ISLAMABAD: The Asia-Pacific region is expected to account for over 40 per cent of the $68 trillion of cumulative energy investments until 2040, according to a document prepared by the United Nations regional commission for Asia and the Pacific (UN-ESCAP).

The document prepared for the policy dialogue on energy for sustainable development in Asia and the Pacific opening in Bangkok on Monday, says with energy demand in Asia and the Pacific forecast to nearly double from 2010 to 2035, access to reliable and adequate energy services will remain a focus for the decades to come.

Of the $68 trillion, $22 trillion will be needed for investments in energy efficiency. It is expected that two thirds of projected investments will be in non-OECD countries and in Asia, and about half of this will be required in the power sector (i.e. generation, transmission and distribution) to fill much needed demand and access gaps.

The region’s energy imports have grown rapidly from 525 mega tonnes of oil equivalent (Mtoe) in 1980 to 2.3 billion Mtoe in 2013. Compared to 1980, the region’s energy import share of the global total has nearly doubled from 23 per cent to nearly 44 per cent in 2013. Compared to imports, overall exports have remained more or less stagnant at around one third of global energy exports since 1990.

The region is expected to remain dependent on oil in the medium term, as the mobility and transport of goods and people is critical for economic development. Currently, transport is currently heavily dependent upon oil and is the fastest growing source of global carbon emissions. With growing middle class in the region and rapid urbanization, overall oil demand for personal mobility and transportation of goods is expected to rise significantly.

Three future trends are likely to dominate the Sustainable Development Agenda for the Asia-Pacific region. First, the next few decades will see a tremendous rise in the urban population globally, but particularly in the region; and new cities and new buildings will have to be built to cope with rapid urbanization. Second, the world will witness a major rise in global middle class: from 1.8 billion in 2009 to 4.9 billion by 2030.

Asia will represent 66 per cent of the global middle class population and 59 per cent of global middle-class consumption, compared to 28 per cent and 23 per cent today. The emergence of a large middle class will have a significant impact on energy demand and on the goods and services that have embedded energy.

In order to effectively progress energy connectivity within Asia and the Pacific there is a need for a common understanding of the benefits by member States. This could lead to a shared vision for energy connectivity that could encompass a connected and fully energized Asia-Pacific region.

Regional integration will not solve all energy challenges, but smart region-wide energy connectivity can play a valuable role in improving energy supply and minimising the environmental impact. It is possible for the Asia-Pacific region to expand supplies, reduce overall cost of energy produced and consumed, lower environmental and social costs, and reduce energy insecurities if energy networks are connected, it says.

According to the ‘Regional Trends Report on Energy for Sustainable Development in Asia and the Pacific’, energy access has remained as the major challenge and the energy poverty is acute in the region impeding development process and economic growth.

In the region, there are 455 million populations live without access to electricity and 2.06 billion relying upon solid fuels for cooking and heating. Mostly the rural populations in the region are deprived of energy access due to unaffordability, low per capita consumption, lack of technological capacity and high capital investment required.

New initiatives are emerging in this region major energy exporter the Russian Federation is turning to the Asian market and major energy importer China formulated the Belt and Road initiatives, both look into energy cooperation with other countries.

The new established Asian Infrastructure Investment Bank, the BRICS New Development Bank, the Silk Road Fund and Shanghai Cooperation Organization will play an important role in regional investment and cooperation, including regional energy connectivity.

Published in Dawn, April 24th, 2016