Towards an Asia-Pacific Energy Security Dialogue Forum
Your Excellencies, fellow panellists, distinguished guests, ladies and gentlemen:
I would first like to congratulate UN-ESCAP for organising this event as part of its 67th session. I hope the speeches and discussions here today will prove useful during ministers’ deliberations this week.
Energy Security
As you know, the session is taking place at an important time. Volatile oil prices are contributing to inflationary pressures that pose a danger for the global economic recovery. The earthquake and tsunami that struck Japan in March was not only devastating and a terrible tragedy, it renewed concerns about the safety of nuclear power and alternative options to fossil fuels. These events have highlighted how critical the issues of energy security are to economic prosperity and sustainability in the Asia-Pacific region.
APEC’s member economies together account for 60 percent of global energy demand and include the world’s four largest energy consumers. Energy cooperation has therefore long been a priority for APEC. Since 1990, APEC’s Energy Working Group has been contributing to energy security and emergency preparedness in the region; including through effective schemes such as the APEC Energy Security initiative and the Joint Oil Data Initiative.
In recent years, as environmental considerations have grown in prominence, APEC’s mandate has expanded to encompass energy use and climate change.
APEC leaders meeting in Sydney in 2007 laid out an Action Agenda to reduce greenhouse gas emissions, and set specific targets such as an APEC-wide reduction in energy intensity of at least 25 percent by 2030 based on 2005 levels.
To this end, APEC Ministers that same year agreed to improve energy efficiency and support the use of cleaner and more efficient energy technologies by setting individual goals and action plans; collaborate with the International Energy Agency (IEA) to develop energy efficiency indicators and share information on energy efficiency policies and measures.
The Energy Working Group has implemented numerous capacity building ‘green’ projects that promote the use of smart grids, efficient building design, biofuel development and carbon sequestration.
As a result, this energy intensity target is expected to be met ahead of deadline if current trends continue, and work is now underway to set an even more ambitious goal.
Future Challenges
Despite the work of APEC and many others, the challenges facing the region now and in the future remain significant. Firstly, on the supply side, world energy demand will increase by 36 percent between 2008 and 2035, the International Energy Agency estimates.
Secondly, the linkage between energy use and climate change. The International Energy Agency warns that economies are not on track to meet the global goal of restricting temperature rises. Economies meeting in Cancun last year agreed to work to prevent world temperatures from rising by more than 2 degrees Celsius. Warmer temperatures, changes in weather patterns and rising sea levels as a result of climate change pose risks for agriculture, food and water supplies - particularly in developing economies.
APEC
The solutions to these challenges are not simple or easy. But APEC is committed to tackling them. APEC Energy Ministers, meeting in Fukui in Japan last June, agreed to strengthen its key strategies of more efficient use of energy and a cleaner, safer energy supply, acknowledging that both will simultaneously boost our energy security, grow our economies and lower our emissions.
APEC Economic Leaders took this one step further. Meeting in Yokohama last November, they stressed that sustainable and secure economic growth are key elements of APEC’s new Growth Strategy. This strategy was unveiled in Yokohama and outlines APEC’s vision for the way forward for the Asia-Pacific region for the next five years.
APEC Initiatives
APEC has made good progress in transforming these policy directions into practical action, through initiatives such as the Low Carbon Model Town Project. The first test case for this project is a town on the outskirts of Tianjin city in northeastern China. The town is being transformed using low-carbon and energy efficient technologies including smart transport, smart buildings, smart grids and creating smart jobs.
An APEC system of peer reviews is providing valuable guidance for member economies on their energy efficiency policies. Economies including Chile, New Zealand, Vietnam and Thailand have undertaken these reviews and this year so have Malaysia and Peru. Indonesia and the Philippines are next on the list.
Energy ministers have also tasked the Energy Working Group with developing joint programs with the International Energy Agency to improve responses to oil and gas emergency situations in the APEC region.
And the Energy Working Group is continuing to spearhead capacity building projects particularly in developing economies that focus on sharing knowledge, expertise and technical skills on improving energy security.
Other important initiatives underway in APEC range from working to harmonize standards and testing methods on the energy efficiency of appliances across the region and the development of biofuels.
APEC also remains committed to phasing out over the medium term inefficient fossil fuel subsidies, while recognizing the importance of providing those in need with essential energy services. Among work in this area, APEC has approved funding for a project to highlight specific cases in the region where economies have rationalized or phased out fossil fuel subsidies while protecting vulnerable populations.
Phasing out subsidies would reduce fossil fuel consumption and encourage greater development and uptake of renewable and clean sources of energy. It would also promote use of energy-efficient goods and technologies, making economies less dependent on imported sources of fossil energy.
Paying for subsidies is a significant cost for many governments and phasing them out would remove this financial burden and help consolidate public finances.
APEC Trade Ministers meeting in Big Sky, Montana last week instructed officials to continue substantive work in this area, including through capacity building programs and developing a voluntary reporting mechanism on subsidies.
This year, the United States is hosting or chairing APEC. President Obama’s administration is focusing on three main areas; strengthening regional economic integration and expanding trade, advancing regulatory
cooperation and regulatory convergence in the region, and thirdly promoting green growth.
Specifically, APEC, under the guidance of the United States, wants to achieve concrete results this year on reducing unnecessary and inefficient trade and investment barriers to environmental goods and services. This will increase our citizens’ access to important green technologies, boost energy security, protect the environment and help economies create new green jobs.
One specific area is trade in green vehicles. APEC Trade Ministers meeting last week in Big Sky, Montana, agreed to develop and implement programs to speed up and simplify the process of importing advanced and alternatively-fuelled demonstration cars. The vehicles could be used for research, training and demonstration purposes in the region and advance this new industry.
Additionally, a joint high-level meeting of APEC Energy and Transport Ministers and officials is being planned for this September in San Francisco on energy efficiency in transport.
APEC Trade Ministers also agreed last week to step up work to strengthen the implementation of good regulatory practices across the region so that some of the technical barriers to trade are removed. Given the tremendous potential of emerging technologies, including green technologies, as well as strengthening environmental protection; it is important to ensure that standards, testing requirements and other importation regulations do not create unnecessary barriers to trade in these products.
APEC will also continue to work closely with the business community to find ways to make it easier, cheaper and faster for companies to trade and invest across borders. This includes small, medium and large businesses wanting to trade and invest in green goods and services and energy supply.
The region faces significant energy challenges. APEC is implementing a practical and visionary energy agenda. It is committed to a sustainable and secure future and to a cleaner environment for the Asia Pacific.
Thank you.