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

Abstract

The IPCC (Intergovernmental Panel on Climate Change) special report on the impacts of global warming of 1.5°C urged the world to move toward carbon neutrality (CN). Following the announcement by European countries of their CN target by 2050, Japan, South Korea, and the USA announced their CN targets by 2050. However, the Russian invasion of Ukraine has divided the world and drastically changed energy markets, including natural gas. Moreover, the EU is now implementing controversial policies on carbon border adjustment mechanisms which may impose a heavier burden on developing countries. This study discusses how global divisions may influence energy strategies and climate policy for various Asian countries.

Exploring Global Economy Evolution: Clusters and Patterns

“…The second wave resumed in the first half of the 19th century and lasted until World War One. The third started after the end of World War Two and has lasted until today, despite some scholars affirming that a phase of "deglobalization" opened with the international financial crisis in 2008 (e.g., James 2018;Baldwin et al 2023;Thakur-Weigold and Miroudot 2023;Arimura and Sugino 2024). This vision, which sees globalization as a non-recent phenomenon capable of experiencing phases of decline, lends itself better to understanding the events of recent decades and to welcoming the most skeptical views on globalization.…”

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

“…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.…”

“…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.…”

“…Arimura and Sugino (2024) discuss the potential effect of the European Union (EU) carbon border adjustment mechanism (CBAM). The underlying principle of a CBAM is to extend the price on negative externalities beyond only domestically produced commodities, although accurate implementation is challenging.…”

“…An imperative for the energy transition is to avoid investments that lock in future emissions and larger emission abatement costs over the long term. Arimura and Sugino (2024) are sanguine about natural gas, although note the large costs involved and that renewables are an alternative. Leaping to zero‐emission energy sources would be much more compatible with climate goals.…”