2 WINDS OF CHANGE: EAST ASIA’S SUSTAINABLE ENERGY FUTURE
deploy renewable energy technologies. Not-yet-proven advanced technologies, such as carbon capture and storage, also are needed to bend the emission curve beyond 2030, but require accelerated research, development, and demonstration today. • Developed countries need to transfer substantial financing and low-carbon technologies. To achieve this sustainable energy path, a major hurdle is to mobilize financing for the net additional investment of $80 billion per year over the next two decades. It is estimated that approximately $25 billion per year would be required as concessional financing to cover the incremental costs and risks of energy efficiency and renewable energy. In addition, substantial grants are also needed to build capacity of local stakeholders. The technical and policy means exist for such transformations, but only strong political will and unprecedented international cooperation will make them happen. • The World Bank Group is committed to scale up policy advice, knowledge sharing, and financing in sustainable energy to help the region’s governments make such a shift. The World Bank needs to increase efforts and focus future Bank energy business in East Asia on energy efficiency, renewable energy, and new technologies. Better integration of new and existing financing sources (IBRD, IDA, GEF, CTF, and carbon financing) can increase the magnitude and speed of the shift to a sustainable energy path. • The current report does not cover energy access issues in the region, nor propose any CO2 emission targets. This report outlines the strategic direction of the energy sector to meet its growing energy demand in an environmentally sustainable manner over the next two decades, and presents a pathway of policy frameworks and financing mechanisms to get there. A separate report will address the energy access issues in low-income countries—Cambodia, Lao PDR, Mongolia, Papua New Guinea, the Pacific Islands, and TimorLeste—as well as part of Indonesia and the Philippines archipelago.
Twin Energy Challenges: Environmental Sustainability and Energy Security For the last 3 decades, the East Asia region has experienced the fastest economic growth in the world, with a 10-fold increase in GDP.1 The region has been less affected than other parts of the world by the ongoing global financial crisis. The high growth has been 1. The East Asia and Pacific (EAP) region within the World Bank Group’s (WBG) operations comprises 12 diverse countries. This report covers only 6 of them and categorizes them into 2 groups: (1) China, and (2) EAP5, which comprises the 5 major economies of Southeast Asia: Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.