDR and 84% in Cambodia. The main
reasons are lack of experiences, funds and data in these areas as well as policy barriers, as identified
by energy directors of the two countries Toch Sovanna of Cambodia and Chantho Milattanapheng of
Lao PDR at the sub-regional EEP Forum.
Cambodia has set as the country target achieving 100% electrification in rural communities by
2020, using renewable sources (Sovanna 2010). For Lao PDR, the government aims to electrify
90% of households by 2020, increase the share of renewable energy to 30% by 2025 and make
biofuel substitute 10% of oil import by 2025 (Milattanapheng 2010). In terms of energy efficiency,
however, both countries are just at the initial stage and started fundamental activities, such as
capacity building on energy management and energy audit, mostly under regional cooperation and
bilateral projects (Kouphokham 2009, Sovanna 2010).
For Myanmar, the country has extensive natural gas reserves, while the domestic consumption is
limited. Thus natural gas has become the largest export earner of the country (Thein & Myint
2008). However, renewable energy and energy efficiency are in concerns of the government and
there are ongoing efforts to increase the usage of renewable energy, especially in the form of
regional cooperation activities. Nonetheless, there are no specific goals or measures set up yet
(Thein and Myint 2008).
In 2007, the government of China adopted “Medium and Long-Term Development Plan for Renewable
Energy in China”. The plan set the following targets. (1) China will raise the share of renewable energy in
total primary energy consumption to 10% by 2010, and 15% by 2020. This will be achieved by fully utilizing,
to the extent possible, technologically mature and economically feasible renewable energy sources, such as
hydropower, biogas, solar thermal, and geothermal, as well as by promoting the development of the wind
power, biomass power, and solar PV industries. (2) China will also aim to provide electricity to people in
remote, off-grid areas and resolve fuel scarcity problems in rural areas through the use of renewable energy,
doing so according to local conditions and at the same time effectively protecting the ecological environment.
(3) China will actively promote the development of renewable energy technologies and industries, building
up a renewable energy technology innovation system. By 2010, China will basically have achieved the
ability to produce domestically the main renewable energy equipment it uses. By 2020, local manufacturing
capability based mainly on home-grown Intellectual Property Right (IPR) will be achieved. The specific
renewable energy development targets are summarized in the following table.
Table 1: Targets for Renewable Energy Power Generation (GW)
9
2005
2010
2020
117
190
300
2
5.5
30
Wind power
1.26
5
30
Solar PV
0.07
0.3
1.8
Hydropower
Biomass power
To enhance the energy efficiency and mitigate its CO2 emission, China set a target of reducing energy
intensity by 20% in 5 years during the period of 11th five year plan (2006-2010). In Copenhagen at COP16,
China announced its GHG emission reduction target – reducing carbon intensity by 40-45% by 2020.
2.2 Sustainable supply of cleaner energy – examples of the regional strategies
The regional targets of energy development and climate change mitigation have been agreed among
the Association of Southeast Asian Nations (ASEAN) member states. Cambodia, Laos, Myanmar,
Thailand and Viet Nam are ASEAN member states, and therefore China is not part of these targets.
The ASEAN Plan of Action for Energy Cooperation (APAEC) 2010 – 2015 aims to ‘enhance
energy security, accessibility and sustainability for the ASEAN region with due consideration to
health, safety and environment’ (ASEAN 2009b). Seven action plans have been formulated. The
goal of ASEAN Power Grid (APG) is to integrate the national power grids of the ASEAN member
states in order to meet the rising electricity demand and enhance the access to energy services while
promoting the efficient utilization and sharing of resources (ACE 2009). Other plans under the
APAEC which directly contribute to the energy and climate sustainability in the Mekong region
include the Coal and Clean Coal Technology, Energy Efficiency and Conservation, Renewable
Energy, and Civilian Nuclear Energy. Each of the seven action plans has established objectives and
outlined activities; and the implementation activities are carried out by different agencies. Two
objectives agreed collectively by the ASEAN ministers are to reduce the regional energy intensity
by 8% by 2015 from the 2005 level, and to increase the total regional power installed capacity of
renewable energy to 15% by 2015 (ASEAN 2009).
Several energy-related policies and actions have been established collectively by the GMS parties.
The GMS Intergovernmental Agreement for Power Trade was signed in 2002 and came into force
in 2003.
ADB has facilitated the process of formulating the GMS Energy Strategy for the endorsement by
the governments of GMS countries. Seven priority actions are identified, including:
1) Natural gas and refined petroleum products need to be considered for cross-border trade and
future energy integration.
2) Energy productivity should be enhanced to increase energy security in the subregion.
3) Policy regimes and sector reforms improvements and restructuring are needed in a timebound manner to improve efficiency of the energy sector.
4) Oil consumption needs to be reduced and technological options, such as coal liquefaction
and biofuels, as well as relevant supportive approaches need to be reviewed in order to
decrease dependency on oil imports.
5) More energy efficient and sustainable patterns of transportation in the long term need to be
reviewed.
6) Policy framework needs to facilitate private investments in energy sector.
7) Institutional and human resources development are needed for a sustainable energy future in
the GMS.
10
Although there are some the cross-border energy projects in design for GMS, implementation and
progress are not satisfactory (ADB 2009). The reasons as identified include lack of infrastructure to
facilitate intraregional energy trading, concerns over externalities which are inherent in energy
distribution networks, and absence of frameworks to share costs and benefits from energy trading
between countries. Hence there still remain significant barriers for energy trading in the GMS.
3
The way forward – a low carbon economy to meet challenges
As described above, the GMS is challenged by poverty and energy inaccessibility. Climate change
is intensifying the poverty cycle. The complexity of the climate challenge for the developing GMS
is due to the following factors. Firstly the region has quite a large poor population, and therefore has
big potential and legitimacy to grow to remove poverty. Secondly the region is experiencing the
fastest growing economy which has increased demands for natural resource and subsequently
would alter the ecosystems as a resource base if no sustainable management of the resources is
adopted immediately (Tyler & Fajber, 2009). Thirdly the heavy dependence of the regional
economy on water, forests and land resources makes the region more vulnerable to the impacts of
climate change. In reality, the region is already suffering from the interactions of these factors
associated with intensification of land erosion, forest degradation and deterioration of water
resources in terms of quantity and quality. Therefore, development in a sustainable manner has to
be put in the centre of the climate change strategies at all levels, so as to remove poverty and
improve the livelihoods of people without depleting their resource base.
Having created the world largest economies over last two centuries as mainstream economic
development models, BAU has left the poor an unfair reality – there is scarce space for the poor to
practice the same pattern of growth. What is urgently needed in the region is exploring new,
sustainable development paths to build sustainable supplies of cleaner energy and enhance the
economic resilience to climate change. A low carbon economy is proposed to achieve the following
goals.




Reduce poverty by growing economies
Adapt to climate change that is already happening and will increase
Develop renewable cleaner energy to substitute for fossil fuels
Control the increase of carbon emission to protect the planet
A low carbon economy is perceived and practiced as an integrated practical solution to the complicated
challenges of climate change at the regional, national and the community levels. For example, if a
rural community economy is diversified it would not be wiped out by natural disasters or
unexpected economic down turns as it is happening now in the region; new crops are adopted to be
more robust against draughts or floods; renewable energy and decentralized power supplies are to
reduce the exposure of the community to the fluctuation of the global energy market while reducing
the carbon dioxide emissions; recycling and reuse of the organic wastes will create community
social enterprises and green jobs.
3.1 Framework of a low carbon economy
McKinsey & Company in its recent report has identified four categories of opportunities of
mitigating climate change as pathways to low carbon economy: energy efficiency, low–carbon
energy supply, terrestrial carbon and behavior carbon. According to this report, by 2030 shift of
energy supply from fossil fuels to low-carbon alternatives, e.g. renewable energy development to
replace conventional fossil fuels can provide an opportunity of 12 GtCo2e per year. Energy
efficiency can bring an annual reduction of 14 GtCo2e. Terrestrial carbon provides an opportunity
of 12 GtCo2e per year, as forests and soils act as natural sinks for carbon. Stopping deforestation,
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reforesting marginal areas of land and sequestering more CO2 in soils through changing agricultural
practice will increase carbon sequestration (McKinsey & Company 2009); this opportunity largely
falls in developing countries. The behavior carbon is associated with people’s awareness,
consumption patterns, capacities of managing emission and adapting to climate change.
To achieve low carbon economies, the first task is to examine these opportunities at community,
national and regional levels in GMS, with consideration of its vulnerable economic base and the
dilemma of coping with climate change and the need of expanding energy use for poverty reduction
purpose. By low carbon economy it is meant an economy that fits the local conditions, balances the
ecosystem service consumption and regeneration, provides sustainable livelihoods, and also
contributes to the safety of the planet. Communities should be given priority attention because
that’s where poverty is located and impacts of climate change are most and first felt. In line with the
four opportunities identified in the McKinsey report, a low carbon economy should have following
characteristics.
1. Sustainable supplies of low-carbon energy
 Reliable cleaner energy supplies and less fossil fuel dependence
 Reduced energy bills (cost)
 Information and advice about energy savings including energy monitoring and auditing
system
2. Enlarged carbon sink
 Deforestation stopped and forests conserved
 Low-carbon land use adopted
 Land degradation reduced or stopped
3. Waste disposal minimized
 Wastes (organic) recycled and reused
 Sanitation and health – communities and households – improved
 Water pollution stopped or reduced
4. Economy diversified with green business and green jobs created
 Improved quality of agricultural products
 Creation of community social enterprises so that money made from the production of
renewable energy is used to fund more community projects.
 Creation of low carbon jobs
 Diversified and improved sources of income for community members
5. Improved awareness amongst citizens and community members, particularly youth groups,
of climate change and its impacts on their livelihoods, and improved capacity and skills with
the community and its members of mitigating and adapting to climate change for
development purpose.
These five categories of indicators are connected to support each other as indicated by Figure 9.
Figure 9: characteristics of community-based low carbon economy
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reduced fossil fuel
use & improved
energy supplies
diversified &
improved income
improved
sanitation
CO2 avoidance
low carbon jobs
high quality of
agricultural products
4
Issues for thought
To build a low carbon economy, four categories of issues need to be studied. For renewable energy
development, it is necessary to find out:
1. How much renewable energy resources are available particularly at national and community
levels?
2. What is the finance scale required to mobilize the resources and turn them into energy?
3. What technologies are appropriate and needed?
4. Long term impacts of renewable energy development, e.g. impacts of hydro power on
ecosystems?
5. What regional cooperation strategies would benefit the renewable energy development –
south-south collaboration?
The low energy efficiency practiced commonly in the GMS countries shows a greater potential for
improvement. It is needed to find out:
1. Opportunities with least costs for improvement
2. Economic incentives and instruments to be adopted
3. Technologies needed including appropriate technologies and financing mechanisms
4. Opportunities of technological cooperation, including south-south cooperation
On the issue of climate change adaptation, which is central to the region, development-oriented
adaptation is needed featuring low carbon economies. What regional and national strategies should
be developed to build the resilient, adaptive and low carbon economies at all levels?
Sustainable management of ecosystems and ecosystem services is an effective approach to climate
change adaptation, because ecosystems supply energy needed for development and sequester
carbon dioxide. An ecosystem based adaptation (EBA) strategy should be developed at all levels,
based on comprehensive studies of ecosystem services and valuation of tradeoffs.
5
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