Countries in the South Asia Region (SAR) face a number of operational and economic challenges as they seek to keep up with rapidly growing electricity demands. Our analysis finds that increased regional electricity trade facilitated by expanded cross-border transmission interconnections among SAR countries can contribute significantly to alleviating these challenges. Cross-border electricity trade could save as much as US$94 billion (in present value terms) in the region during the 2015-2040 period. It would reduce the regional power sector CO2 emissions during the period by 8% even without pro-active measures to reduce CO2 or harmful local pollutants. Moreover, significantly increasing cross-border interconnection and trade will necessitate taking steps that inevitably will reduce substantial existing inefficiencies in national power systems in the region, as well.
Some countries are blessed with natural resources, others are cursed. It’s been said that all the blessed ones are alike, they put the resources to good use, improving the people’s welfare in a sustainable manner. And for the cursed? More often than not, they struggle with political violence, especially when ethnic or religious fragmentation and weak institutions are a concern. Not surprisingly, it was Venezuela’s former Development Minister and OPEC Founder Perez Alfonso who christened oil the “Devil’s excrement.”
If natural resources could be the source of such evil, are there ways of “exorcising” them? Perhaps policymakers could try to prevent or resolve resource-related conflicts by sharing natural resource wealth with opposition groups or directly with the people. Would such a counter spell work?
The Organization of the Petroleum Exporting Countries (OPEC) unsettled oil markets in September when it announced it would resume placing limits on oil production among its members, effectively reversing two years of unrestrained production.
But how much control can OPEC really exert over prices? History suggests that formal agreements to influence the price of a particular commodity eventually fall apart. OPEC’s own history also shows that the short term benefits of managing supplies become long term liabilities. In addition, the oil producing landscape has changed dramatically in recent years with the advent of nonconventional producers, notably the U.S. shale oil industry. These factors will test the oil exporting organization’s power to influence markets.
Prices for most commodities, including oil, are forecast to rise in 2017 as a long period of declining prices appears to be bottoming out, according to the October Commodities Markets Outlook.
Oil prices are forecast to rise to $55 per barrel next year from $43 per barrel in 2016 as markets readjust after an era of abundant supply that outpaced demand. Energy prices, which also include coal and natural gas, are forecast to jump 24 percent in the coming year. The decision in September of the Organization of the Petroleum Exporting Countries (OPEC) to resume limiting oil production is another important factor behind the higher price forecast.
About 40% of the human population, or about 2.8 billion people, find commercial fuels like electricity and gas inaccessible, too expensive or too irregularly supplied to use for cooking and heating (Smith et al., 2013; IEA, 2012). Instead, they rely on solid fuels like coal, fuelwood, dung and charcoal that are combusted inside their homes (Jeuland and Pattanayak, 2012, Grieshop et al., 2011, Smith et al., 2013). Biomass fuels in particular are often self-collected and easy to use in inexpensive traditional stoves. This leads to severe public health problems, especially for women and children exposed to indoor smoke, and also can lead to forest degradation. Without major policy and/or technology changes, the global number of people depending on such fuels is projected to remain very large at least through 2030 (IEA, 2006, IEA and World Bank 2015).
Improved biomass cookstoves that use less fuel and burn fuel more fully often are recommended as relatively affordable ways to deal with these concerns.
Energy prices play a key role in the determination of food prices. The post-2006 boom of food prices was partly driven by higher energy costs, and the weakness in energy prices since 2014 is expected to hold food commodity prices down in the future as well.
I’ve suggested recently that although high economic growth in recent decades has greatly improved average life expectancy, infant mortality, and other leading indicators policymakers and development practitioners were still worried about the sustainability of these trends and whether people in developing countries would eventually enjoy the high standards of living of high-income countries. This, against the background of a planet under increasing stress, particularly as a result of climate change. In this blog, I explore some of the actions needed to sustain our global economy.
The World Bank is raising its crude oil price forecast for 2016 to $43 a barrel from $41 dollars after a 37 percent jump in energy prices in the second quarter due principally to disruptions to supply, particularly from wildfires in northwestern Canada and sabotage of oil infrastructure in Nigeria.
Most commodity price indexes rebounded in February-March from their January lows on improved market sentiment and a weakening dollar. Still, average prices for the first quarter fell compared to the last quarter of 2015, with energy prices down 21 percent and non-energy prices lower by 2 percent according to the April 2016 Commodity Markets Outlook.