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Australia

Can the baby tame the tiger?

Energy ministers from the fledgling Asia Pacific Economic Cooperation Forum (APEC) took the first steps towards an ecologically sustainable future at a meeting in Australia recently.

With a dramatic increase in electricity demand predicted in the APEC bloc, steps must include the most basic tenet of competitive markets, i.e. price reflecting true cost, as well as technology transfer, research, and co-operative joint ventures. Australia, the world's largest exporter of coal, with its numerous subsidies to the fossil fuel industry will be hard tested.

When energy ministers from the fledgling Asia Pacific Economic Cooperation Forum (APEC) met in Australia recently, they took the first baby steps on the road to an ecologically sustainable future. The toddler trading bloc of 18 countries, including some fast-growing Asian tiger economies and the OECD countries of Australia, Canada and the United States, bravely took the Asia-Pacific tiger by the tail when they officially acknowledged that given today's choice of technologies, energy growth and environmental degradation are inextricably linked.

The danger of tweaking the tiger's tail, though, is its propensity for economic whiplash. The extent to which ministers are prepared for this sting will decide whether APEC can not only tame, but also house-train the tiger to cleaner activity. Doing so, however, has more to do with the estimated $1.6 trillion to be invested in energy infrastructure over the next 15 years in APEC countries than with polite ministerial meetings.

APEC's effectiveness as a "co-operative forum" is debatable, but it is not to be forgotten that APEC countries represent 46% of the world's total merchandise trade and half the world's GDP. Some planners predict a dramatic increase in electricity demand, with estimates varying between 50% and 80% to the year 2010. Considering this growth, APEC statements emphasising the importance of environmental considerations are not insignificant. They include such positive (but easy) steps as technology transfer, research, and co-operative joint ventures. Such warm and fuzzy, but non-binding, pronouncements, however, will simply be hot air adding to global warming if the right investment signals are not sent to the business community.

Those signals must include the most basic tenet of free (competitive) markets: price reflecting true cost. This means the removal of subsidies and the inclusion of environmental costs. It will be a process that will severely test each country and particularly host country Australia, the world's largest exporter of coal. Even before the ink dried on the meeting's press statement, Australia's representative and energy minister, Warwick Parer, was defending his country's numerous subsidies to the fossil fuel industry. "These [APEC] principles are not binding... it is something to be looked at by the government," he said. Coming straight out of a meeting that espounded environmental protection, this was a backflip worthy of Olympic gold.

Parer -- and many of his colleagues -- also displayed a common lack of awareness of the formidable technical developments in renewable energy when he talked about "opportunities, not just in the supply of energy materials which include coal, gas, and nuclear but also the technology with regards to efficiency and clean coal technology." Renewables, apparently, are not worthy of mention.

Indeed, the oxymoronic "clean coal" and nuclear technology seem to be big on the list of ministers and their formidable lobby groups. When asked how his country's intense coal-fired development path would meet greenhouse targets, the Chinese energy minister, Ye Qing, said his country would continue to develop its vast coal resources, but that "new technology would solve the greenhouse problem." Not once, however, did the "new technology" mentioned include wind energy -- although several APEC countries including India, the United States and Canada have major wind power developments and the capacity to transfer technology to developing countries such as China. The ministers also failed to mention how their plan would benefit the world's two billion people who currently have no electricity, many of whom live in APEC countries.

Ironically, considering the lack of acknowledgement of the existence of renewables as a mature technology, APEC ministers were visiting a state in Australia with model legislation to develop markets for clean energy under the aim of reducing greenhouse gas emissions. The legislation is already beginning to "refocus" retail electricity companies towards a cleaner energy path. One of those companies has a publicised objective to be recognised as "the leading commercial provider of sustainable energy services to the Australia market" and to accomplish this through earning "a significant proportion" of profits from sustainable energy.

These developments challenge assumptions of continued and expanding use of fossil fuels. APEC would also do well to heed the paradigm shift to what Robert Shaw of the US Electric Power Research Institute called the "economy of precision" where modular, manufactured technologies replace the laborious process of on-site construction. There is a feeling that the ministers of the trading bloc realise that the road to ecological sustainability is long and difficult. But unless they begin to seriously invest in their own indigenous and truly ecologically sustainable energy resources, the toddler bloc's baby steps will be in vain. To gain the tiger's respect, a toddler must learn to walk tall.

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