A general equilibrium perspective on energy and environmental policies in ASEAN

Concern about fossil fuel resource depletion in the early 1970s has led to the development of theoretical and applied economic models of energy-economy linkages with a detailed representation of the energy market. More recently, the period of sharply increasing crude oil prices from 2004 and followed by a phase of sharply declining crude oil and petroleum product prices at the end of 2008 has reinvigorated energy-economy modeling efforts. Primary focus, however, no longer concentrates solely on the representation of scarce energy resources and their impacts on the economy. The argument that environmental degradation will reduce future benefits from economic activities has been widely accepted, so much so that integrated energy{u00AD} environmental strategies and policies are required which need to take into account the complex interactions between climate, economic, and social systems. As such, the first goal of this thesis is to develop methodologies to model economic activities in six selected member countries of the Association of Southeast Asian Nations (ASEAN) and link these activities to the environment. The second goal is to identify and understand the impact of energy and environmental reforms in these countries. With the aim of improving the environment,the success of each reform implementation largely depends on its effect on economic development and welfare distribution. In order to achieve the first goal, the thesis develops an inte11rated social accounting matrix (SAM) for six member countries of ASEAN, namely Indonesia, Malaysia, Philippines, Singapore,Thailand, and Vietnam,called the ASEAN-SAM. The thesis then uses the ASEAN-SAM to construct a unique static multi-sector, multi-household, and multi-country computable general equilibrium (CGE) model, called the Inter-Regional System of Analysis for ASEAN (IRSA{u00AD}ASEAN) model. The model examines the relationship between production activities,household welfare, and pollution to capture the energy-economy-environment links. There are two major highlights of the IRSA-ASEAN model: first, it allows the exploration of the immediate impacts of a policy in one country on all other countries in the region; and second, it endogenizes various revenue recycling mechanisms, whether through increased government expenditure, lump sum cash transfer to households,and/or indirect tax reduction to industries. The thesis fulfils the second goal by applying the lRSA-ASEAN model to look at the impact of an energy subsidy reduction and a carbon tax implementation. In the case of an energy subsidy reduction,the model eliminates existing energy subsidies,namely fuel subsidies in Indonesia and Malaysia as well as electricity subsidy in Indonesia. The thesis finds that the elimination of energy subsidies is an effective measure to reduce pollution in the form of carbon dioxide (CO,) emissions, generates economic expansion in these countries, and is progressive in nature. In the second case, implementing a USO 10 per ton of C02 emissions sales tax on coal, petroleum products, and manufactured gas is also an effective measure to improve the environment in terms of C02 emissions reduction. However, this environmental improvement comes at a cost as gross domestic product (GOP) contracts in some countries if a carbon tax is uniformly applied. Vietnam stands to lose the most, while Philippines, Singapore, and Thailand are slightly adversely affected. Indonesia's and Malaysia's economies, on the other, actually expand. In terms of distributional impact, a carbon tax is strictly progressive in Vietnam and strictly regressive in Singapore. For Indonesia, Malaysia, Philippines, and Thailand a carbon tax is progressive for those below the 70"' to 90'" percentile income group, depending on the countries, and regressive for those In the right-end tail, or higher, income group. The thesis finds that both an energy subsidy reduction and a carbon tax implementation are both effective measures to Improve the environment. However, in terms of economic development, a carbon tax implementation appears to be a second-best policy alternative to an energy subsidy reduction, with the latter promoting a more efficient allocation of resources. The thesis also finds that recycling mechanisms do not affect the overall GOP and co, reduction differently, but they do affect greatly the distributional impact of these policies. As such, energy and environmental reforms do not necessarily conflict with development and equity objectives. Nevertheless, a policy in these areas must be carefully designed to account for acceptability, feasibility, and utility

Energy Security in Indonesia

The issue of energy security has been a subject of discussions in Indonesia for a long time. However, until the end of the 1990s, it had never been at the centre of the country's policy debates. The sharp depreciation of Rupiah during the 1997/98 Asian financial crisis and increase in the price of crude oil in the early 2000s made it very expensive to control domestic prices of fuel and electricity through subsidies. With approximately 43 percent of the country's energy sources derived from crude oil, the amount of government spending on energy subsidies increased from almost nothing in 1996 to approximately 21 percent of total government expenditure in 2005. Whether the government could guarantee Indonesia's energy needs at an affordable price, and how to achieve it, has therefore become one of the hottest policy issues. This paper probes reasoning behind the current energy security policies and discusses some of the main policy challenges, paying special attention to the emerging interest on climate change issues.energy, climate change and Indonesia

When people and environment collide in the tropics

South East Asia and tropical Australia are undergoing major changes, which are likely to intensify in the next decade. Booming economies in China and India, and potentially other countries, are likely to drive exponential increases in demands for natural resources. Climate change is likely to have severe impacts, ranging from those associated with changes in severity of cyclones, to those associated with sea level rise in shallow oceans. Land cover transformations, already a common feature in many parts, could well decimate biodiversity. Human disease outbreaks, which have already caused alarm and economic disruption, could remain a feature of the region. The challenges are immense; it is timely to reflect on transforming forces and our responses. In May 2006, an international symposium was held in Darwin in the Northern Territory of Australia, to discuss these very issues. This publication features papers by leading researchers and policy makers on the following themes:'Drivers of Change; 'Values & Livelihoods; 'What Are the Changes and Their Impacts? The editors of this book all have wide experience in this area. Dr Natasha Stacey is an anthropologist with expertise in natural resource management in the Asia-Pacific region. Dr Guy Boggs has focused his GIS and modelling research on the use of technologies for understanding changes in spatial patterns of vegetation distribution, erosion and runoff response. Prof Bruce Campbell works in the tropics on four continents from humid rainforests to dry woodlands and is focussed on achieving better outcomes for conservation and development and improving the well-being of people through natural resource management and use. Prof Will Steffen has research interests which span a broad range within the field of Earth System science.Setting the scene -- Gerritsen : A resilient future for Northern Australia? People, economics and policy issues -- Resosudarmo : Setting the scene : driving forces of change in Southeast Asia -- Drivers of change -- Steffen : Climate change in the tropics -- Srivastava : Securing India's energy future : what does the world have to worry about? -- Tay : Trade and environment in Southeast Asia -- Williams : Food production systems and policy development in Southeast Asia -- Values and livelihoods -- Armstong et al : Indigenous land and sea management and sustainable business development in Northern Australia -- Garnett : Enterprise development by indigenous communities using natural resources : where do the benefits go? -- Campbell et al : Do local people and the environment collide? Who drives environmental change? -- What are the changes and their impacts? -- Cunningham : Culture, livelihoods and conservatism -- Sodhi and Brook : Biodiversity crisis in Southeast Asia -- Wright et al : The future of Southeast Asian forests and their species -- Bunn : Northern Australia -- all that water ... going to waste? -- Bowman : Time's up for Australia's last frontier.Jira Ticket : CDU-227 : Collection Development Manager made the decision that for the books that have this message " This book is copyright. Apart from any fair dealing to the purpose of private study, research, criticism or review as permitted under the Copyright Act, no part may be reproduced, by any process, without written permission. Enquiries should be made to the publisher, Charles Darwin University Press, Charles Darwin University, Darwin NT 0909, Australia" in the front they would treat CDU NTU Press as the copyright holder based on this statement. CDU Press have given permission for these to be added to our site but no additional licencing terms provided. That is a reasonable risk management based decision