Asia’s developing countries face a constant struggle: build enough energy capacity to keep up with the needs of their growing economies while seeking out new solutions to replace the unsustainability of past development models.
Thanks to the International Energy Agency (IEA), Southeast Asia at least has an updated picture of just how great the challenge will be. The agency projects that oil use in the region will grow from 4.7 to 6.6 million barrels per day by 2040. It also foresees over 565 GW in new power capacity, compared to just 240 GW today. 40% of that new capacity will be powered by coal.
The IEA’s numbers are a solid reminder of Asia’s long-term reliance on fossil fuels. At the same time, many areas of the continent are highly vulnerable to climate change. Can economic planners chart a path to industrialization without the environmental price paid by developing nations before them?
The answer could depend on recent innovations in carbon capture technology. On October 11th, Switzerland-based Climeworks inaugurated the first-ever “negative emissions” geothermal plant in Iceland. The company carbon capture system trapped 50 metric tons of carbon dioxide and converted it into stone, keeping more CO2 out of the air than it admitted.
If these technologies can be scaled up and combined with other energy sources, can help reconcile the expected growth of Asian coal energy in the coming decades with regional and global climate needs.
While Asia’s growth in economic clout over the past half century has refocused global attention eastward, the ways in which it has been accomplished are eerily similar to Europe’s coal-fueled rise.
China’s economic model has lifted hundreds of million out of poverty over a few decades of rampant industrialization, but the perpetually smog-filled skies over Beijing have forced the Chinese government to dramatically invest in clean energies and force outdated thermal coal mining and power capacity offline.
Nearly two billion people across South and Southeast Asia hope to follow China’s path of rapid industrialization. Should nations such as Pakistan, Bangladesh and Indonesia resort to the same strategy of employing fossil fuels, or should they take the more uncharted path of investing in renewable energy?
In countries such as Pakistan, the choice has been made and environmentalists are not pleased with the outcome. As part of the $55 billion China-Pakistan Economic Corridor (CPEC) program linking Pakistan to China’s One Belt, One Road (OBOR) initiative, US$35 billion is being spent on 21 major energy projects.
These include a mix of coal and renewable power plants, transmission lines, and other infrastructure. Roughly three quarters will be coal powered, with the end goal to produce over 16 GW of sorely needed electricity to power Pakistan’s ongoing development.
This underscores a growing conundrum in Chinese policy. While China weans itself off of fossil fuels, almost half of new coal capacity in the developing world is being built by Chinese companies hungry for business elsewhere. This will expand global coal power capacity by 43%.
President Donald Trump also wants to get the US back into this game, replacing Obama-era regulations on the coal industry with plans to export American coal plant technology through the world. Arlington, Virginia-based AES Corporation, for example, is completing coal projects in India and the Philippines that will add an expected 1.7 GW in new capacity.
The company insists these are the final coal plants it will build, but its Chinese counterparts are clearly of a different mind.
These stark realities present a quandary for the World Bank in balancing climate goals and economic development. The Bank’s recent decision to begin reporting greenhouse gas emissions from its projects highlights its ideological commitment to climate goals, but the bank still needs to fulfill pressing development needs.
The Trump administration is applying pressure to change the Bank’s policy of not financing fossil fuel projects. In a directive issued in August, the Treasury instructed US representatives on the executive board of the Bank to vote to “help countries access and use fossil fuels more cleanly and efficiently.”
Could institutions like the World Bank find a way to balance their climate goals with their development goals? Yes: by investing in carbon capture and storage (CCS) technology. Beijing has been investing billions in developing CCS for its coal power plants and is expected to retrofit 330 gigawatts with such emissions-reducing technology by 2020. With financial support, other developing countries in Asia could follow suit.
After all, as far as Asia is concerned, the growth in coal capacity seems inevitable – although the region’s governments are increasingly realizing they can’t afford to follow the old, environmentally damaging path to industrialization wholesale. Indonesia recently declared no new coal fired power plants will be allowed on Java, home to 140 million of the archipelago’s 250 million people.
The Indonesian government wants renewable energy to make up 22.5% of its total power capacity by 2025, but that hardly means the imminent demise of fossil fuels. The Java decision aside, coal will still account for 50% of Indonesia’s energy mix.
Could negative emissions plants like the Climeworks process or advanced CCS technologies solve the impasse? While supporters and opponents disagree on how widely applicable current solutions can be, groundbreaking innovations in the field of carbon capture could make significant contributions in cutting emissions – from power generation but also from industry.
While renewable sources such as solar and wind continue to develop, developing economies like Pakistan need reliable base load power to overcome chronic energy poverty (and the humanitarian costs that come with it).
Major institutional lenders, national governments, and climate advocates would all like to see a path to industrialization for that no longer has to come at the expense of a healthy Earth. By encouraging and fully utilizing emerging technologies across power sectors, Asia’s emerging economies may find a way where China previously did not.