‘Don’t disturb our economic growth’: Asian leaders weigh energy transition, development at Davos

Expanding wealth and creating jobs remain top priorities for many policymakers in the rapidly emerging region. Several industrial powerhouses also promoted nuclear power as a green energy source.

Busy India street scene
A busy street in Varanasi, India. India is one of the fastest growing economies in the world, much of it powered by a continued reliance on fossil fuels like coal. Image: Wikimedia Commons/ Jorge Royan.

Amid a lengthy pandemic, geopolitical tensions and recession fears, Asian leaders were measured when discussing the clean energy transition and their climate goals at the World Economic Forum in Davos last week, reflecting the region’s struggle with balancing its domestic priorities against more urgent calls for it to act now and combat the climate crisis.

In a discussion on Southeast Asia at the global meet, Indonesia’s coordinating minister for maritime affairs and investment Luhut Pandjaitan was straightforward about the nation’s primary goal. Job creation needs to come first, he said, even as Indonesia is keen on starting pilot projects under a recently signed US$20 billion deal on energy transition.

The ‘just energy transition partnership’ (JETP) was signed last November with the United States, Japan and a group of European countries, to hasten emissions cuts and coal plant closures in the world’s fourth most populous country of 282 million people.

Some details, such as renewable energy buildout and emissions reductions targets, are already agreed upon, but more specific plans on policy reform, attracting investments and choosing which coal plants to close, are still in the works.

Pandjaitan said he had told US officials in a meeting at Davos that Indonesia is open to advice, but with one condition – that the suggestions “don’t disturb our economic growth”.

It could mean challenges in dealing with Indonesia’s huge but pollutive coal industry. The fossil fuel is one of the country’s largest export sectors by value, and coal mining raked in about US$40 billion last year, or 3.5 per cent of the country’s gross domestic product.

India, another coal powerhouse in Asia, has set a target to install 500 gigawatts of renewable energy by 2030. But Natarajan Chandrasekaran, chairman of Tata Sons, the parent company of India’s largest conglomerate, said that “new energy” under development would be to feed new energy demand as the country develops.

“We are not replacing bad energy,” he told a panel discussing India’s economic trajectory.

“We are creating new energy for development, and to do the [energy] transition [with] growth. All of us who are in business know, growth fixes every problem,” added Chandrasekaran, who has been appointed to lead business talks this year at G20 meetings, as India assumes presidency for the bloc of the world’s largest economies.

At the same panel, India’s women and child development minister Smriti Irani said that climate change is both an investment and humanitarian opportunity, pointing to India’s space programme, which Irani said could open up collaboration with other countries in fighting climate change. India has a series of satellites orbiting Earth that can track meteorological data and provide telecommunications services.

For China, the world’s largest economy, economic development needs to remain the government’s “primary and central” task, said its vice premier Liu He in an address. He said the philosophy was among key factors to China’s more than doubling of gross domestic product (GDP) and an increase in life expectancy by almost four years in the last decade.

Liu added that such growth needed to be “green” today, and that carbon neutrality, which China has pledged to reach by 2060, is key to domestic growth, given its large manufacturing industry and growing cities.

China has garnered praise for its large solar and wind energy buildout in recent years, with analysts expecting the country to exceed its own target of having a third of its electricity produced from renewables by 2025.

However, China also increased its coal mining output last year amid a global power crunch, and is the world’s fastest builder of coal power plants. The country, home to 1.4 billion people, emits a third of the world’s greenhouse gases.

Many industries are expected to rebound after China relaxed Covid-19 rules last month. At Davos, chief executive of Shanghai-based travel services firm Trip.com Jane Sun said that domestic travel demand in China could already be exceeding 2019 levels. There is also a “three-digit surge” in demand for international flights in and out of China, Sun said.

Nuclear ascendency

Asian leaders also talked up the climate credentials of nuclear power at the Davos summit.

Nishimura Yasutoshi, Japan’s economy, trade and industry minister, said that one nuclear reactor can help to reduce the country’s import of liquefied natural gas by a million tonnes.

The country had started rebooting offline nuclear plants in 2021, a decade after the Fukushima nuclear meltdown which forced 150,000 people to evacuate and left several settlements around the crippled plant off-limits to this day.

Yasutoshi shared that Japan has 17 reactors with permission to operate, of which 10 are running, and 10 more which could restart after safety audits. Japan generated about 6 per cent of its electricity from nuclear power in 2021, down from over a quarter before the Fukushima incident. The country has a goal to get the fraction up to at least a fifth by 2030.

South Korean President Yoon Suk Yeol said that the country wishes to export its nuclear power technologies.

“We will make sure that nuclear power will be used as a main energy source in the international community, as a major clean energy [source],” Yoon said. Interest in nuclear power in South Korea is in the midst of a rebound, since earlier administrations wanted to phase it out in 2017. The country got about a fifth of its electricity from atomic power in 2020, and wants to raise it to almost 35 per cent by 2036.

The South Korea government revised its green finance rulebook last September to include nuclear energy, following similar moves by the European Union in end-2021.

China’s He said that the country’s “national reality dictates” that it promotes the “safe and green use” of nuclear power. China is currently the world’s second largest user of nuclear power, with over 50 reactors in operation.

Proponents of nuclear power say the energy source can replace fossil fuels to provide a steady flow of low-carbon electricity – something wind and sunlight struggle to achieve. Critics fear the lasting impact of both disasters and nuclear waste, a permanent solution for which largely does not exist.

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