Networks of Power: Development Banks and Energy Security in the Mekong Region in the Mekong Region

Transcription

1 Networks of Power: Development Banks and Energy Security in the Mekong Region in the Mekong Region Hanna Kaisti & Mira Käkönen Finland Futures Research Centre, University of Turku

2 Aim of the paper The aim is to analyse the development of ADB s and WB s energy policy from energy security perspective: How their energy policy has evolved; what are the targets and means to reach the targets? How their understanding of energy and security has changed? How their energy policy is implemented in the Mekong region? 2

3 Energy and power relations Energy policies, systems and technologies are the product of complex power play between divergent actors and their interests Discourses are intertwined with power relations some of them are more dominant than others The energy production and distribution choices are political but usually they are rendered technical and administrative One of the most dominant concepts in the energy sector has been energy security 3

4 World Bank and ADB in the Energy Sector In the developing country context developing banks are powerful actors in the field of energy WB and ADB enjoy great leverage and influence by virtue of its superior credit rating and close cooperation with governments: Project- or programme-based lending Technical assistance Training Policy dialogue and evaluation, which are especially linked to transferring certain ideas, concepts, practices, and values to the recipient countries 4

5 WB and ADB are major creditors in the energy sector in the developing countries WB: In the 1980s 25% of all ending to energy sector. In 1990s the lending degreased to 10% Opposition to dam construction increased WB began to emphasize the importance of private investments Early-21 st century the share has increased: clean energy technologies ADB has increased lending for the energy sector: Early-1980s: $ 0,5 billion Early-1990s: $1,7 billion Target: $2 billion by

6 Different Securities Banks understanding of energy security has changed, which reflects wider change in understanding energy security Energy security concept was developed in 1970s as a reaction to oil crises. Oil crises and Arab oil embargo was seen as a threat to Western energy security. Oil supply is heavily dependent on the politically volatile Middle East From the late-1970s and 1980s the decline of fossil fuels is seen as main threat to energy security Sufficiency of supply in affordable prices In 1990s also environmental considerations and sustainable development Sustainable development and energy for all Now climate concern overcome other environmental concerns Low-carbon technologies and climate-smart solutions: energy efficiency, renewable energy and nuclear 6

7 Development Banks Defining Energy Security / Insecurity Decade Source of insecurity Solution increasing energy security 1980s Vulnerability Building of energy infrastructure and use of indigenous energy sources 1990s Inefficiency Privatisation of energy sector; regional electricity trade Early 21th century Poverty and climate change 2010 Poverty, climate change, population growth and other reasons for growing demand, lack of energy security Sustainable development and energy for all, capacity-building, renewable energy, regional cooperation Climate-smart energy solutions renewable energy and nuclear (for middle-income countries) 7

8 WB and ADB Shaping the Energy Policy in the Mekong Region World Bank and ADB extended their focus from Thailand to other countries in the region in the late-1980s as stability was largely restored ADB and the World Bank have influenced the energy policies and especially the development of dams and electricity infrastructure in the Mekong Region, and attempted to orientate national policies towards private-sector led development In 1992, the ADB launched the Greater Mekong Subregion (GMS) program It set a path towards regional economic integration - orientated around establishing a neo-liberal market-based economy Assumptions that regional cooperation is an automatic outcome of economic integration 8

9 GMS and Regional Grid Emphasis on physical interconnectivity of the region In addition to transnational highways, railways to encourage cross-border trade major focus has been on energy related infrastructure Energy development has become a major focus of economic cooperation One of the core objectives of the GMS program has been the establishment of a regional power grid & regional power-gridbased energy market In November 2002: signing of an Inter-Governmental Agreement on Regional Power Trade The Mekong Power Grid is expected to connect to the industrialized centers of Singapore and Malaysia as part of a larger ASEAN grid 9

10 The Grid & Hydropower Dams Regional power grid is arguably environmentally friendly as it would enable substitution of a large number of coal-fired plants by hydropower The transmission lines are opening up previously inaccessible (remote & mountainous) areas for hydropower development Many of the hydropower projects that would be powering the grid are controversial (Tasang in Burma, Nam Theun 2 in Laos, Sambor in Cambodia ) 10

11 Critisism on GMS and Development Banks Assumptions Vis- à-vis national energy security: too strong an emphasis on market and trade failures in paying attention to meeting the basic domestic, commercial and industrial needs for electricity in these nations Vis-à-vis regional markets delivering cooperation and mutual benefits: poorer economies (Laos and Burma in particular) supplying hydropower to wealthier neighbors (Thailand and Vietnam) unequal allocation of risks related to hydropower Externalised political risks to countries were space for public debate and civil society is very limited Plans for hydropower projects in the region are largely justified by projections of over-estimated demand for electricity in Thailand, Vietnam and China 11

12 Boom of dams: Several Old Dam Plans Revived & New Identified Vietnam: 11 large dams built by under construction 28 more planned by 2025 Laos: Projects in operation: 7 Projects officially under construction: 8 Projects at pre-construction or advanced planning stages: 16 Projects at feasibility stage: 44 Projects proposed for Mekong mainstream in Laos/Lao-Thai border: 8 China/Yunnan: 8 dam cascade for the Lancang Cambodia: 2 dams under construction At least 11 large dams under study Burma 14 Chinese companies involved in at least 40 hydropower projects Large dams mainly financed by the private investors, but development banks also involved 12

13 Dams in the Mekong Basin Existing Under construction China Thailand Laos Cambodia Vietnam Total Proposed From these dams in the mainstream: 3 existing, 2 under construction, 14 mainstream dams planned Impacts: The tempering of the peaks of flood and drought by hydropower dams although beneficial for industrial agriculture, would be seriously damaging for the basin s fisheries. The dams are estimated also to block important routes of migratory fish. 13

14 Cambodia s Tonle Sap Lake and its fisheries especially under threat One of the richest inland fisheries in the world A central source of livelihoods and food for well over one million people living in the lake are and its flood plains Half of Cambodia s population benefits directly or indirectly from the lake s resources MAP: Matti Kummu Examples of the impact mechanisms: Increased dry-season water level part of flooded forest lost Sediments trapped by dams nutrient-rich sediment driver of aquatic production

15 Mekong Region vs. Mekong Basin WB and ADB backed Greater Mekong Sub-Region are not directly dealing with impacts of energy plans to Mekong Basin these issues are externalized to the Mekong River Commission (MRC) MRC defines its role as a basin management organization, but not a simple role in the face of the current wave of extensive hydropower development plans Challenges of regional cooperation China: energy needs, Yunnan seen as a periphery Thailand: Greening Isaan water diversions Laos: the battery of Asia hydrodams Cambodia: the fish basket Mekong Delta of Vietnam: the rice basket (green and blue revolution) 15

16 The Debate So Far MRC has been trying to balance the conflicting ways of seeing the river basin: Development engine/energy production vs. Conservation region/biodiversity vs. Livelihoods/fisheries/food security/social equity At the time when there is a major concern that most large rivers have been overdeveloped and problems related to large-dams have been widely acknowledged (e.g. WCD 2000) the justification for dams in Mekong has been somewhat challenging Despite the high figures of estimated losses of fisheries the official discourse of the governments has been to frame the fisheries as a doomed resource, without any development potential, so the destruction of fisheries dependent livelihoods, even if seen as lamentable, is also seen as inevitable and something that can be compensated through proper calculations 16

17 Now: Justification in Terms of Climate Change WB and ADB vision hydropower as the source of clean and climate friendly energy for the Mekong s future Dams are being seen in more favourable light and one main justification is hydro being presented as clean energy Also MRC is adopting the new line of justification: The dramatic fluctuations in oil and gas prices over the last year and the growing evidence of change in the planet s climate have focused global attention on the need for sustainable sources of clean energy and Mekong is a source of enormous collective energy potential to date only around 5 per cent of that potential has been realised (Jeremy Bird, CEO of Mekong River Commission) But also counter arguments are emerging Dams and reservoirs are major global sources of global warming pollution Dams threaten sustainable, low-carbon livelihoods 17

18 Interesting Shifts Even though dams have been going ahead full-speed their legitimisation has faced several challenges Energy security vs. food security: The losses in fisheries threatening the region s food security have recieved increasingly attention Now argumentation is shifting: From acceptable sacrifices of economical development acceptable sacrifices for saving the climate & enhancing adaptation Climate Change and the new emphasis in clean energy has created new justification momentum also for nuclear energy 18

19 WB s Vision for East and Southeast Asia 2030 low-carbon discourse enableing nuclear development Low-carbon technologies would meet half of East and Southeast Asia s power demand by 2030 (WB 2010) This would require a 3-fold increase in the share of low-carbon technologies in power generation from today s 17 percent Both banks see nuclear as an option, at least for some middleincome countries in the near future, especially in Asia Governments nuclear plans in the Mekong region: (China: aggressive plans to boost nuclear power) Vietnam: National Assembly approved the construction of first nuclear power plant in November 2009 Thailand: Plans to introduce nuclear power after

20 Risks of the low carbon discourse Now the discussion of low carbon society has begun in Thailand. We see now that we have to change our strategy and start discussing about energy democracy, sustainable livelihoods and sustainable communities because in the name of low carbon the government has started talking about four new nuclear plants. Wanun Permpibun, Researcher and member of Thai Working Group on Climate Justice 20

21 Alternatives? Decentralised Systems and off-grid Programs Energy for all strategy: more focus on small off- grid solutions Alternatives mostly developed as off-grid programs Especially in Laos decentralized sustainable renewable energy considered as pre-electrification or option for areas where grid is estimated not to reach in future In Laos WB has focused more on hh level solutions than in supporting small grids More of a complementary electrification strategy than an alternative pathway? 21

22 Conclusions The narrow interpretation of energy security has been challenged Development banks discourse on energy and seciurity have been transforming during last decades Energy policy shifts and discursive turns of development banks have been influencial in the Mekong region s energy development However, the pervasive hydropower plans have not gone through considerable changes but their justifications have changed: Energy for economic development Energy for all in line with sustainable development and poverty reduction Energy by using low carbon technologies Today development banks see also nuclear as an option for middle income Asian countries 22

23 Despite the changes in the conceptualisation of security it remains to be a depolitizising one the power relations not receiving enough attention The communites most threatened by the current energy plans still remain as subaltern subjects not heard in the debate However, the dominant discourse has been contested by NGOs and research organisations Some demand human security dimension to be included in energy security discussions More critical actors demand energy democracy instead of energy security 23