RAWALPINDI, April 5: The United Nations Regional Commission for Asia and the Pacific, in a new report, says that the region would become self-sufficient in meeting its demand for energy if the abundant energy resources could be developed and shared optimally.

While ensuring that energy security is primarily a national concern, regional and sub-regional energy cooperation has good potential for supplementing national efforts. A strategic and collaborative policy at the regional and sub-regional levels could ensure a regional balance, says “Energy Security and Sustainable Development in Asia and the Pacific.”

This report has been prepared by the Economic and Social Commission for Asia and Pacific (Escap) prepared for its sixty-fourth session being held in Bangkok from 24-30 April.

In the face of the enormous energy demand that is projected for the future in order to maintain the sustainability of the region’s dynamic economic growth, no strategic option could be considered complete without trans-boundary energy cooperation. Such cooperation would be needed in order to supplement national efforts in enhancing supply security and in managing energy demand in a more efficient way, emphasises the report.

Global energy demand is estimated to increase by 47 per cent in 25 years, with Asia and the Pacific accounting for almost 50 per cent of the total global energy demand in 2030. Under the baseline scenario, fossil fuels are expected to continue dominating the global energy system, representing almost 90 per cent of the total energy supply in 2030.

Of the total energy demand of 8.9 billion tons of oil equivalent in the region, coal is predicted to remain the main source of energy, followed by oil and natural gas, while nuclear and renewable sources of energy would account for slightly more than 10 per cent of the region’s energy supply.

The report says the current energy infrastructure in most developing countries is grossly inadequate at worst and suboptimum at best, a situation which requires immediate attention, not only to the addition of new infrastructure, but also to the modernisation and improvement of the systems for bringing about efficiency in the production, processing, transmission and distribution of energy.

The report estimates that $9 trillion financing would be needed for building new infrastructure or improving the existing structures; however, financing would be a key constraint. If a more sustainable scenario is considered for the period between 2006 and 2030, the investment figure would drop to $8.3 trillion, resulting in a savings of $766 billion.

Energy infrastructure development is one of the key national programmes needed to ensure that a proper supply of energy is delivered to the end-users and consumers.

Most countries in Asia and the Pacific have developed national energy policies aimed at ensuring an adequate and affordable supply of energy, improved energy efficiency, accelerated utilisation of renewable energy and widened access to modern energy services for the rural population.

However, current energy policies do not comprehensively or adequately address the energy security challenges facing the member states, especially the developing countries of the region, notes the report.

The report says in recent years, there has been renewed interest in nuclear power as a means of supplementing the existing supply of electricity. Most recently, many of the members of the Association of Southeast Asian Nations have expressed interest in conducting studies to determine the feasibility of building their first nuclear reactors, with technical assistance from countries already producing nuclear energy.

In the Asian and Pacific region, energy and fuel prices vary greatly from one country to another as a result of regulated policies, low taxes and subsidies which distort the market economy. Energy prices need to be reviewed in order to bring the price of energy into line with national development levels. Low fuel costs and heavy subsidies often lead to unsustainable energy use and negatively affect the environment and efforts to conserve energy.

In tackling the issue of energy pricing, governments could create a regional market environment by introducing innovative and rational pricing policies as a tool for increasing market competitiveness. By stimulating the market, more incentives for developing energy-efficient and clean energy technologies could be developed, eventually leading to savings for government budgets and profits for corporations.

The report suggests that energy taxation could be an important instrument for promoting renewable energy and improving energy efficiency without undermining the competitiveness of member states. As part of the green budget and tax reform under its five-track “green growth” approach, the ESCAP secretariat is already engaged in dialogues on the potential benefits of applying green taxes by considering the environmental tax reform experience of the European Union.

Often, an energy tax is erroneously viewed as an additional tax on industries and consumers, but in fact it is a tax shift rather than a tax increase, lowering income-related taxes while raising taxes on carbon emissions. In pursuing a tax shift, lessons can be learned from the European experience; in this regard many countries have instituted fiscal legislation, regulations and tax policies aimed at controlling carbon emissions, it says.