Lowering tariffs on green goods will decrease the costs of these technologies and increase their deployment, benefitting consumers, exporters, and the environment.

 

Six hundred million more people will be living in cities in the Asia-Pacific region in 2035 than now. That’s a 38 percent jump in 25 years.1 It’s not just a question of overcrowding as people increasingly migrate from the countryside to urban areas. It raises concerns about traffic congestion, air pollution, green house gas emissions and overwhelming demands for energy.

“This scale of city growth is unprecedented in history,” says Kenji Kobayashi, President of the Asia-Pacific Energy Research Centre (APERC).

“Without effective policies in place, the rapidly growing urban areas of the APEC region are likely to follow the pattern already established in many economies of automobile-oriented development and urban sprawl,” Mr Kobayashi says.

APEC is tackling these types of economic and environmental challenges through its green growth agenda, which was a key focus in 2011. At their annual meeting in Honolulu in November, APEC Leaders committed to a series of initiatives that aim to assist the region speed the transition toward a low-carbon economy, in a way that promotes the development and spread of green technologies, and thus helps grow our economies, increases energy efficiency and enhances energy security.

Energy efficiency

Leaders singled out the need for increased energy efficiency, which would cut demand for energy including for fossil fuels, reduce emissions and save money. They also directed APEC economies to further encourage development of energy-smart, low-carbon communities.

The APEC-related Energy Smart Communities Initiative has some 30 projects up and running on four pillars - smart transport, smart buildings, smart communities and smart-job education and training. A wealth of information about these technologies and methods is being collected online so that economies can share knowledge and learn best practice.

One such project profiles new low-energy buildings in the region that have cut energy use at least by half, compared with buildings of similar types in similar climates. Existing buildings are also showcased that have been retrofitted – including with energy-efficient roofs, windows and ventilation systems – to reduce energy use by at least a quarter.

In a separate initiative, APEC is supporting development of smart electricity grids that enable sources of clean power to be seamlessly connected to existing structures. Supplying cheap and reliable power to residents, businesses and communities will be a major challenge, particularly for developing economies facing growing energy demand.

“To move forward, we need a new kind of electric grid that is capable of delivering new and renewable energy sources such as wind and solar power,” says Tom Lee, Chair of the APEC Expert Group on New and Renewable Energy Technologies.

“We also need a grid that can automatically manage the increasing complexities and electrical needs of the 21st century,” says Dr Lee who is with the Industrial Technology Research Institute in Chinese Taipei.

“Therefore a power grid must become smarter to maximize the use of renewable energy and improve energy efficiency.”

To underline the importance of saving energy, Leaders agreed to a goal to reduce energy intensity by 45 percent by 2035 using 2005 as a base year. The target is a regional or aggregate one, meaning individual economies could vary above or below the exact mark.

Energy intensity, energy consumption per unit of gross domestic product, is already falling thanks in part to previous pledges, including UN-sponsored commitments to reduce climate change. Indeed APEC decided this new target after evidence showed it was already set to surpass its previous reduction goal of 25 percent by 2030.

But Dr Ralph Samuelson, Vice-President of the APERC, which worked with APEC to develop the new goal, argues this improvement is “no cause for complacency.”

With the region set to grow rapidly, so will the demand for energy. An APERC report shows the region’s carbon dioxide emissions from fuel combustion are expected to increase by about 40 percent by 2030 compared to 2005 and oil imports from outside the APEC region are likely to rise some 70 percent.2

As part of efforts to slow this down, Leaders also committed to phasing out inefficient fossil fuel subsidies that encourage wasteful consumption. Economies will reform their policies at their own pace, and in their own way, recognizing that the poorest populations who rely on them need to be protected.

APEC is also building a reporting mechanism to assist economies to detail and analyse their current subsidies. In this way, economies can share lessons learnt on subsidy reform, and build on best practices. A report that tracks progress of these reforms will be presented to Leaders annually.

“The reform of inefficient fossil fuel subsidies would free significant resources in the region that could be used to enhance economic growth, strengthen energy security and help address climate,” says Phyllis Yoshida, Lead Shepherd of the APEC Energy Working Group.

Peer reviews are another tool to help economies undertake policy reforms to achieve their green goals. Economies can volunteer for a peer review of their energy efficiency efforts, which allows a team of experts to analyse in detail their policies and provide objective feedback and constructive criticism. The resulting report is circulated among economies so they can identify and share best practice, and ultimately improve energy efficiency. Eight economies have volunteered for assessment with more to come.

Green goods

Current estimates suggest that tens of trillions of dollars of investment will be required in the coming years to meet our clean energy, clean air, sanitation and other environmental goals, Leaders said in their Honolulu declaration.

One of the best ways to meet these goals is to increase the flow of green goods, they said. APEC therefore is working to reduce tariff and non-tariff barriers to trade in environmental goods and services. Leaders committed, for example, to eliminating existing policies that require businesses to source some or all of their inputs locally. While these “local content requirements” are designed to foster local green industries, they can also discriminate against foreign companies.

On tariffs, APEC will work to develop a list of environmental goods next year, on which member economies are resolved to reduce tariff rates to 5% or less by 2015.

“Lowering tariffs on green goods will decrease the costs of these technologies and increase their deployment, benefitting consumers, exporters, and the environment,” says Dr Yoshida, a Deputy Assistant Secretary at the US Department of Energy.

“The greater deployment of these technologies will support the region’s sustainable economic growth by creating jobs, addressing climate change, and increasing energy security.”

Looking ahead

Many other important initiatives are underway in APEC, ranging from harmonizing standards of the energy efficiency of appliances to promoting development and trade of alternative fuels such as biofuels. As the United States hands over the APEC chair to Russia in 2012, APEC’s commitment to green growth is strong, with a long list of goals, initiatives and projects to produce concrete results going forward.