The Economics of Climate Change in Southeast Asia - 30 Jun 2009

The Asian Development Bank, in its study entitled "The Economics of Climate Change in Southeast Asia: A Regional Review," argues that while Asia has much to lose from uncontrolled climate change, it also has much to gain from emissions-reducing energy market reform that would include aggressive development of biomass, geothermal and solar.

Southeast Asia comprises nearly 600 million people and the region was responsible for 12% of global greenhouse gas emissions in 2000.

If no action is taken to cut greenhouse emissions globally, annual mean temperature is projected to rise 4.8°C on average by 2100 from 1990 in Southeast Asia. Mean sea level is projected to rise by 70 cm during the same period.

Rice yield could decline by up to 50% on average in Philippines, Indonesia, Vietnam and Thailand; and a large part of the dominant forest/woodland could be replaced by tropical savanna and shrub with low or no carbon sequestration potential.

The potential economic cost of inaction could equal a loss of 6.7% of the combined gross domestic product of the four countries studied by 2100, more than twice the world average.

Southeast Asia is among the regions with the greatest potential for mitigating carbon dioxide by reducing deforestation and improving land management practices.

It also has untapped opportunities for energy efficiency improvements and increasing the use of renewable energy, including biomass, solar, wind, hydro and geothermal.

The report urges Southeast Asian countries to treat climate change adaptation as a key part of development polices, such as adapting agricultural practices to changes in temperature and precipitation and adapting water management to greater risk of floods and droughts.

DESERTEC Australia has suggested that Australia and Indonesia should take the first steps toward creating a pan-Asian clean energy superhighway. The steps could focus upon development of Australian solar and geothermal energy and Indonesian hydro and geothermal energy. As this occurs, Australian natural gas could provide 'load balancing' via an Australian-Indonesian first leg of an eventual Australian-Chinese HVDC.

Joined together, Australia and Indonesia could become a Southeast Asian/antipodean 'clean energy' colossus. Together, they could catalyse development and interconnection of other geothermal, wind, hydro and natural gas resources throughout the rest of the region.

Asia has plenty of energy. What it suffers from is an autarky problem of poorly inter-connected national grids. Once 'carbon price-adjusted' energy can flow across borders like goods in container ships and services over telecommunications networks, the 'invisible hand' of the market place will deliver optimised low emission energy technologies to market and retire aging, inefficient capacity.

Increased trade in clean energy across the Asian hemisphere could bring a bundle of benefits we can only vaguely imagine. The upside is huge.

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