Driving forces of energy consumption and carbon emissions: Southeast Asia at the crossroads between domestic and trade related effects

Climate change mitigation has motivated numerous evaluations of the drivers of energy consumption and related carbon emissions. A comprehensive review shows that input output and decomposition analysis are among the most... [ view full abstract ]

Climate change mitigation has motivated numerous evaluations of the drivers of energy consumption and related carbon emissions. A comprehensive review shows that input output and decomposition analysis are among the most commonly used methodological approaches. Both rely on high levels of data availability and analytical capacity, two ingredients which are seldom found in places at the forefront of economic development, in particular Southeast Asia. We attempt to evaluate the underlying forces in energy consumption and carbon emissions and show that economic growth plays a major role in the region but with heterogeneous effects. Decomposition of the carbon emissions for the Philippines shows that in addition to growth, domestic consumption and higher standards of living have increased emissions. Yet, the energy balance of economic activities shows that energy intensity has decreased significantly over the past 15 years – a part of which was caused by a shift to less energy-intensive industries. While this dual effect holds for the Philippines, we have quantified energy consumption, including energy embodied in imports and exports to identify any structural or trade related effects in six countries of the Association of Southeast Asian Nations (ASEAN).

The lack of input output data outside the Philippines and Indonesia meant we used a hybrid approach to quantify energy intensity between national accounts and life cycle inventory data. The results show that energy consumption and carbon emissions in Malaysia, Thailand and Vietnam increased because of export led development rather than growth in domestic consumption. Moreover energy intensity has remained essentially constant whereas the Philippines and Indonesia have managed to decouple energy consumption and economic growth, albeit at much different rates. This illustrates the difference in the performance of the energy production and consumption systems across Southeast Asia, with the notable exception of Singapore which exhibits a very stable energy profile. The energy intensity in Singapore, including embodied energy in trade, is 3 to 5 times less than that of other ASEAN nations.

These results lead us to recommend the integration of industrial, energy and trade policies for better planning, in particular, with the promotion of value chain, industrial symbiosis, energy efficiency and consumption based accounting of carbon emissions.