This week’s DRI Asia Review focuses on energy and climate change in Asia-Pacific. We offer you an analysis of what Europe’s deepening energy crisis means for India and other major developing countries in the region and look at what a leading Japanese newspaper expects Prime Minister to-be Kishida Fumio to do when it comes to disaster prevention and mitigation. Drawing on a DRI Monthly Report, we briefly flag how India is faring when it comes to combatting climate while setting its economy on a path of mend. And finally, we ask: Is climate change an existential risk, and if not why call it so?
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DRI Asia Review
October 1, 2021dri.thediplomat.com
Asia-Pacific’s Climate and Energy Woes
What lessons does Europe’s energy crisis hold for India?
Japan’s ruling party elects new leader: What must he do for disaster relief planning?
India’s economy and climate commitments: Squaring the circle?
Climate change as existential risk?

Welcome to the newsletter of Diplomat Risk Intelligence, the research and consulting division of The Diplomat, your go-to outlet for definitive analyses from and about the Asia-Pacific.

This week’s DRI Asia Review focuses on energy and climate change in Asia-Pacific. We offer you an analysis of what Europe’s deepening energy crisis means for India and other major developing countries in the region and look at what a leading Japanese newspaper expects Prime Minister to-be Kishida Fumio to do when it comes to disaster prevention and mitigation. Drawing on a DRI Monthly Report, we briefly flag how India is faring when it comes to combatting climate while setting its economy on a path of mend. And finally, we ask: Is climate change an existential risk, and if not why call it so?

THE BIG ONE

Europe’s Energy Crisis: Lessons for India
IAEA Director General Yukiya Amano tours the International Thermonuclear Experimental Reactor complex in Saint Paul-les-Durance, during his official visit to France, September 6, 2016.
— Conleth Brady, IAEA

The following is a guest post by Niharika Tagotra. Tagotra is a nuclear physicist and an energy consultant with a PhD in international relations.

European countries are facing a major energy crunch as the prices of natural gas in the European markets has risen by nearly 250 percent since January this year. By the second week of September, gas prices had hit a record high of $93.31 megawatt-hour, translating into very expensive electricity supplies across the continent. Energy shortages and ensuing power cuts have already caused shortfalls in production and supplies. The fertilizer industry in the United Kingdom is particularly hit, with natural gas shortages causing the closure of two large fertilizer plants in the country, prompting food supply concerns. Other European countries like Germany and Poland are also facing massive power outages. The situation has evolved from what seemed like a regional crisis to a global one. Prices of liquefied natural gas (LNG) in the United States have soared to a seven year high. Importing countries in the Asia-Pacific are already paying record high prices for natural gas imports, although countries like Japan and South Korea are protected through long-term gas supply contracts. The shortage promises to hit gas-based steel and aluminium industries in China and causing prices of those commodities to skyrocket.

The situation has prompted wide-ranging concerns regarding the reliability of the global energy transition that is underway and holds important lessons for developing countries with largescale energy needs such as India. Currently, India imports nearly 50 percent of its gas requirements, which powers its electricity and fertilizer sectors. The country is the world’s fourth largest importer of LNG since 2011, and in its efforts to shift to a low-carbon source, the Indian government has announced plans of increasing the share of natural gas in India’s total energy mix, from the current 6 percent to 15 percent by 2030. Any external shocks to the global gas markets could cause stress in the country’s energy and food security segments, delivering a blow to an economy that is still recovering from COVID-19 pandemic aftereffects. It is in this context that India will need to carefully watch the unfolding global gas crisis and evaluate its energy options.

The energy crunch witnessed across Europe was years in the making. By 2021, several factors contributed to the unfolding crisis. Europe continues to be massively dependent on natural gas supplies from Russia, which is the continent’s largest supplier, thus making it susceptible to the geopolitics of Russian gas supplies. The Nord Stream 2 pipeline from Russia to Europe continues to face operational delays owing to the protests from eastern European countries that would previously transit Russian gas to European markets and earn revenues, and U.S. sanctions on the project. To force through the operationalization of the pipeline, Russian gas major Gazprom is alleged to have manipulated gas supplies to European markets, causing a demand-supply imbalance. Besides, the prolonged pandemic and China’s rapid economic bounce back also caused a sharp rise in the global gas demand.

Overt dependence on Russian gas aside, most of the European countries have moved rapidly towards renewables as a key source of power. In Germany, for instance, 45.4 percent of the gross power consumption comes from renewables, while 24 percent came from coal and 12 percent from natural gas. The German government announced its plans of phasing out coal by 2038, which implies that the mantle could be picked by either natural gas or renewables. The former could allow Russia to control a key aspect of Germany’s energy security, thus creating a potential security risk. A complete transition to renewables remains difficult, given the intermittency of renewable energy sources and persisting problems with large-scale storage.

The gas supply crunch in Europe has exposed the perils of overdependence on a particular kind of fuel, sourced from one country/region, putting a question mark over the resilience of energy supply chains. Russian gas supplies to Asia-Pacific countries remain limited. India, for instance, imports gas from Qatar, Nigeria, United Arab Emirates and now, increasingly, from the United States. But the threat of the supply crunch in Europe spilling over to the global gas markets remains very real. If unresolved, in the medium-term the situation could witness consumer countries in Asia and Europe scrambling to source supplies from the same countries. To tackle this scenario, consumer countries could either make a complete transition to renewable energy or increase the use of coal. The former, as discussed above, remains unfeasible while the latter is no longer an option owing to climate change concerns.

India’s total energy imports (in mega tons of oil equivalent)
— Data: India Energy Dashboards, NITI Aayog, Government of India. Graphics: DRI

This scenario was probably not fathomed by European lawmakers when they decided to switch off the nuclear power plants across the continent about a decade ago. Since then, Germany has phased out its nuclear energy almost entirely, while U.K.’s nuclear energy industry also remains stagnated. The only European country to escape unscathed from the ongoing crisis has been France which derives nearly 70 percent of its power requirements from its domestic nuclear power plants, considered a cornerstone of France’s strategic autonomy and energy independence.

India’s energy generation from renewable sources (in gigawatt hours)
— Data: India Energy Dashboards, NITI Aayog, Government of India. Graphics: DRI

The ongoing crisis reflects the limitations of a short-sighted public policy which can lead to long-term consequences for a country and its foreign policy, thus holding important lessons for developing countries like India. The clamor within Indian policy circles for a full-scale transition to renewables remains high, and justifiably so. But Indian policymakers need to remain cognizant of three factors that must determine their energy choices. These include energy affordability, sustainability, and security of supplies. To fulfil all three obligations, India’s energy mix must remain highly diversified to include a variety of resources including renewables, green-hydrogen, hydropower, natural gas and nuclear. Nuclear energy must be developed in India given the country’s expertise in the sector. Domestic concerns around nuclear energy in India must also be addressed to develop capability on a long-term basis for zero-carbon electric power.

BABEL

Japan’s Ruling Party Elects New Leader: What Will He Do About Disaster Relief Plans?
Temporary storage of radioactive material after decontamination in Fukushima, Japan after the 2011 tsunami
— Global 2000, Lydia Matzka-Saboi

On September 29, former foreign minister of Japan Kishida Fumio won the election within the ruling Liberal Democratic Party (LDP), defeating the popular Kono Taro and paving the way for Kishida to become prime minister on October 4. Analysts believe that Kishida will have his tasks cut out for him when it comes to foreign policy and the economy. But that will not be all.

On September 25, and ahead of the LDP election, Japanese newspaper Asahi Shimbun compared the news of the candidates in the fray on disaster management including those of Kishida and Kono. “As such, each candidate must have their own views based on their experience. However, in the debates so far they have failed to present specific proposals for what should be done now from a broader viewpoint,” the newspaper noted. Noting the need for close scrutiny of public spending on disaster mitigation and relief, the newspaper pointed out that despite the Suga administration’s spending commitments in that direction, Japan is staring at serious problems including significant flooding of Japan’s three largest bays, tsunamis, and landslides.

Between meeting the challenges of an intransigent China and a demographics disaster, Kishida and his successors have a lot on their plate. The action plans they adopt to deal with climate change—and contingencies associated with it—remain to be seen.

DRI TRENDLINES

The Soundless Wailing: Water, Climate Change, and Security Risks in the Asia-Pacific

The upcoming edition of DRI Trendlines looks at the nexus of water, climate change, and internal and external security risks across the Asia-Pacific. By examining the link between water scarcity and conflict, the challenges of deepening urbanization, and finally, the implications of a melting Arctic, the report—drawing on multiple streams of quantitative data—visualizes how climate change could dramatically reshape geopolitics and security in the Asia-Pacific.

FROM OUR STABLE

India’s Climate Commitments
A “barefoot engineer” installs a solar panel in Tinginaput village, Orissa, India, 2009.
— DFID, Abbie Trayler-Smith

Between January 2020 and September 2021, India has committed at least $150.1 billion in supporting fossil fuels, clean and other energy sources making it the largest public money commitment to energy projects among G-20 countries’ COVID-19 economic recovery packages. Of this, at least $44.31 billion has gone into supporting fossil fuel energy, while $37.02 billion has been committed to support clean energy. India is well on track towards achieving its goal of establishing 523 GW of renewable energy capacity by 2030, having already achieved 147.05 GW capacity as of September 27.

Despite these promising trends, estimates from the Indian government suggest that India needs $2.5 trillion between 2015 to 2030 for effective climate action. Latest data indicates green financial flows grew from $17 billion in 2017 to $21 billion in 2018, suggesting an overall shortage of funds to achieve its green goals.

There is of course a larger problem as New Delhi embarks on tackling climate change while attempting to combat the economic fallout of the COVID-19 crisis. An expert DRI interviewed for a report on India’s post-pandemic economic outlook pointed out Indian government policy uncertainty as an inhibitor to industrial growth, with its climate change commitments sitting uneasily with its commitments to industry. That said, “the economics of ‘disruption’ and the transition towards electric vehicles with the support of government subsidies can affect the traditional automobile manufacturing sector,” which was slowing even before the pandemic hit, they observed.

Access the report

DRI Report

Afghanistan and Taliban 2.0 Political Drivers, Taliban Strategies, and Domestic Implications

Based on exhaustive in-house research and interviews with 10 leading experts, the report looks at the domestic and international drivers behind the collapse of the Afghan government on August 15 and the return of the Taliban to power two decades after they were ousted. The report also probes Taliban 2.0, the group’s possible economic strategies, as well as the social implications of their return to Kabul.

View Report

DIGESTIF

What We Talk About When We Talk About Existential Risk
— IMF Photo, Tamara Merino

“Climate change poses an existential threat to our lives, to our economy, and the threat is here,” U.S. President Joe Biden said on September 7 as he toured storm-hit neighborhoods in New York, repeating a familiar, signature line. And—judging by the recent Intergovernmental Panel on Climate Change report, not to mention lived experience around the world—it is all but certain that climate change is quickly posed to become the defining international and national security threat over the next two decades. But is climate change an “existential” threat, as Biden and his political allies keep terming it?

Philosophers who study existential risks and climate policy specialists who study the subject may quibble: an existential risk rises far above the merely truly catastrophic, and for climate change to qualify as one, it should carry the potential to not only wipe out the earth’s population but also cause human extinction. On this, as a Vox article from last June explains, there is little consensus. While this, as the article also notes, may come across as needless, insensitive quibbling, the difference between climate change as a global catastrophe and an extinction risk for humanity has important policy consequences.

“If the models tell us that all humans are going to die, then extreme solutions — which might save us, or might have unprecedented, catastrophic negative consequences — might be worth trying,” the article adds.

There is a larger point also. Vivid language—whether describing climate change as an existential threat, or comparing the growing military use of artificial intelligence to the rise of “killer robots”—is often a call-to-action (as Biden apparently intends it to be, in case of climate change). But such language often risks rendering the problem at hand so outlandishly frightful so as to, paradoxically, push it out of public imagination. After all, and let’s face it, not many who are not part of the professional worrying class will lose sleep over extinction of humanity or the rise of a superintelligence that annihilates human life on earth.

Language matters. As policymakers around the world—rudely jolted by the COVID-19 pandemic—impress upon publics their need to do much more to meet catastrophic risks, straining government expenditure and imposing painful choices, how they frame these risks—and the balance they strike—will be key.

External expert Niharika Tagotra, DRI’s Director of Research Abhijnan Rej, DRI Research Analysts Malvika Rajeev and Rushali Saha contributed to this edition of DRI Asia Review. Translation of Japanese media article was provided by an in-house linguist.

Diplomat Risk Intelligence (DRI) is the research and consulting division of The Diplomat, the Asia-Pacific’s leading current affairs magazine.

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