These are just some of the more glaring scenes set in the Asia-Pacific region, where several countries are facing the worst energy crisis in years — and grappling with the growing discontent and instability caused by the domino rises in the economy. cost of living.
The sense of crisis is palpable in Sri Lanka and Pakistan. Public anger has already caused a wave of ministers in Colombo to resign and contributed to the demise of Imran Khan as prime minister in Islamabad.
Elsewhere in the region, the signs of trouble may be less obvious, but they could have far-reaching consequences. Even in relatively wealthy countries, such as Australia, economic concerns are starting to emerge as consumers feel the pinch of higher energy bills.
But it is India’s experience, where power demand has recently hit record highs, that illustrates most clearly why this is a global – rather than regional – crisis.
After suffering widespread outages amid record temperatures, the world’s third largest carbon emitter announced on May 28 that state-run Coal India will import coal for the first time since 2015.
What is causing the problem?
According to experts, the root of the problem lies in a growing mismatch between supply and demand.
But as countries begin to move out of the pandemic, demand for fuel is rising – and sudden competition is pushing coal, oil and gas prices to record highs.
“Energy demand has recovered from the coronavirus quite quickly and faster than supply,” said Samantha Gross, director of the Brookings Institute’s Energy Security and Climate Initiative.
“So we saw high prices even before the Russian invasion of Ukraine (but then there was) a real shock to the energy supply. Several measures taken after that pose a real challenge to the energy supply worldwide.”
“If you’re a country, especially an emerging economy like Sri Lanka, that has to buy those commodities, buy oil, buy natural gas, it’s a real struggle,” said Mark Zandi, chief economist at Moody’s Analytics.
“You pay a lot more for the things you need, but the things you sell haven’t gone up in price. So you spend a lot more money trying to buy the same things to keep your economy going.”
Poorer countries that are still developing or newly industrialized are simply less able to compete with rivals with more entrenched pockets — and the more they have to import, the bigger their problem will be, said Antoine Halff, adjunct senior researcher at Columbia University’s Center on Global Energy Policy.
“So Pakistan definitely fits there. I think Sri Lanka fits there too,” he said. “They are faced with the price drop, but also with the supply pressure. They have to pay more for their energy supply and in some countries, such as Pakistan, they even have a hard time purchasing energy.”
Canaries in the Coal Mine
This dynamic is behind the increasingly chaotic scenes that take place in those countries.
Pakistan has also had to shorten its working week – from six back to five days – although that could only make the situation worse. The only recently introduced six-day workweek was supposed to improve productivity and stimulate the economy.
Instead, daily power cuts for hours on end have ravaged the country of 220 million people for at least a month and malls and restaurants in Pakistan’s largest city, Karachi, have been told to close early to save fuel.
And any idea that such problems are only a matter for poorer, less developed countries is dispelled by the experience of Australia – a country that has one of the world’s highest levels of global median wealth per adult.
Since May, the “Lucky Country” has been without 25% of its coal-based energy capacity — in part due to planned maintenance outages, but also because supply disruptions and rising prices have caused unplanned outages.
Like their counterparts in Pakistan and Bangladesh, Australians are now being urged to save. Energy Secretary Chris Bowen recently asked households in New South Wales, including Sydney, not to use electricity for two hours every night.
A bigger problem ahead
How these countries react could cause an even bigger problem than rising prices.
Under public pressure, governments and politicians may be tempted to return to cheaper, dirtier forms of energy such as coal, regardless of the effect on climate change.
And there are signs that this may have already begun.
Both measures have been criticized by those who accuse the government of betraying its commitment to renewable energy.
In India, a country of 1.3 billion that depends on coal for about 70% of its energy generation, New Delhi’s decision to increase coal imports is likely to have an even more profound environmental impact.
Scientists say a drastic reduction in coal mining is necessary to limit the worst effects of global warming, but this will be difficult to achieve without the support of one of the world’s largest emitters of carbon.
“Any country, be it India, be it Germany or the US, if they double on any fossil fuel, it will eat up the carbon budget. That’s a global problem,” said Sandeep Pai, senior research leader for the Center for Energy Program Strategic and International Studies.
While Pai said India’s decision could only be a temporary “response to the crisis”, it would have a significant impact on the fight against global warming if countries continued to rely on coal in a year or two.
“If these actions take place, it will eat up the carbon budget already shrinking in India and the 1.5 or 2 degree target will become increasingly difficult,” Pai said, referring to the Paris climate accord’s goal of limiting the rise in global warming. maintain average. temperature between 1.5 and 2 degrees Celsius.
As Pai put it, “India’s scale and size and demand means that if it really doubles on coal, we’re going to have a very serious problem from a climate point of view.”
Iqbal Athas has reported.