Energy Market Integration in East Asia: What an Economic Analysis Tells Us?

Number 15
Policy Brief
Energy Market Integration in East Asia: What an Economic Analysis Tells Us?

The East Asia region has been a hot spot of economic growth, and a substantial amount of energy input is essential to fuel this growth. Given the diverse conditions of economic, demographic, physical and natural resources in this region, a harmonised and integrated energy market will be beneficial to secure an affordable and reliable energy supply for the region. Towards this goal, the Energy Cooperation Task Force (ECTF) of the East Asia Summit (EAS), which was established by EAS in 2007, launched a study on Energy Market Integration in East Asia. This study reviews trade and investment barriers of energy commodities in the EAS region and assesses the potential impacts of energy market integration in this region. In this study IGES conducted an economic analysis of energy market integration scenarios including trade liberalisation of energy commodities and energy subsidy reduction in the EAS region. Our analysis indicates that an integrated energy market will promote the economic growth of this region as a whole, but some EAS member countries will see a reduction in their national gross domestic product. This means that appropriate regional cooperation including some compensating schemes for potential losers is necessary to realise the potential benefit of energy market integration in this region.

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Japanese version: http://pub.iges.or.jp/modules/envirolib/view.php?docid=3375
English version: http://pub.iges.or.jp/modules/envirolib/view.php?docid=3354

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