Comment on “Implications of Deglobalization on Energy and Carbon Neutrality in Asia and the Pacific Region”

Abstract

Arimura and Sugino (2024) highlight the shock to fossil fuel markets caused by Russia's expanded invasion of Ukraine in 2022 and the Western-led international response. While fossil fuel prices generally soared, some countries including China and India benefited from relatively cheap Russian fuels.What happened in 2022 is certainly interesting. Data from the Energy Institute (2023) and BP (2022) suggest that Russian exports of oil, coal, and piped natural gas to the Asia-Pacific increased relative to the prior year, although exports of liquefied natural gas (LNG) fell. Nevertheless, Russia continued to play a relatively modest role in supplying the Asia-Pacific's energy needs, especially for non-oil products. In 2022, Russian exports supplied about 10% of the oil consumed in the Asia-Pacific, 3% of the region's coal use, and 2% of its natural gas use (via a pipeline to China). Russia was only the fifth-largest supplier of LNG to the region, after Australia, Qatar, Malaysia, and the United States (US).Russia appears set to increasingly look East for its energy exports, with a new gas pipeline to China as part of the potential mix. Yet most Asia-Pacific countries are unlikely to wish to become overly dependent on Russian energy. The competitive nature of global energy markets, the economic and political benefits of diversification, and constraints on rapid ramp-up of Russian supply are instead likely to mean that Russia remains only one of a number of suppliers to the region. In 2023, fossil fuel prices were also already down from their 2022 levels, reducing the size of the price discounts available from Russia.Arimura and Sugino (2024) highlight a division in emission reduction ambition between developed and developing countries. Fortunately, this is one that has generally declined over time, with the Kyoto-era distinction between Annex B countries and others now behind us. One of the major achievements of the Paris Agreement era has been the net zero emission commitments announced by countries from Vietnam (by 2050) to India (2070).While energy security concerns spiked in 2022, climate ambition was not cast to the wayside. Indeed, the G20 declarations of 2022 and 2023 included strong climate