MANAGEMENT OF ENERGY BALANCE BY ASEAN COUNTRIES

Abstract

The main objective of this thesis is to analyse demand-side and supply-side energy management policies of ASEAN countries, and to address issues and development of current concerns taking place within and outside ASEAN. The relationship between energy and economy is widely regarded as a complicated one. I attempted to obtain a better understanding of the relationship for fulfilling my main objective. I have conducted an energy intensity and elasticity study of 5 ASEAN countries - Indonesia, Malaysia, Philippines, Singapore and Thailand. Results showed that economic growth and energy consumption are closely related through industrial structure. There is a basic pattern of energy consumption, which corresponds to economic development. Simulation results generated from an integrated ASEAN Computable General Equilibrium (CGE) model showed that the ASEAN region as a whole will benefit from the removal of import tariffs on energy products traded within ASEAN countries. In addition, the model illustrated neatly the energy-economy interaction of ASEAN countries in a general equilibrium framework. The conclusions and recommendations arise from the study of energy-economy interaction, energy profile, energy balance management issues and current concerns of ASEAN countries. ASEAN countries share the common long-term energy policy objectives of energy diversification, intensification, energy conservation and efficiency, commercialisation and environment-friendly energy development. However, the lack of a regulatory framework emphasising fairness, transparency and flexibility as welt as the lack of institutional structures for the mobilisation of capital in some ASEAN countries limit foreign and private sector investment in energy infrastructure and technology. The immediate concern and task of ASEAN governments is to push for structural reform and effective functioning of the energy markets to attract foreign and private sector investment in energy infrastructure and technology development. It is also necessary for ASEAN to have long-term energy balance management policies such as putting in place long-term oriented R & D and technology management policies, intensifying efforts on regional and international co-operation in energy matters and environmental protection. ASEAN countries recognised and supported continued concerted efforts towards regional and international co-operation in energy matters. The establishment of ASEAN-EC Energy Management Training and Research Centre (AEEMTRC) is a testimony to that. The production, distribution and use of energy result in a wide range of adverse environmental effects. However, these adverse effects cannot be completely eliminated but can be reduced as reducing environmental pollution is often costly and must be weighed against the economic benefits which energy provides. That is, the challenge to all countries today is to strike a balance among the goals of sustained economic growth, energy security and environmental protection. From the analysis, it is clear that the government plays a very important role in sustaining and balancing economic, energy and environmental development. vii All said, given their short history of economic and social development, ASEAN countries should be commended for their current efforts to ensure energy security vital to supporting economic growth and meeting aspirations for a higher standard of living. Nevertheless, we should bear in mind that the road to energy security is a long and difficult one.