Guest Article #65

Clean Energy: Helping Propel Asia to New Prosperity

There are many people claiming that this could very well be Asia's century. The region's relatively quick recovery from the global recession has caused the economic axis of the world to tilt in its direction, and Asia seems poised to lead the world with its vibrant, dynamic economies. While the eyes of the world may naturally fall on the economic powerhouses of the People's Republic of China and India, countries such as Indonesia and Viet Nam are also finding success, climbing out of poverty to reach middle income status within a few decades, and poised to continue their ascent.

While Asia continues to march towards success, there is still a multiplicity of factors that could make or break the region's future prosperity, and energy is undoubtedly a core concern. Crippling poverty across the region means that 1.8 billion people are still burning primitive biomass fuels and an estimated 800 million have no access to modern electricity. And as the region struggles to provide electricity to these poor, pressures are mounting across the board on reserves of energy, water and food, with Asia's needs expected to grow exponentially as more people attain a higher standard of living.

The key to this problem is a transition to clean energy, which offers effective and practical solutions to the many interlinked issues that Asia is facing today. Renewable power is found in abundance on the continent. Large areas of the Asian mainland are ideal for solar and wind installations, while geothermal resources are waiting to be tapped in archipelagic Southeast Asia. As Asia is a net importer of fossil fuels, this places it at the mercy of fluctuations of a less than stable world oil market. Indigenous resources mean the region will have a more secure energy supply, and will also help Asia break the cycle of high-carbon development that has led to the world being threatened by runaway climate change.

Asia's patchwork of infrastructure, which is aged in some areas and nonexistent in others, presents an outstanding opportunity for a clean energy retrofit. This infrastructure can be fully retrofitted or new systems can be built from the ground up to be more efficient and to serve a “green” economy and its paradigm of sustainable, inclusive development.

We shared these thoughts with many other clean energy experts from around the region and the globe who attended ADB's annual forum on clean energy in June this year. The theme of this year's conference concerned business models and policy drivers that can enable a clean energy paradigm shift in Asia. Opportunities abound and great changes are expected as governments build the right frameworks, and the private sector is incentivized to pour resources into clean energy. These investments surpassed $82 billion in 2010, but the infrastructure investment needed by developing Asia over the next few decades reaches into the trillions.

Much more work on the part of all stakeholders is needed. This is a massive challenge but not a challenge in the form of barriers to be overcome, such as absent regulation and weak policy. This challenge is about “do we dare reach for this better way of doing business?” Our current business-as-usual scenario, characterized by high carbon emissions – and the sacrifice of tomorrow's environment for today's progress – has served the world well enough for more than a century. But that is our past and Asia has to now take radical steps to increase energy efficiency.

That the entire world is facing a new era of scarcer resources is a fact. In all areas – from clean water to food to natural capital – scarcity is the new normal, and sustainability is the new watchword. The regular critique of such an assessment is fear mongering, but the region has an understanding of hardship and the need to be prepared, particularly as Asians have more to lose from climate change than any other people. And we do not simply seek to withstand whatever the future holds. But rather, we aspire to be a region that can shape itself into one free of poverty, and a place where growth is inclusive and sustainable.