The Singapore Economic Review

Energy security, a multidimensional concept that encompasses the notion of resource availability, accessibility, environmental acceptability and cost affordability, has been widely discussed. However, the same cannot be said about energy insecurity, a concept that may not necessarily mirror energy security, but also comprises the various consequences of energy unavailability. Energy insecurity mostly affects the poorest and can lead to deepened inequalities and poor health at the household level. One solution for tackling energy insecurity could be adoption of renewable energy. Power generated from renewable sources could help in mitigating energy price fluctuations and reduce health issues, as well as encourage stable economic growth. This special issue discusses the interaction between the three concepts through careful case studies and panel analysis and proposes various policy implications for energy policymakers. This introductory paper introduces the articles selected for this special issue.

Many countries rely on the international energy market as their main energy supplier, thus leading to issues of insecurity. Energy insecurity can potentially hinder economic growth and cause sustainability problems. This paper builds on cross-country panel data and estimates the relationship between energy insecurity and economic growth. We explore the multi-dimensional feature of energy insecurity through energy dependency, renewable energy share, and price effects. Our results show statistically significant negative impacts on growth due to energy insecurity, but the effects are mostly relevant to developing economies. Moreover, we show that the development renewable energy sector can mitigate the negative effects.

Energy insecurity has become an alarming issue among ASEAN countries. One proposal to overcome this energy insecurity is to integrate energy markets among ASEAN countries. In order to do this integration, a major energy policy reform, particularly the elimination of energy subsidy policies, is needed. The main goal of this paper, hence, is to analyze the impact of an energy subsidy reduction policy in ASEAN, particularly in terms of economic growth, environmental improvement and welfare distribution. To achieve this goal, this paper uses a multi-country computable general equilibrium (CGE) for Inter-Regional System Analysis for ASEAN (IRSA-ASEAN) to conduct the analysis. This paper finds that countries in which energy subsidies significantly exist, i.e., Indonesia and Malaysia, stand to gain much from eliminating these subsidies. Gross domestic product (GDP) is likely to increase, with the added benefit of reduced CO₂ emissions. In terms of welfare distribution, this policy appears to be progressive in nature.

Cutting the overcapacity in coal industry is a current critical issue in China and is a matter for the world. However, inappropriate capacity cut policies may induce huge fluctuations of energy price, creating a threat to energy security and even economic stability. This paper designs a capacity permit trading scheme to minimize the compliance cost of production capacity cut, and proposes the operational details of capacity permit trading scheme using China’s coal industry as an example. We also construct a simple partial equilibrium model to examine the benefits and firm behaviors when adopting the permit trading scheme. The results demonstrate that the permit trading scheme will generate an overall positive social welfare as well as reduce firms’ cheating incentives. The results confirm that the more heterogeneous the firms are in terms of compliance costs, the higher will be the social welfare gains and the trade volume. Our findings show that the proposed permit trading scheme is feasible and beneficial in achieving the capacity cut target in China.

Renewable energy decreases the threat of energy insecurity. Solar energy systems are proving to be an easy and cheaper solution to energy crisis worldwide. Developing countries including Pakistan have augmented efforts to boost the current solar capacity. The identification of desired solar power point plant fabrication requires robust analysis of several factors. Adequate research has not been done on the site selection process for solar projects in Pakistan. This study identifies and proposes multiple point states having solar energy potential. Based on the multiple main and sub-criteria obtained from the literature, a mathematical formulation has been used to install the solar projects at rural areas of Pakistan. An empirical assessment of the off-grid rural solar power projects in Pakistan has also been conducted in this case study. The results reveal that mass, money supply and ratio are important, while the transmission on the matrix, the cost of land and the sun were generated. The study found the district of Barkhan (R2) of Baluchistan to be the most ideal site, followed by Jacobabad (R3) and Mastung (R3). With respect to economic viability, this study found that solar energy systems provide electricity which is much cheaper than conventional energy supplied in the country. This study could be useful reference for South Asian countries including India, Bangladesh, and Afghanistan, which are currently electrifying remote and rural areas through solar energy system.

This study aims to investigate the nonlinear effect of financial development on energy security in Asia-16 countries over the period 2000–2016 using the proposed Panel Smooth Transition model for heterogeneity in time trends. Our model shows a single-threshold effect on financial development and energy security relationship, whereas energy accessibility, renewable energy share, and energy intensity are used as indicators of energy security. It implies that the sample can be split into two regimes: low- and high-FDI regime, we choose FDI as the threshold variable because it is a source of innovation that could reduce the demand for energy. The findings indicate that financial development goes hand-in-hand with energy accessibility and renewable energy share, and it also reduces the energy inefficiency in the economy. We also find that the contribution of financial development on renewable energy share becomes more substantial when the FDI is greater than the threshold point (0.9343% of GDP). However, the value of crude oil imports shows a negative impact on energy security in our empirical model.

Increased consumption of nonrenewable energy sources may lead to more air pollution, resulting in negative health impacts in a society. The main purpose of this study is to investigate the relationship between fossil fuel energy consumption and health issues using generalized method of moments estimation technique for data from 18 Asian countries (both low- and middle-income) over the period 1991–2018. The findings demonstrate that fossil fuel energy consumption increases the risk of lung and respiratory diseases. In addition, the results demonstrate the significant effect of CO₂ emissions and fossil fuel consumption on undernourishment and death rates. Furthermore, we find that increases in the gross domestic product per capita and healthcare expenditure may help reduce undernourishment and death ratio. The conclusion recommends that diversification of energy in low- and middle-income countries from too much reliance on fossil fuels to more renewable energy sources can improve energy insecurity, at the same time reduce greenhouse gas emissions and minimize the negative impacts on human health.

This study examines the linkages between energy security (ES), renewable and non-renewable energy on economic growth for ASEAN countries within a neo-classical growth framework. The econometric techniques account for cross-sectional dependence and structural breaks by undertaking a dynamic common correlation effect analysis unlike previous studies. The study finds a long-run relationship between ES, renewable, non-renewable energy and economic growth for ASEAN economies between 1980 and 2018. Our results also confirm a feedback relationship between renewable energy and economic growth in the ASEAN. Thus, the ASEAN governments must prioritize renewable energy funding and investments. The results are robust to different estimations and methods.

Assessment of energy and environmental issues has received a special focus due to global warming and climate vulnerabilities. Energy, environment and economic development simultaneously yielded a combined effect, which is favorable from the economic point of view while unfavorable for environmental aspects. It is necessary to measure the energy, economic and environmental performance with appropriate methods. Therefore, this study measures the energy security and environmental efficiency. Data used in this study were collected from the official website of International Energy Agency (IEA), British Petroleum (BP) and World Bank. We employ a non-radial DEA technology for assessing energy and environmental efficiency for OECD countries. Results reveal that the values of energy intensity range from 0.93 to 0.30, while GHG emission per capita values range from 24.61 to 5.28. As far as energy efficiency is concerned, Iceland and Greece have the highest value (0.99) of energy efficiency, whereas Ireland has the lowest value (0.34) of energy efficiency. Further analysis shows that Austria, Australia, Portugal and Spain have values between 0.70 and 0.80 for energy intensity, whereas UK, Sweden, Germany and the USA have values of energy intensity, between 0.40 and 0.50. The study proposes some valuable policy implications for policy and decision-makers to make the environment more sustainable.

The Great East Japan Earthquake (GEJE) and Fukushima nuclear disaster that occurred in 2011 gave a sharp reminder to Japan’s energy security to reconsider the reduction of nuclear power dependence with a better energy mix. We use a recursive CGE model based on Japan’s renewable energy input–output model to analyze the energy composite of power generation and consumption to investigate cost-effective policy incentives to achieve an optimal energy mix to reduce the nuclear power dependence to less than 5% within 10 years. Moreover, we create scenarios of: (1) nuclear power decommission, (2) renewable energy promotion and (3) virtual power plant (VPP) implementation with public R&D expenditure and power infrastructure investment. The simulation results show that renewable energy could gradually replace nuclear power with capital-use subsidies. Under the direction of nuclear power decommission, the VPP installation could reduce the fiscal cost of wind power by 13%, solar energy by 8% and the social cost by 36%. We provide empirical evidence that the implementation of VPP should be promoted in addition to the renewable policy promotion policy to facilitate power allocation and overcapacity problems better.

This study is an empirical attempt to revisit energy insecurity in Vietnam by focusing on the role of the official exchange rate. To this end, we gathered data of the related variables based on the 4A’s theory for energy security over the period 1985–2017, and conducted estimation using GMM estimator. The major results proved that economic growth has a positive impact on official exchange rate. CO₂ emissions have negative coefficient which means negative relationship between this variable and the Vietnam’s official exchange rate, while inflation rate has a negative sign suggesting that by increase in price level of commodities in Vietnam’s economy, the domestic product will be more expensive than that before which accelerates commodities import flows that leads to depreciation of Vietnam’s national currency. In addition, we found out that energy intensity has a negative relationship with official exchange rate in Vietnam. Moreover, the results revealed that a 1% increase in gas import has a negative linkage with the Vietnam’s official exchange rate. According to the results, we recommend that Vietnam needs to diversify its gas imports, strengthen local energy production, increasing energy efficiency to have a stronger national currency against U.S. dollar which ensures energy security in this country.

Rapid economic growth in Asia recently has been driving global energy demand and prices. However, little progress has been made concerning the region’s energy security. To assess Asia’s progress in energy security and its impact on real income per capita growth, the 4-As energy security framework — energy availability, applicability, affordability and acceptability dimensions — is integrated into the cross-country generalized method of moments (GMM) model and empirically estimated using data from 20 Asian countries (1995–2015). Results indicate that energy security measured by expanding renewable energy use, increase in electricity access and electric power consumption per capita growth are positively associated with real income per capita growth, while a larger share of imported energy and higher energy intensity hinder growth. Meanwhile, climate security is included in the energy security framework; the results suggest that an increase in CO₂ emissions has a negative impact on economic growth. Possible policy implications for improving energy security in Asia are discussed in the conclusion.

During the past 10 years, the oil market has been very unpredictable and volatile, which created uneasy conditions for market participants. The remedy of increasing oil prices is considered as a positive factor for the economy of the Republic of Kazakhstan as an oil-exporting country. Using structural decomposition of vector autoregression (VAR), this study aims to examine how the whole financial system in Kazakhstan is depending on oil prices. The results suggest that the strongest factor affecting the stock index is aggregate demand, and the impact of oil production shocks on the equity market is, on average, insignificant. Such shocks can be discounted while a fall in oil prices affects financial conditions as a whole, damaging the solvency of Kazakhstan, an oil-exporting country. With the positive shock of aggregate demand, the stock market index tends to rise. There is also an effect of oil price volatility on changes in currency value, which also influences the financial situation of the country. Moreover, oil-exporting countries such as Kazakhstan can secure and support their economies with the help of “stable aggregate demand”. The focus on Kazakhstan as one of the oil-producing countries is interesting for at least two reasons. Importantly, oil-exporting countries supply oil to really strong countries concentrating on manufacturing and other industries. Besides, this study provides useful insights for countries with similar economic conditions, including similar stock market development.

This research paper aims to investigate linkages of electricity consumption representing energy security with estimated factors — GDP, population and foreign direct investment (FDI) during 1998–2018 for Laos People Democratic Republic (Lao PDR) by using ARDLbased Bayesian inference. This study provided empirical evidence on a long-run linear relationship analysis under ARDL-based Bayesian inference, which concludes that they have performed real relationships between electricity consumption, GDP, population and FDI. In addition, in the short-run, it was found that explanatory factors have both negative and positive impacts on Laos’ electricity consumption. The results confirm the hypothesis that although Lao PDR has access to domestic energy resources, only relying on one energy resource will make the energy system insecure. Thus, Lao PDR must develop substantial infrastructures and alternative renewable energies to support the campaign of Lao PDRs electricity security in the long-run.