12th APEC Energy Ministers’ Meeting
13 October 2015
Senator Loren Legarda
Secretary Zenaida Monsada,
Distinguished guests and delegates,
Ladies and gentlemen,
Good morning to all of you!
I am deeply honored for this opportunity to address the 12th Energy Ministerial Meeting.
APEC’s 21 member economies is home to about 2.8 billion people and account for approximately 57 percent of the world GDP and close to 50 percent of world trade. It is said that because of APEC’s hard work, “growth has soared in the region, with real GDP doubling from just USD 16 trillion in 1989 to USD 31 trillion in 2013.”
The statistics of APEC build a solid case—”Average tariffs fell from 17 percent in 1989 to 5.2 per cent in 2012, and within that period the region’s total trade increased over seven times—outpacing the rest of the world with two-thirds of this trade occurring between member economies.”
Consequently, per capita income rose by 45 percent, and as the adage goes, millions were lifted out of poverty.
To what extent growth has been translated to equity and fair opportunities for all is a different discussion altogether. But I will touch on that later.
The connection between free and open trade and investment and poverty reduction, many would say, is indisputable — with reduced trade barriers comes increased trade and therefore, growth and prosperity comes not too far behind.
Let me hasten to add, however, that the sum of 1 + 1 is not always 2. Development is indeed good; but development without conscience destroys the world. We end up with zero.
Development and the choices we make, the enlightened choices, should not be a zero sum game.
It is for this reason that I welcome the work of APEC in the energy sphere.
The theme of your meeting, “Towards an Energy Resilient APEC Community,” resonates deeply and passionately in my own advocacy as the United Nations Champion in Asia-Pacific for Disaster Risk Reduction and Climate Change Adaptation.
So, when Sec. Monsada and the DOE family asked me to during a budget briefing to be their speaker today, I did not think twice and I said, “Of course, it will be my distinct honor.”
As an Asian, my resolve on the subject is deep and personal. Asia Pacific bears much of the brunt of climate change, accounting for more than 80 percent of the global loss of life due to disasters.
Why do I speak of climate change in an energy meeting? You might ask.
Energy security and climate security are two stories under the same plot.
There is strong scientific consensus that climate change is largely the consequence of greenhouse gas emissions. And as you know, these emissions largely come from human activities, including burning fossil fuels for electricity, heat, transportation, and even agriculture.
The Asian Development Bank projects that energy demand in Asia Pacific will almost double by 2030. With development comes greater demand for energy. The Asia-Pacific region is poised to have a 3.2 percent growth both in 2015 and 2016 from a 2.9 percent expansion in 2014.
Clearly, the sustainable development-energy nexus requires an urgent examination of how the region can tap on the power of innovation and new technologies to provide for the energy it needs in a sustainable and socially inclusive manner.
These are three issues that I wish to underscore today:
First, across Asia, 610 million are still without access to electricity;
Second, energy decisions have mainly been rooted on affordability and expediency as primary considerations. ADB, in its 2013 Outlook Report, cites that by 2035, the majority of the region’s primary energy demand will still come from fossil fuels such as coal, oil and natural gas;
Third, more than half of the global population live in cities. The ADB report poignantly pictures the problem—”Cities consume 78% of the world’s energy and contribute more than 60% of all carbon dioxide and other GHG emissions, while covering less than 2% of the earth’s surface.”
We know all these issues, but solutions are sometimes hard to come by.
A great man once said, “Sometimes it falls upon a generation to be great. You can be that great generation. Let your greatness blossom.” I am referring, of course, to the late great Nelson Mandela.
Ten years hence from the time he said that, we are still seeking for innovative solutions, not just to the daunting problems of poverty, but to the looming threats of global catastrophe brought about by climate change.
The First Energy Ministers Meeting was held in August in 1996 in Australia. It was the year the Philippines first chaired APEC as well. And just on a sidenote, I recall that was in Subic, I was a young journalist covering APEC for ABSCBN. As early as then, Ministers already talked about the “adoption of a strategic approach to reducing environmental impacts of energy supply and use.”
For this Meeting, I understand that you have identified four key very important themes for discussion: 1) climate proofing energy infrastructure already mentioned by Sec. Monsada; 2) improving energy trade and investment in APEC; 3) advancing cutting-edge energy efficient technologies; and 4) promoting community-based clean energy use in energy poverty stricken areas.
This event is an opportunity for all of us to address issues that need immediate response, and propose strategies that will augment present initiatives of APEC.
The APEC Business Advisory Council (ABAC) headed by Doris Ho, the voice of APEC, has been very forthcoming in its views on the region’s sustainable energy agenda. Energy security, it said, will increasingly depend upon the policies that support green sustainable growth. I join ABAC in welcoming the APEC Leaders’ ambitious commitment to double the share of renewables in power generation by 2030. Technical innovation will contribute greatly in this endeavour.
It is time to achieve progress in these commitments.
Allow me now to briefly give you my humble views on the four themes of your meeting.
The energy infrastructure system receives the brunt of disaster impacts. This results to disruptions in business and in the delivery of basic services.
Interconnecting systems is considered as one of the most critical features of the energy sector. Natural hazards put the highly interdependent energy system at risk. Disturbances in the energy system, in turn, upset our economic activities and cause distress to other critical infrastructure sectors, like transportation, water supply, communications.
We need to give focus on risks, as understanding our vulnerabilities supports decision-making in the context of climate change. And so we see here a marriage of disaster risk reduction and climate change adaptation in planning and climate-proofing the energy infrastructure.
The approach being advanced by the Philippines is the incorporation of information parameters and benchmarking in carrying out vulnerability assessments and emergency response planning. Our aim is to identify major energy networks that may be compromised by natural hazards which abound.
I actually have authored three laws which are now being applied and implemented here in the Philippines—the Climate Change Act of 2009, which created the Commission on Climate Change, chaired by no less than by Pres. Aquino, the Philippine Disaster Risk Reduction and Management Law which created NDRRMC which is tasked in preparing the Philippines for the 20 or more natural hazards which come to our shores, and the Renewable Energy Law which is being implemented by the Department of Energy.
Our experiences with Typhoon Haiyan in 2013, whose intensity is unmatched in recent history, gives us crucial lessons. The total damage to the electricity sector then was US$ 155 million. The distribution utilities were the hardest hit, which accounted for 76 percent of the total damage to the energy sector, causing disruptions in electric supply to residential consumers and even public buildings.
This underscores the importance of building adaptability to the energy sector. Climate proofing, energy infrastructure has become a basic necessity. APEC and its member economies need to cooperate with the private sector, including ABAC, towards fostering public-private partnerships that will encourage the adoption of appropriate templates or standards for critical energy infrastructure.
Second, Improving Energy Trade and Investments in APEC
The Asia Pacific region, according to ADB, requires between $7 trillion and $9.7 trillion in the energy sector from 2005 to 2030.
Creating a fiscal space for investments in climate resilient infrastructure, by providing easier access to markets, to finance, and innovation—these are crucial.
Energy trade and investment, can be affected by barriers which creates obstacles to fair competition. These come in the form of quotas, of export subsidies, procedural hurdles, local content requirements, just to name a few.
They can also come in the form of “behind-the-border barriers” such as poorly functioning financial markets, weak legal systems, restrictive regulatory approaches, among others.
Bottlenecks also come in the form of inadequate infrastructure, power grids, road and port facilities; but one of the biggest hurdle comes in the form of regulatory overreach. These bottlenecks lay the predicate for a status quo — with economies continuing to embrace technologies that are easily accessible and even cheaper, but very harmful to our environment.
Business environments need to adhere to the Rule of Law—considering that businesses will not only be willing to invest in an economic space that provides predictability, transparency, and fairness.
Investments in resilient energy infrastructure generate sustained economic and social benefits and deserve the highest priority for policy makers.
Third, Advancing Cutting-Edge Energy Efficient Technologies
We live in a world with finite resources and yet generations have lived over the centuries like there is no tomorrow. Our natural environment has been compromised. We all need to acknowledge and embrace this sorry and sad reality.
It does not mean, however, that we can just stand idly by to witness the continuing decline of our environment.
New, cutting-edge energy efficient technologies are within our reach. I am therefore encouraged by APEC’s commitment to reduce aggregate energy intensity by 45% by 2030 from 2005 levels. And wider use of energy-saving equipment and technical innovation will contribute greatly in this endeavor.
We need to heed the private sector’s call for governments to take decisive action on environmental services, including further identification and elimination of non-tariff barriers to environmental goods and services and support for the development of low-carbon and renewable energy technologies.
Many APEC economies will continue to generate power, using fossil fuel, including the very harmful coal. It is imperative that the best available technology be deployed. Diversification of energy sources will promote disaster resilience.
Investments in sophisticated sustainable energy technologies augur well in reducing harmful emissions, protecting health and the environment, and sustaining still economic growth.
APEC economies need to work with the private sector to develop clean and energy-efficient, climate-friendly technologies and I, therefore, welcome ABAC’s initiatives that seek to build a culture of technological innovation in our economies.
Fourth: Promising or Promoting Community-Based Clean Energy Use in Energy Poverty Stricken Areas
The final theme touches the very core of the APEC 2015 theme—”Building Inclusive Economies, Building a Better World.” It can’t be better said.
Growth is difficult to imagine without energy; and energy that does not take into consideration the needs of future generations, can only destroy and not build.
This brings me to my final point I made at the onset. Development—sustainable and inclusive development, progress, and the quality of life cannot be the exclusive domain of a few. Open trade brings immense opportunities, but unless fair opportunities are shared with all, the prosperity that APEC aims to deliver becomes an empty promise that will stop, begin, end, and stop in halls like this.
Energy drives economic growth and yet 1.1 billion, globally, have no access to electricity. Asia accounts for 615 million.
I, therefore, welcome APEC’s initiatives that will provide energy access to everyone, including those in the most remote and backward communities. Clean fuel and renewable energy: they need to be harnessed, and development of micro grids has to be pursued in addressing energy access challenges.
Inclusive growth begins with making basic services available to all. Fostering the participation of micro-, small, and medium enterprises (I’m sure Doris shares this with me because her focus is not simply big businesses in APEC and ABAC, but specially SMEs). So, the MSMEs in the regional and global markets, much less in the domestic supply chain, will not happen unless energy access is guaranteed to everyone. Off grid and last mile communities need to enjoy the benefits of APEC as much as everyone else in urban areas.
With the onset of technological innovation in energy, achieving universal access to clean energy technologies is within the reach of communities in APEC.
In the Philippines, for example, estimates indicate that, and this is not based on Philippines’ studies but based on US’ studies, we actually have more than 240, 000 (in fact, to be exact, 246, 000) megawatts of untapped, unharnessed, renewable energy capacity. This is thirteen times more than our current installed capacity. I couldn’t believe when I read this research by the US. Failure to develop these capacities would be unforgivable. So, in short, with our 16, 000 megawatts installed capacity, we actually have over than 200, 000, but of course, this includes ocean energy, etc. So, we simply want to focus more on R&D so we can harness the untapped potential. And even if it may seem a utopia, the hundred million Filipinos can actually eventually find a world where the energy mix is not just 30% coming from RE, but perhaps, we can be an RE nation. Again, they’ll say, “There she goes again in her utopian mind.” But really, the scientists will not disagree. If you have 246, 000 untapped, unharnessed RE potential in such a wealthy nation, why not? And that’s a reason why I will increase the budget of the DOE because of this in the renewable energy portfolio.
APEC needs to focus on promoting the growth of low-carbon economies as a means to create jobs and curb carbon emissions. APEC cannot afford to take half baby steps in its efforts to deliver clean energy to poverty-stricken areas. APEC economies account for 55 percent of global energy production, but accounts for 60 percent of total energy consumption. Clearly, new and cleaner energy options need to be developed.
In closing, I wish to acknowledge the role of APEC as a very important global platform that can bring together all the 21 economies in finding sustainable and durable solutions to the region’s energy needs. I urge closer public-private engagements and dialogues.
Ministers, Your Excellencies, we can no longer address the sustainable development-energy nexus on an ad-hoc basis. We cannot be business as usual or APEC or ABAC as usual. The world is in an ICU situation—we are in the emergency department or in an intensive care unit.
Barely 2 months from now, the world will see one of the biggest gatherings of representatives of government, of intergovernmental organizations, of international agencies, NGOs and POs, civil society and world leaders in Paris by end of November and first week in December towards in achieving a universal, ambitious climate agreement.
As a body that operates on consensus, it might be too much to ask for APEC to lend its voice that would call for positive actions from the Conference of Parties to the United Nations Framework Convention on Climate Change in Paris. But why not? It is worth making the appeal, however, considering the immeasurable cost of doing nothing and saying nothing.
On that note, I thank all of you for bearing with me and listening intently. Mabuhay.