Energy sustainability in Asia: An assessment based on composite indices and panel regression

What is it about?

The objective of this chapter is to analyse energy sustainability, with specific emphasis on measuring various dimensions (availability, efficiency, and acceptability) of energy sustainability, and assessing the nature of interactions between these dimensions. A combination of measurement (i.e. principal–component–analysis based, weighted average, and composite indices of energy sustainability) and assessment (i.e. relevant econometric tests, panel causality analysis, and FMOLS regression) approaches was employed for this purpose. The case-in-point context for the analysis of this study was provided by 19 Asian economies, divided into three groups: mature, fast-growing, and emerging. The analysis period was between 1990 and 2016. The empirical analysis revealed that the Asian economies experienced a significant improvement in the overall sustainability of their energy systems over 1990–2016. This improvement varied across different dimensions of energy sustainability, i.e., improved availability, and to a lesser extent efficiency, while environmental acceptability worsened. The interactions between these dimensions are also varied: positively correlated causality from efficiency to availability in mature economies; positively correlated causality from availability to efficiency, but negatively correlated causality from availability to acceptability, in fast-growing economies; and positively correlated causality from acceptability to efficiency in emerging economies. These findings imply that such a varied outcome on energy sustainability is the result of unbalanced and, perhaps, misdirected policy approaches that have been implemented without a clear understanding of their potentially unintended consequences. The insights gained in this chapter from a better understanding of energy sustainability, which is inherently complex, and interactions between different dimensions of energy sustainability, are arguably useful for policymakers to develop a much more balanced approach for promoting energy sustainability in the region.

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Photo by Karsten Würth on Unsplash

Photo by Karsten Würth on Unsplash