Search

© 2018 Elsevier Ltd Natural resource endowment has a significant influence on manufacturing structure which in turn influences CO2 emissions. This paper investigates the effect of the rationalization and upgrading of manufacturing structure on carbon dioxide emissions in China, based on the perspective of natural resource dependence. The results of the STIRPAT model on provincial panel data of the manufacturing sector from 2003 to 2014 show that manufacturing structure rationalization and upgrading will help curb CO2 emissions, while such effects are restricted by a region's reliance on natural resources. The panel threshold model estimations further indicate that the greater the ratio of industrial output to GDP, the weaker the restricting effect of resource dependence on the emissions reduction of manufacturing structure. These findings reveal that the development strategies of manufacturing structural rationalization and upgrading that aim to reduce emissions depend on the level of a region's resource dependence and industrialization.

We use a time series approach to investigate the determinants of import natural gas prices in China with the aim to understand the impact of its natural gas market reform and liberalisation. We pay special attention to the impacts on import liquefied natural gas (LNG) and pipeline gas prices. The liberalisation of the domestic natural gas market and the reformation of pricing mechanisms in the country have caused systemic structural changes. Our results provide clear evidence of a slow but steady departure from oil indexation, in which China’s import gas prices are increasingly affected by market fundamentals such as economic growth, climate factors, policies and other market factors. The empirical results provide supporting evidence to further market reform in China. Moreover, we can generalise the present study to the development of East Asian natural gas price benchmarks. It is important for China and the East Asian region to develop their own natural gas price benchmarks that better reflect regional market fundamentals.

© 2018 Oil indexation and hub-based pricing are two competing pricing mechanisms in the international natural gas markets. The debates over whether hub-based pricing is preferable to oil indexation have become intense among academics and practitioners, for example, whether and when East Asia should adopt hub pricing. This paper contributes empirically to the debate using a multiple bubble test. Adopting the generalized sup augmented Dickey-Fuller test proposed by Phillips et al. (2015), we show that more explosive bubbles exist in Japan and European gas prices than in the US prices. The argument is that hub-based pricing mechanism can better reflect fundamental values in the gas markets and thus is less subject to speculations. Given the recent trend of financialization in energy markets, gas prices are more likely to deviate from fundamental values when they are not clear to investors. Although oil indexation is simple and has been an effective tool over the past few decades, our results suggest that hub pricing is associated with less extreme price movements in the market and thus is a better choice for both policy makers and practitioners.

© 2018 Institute of World Economics and Politics, Chinese Academy of Social Sciences Previous studies have investigated whether Chinese exports have crowded out those from other countries. However, what has yet to be considered is the evidence based on different quality varieties. Using the most detailed Harmonized System 9-digit product-level data, the present paper provides evidence of crowding-out and crowded-out effects across different product quality segments and across manufacturing sectors by quality segments. The empirical evidence presented in this paper shows that the crowding-out effects of Chinese exports have been greatest at the lower end of the quality spectrum but less significant at the higher quality spectrum. Moreover, since 2007, China's own exports of lower quality manufactured goods have been increasingly crowded out. The key policy implication is that China's export path is in line with that taken by other Asian economies in previous decades; the crowded-out effect could achieve win–win outcomes for countries involved; and lower income countries would do well to be open to receive those relocated low value-added industries from China. However, the relocation policy in China is best implemented gradually as climbing up the product quality ladder takes time.

© 2015 Elsevier Ltd. All rights reserved. This paper assesses competing outlooks for energy mix in the Association of Southeast Asian Nations (ASEAN), highlighting the paradox of its fossil fuel-dominated outlooks when contrasted with its aspirations to move toward a green energy mix, and reviews green energy strategies using the strengths, weaknesses, opportunities, and threats (SWOT) analysis method. The paper argues that despite the looming brown outlooks due to the expected surge of coal, the ASEAN region has many advantages in providing cleaner energy for its green vision. However, reduction of CO2 emissions has not been explicitly set in the region's policy agenda and thus green energy potential is underdeveloped. To achieve a greener energy mix, ASEAN needs to make further efforts such as cleaner use and removal of subsidies of fossil fuels, promotion of renewables and energy efficiency, regional market integration and connectivity, and execution of existing plans by nations. Ultimately, each of these strategies will require sustained leadership, political determination, and concrete actions from stakeholders, in particular, national governments across the region.

© 2015 by the authors, licensee MDPI, Basel, Switzerland. This paper presents the findings of an expert working group of researchers from East Asian countries. The group was tasked with developing a theoretically sound and practically implementable methodology for assessing the sustainability of biomass utilisation in East Asian countries based on the needs and potential of biomass resources in this region. Building on six years of research conducted between 2007 and 2013, the working group formulated a set of main and secondary indicators for biomass utilisation under three pillars of sustainability. For the environmental pillar, the main indicator was life cycle greenhouse gas emissions and secondary indicators were water consumption and soil quality. For the economic pillar, the main indicator was total value added and secondary indicators were net profit, productivity, and net energy balance. For the social pillar, the main indicators were employment generation and access to modern energy, and the secondary indicator was the human development index. The application of the working group methodology and indicators in sustainability assessments of biomass utilisation will enable decision makers in East Asian countries to compare the sustainability of biomass utilisation options and to make decisions on whether or not to launch or sustain biomass utilisation initiatives.

© 2015 Elsevier Ltd. Application of the best practice of setting minimum energy performance standards (MEPS) in technically disadvantaged countries (TDCs) faces many barriers. The best practice of determining MEPS has a comprehensive analytical framework including engineering-economic analysis, life-cycle cost-benefit analysis, as well stakeholders' and market impact assessments. However, TDCs usually are lack of reference product classes, market data, and other necessary inputs data. This study demonstrated how to overcome those barriers to apply the best practice to TDCs using the actual experience in setting initial MEPS for Air Conditioners (ACs) in Brunei from scratch with limited secondary data as an example. The series of application works include definition of the product classes and the baseline group; collection of market data; formulation of cost-efficiency relationship from the market data; examination of the economic, environmental, and financial impacts of various MEPS options; revealing of the consumers' willingness to pay; and analysis of the impacts and responses from the industry and consumers. The coordination with the compliance of the Montreal Protocol was also considered. The methodology should also be applicable to setting MEPF for other appliances in any TDCs.

The energy transition often includes capping policies on fossil fuel production or consumption but little attention in the literature has been paid to introduce a permit trading scheme to minimize the cost of such a cap. In this paper, we propose a permit trading mechanism for capping issues and apply this proposal to studying China’s coal capacity control. Theoretically, we argue that the benefits of such a trading scheme comes from rescuing high-efficiency mines being administratively closed and relocation of capacity from lower to higher efficiency mines. Using a non-parametric frontier method and more than 1100 firm-level data merged from financial data and capacity data, we estimated the benefits from a capacity permit trading could lead to more than 30% input saving and additional 26% income boost. The results also demonstrate that the economic benefits rise in a larger trading zone and the permit trading is a Pareto improvement for all participated province when compared with command and control policy. The study suggests that adopting permit trading schemes for capping policies is economically beneficial and politically feasible, and a large trading zone is preferred to a small one. Such permit concept could be used to facilitate energy transition in other countries.

Dramatic fluctuations in oil prices from time to time demand more research that can evaluate the impact of oil price shocks across the globe. Using a large-scale structural vector autoregression (SVAR) model that allows for an evolving parameter structure and that covers 60 oil-importing and -exporting economies, this paper disentangles the direct and indirect effects of oil price shocks on an economy. The results based on changes in oil prices and oil prices decomposed into aggregate demand, oil-specific demand and oil supply shocks show that in addition to the often measured direct impact, the indirect multiplier impact that works through the international transmission mechanism plays a crucial role in explaining the impact of oil price swings. The negative effects of a sharp rise in oil prices on oil importers are likely to be offset by the positive impact on oil exporters. Nevertheless, oil exporters may also suffer in the long run.

Agro-based liquid transportation fuels, or biofuels, have been promoted in several countries in Asia because of the relatively large potential availability of feedstock biomass. Furthermore, they may contribute to energy security goals and have received support due to perceived greenhouse gas emissions benefits. Employment generation, particularly in rural areas, has been another anticipated benefit. However, there have also been fears of negative impacts on land use, freshwater resources, and competition between food and fuel especially for the more vulnerable sections of society. After several years of biofuels promotion, it is interesting to evaluate past experiences and make recommendations for the future. To what extent have the perceived benefits of biofuels actually been achieved? What have been the associated costs - socio-economic as well as environmental? What are the pitfalls and what are the conditions under which benefits are possible? What are the other issues that need further consideration? What are the possible strategies to further improve the sustainability of biofuels? These questions are looked at from the point of view of both theory and practice in Asia.

This paper examines the endogenous evolution of household consumption patterns and household carbon emissions (HCEs) by integrating the analysis methods of income distribution with climate change. Based on a large-scale household survey spanning from 2012 to 2016 in China, we estimated the direct and indirect HCEs, observed inverse U-shaped Carbon Kuznets Curves (CKC) and significant changes in HCEs over the period at the household level. Applying the Oaxaca-Blinder method, we decomposed factors causing the changes in HCEs and found that income and demographic effects contribute only 25.1% to the total increase of HCEs. The other 74.9% remain unexplained and we define them as the effect of intertemporal lifestyle changes. Further analysis from multiple perspectives illustrates that the lifestyles of households across various social strata are becoming increasingly higher carbon-intensive over time even though the income remains unchanged. The findings indicate that existing modeling and projections of carbon emissions based on income and household characteristics may underestimate the future emissions pressure from the household sector. Hence, we conclude that in order to reach more meaningful results, the increasing effect of lifestyles should be taken into account when conducting climate change studies and formulating climate policies.

© 2019 Elsevier Ltd The technological progress of a country may mean that its technology gap compared to the frontier has changed, which will induce a change in its positioning in the global value chain and affect its carbon intensity. Using paten data, Input Output Database and the Global Value Chain Index, we employ systematic Generalized Method of Moments, quantile regression with panel data and multilevel mediation analysis to measure empirically the impact of the technology gap on carbon intensity and positioning on the global value chain. The empirical analysis shows that narrowing the technology gap will reduce significantly a country's carbon intensity. Further, the effect of the technology gap on carbon intensity is more pronounced on industries with higher carbon intensity. The mechanism test using the mediation effect model proves that the impact of the technology gap on carbon intensity is achieved by changing in the position of global value chain. The findings suggest that a country's carbon intensity performance is not only affected by its own technological progress, but also by global frontiers. Therefore, a country should not only pay attention to its own technological progress but also to the development of global frontier technologies and speed of technological progress.

China’s Photovoltaic (PV) industry plays a critical role in the global PV industry. Between 2013 and 2015, Chinese PV companies were restricted in their access to debt financing. However, to date there has been a lack of studies investigating this “Credit Restriction Policy“. This paper innovatively builds a dynamic game model to analyze the behavior of governments, banks and the PV companies in the process of financing PV companies and is the first attempt to use the quasi-natural experiment in the PV industry to investigate the impact of loan restriction on firm performance. The game analysis shows that both the governments' support behavior and companies' loan decisions have nothing to do with the cost of governments' support to companies. Using the panel data for China's listed PV companies from 2007 to 2017, the empirical results reveal that restricting access to bank loan undermines PV companies’ performance, but government subsidies have little impact on the operating performance of PV companies. The results suggest that while restriction of financial access has negative impact on PV companies, government’s administrative intervention is not desirable and instead government should improve the institutions for bank lending.

One critical factor that affects China's achievement of its peak emission by 2030 is total electricity demand. The aim of this study is to examine regional disparity in electricity consumption in China. The analysis is based on a panel database which is compiled at the provincial level. A distributional dynamics approach is then employed to reveal the trend and movement of each province within the distributions in different regional groupings. The mobility probability plot (MPP) is also employed to provide detailed information on the probability of change in electricity consumption. The results demonstrate significant divergence presents across provinces, over time and within different regional groups. The results can pinpoint the transition mechanism within each region so that appropriate energy policy can be formulated to accommodate future demand in electricity for different regions in China. The results suggest that regional specific energy efficiency policy is needed.

Poverty reduction and access to clean energy are two challenges highlighted in the UN Sustainable Development Goals. China's Photovoltaic (PV) Poverty Reduction Program provides an archetype model to address those two questions simultaneously. Using a tripartite game of government, enterprise and household, this paper examines the challenges that have impeded the development of China's PV poverty alleviation program. Based on an evolutionary game model and the Graph Model for Conflict Resolution (GMCR) model involving the three major parties, this study shows that: (1) Governmental monitoring and the active participation of both enterprises and households are essential to achieve a win-win-win outcome; (2) the government plays a leading role in monitoring and encouraging the active participation of enterprises and households and resolving the conflicts between enterprises and households; and (3) households should have a minimum share in the project. The analyses imply the following policy suggestions such as ensuring optimal path selection for all parties, avoiding the abandonment of projects, increasing households' sense of ownership and creating accessible finance.

Increasing willingness to pay (WTP) is critical to promote green residential buildings (GRBs), but residents' WTP for GRBs has not yet been well studied. To examine residents' WTP for GRBs and its determinants, a survey was conducted among 511 current GRB occupants living in Sino-Singapore Tianjin Eco-city in China, and latent class regression was used to analyze the heterogeneity of their preferences. Four factors of residential satisfaction were identified—operation and maintenance, comfort and health, architectural and construction quality, and accessibility of GRBs—and these determinants of WTP had different effects on different groups of residents. The mean WTP of the majority (64.5%) of residents was 374 CNY/m2 (about 54 USD), accounting for only 2.2% of the housing price. Four segments of residents with heterogeneous preferences were identified. The dominant segment (accounting for 64.5%) was “Indifferent residents with low WTP”. The second largest segment (accounting for 18.9%) was “Critical residents with 1000 + WTP”, followed by the third largest segment (13.3%) — “High WTP residents driven by comfort and health”, while the smallest segment (3.3%) was “Operation and maintenance-sensitive residents”. The policy implications are that stakeholders should work to enhance the operational performance of GRBs, thereby improving residents’ satisfaction and increasing their WTP.

China has been trying to improve the safety and environmental performances of small coal mines (SCMs) in 2000s through measures of trusteeship and consolidation. The question whether such policy and practice can sustain small scale mining is interesting academically and important practically for China and the world. This paper finds that the Chinese SCM policy has been switched from encouragement to restriction for legal SCMs and from privatization to nationalization in some provinces in the past 10 years. Legal SCMs face pressure to be expanded continuously and to be absorbed or consolidated by large coal mines, which often are state owned. Unexpectedly, financial resources may not be a big constraint nowadays due to availability of private equity investment resources. The paper argues that both the trusteeship and consolidation approaches may only be able to sustain SCMs in the short run. A more sustainable measure is to establish a stable, transparent and inclusive legal and fiscal framework. This paper concludes that those trusteeship approaches may be applicable to restructuring small scale mines in other countries; however, the consolidation practice in China's is unique and thus may not be applicable to others. © 2013 Elsevier Ltd.

The spillover effects of carbon footprint (CFP) labelling are particularly significant in the East Asia Summit (EAS) region which has closely integrated production networks, wide development gaps and predominantly small and medium-sized enterprises. Poor management of the effects would undermine not only the effectiveness of CFP labelling, but also EAS efforts towards economic integration and the narrowing of development gaps. Well-designed labelling schemes, accessible and affordable data and transparent certification processes are essential, as well as capacity-building and engagement of non-labelling countries, in particular LDCs. © The Author 2013. Development Policy Review © 2013 Overseas Development Institute.

The natural gas market in East Asia remains fragmented without a functioning benchmark price to duly reflect the dynamics of demand and supply forces in the region. A functional regional gas futures market, which is highly dependent on the presence of well-developed physical spot trading, is yet to be established. Since the intra-regional pipeline connection is largely non-existent in East Asia, it is the LNG spot cargo trading that is likely to become the basis for the regional gas futures market. This paper offers a novel approach to understanding the development of such a market by analyzing the experience of a different commodity market – the Dojima Rice Exchange (DRE) – and identifying potentially transferrable lessons in the market design and the role of government regulations. Based on the case study analysis, implications for the development of natural gas trading hubs in East Asia are offered and an LNG futures exchange design is put forward.

© 2016 University of Durham and John Wiley & Sons, Ltd. The prevailing architecture of global energy governance is fragmented, uncoordinated and failing to yield the required outcomes. This article examines the argument that the Group of 20 (G20) can provide a leadership role to improve the quality of global energy governance. Energy has characteristics of a global public good and the energy system resembles a complex adaptive system. These observations imply that the global governance of energy should be polycentric and this, in turn, entails a high level of coordination and trust between governing actors. Clubs and networks are institutions that can usefully enhance coordination and trust. In this respect, the G20 can be seen as a club at the hub of networks that can play a key role in improving the global governance of energy and China's presidency of the G20 in 2016 provides a unique opportunity for the G20 to prove its worth.

In response to the importance of assessing both positive and negative impacts caused by biomass utilization for energy, number of initiatives in the world are currently working on development of criteria and indicators for sustainable biomass utilization. Although there is abundant biomass to be utilized in East Asia, it is difficult to say that countries in this region are at forefront of those initiatives. In this context, in order to provide a decision-making methodology to evaluate sustainability of biomass energy utilization in East Asia, the authors were formed as an expert working group in 2007 and since then has been conducting researches to assess its sustainability with the concept of triple bottom line; namely, environmental, economic and social aspects of sustainability. In addition to the development of a methodology and indicators for sustainability assessment for biomass energy utilization, we have field-tested the applicability of the methodology in selected four East Asian countries. This paper firstly explain the methodology the working group developed, secondly the results and lessons learned from the field-tests of the methodology, and thirdly the latest works based on those lessons, aiming at comprehensive assessment of the sustainability of biomass energy initiatives at small to large scale in East Asian countries.

Using firm-level data for China’s state-owned coal mines, this paper examines the impact of privatization, corporatization and debt restructuring of state-owned enterprises on technical efficiency. A stochastic frontier production method is applied to a panel dataset from 2000 to 2007. The simultaneous study of these three measures makes it possible to study individual effects more precisely than otherwise. The study shows that the three reform initiatives are all able to improve technical efficiency in state-owned coal mines. The finding of a significant efficiency improvement from relinquishing state ownership provides an alternative to privatization. The study of debt restructuring and technical efficiency has not been documented in the published literature.

This paper explains the variation in technical efficiency across firms due to transitional reforms. A translog stochastic frontier production method incorporating regional heterogeneity and technical change is applied to a panel data set of coal enterprises in China between 2000 and 2005. The results provide evidence that the privatisation, consolidation, decentralisation and participation of the unemployment insurance system have contributed to improving technical efficiency. The study also shows that neither favourable geological conditions nor an advanced regional economic development level can explain differences in technical efficiency.

Problem Empirical studies on the effectiveness of workplace safety regulations are inconclusive. This study hypothesizes that the asynchronous effects of safety regulations occur because regulations need time to become effective. Safety regulations will work initially by reducing the most serious accidents, and later by improving overall safety performance. Method The hypothesis is tested by studying a provincial level aggregate panel dataset for China's coal industry using two different models with different sets of dependent variables: a fixed-effects model on mortality rate, which is defined as fatalities per 1,000 employees; and a negative binominal model on the annual number (frequency) of disastrous accidents. Results Safety regulations can reduce the frequency of disastrous accidents, but have not reduced mortality rate, which represents overall safety performance. Discussion and summary Policy recommendations are made, including shifting production from small to large mines through industrial consolidation, improving the safety performance of large mines, addressing consequences of decentralization, and facilitating the implementation of regulations through carrying on institutional actions and supporting legislation. Impact on industry Until recently, about 4,000 coal miners perished annually in China, demonstrating that workplace safety in China's coal industry is an urgent and important issue. This research provides evidence that safety regulations have asynchronous effects and identifies the priorities in improving safety in China's current coal mining. This may assist the Chinese government to design more effective safety improvement policies and improve the effectiveness of safety regulations and safety performance.

© 2015 Elsevier B.V. The energy market integration (EMI) in East Asia has been carried out for over a decade. Despite the efforts exerted by countries in the region, little has been known about the EMI progress. This paper innovatively applies the dynamic principal component analysis to measure the EMI and its evolution in East Asia between 1995 and 2011. The EMI is measured by using information from all the five dimensions that have been identified in the literature: (1) energy trade liberalisation; (2) investment liberalisation; (3) development of energy infrastructure and its associated institutional arrangements; (4) domestic market openness; and (5) energy pricing reform. Results show that although significant progress has been made for EMI in East Asia, there are significant cross-country disparities in different aspects. Moreover, we show that further efforts towards EMI in general should focus on liberalising national markets first, then phasing out fossil fuel subsidies and finally, liberalising investment regime since national market liberalisation is the least developed dimensions. Certain countries that lag behind in EMI need to learn from either their past experiences or from other nations and focus their efforts on their relatively weak dimensions.

With the continuous growth of economy and population, electrification, industrialization, and urbanization, Association of Southeast Asian Nations (ASEAN) energy demand will be more than tripled during 2010–2035, which will create huge pressure on energy supply, energy security, and the environment. Energy efficiency, which offers a possible measure to mitigate the demand shock, is particularly important in ASEAN because of the dramatic energy demand growth and vast energy saving potential. Many ASEAN countries have implemented various measures to promote energy efficiencies, with Thailand, Singapore, and the Philippines being the leaders. The development of energy efficiencies in ASEAN members, in terms of sectoral goals, action plan, policy measures, activities, and achievements, however, is unbalanced, which offer opportunities for regional cooperation. Good practice in some ASEAN members in the areas of goals, policy instruments, standards, labeling, and financing offer lessons for the others. Regional cooperation has been present in the past few decades fueled by ASEAN dialog countries and is further boosted by the building of ASEAN Economic Community. The considerable economic benefits from the cooperation will further sustain the energy cooperation. Keywords: energy efficiency; energy intensity; energy demand; energy outlook; ASEAN; Southeast Asia

© 2015 Elsevier B.V. This paper adopts the Malmquist index approach to investigate multi-product energy trade efficiency and its determinants from an empirical perspective. Using trade statistics of coal, oil and gas of 40 countries over the period of 1995 to 2008, we found that the efficiency of bilateral energy trade ranged between 0.26 and 0.35 when imperfect substitution between different energy products is taken into account. This measure is significantly lower than those obtained from traditional gravity models. It suggests that the ability of cross-product substitution affects trade efficiency improvement which results from regional market integration and related trade policy. The results provide useful insights on predicting the pattern of future energy trade and hence have important implications for relevant countries to prioritize product-specific trade policies.

Copyright © 2018 Inderscience Enterprises Ltd. Development of policy for variable renewable energy (VRE), such as wind and solar power, could be difficult in developing countries that have limited capacity, limited technical, and fiscal resources. Sri Lanka is such a case. Although Sri Lanka has a potential to develop VRE, the development was neither sufficient nor smooth. This study explores the development of VRE in the 2000s and analyses the impacts of the cost reflective feed-in-tariffs (FITs). The study finds that VRE public policy in Sri Lanka can be improved in a number of ways: better coordination among government agencies; technology specific policy and accommodation of cost dynamics; and redesign of subsidy policies. Generally, the governance mechanism suggested in this research is an innovated structure to coordinate multiple government agencies by specifying policies according to technologies and redesigning the subsidy structures by accommodating the cost dynamics.

This paper attempts to inform policy makers and legislators on how to set energy efficiency standards and labelling (S&L) regulations. It draws lessons from the literature on S&L regulations in the Asia-Pacific region and from practical experience in drafting the S&L regulations for Brunei Darussalam. The paper proposes necessary components for effective S&L regulations, as follows: clear liabilities, authoritative administration, open principles for technical systems, and enforceable mechanisms. It also recommends some key issues in good practice toward effective S&L regulations, such as policy making in advance, customised legislation, inclusive and transparent legislative procedure, and flexibility in the legislation. © 2014 Elsevier Ltd.

Using the panel data of 27 provinces between 1978 and 2008, we employed a instrumental regression technique to examine the relationship between economic growth, energy demand/production and the related policies in China. The empirical results show that forming a cross-province integrated energy market will in general reduce the response of equilibrium user costs of energy products to their local demand and production, through cross-regional energy transfer (including both energy trade and cross-regional reallocation). In particular, reducing transportation costs and improving marketization level are identified as two important policy instruments to enhance the role of energy market integration. The findings support the argument for a more competitive cross-province energy transfer policies and calls for more developed energy connectivity and associate institutional arrangements within China. These policy implications may also be extended to the East Asia Summit region where energy market integration is being actively promoted. © 2014 Elsevier Ltd.

This report presents an updated and expanded review of reforms in China’s electricity sector. It aims to examine the impact of reforms on competition, deregulation, and electricity market integration in China. The findings are used to draw policy implications for electricity market development, particularly the promotion of energy market integration (EMI).

As This paper uses the data envelope analysis method to investigate the Malmquist index-based gravity relationship between bilateral energy trade flows and their determinants throughout the world. Using a balance panel data of 40 countries between 1995 and 2008, this paper shows that market integration will increase energy trade by improving trade efficiency between trade partners, though allowing for a flexible substitution between different energy products tends to weaken these effects. This result highlights cross-product substitution and its implications for the aggregate energy trade pattern, providing insights on the importance of prioritising product-specific trade facilitating policies.

This paper uses a general method of moment regression technique to estimate an energy demand function with a dataset covering 71 countries between 1965 and 2010. The estimated results show that countries undergoing rapid economic growth may show relatively higher income and price elasticities in the long run. The higher income elasticities and lower price elasticity in the short run of rapid growing countries may impose pressure on energy demand in the domestic and international markets. Energy market integration can help to reduce such pressure by smoothing energy demand through lowering its income elasticity and creating a flexible energy market through increasing its price elasticity. These findings have important implications for forecasting energy demand and promoting international cooperation in East Asia. Keywords: Economic development, Energy market integration, Energy demand, East Asia

Biofuels are being supported by many governments for a range of perceived benefits including improved domestic energy security, reduced greenhouse gas (GHG) emissions when compared with fossil-fuel counterparts, and economic development and employment generation, particularly in rural areas. Life-cycle, cost-benefit, and systems analyses, however, indicate that the expansion of biofuels can have complex effects on, and interactions with, land use and food and fuel prices. This article reviews the economic, environmental, and social benefits and costs of biofuels using experiences from developing countries in Asia. The review reveals the following: (1) biofuels are generally not economically competitive with fossil fuels and government support, though prevailing, is costly and questionable. (2) Although biofuels are generally viewed to be a threat to food security, if properly managed, their development could lead to improved productivity in the agriculture sector over the long term with benefits for rural livelihoods and food security. (3) Even though reducing GHG emissions is a key driver for the development of biofuels, effects in terms of soil quality, biodiversity, and water quality must also be assessed; the environmental benefits of biofuels are debatable and depend on a range of fuel-specific factors, management, and agricultural practices. On the basis of this assessment a range of strategies are suggested to further improve the sustainability of biofuels in Asia. WIREs Clim Change 2013, 4:497–511. doi: 10.1002/wcc.241 This article is categorized under: The Carbon Economy and Climate Mitigation > Benefits of Mitigation Climate and Development > Decoupling Emissions from Development

Energy Market Integration (EMI) has been a goal for many regions, including the European Union and East Asia, for quite a long time. How it could play a role in facilitating equitable economic growth among a group of countries remains an empirical question that this paper will attempt to answer. The paper uses economic convergence analysis (including both the σ-convergence and β-convergence approaches) to examine the impact of EMI - measured by two newly constructed indexes (namely, the energy trade index and the energy market competition index) - at the country level on dynamic economic growth paths across countries. Its special interest lies in informing policy making related to promoting EMI. The results show that countries involved in a more integrated energy market are more likely to reduce their income disparity, suggesting that EMI may help the region to achieve equitable growth through the accelerated economic development of lagged economies. © 2012 Elsevier Ltd.

This paper discusses the development of and policy towards biodiesel fuel (BDF) in the East Asia Summit (EAS) region (hereafter East Asia), with a focus on activities related to harmonizing BDF standards. To minimize problems with engines arising from the use of BDF, most EAS countries have established national BDF standards. However, these diverse standards cause barriers for BDF trade, and act against the regional interest in maximizing benefits from BDF production and utilization. Therefore, the East Asian policy-makers decided to harmonize BDF standards and a regional benchmark standard has been published. Through a comparative review of existing national standards against the benchmark, it finds that the harmonization is beneficial economically, and feasible technically, but stalled practically due to a lack of political determination. The key message from this paper is a call for political determination in East Asia to implement the harmonization. The findings of this paper may supplement the literature, enhance understanding of the East Asian case, and provide lessons and implications that may be helpful in advancing similar harmonization elsewhere. © 2013 Elsevier Ltd.

This paper argues that the use of coal can be reconciled with the environment. In the empirical work, three environmental pollutants are considered, using two alternative methods with two sets of Chinese data. CO2 emissions could not be studied because of data limitations. The hypothesis that the use of coal can be reconciled with the environment through declined emission intensity is confirmed by the empirical tests. The decreases in emission intensity are driven by the application of clean coal technologies, which can be encouraged by appropriate regulations and incentives and have both environmental and economic benefits. Therefore it is critical that appropriate legal and fiscal regimes be formulated and that the development and utilization of high-efficiency and clean coal technologies be promoted. The paper also suggests that the use of coal could continue to be reconciled with concern for the environment, even while considering CO2 emissions.

Energy Market Integration (EMI) has been pursued by East Asian countries in recent years, but how it could play a role in facilitating economic growth of countries in the region remains to be an empirical question. This paper uses the economic convergence analysis (including both the σ-convergence and β-convergence approaches) to examine the impact of EMI - measured by two newly constructed indexes (namely, the energy trade index and the energy market competition index) - at the country level, on dynamic economic growth path across countries, with a special interest to inform policy makings related to promoting EMI among East Asian countries. The result shows that a more integrated energy market may significantly reduce income disparity across countries and thus help poor countries to catch up with rich countries in economic development. Moreover, a comparison among the three regions including EU, NAFTA and EAS shows that EAS countries are more likely to achieve economic convergence along with the construction of EMI process. An important policy implication is that less developed countries in the EAS region can increase benefits from actively participating into the EMI process.

This paper discusses the development of and policy towards biodiesel fuel (BDF) in the East Asia Summit (EAS) Region (hereafter East Asia), with a focus on activities related to harmonizing BDF standards. It finds that the EAS countries have actively promoted the development of BDF for a variety of reasons. To minimize problems with engines arising from the use of BDF, most EAS countries have established their national BDF standards. However, these diverse standards cause barriers for BDF trade and act against the regional interest in maximizing benefits from BDF production and utilization. Therefore, the EAS policy makers decided to harmonize BDF standards, and a regional benchmark standard has been published. Through a comparative review of existing national standards against the benchmark, it finds that the harmonization is beneficial economically and environmentally, and is technically feasible but practically stalled due to the lack of political determination. Therefore, among a few policy implications, the key message to deliver is a call for political determination to implement the harmonization in the EAS region. Since harmonization of BDF standards has been tried in other regions, the findings of this paper may supplement the literature, enhance understanding of the EAS case, and provide lessons and implications that may be helpful in advancing similar harmonization elsewhere.

In order to provide decision-making methodology to evaluate sustainability of biomass utilisation in East Asian context, an expert working group has been formed since 2007 and has been conducting researches to assess the sustainability of biomass utilisation with the concept of triple bottom line focusing on environmental, economic and social pillars of sustainability. Based upon the methodology developed in 2008, the WG had conducted four pilot studies in India, Indonesia, Thailand and the Philippines in 2010 to field-test the methodology developed and investigate the sustainability of various feedstocks utilisation for biomass energy. This paper aims at introducing the sustainability assessment methodology the WG developed and addressing experiences and lessons learned through the pilot studies.

This paper discusses carbon footprint (CFP) labeling activities in the East Asia Summit (EAS) region with a focus on their spillover effects on less developed countries (LDCs). Due to increased and increasing economic integration, implementation of CFP labeling schemes in one country will have significant impact on others. The impact is particularly significant for LDCs in the EAS region because: the EAS production networks are highly integrated, which provide necessary condition for the spill-over effects to be generated; LDCs generally lack the capacity to measure and label CFP of their products; and exports from LDCs often produced by relatively small producers. However, the effective inclusion of LDCs in labeling schemes may offer more and cost-effective opportunities for carbon emission reductions. The presence of spillover effects means that countries that are implementing carbon labeling schemes need to take stakeholders outside of their boundaries into consideration. The disadvantages of LDCs can be reduced by well designed carbon labeling schemes, by innovative solutions to low cost data collection and certification, and by technical transfer, training and capacity building.

This paper argues that coal and its industry is promising. It is found that the Western European (including the British) case has been misunderstood and the US case shows a developing coal industry under increasing levels of environmental pressure. The demonstration of the declining emissions intensity of coal provides an additional mean of reconciling the development of the coal industry with the environment. In the long term the enforcement of environmental regulations can benefit the coal industry in several ways, and the alternatives to coal are not yet available in a sufficiently large scale. Based on the positive prospects of coal, issues related to climate change, clean coal technology and energy policy are discussed.