Asia & China Taking Energy & Poverty Seriously

The Asian Development Bank has figured prominently recently with the findings of two of its studies, one highlighting the need for continued fight against poverty to ensure the future prosperity of Asia. The other looks at the state of energy efficiency in Asia, which is an increasingly important resource in managing the changing demographics and economic conditions of Asia. An observation well taken by China, who announced recently its plan to make energy efficiency a ‘pillar’ of its economy. Read more

Growth Not Enough To End Poverty and Deprivation – Study

15 August 2013:

Asia’s future prosperity will only be assured if countries continue the fight against poverty and other areas of deprivation, and this will require proactive state intervention, not just economic growth, says a new ADB/National University of Singapore study.

MANILA, PHILIPPINES—Despite Asia’s rapid growth, vast sections of its population still live in poverty and suffer hunger and other forms of deprivation, which could threaten the sustainability of the region’s growth and its integration, says a new study by the Asian Development Bank (ADB) and the National University of Singapore.

“Asia’s future prosperity will only be assured if countries continue the fight against poverty and other areas of deprivation, and this will require proactive state intervention,” said Kazu Sakai, Director General of ADB’s Strategy and Policy Department. “As the deadline for the Millennium Development Goals (MDGs) looms in 2015, this publication provides a timely reminder of the vast unfinished business in the region and the steps needed to end deprivation across the board.”

Despite a sharp reduction in income poverty in recent decades, a fifth of Asia’s population still lives in extreme poverty. If the highly vulnerable who can easily revert to extreme poverty are included, this figure could rise to one in two. Many countries will likely fall well short of achieving the MDGs in areas such as basic sanitation, underweight children, infant and maternal mortality, while growing income gaps and other forms of inequity are becoming increasingly acute.

The ‘Ending Asian Deprivations’ study, compiled with contributions from 23 Asian development experts, says the number of people being left behind despite the region’s boom shows that past development efforts have not been sufficient to end poverty and deprivation. The study shows that while GDP growth on its own helps reduce income poverty, it plays a much smaller role in reducing other deprivations, like education and health outcomes. The spike in inequality will also impact future economic growth through slower poverty reduction and employment generation.

New approaches may need to be considered to make growth more inclusive and to promote more effective state action in areas such as skills development, delivery of quality education, and incentives for entrepreneurs. These measures must be carried out in conjunction with institutional improvements and stepped-up partnerships with the private sector and civil society. Policymakers will also need to do a lot more to create conditions for more small-and-medium enterprises – a key jobs generator – to flourish, and to reduce the informal sector through actions like improved property rights and access to finance.

Other areas where the state needs to increase support include infrastructure, improving urban environments, social protection programs, and the removal of gender inequities and labor market rigidities to boost employment opportunities. Closer regional cooperation is also crucial, with ADB estimating that the rollout of needed infrastructure for cross border connectivity will deliver benefits equivalent to about $13 trillion for developing Asia in the decade up to 2020 and beyond.

The report says any successful new development approach must have clearly defined goals with a definite timeframe, a credible strategy to achieve them, and a detailed list of public interventions. The MDGs provide an effective base but future development goals also need to incorporate region and country- specific needs. A reasonable time frame for ending deprivations in Asia would be 2025, a decade after the MDGs come to an end.



China to make energy efficiency a ‘pillar’ of its economy

By Nicky Stubbs (17 August 2013):

The Chinese state council announced plans last Sunday that will see energy efficiency placed at the heart of economic activities by 2015.

Although it is the world’s most densely populated nation, and therefore the biggest global polluter of harmful carbon dioxide, China’s state council has committed to tackling climate change by implementing energy efficiency policies that will see positive steps to reduce its risks.

The Chinese cabinet expects the environmental protection industry to grow by 15% year-on-year, to a value of 4.5 trillion Yuan (£474m).

Figures from the Nation Resource Defence Council (NRDC) suggest that China burns more coal than the rest of the planet combined. Alvin Lin, NRDC’s China climate change advisor warned of the implications of such mass usage.

“The impacts of coal mining and consumption on China’s environment, public health and the economy are already astronomical”, writes Lin, “China’s leaders are paying close attention to coal and have sought now seek to reduce coal consumption and pollution by introducing a suite of policy measures”.

Measures, according to Lin, include carbon trading, capping energy consumption, resource taxes, new emissions controls and regional coal consumption caps. He criticises the government however, for not doing enough, saying that targets are non-binding and that there are no penalties in place for non-compliance.

The announcement comes amid China’s attempts to bring its excessive carbon emissions under control, with authorities even suggesting they could sentence polluters to death in extreme cases.

Despite being the most densely populated country on the planet, Chinese authorities are considering lifting the country’s one child policy, which was introduced in 1971 to tackle mass population, due to the ageing crisis that is on the horizon.



From the E2 Singapore website (23 August 2013):

State of Energy Efficiency in Asia

Energy efficiency is an imperative of our modern world. Unfettered consumption of energy of our past no longer has a place with better understanding of the consequences, and of the benefits of energy efficiency.

The need for increased energy efficiency could not be higher in Asia. Population growth, increasing affluence, and increasing economic activity are expected to increase energy demand significantly. However, a 1-4% investment in energy efficiency, as share of overall energy sector investment, can meet as much as 25% of the projected growth in primary energy consumption in developing Asian nations by 2030.

In the report ‘Same Energy, More Power: Accelerating Energy Efficiency in Asia’, the Asian Development Bank (ADB) examines the causes of underinvestment and obstacles to energy efficiency in Asia. The report further considers the ramping-up efforts in the region by ADB for greater utilisation of energy efficiency.


Causes of Underinvestment and Barriers to Energy Efficiency in Asia

Within Asia, profitable opportunities for energy efficiency investments struggle to compete with alternative investments for new energy supply. Some reasons for of this underinvestment are considered below:

•             Economic

o             Energy price distortion: Price distortion may result from incomplete prior knowledge of the full range of costs associated with energy production and consumption, or from poorly designed policy or regulatory interventions, such as energy subsidies. When energy tariffs do not accurately reflect the true cost of resource capture and delivery, adoption of more energy efficient technology may be discouraged.

o             High transaction costs: Beneficiaries of energy efficiency investments may not be able to obtain financing for proposed projects, or the cost of capital may prove to be excessive. Access to professionals with the appropriate managerial or financial expertise may also be hard to come by.

o             Perception of risks: customers may experience concerns about larger impacts of project implementation on the normal operations of their business and the disruptions that may occur.

o             Savings may appear too small: This is especially in the short term, relative to the cost of the immediate required investment.


•             Social

o             Requirements of demographic trends: Attention of investment is on the need for expanded energy access and supply, due to growing population and economic activities.


•             Behavioural

o             Passivity towards energy management: Consumers are typically content to passively receive energy service if the cost is reasonable, and lack the initiative to actively seek ways to alter or reduce their consumption.


•             Institutional

o             Lack of public institutional leadership: Absence of government leadership, or lack of a centralised authority or agency that can lead, encourage, or manage wide-scale energy efficiency implementation.

o             Lack of familiarity in financial institutions: Many banks continue to lack familiarity with energy efficiency projects and the type of value streams that are likely to result.

o             Lack of capacity or authority by tenants to improve: Developers of owners of buildings rarely occupy or utilise their facilities on a daily basis, and may fail to incorporate energy efficiency improvements without incentives or requirements to do so

o             Split incentives across various agencies: Bureaucratic character of many government functions often results in the performance of planning and management duties according to very specific mandates, within discrete agencies. This can impede collaboration and information sharing, resulting in duplication of effort while not reaping the maximum benefits.


•             Policy design

o             Level of administrative and regulatory oversight: Stakeholder compliance enforcement can be expensive and time-consuming compared to market-driven forces. Public authorities may also lack the will or capacity to pursue ambitious enforcement, which can be better facilitated by self-enforcing markets.

o             Clarity and consistency of policy design and implementation: Policy and program stability can enhance stakeholder confidence in the credibility of energy efficiency initiatives. Consistent enforcement and implementation across stakeholders encourages robust compliance. These are important determinants of a desirable investment climate for energy efficiency.

o             Awareness campaign: This can help targeted groups or sectors understand new energy efficiency initiatives and methods for compliance, or may encourage participation by emphasising the benefits.

o             Financial schemes for energy efficiency projects: Commercial banking sector may have to make changes to the credit review process and loan terms for energy efficiency projects. Also, with better understanding of energy efficiency’s value to different customers, banks may devote attention to devising sophisticated financing mechanisms to encourage more ambitious action in different sectors.


Scaling-up of Energy Efficiency Efforts

To increase its investment in energy efficiency efforts throughout the Asian region, ADB may draw upon a mix of approaches, characterised by ambitious targets or mandates with goals for participation across sectors and stakeholders:

•             Energy efficiency policy and regulation

•             Energy efficiency standards and building codes

•             Utility demand-side management market activities

•             Innovative financing mechanisms

•             Development of national and/or local institutional capacity

•             Energy efficiency information systems

•             Awareness of energy efficiency means and benefits

More systematised program support and investment can leverage existing resources to generate broader and deeper impacts while generating momentum for further energy efficiency market development. Areas where ADB may engage such activities to significant effect in Asia include:

•             Regional and country-specific thematic energy efficiency programs

•             Investments in utility-sponsored performance-based energy efficiency resource programs

•             Investments in raising energy efficiency standards

The role played by the Asian Development Bank in promoting investments in energy efficiency programs throughout Asia is a crucial one to ensure economically and environmentally sustainable development. Energy efficiency remains the least-cost solution to meeting Asia’s growing energy demand in face of its changing demographic and economic development.

To read the full report ‘Same Energy, More Power: Accelerating Energy Efficiency in Asia’, please visit:


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