SGRA in English

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Manila Report in Waseda (SGRA Kawaraban Essay #317)
Max Maquito, Ph.D.
Senior Lecturer, School of Labor and Industrial Relations (University of the Philippines)
Researcher, Sekiguchi Global Research Association (SGRA)

The 42nd SGRA Forum was held in collaboration with Kita Kyushu University on October 29, 2011 at Waseda University. I helped in the translations, and was in charge of the panel discussion at the end.

The main issue of this forum was about how to secure energy in order to support high economic growth while protecting the environment. In this connection, enhancing energy efficiency was a common point of discussion by the presenters. In enhancing energy efficiency, adjustment of the energy supply to meet demand becomes possible, while reducing the burden on the environment.

By the way, in the energy field, “3E”, a key term in the forum, seems to stand for
Energy Security, Economic Growth, and Environmental Protection. In my field of
development economics, I have used 3E to refer to Efficiency + Equity + Environment
(please refer to the Manila Report 2010 Spring).

Energy efficiency was such a common point of the discussions/presentations that I
prepared a slide compiling the energy efficiency of 120 countries (where energy
efficiency = GDP divided by the total energy consumption)—please see slide. Energy
efficiency seems to be on average not significantly different between low and high
income countries.

Mr. Kritsanawonghong of Thailand and Mr. Ireland of Australia presented an energy
conservation method which utilized a market-based mechanism for the environmental
evaluation of buildings and electric devices. The actual introduction of such a
mechanism led to increasing the environmental awareness of users, and improving
energy efficiency. However, even though it is market-centered, the government plays a big role in setting up and diffusing such a system.

Speaking of markets, the correct pricing of energy resources and electricity is important. Ms. Balbarona of the Philippines reported that the electricity rates of the Philippines have overtaken that of Japan as being the highest in Asia. She explained that the distributing company passes all of the cost to the user, and that the Philippine government, unlike neighboring countries, does not provide substantial subsidies for electricity rates. Owing to this, various energy conservation movements naturally take place, such as the project headed by Ms. Gilles, wherein energy conservation was achieved in a Manila building through the creative balancing of daily usage of electricity. Mr. Ireland added that the Australian government’s subsidy on coal has led to the excessive use of this resource.

Next, some methods were reported for improving energy efficiency, which emphasized the importance of a low-cost and low-income (the poor) perspectives. Ms. Paramita of Indonesia raised the concept of urban optimal density. There is the thinking that for the sake of improving energy efficiency various resources should be concentrated in the city, but there should also be the thinking that, once the urban optimal density has been exceeded, problems such as slums arise, wherein efficiency begins to actually go down. Mr. Faisal of Indonesia emphasized that his country is not an exemption, since it has been promoting a concentrated-type of urban development, but what is really needed in fact is “reversed urbanization”. Incidentally, in the first joint forum of SGRA and Kita Kyushu University last year, I referred to this as “ruralization”. The urban problem should not be considered as separate from the rural sector. In addition, Ms. De Asis of the Philippines shared stories of recycling projects in the field of architecture such as the use of containers and plastic bottles. In the Philippines, there are projects such as largescale wind farms (first in Southeast Asia) and environmentally friendly shopping malls, but these are very costly. It is doubtful whether such technologies are really appropriate for developing countries such as the Philippines. Architecture based on recycling seems to have started in the countryside. Mr. Ireland pointed out that the rural-urban gap is
also an important problem in developed countries such as Australia and Japan.

Another method that was mentioned for improving energy efficiency was the development of renewable energy. Unlike oil, coal, or uranium, renewable energy relies on unlimited energy resources; hence, the risk of resource costs going up is practically non-existent. In fact, as technologies progress, it is highly possible for costs to go down. The question as to whether renewable energy could replace nuclear energy in the medium- to long-term, was posed to Mr. Iyadurai of India and Ms. Balabarona of thePhilippines, who reported on renewable energies in their respective countries. The two countries also shared the same experience of forbidding the use of nuclear power plants that were being constructed. They shared the opinion that citizen sentiments against the use of nuclear power would continue to be strong. Mr. Kritsanawonghong added that the situation appears to be the same in Thailand. However, there were also participants in the forum who stated that nuclear power will not completely go away.

The above are some of the examples by which each Asian country grappled with the issue of improving energy efficiencies. Taking one step back, with the objective of promoting the consideration of an East Asian regional perspective, I shared with the forum participants a certain Japanese initiative. This initiative is particularly significant given that for the past few decades Japan has not come out with a compelling strategy for East Asia. I first came to learn about this initiative from a Fuji Television program called Prime News Live, where it was referred to as the “Asia-Pacific” Electricity Network” or “The Energy Version of the Trans-Pacific Partnership (TPP)”. –please see slide
Behind this initiative was the unstable electricity supply situation caused by the Great East Japan earthquake of March 11th. This initiative was proposed by the Japan Creation Council (Nihon Sousei Kaigi), which was headed by Mr. Hiroya Masuda, former governor of Iwate Prefecture (one of the seriously stricken prefectures of March 11th). The issues being addressed by this initiative are the ensuring of energy security, the improvement of the international competitiveness of industries, and environmental sustainability. The ultimate objective is the establishment of a renewable energy state.

This initiative is very ambitious but I think it promotes a balanced integration of East Asia (together with Oceania). I am hoping that it could also be a policy for extricating Japan from its decades of debilitating despair. I refer to such an initiative as regional shared growth, which is a concept based on the Flying Geese Model of Development that I have learned from Japan. For many decades now, Japanese firms going overseas have tended to concentrate on selected countries. This is very disappointing since it actually runs opposite to the diversified-type of division of labor that Japan has earlier espoused. I have actually raised the alarm against such type of division of labor many years ago. No matter how many crises occur due to globalization or climate change, nobody seems intent on learning the lessons.

The current initiative strikes a beautiful image in my mind’s eye: the electricity network flies southward, jumping from one island to another, connecting the three East Asian archipelagoes of Japan, the Philippines, and Indonesia, and merging with its sister ASEAN power grid from the western side.

At long last, an East Asian strategy has come out from Japan that is truly Japanese in spirit.

Notes:
1. I would like to express my heartfelt gratitude to Professors Soichiro Kuroki and Weijun Gao for inviting to Kita Kyushu University’s exchange program three graduate students from the University of the Philippines (i.e., Stephanie Gilles, Juvy Balbarona, and Josefiina De Asis) on recommendation by Professors Edwin Quiros (Department of Mechanical Engineering, UP) and Mike Tomeldan (College of Architecture, UP)
2. I would also like to express my thanks to Professors Hidetoshi Nakagami and Hiroto Takaguchi for emphasizing the importance of an energy policy that puts weight on a long-term perspective and traditions.