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Deepen Understanding and Move Forward: Energy Market Integration in East Asia

Author

Listed:
  • Fukunari Kimura
  • Xunpeng Shi

Abstract

Energy Market Integration (EMI) in East Asia has been implemented in the past decade with the emergence of cooperation between ASEAN and its dialogue partners. ASEAN is working towards a single market by 2015, under the guideline of AEC (Bali Concord II, 2003). Considerable progress in the EMI was made as a result of cooperation achieved through the ASEAN plus Three (APT) process and, later through the East Asian Summit (EAS) 1 process (Shi and Kimura, 2010). The main incentives to promote EMI are improving energy security, reducing carbon dioxide emissions, and facilitating regional integration. EMI is also expected to foster economic growth through facilitating trade in energy within the region, optimizing resource allocation across countries, improving the productivity of energy consumption in each country, and protecting the environment. It is therefore widely believed that EMI in East Asia is beneficial for both developed and developing countries. This is partly because rapid economic growth of a country in this region always requires steady energy resource supply and EMI can provide a guarantee for the energy resource supply from an institutional perspective and partly because many East Asian countries are less developed but resource abundant and thus EMI can facilitate their development. However, such benefits are more often stated in qualitative ways than in quantitative ways. Since the benefits of EMI are not without questions, it is useful to do further quantitative studies to deepen our understanding on the impact of EMI. Moreover, even though EMI in the EAS region seems beneficial and promising, the way toward EMI will not be smooth and therefore the implementation of EMI should be carefully studied. East Asia has been pursuing economic integration an effective instrument proved by the European and North American experience to maintain sustainable regional economic development and poverty reduction across countries, for quite a while. However, the progress on EMI so far is limited. This is not exceptional as EMI is often closely related to national sovereignty, energy security, and other sensitive issues such as subsidy removal. It is therefore necessary to find ways to move EMI forward.

Suggested Citation

  • Fukunari Kimura & Xunpeng Shi, . "Deepen Understanding and Move Forward: Energy Market Integration in East Asia," Chapters,, Economic Research Institute for ASEAN and East Asia (ERIA).
  • Handle: RePEc:era:chaptr:2010-rpr-25-01
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    Citations

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    Cited by:

    1. Fumihiko Matsubara, 2019. "The Landscape of Business Growth for Oil and Gas Upstream Companies: A case from Japan," International Journal of Energy Economics and Policy, Econjournals, vol. 9(6), pages 86-94.
    2. Sheng, Yu & Wu, Yanrui & Shi, Xunpeng & Zhang, Dandan, 2015. "Energy trade efficiency and its determinants: A Malmquist index approach," Energy Economics, Elsevier, vol. 50(C), pages 306-314.
    3. Shi, Xunpeng & Padinjare Variam, Hari Malamakkavu, 2016. "Gas and LNG trading hubs, hub indexation and destination flexibility in East Asia," Energy Policy, Elsevier, vol. 96(C), pages 587-596.
    4. Edward Halawa & Geoffrey James & Xunpeng (Roc) Shi & Novieta H. Sari & Rabindra Nepal, 2018. "The Prospect for an Australian–Asian Power Grid: A Critical Appraisal," Energies, MDPI, vol. 11(1), pages 1-23, January.
    5. Shi, Xunpeng, 2016. "The future of ASEAN energy mix: A SWOT analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 672-680.
    6. repec:era:chaptr:2013-rpr-29-06 is not listed on IDEAS
    7. Widodo, Tri, 2016. "Comparative Advantage of Energy Products in the Midst of ASEAN Economic Integration," MPRA Paper 79964, University Library of Munich, Germany.
    8. Li Yingzhu & Su Bin & Shi Xunpeng, 2017. "Economic, Social, and Environmental Impacts of Energy Subsidies: A Case Study of Malaysia," Chapters, in: Han Phoumin & Shigeru Kimura (ed.), Institutional Policy and Economic Impacts of Energy Subsidies Removal in East Asia, chapter 2, pages 15-32, Economic Research Institute for ASEAN and East Asia (ERIA).
    9. Dandan ZHANG & Xunpeng SHI & Yu SHENG, 2014. "Enhanced Measurement of Energy Market Integration in East Asia: An Application of Dynamic Principal Component Analysis," Working Papers DP-2014-23, Economic Research Institute for ASEAN and East Asia (ERIA).
    10. Sheng, Yu & Shi, Xunpeng & Zhang, Dandan, 2014. "Economic growth, regional disparities and energy demand in China," Energy Policy, Elsevier, vol. 71(C), pages 31-39.
    11. repec:era:chaptr:2013-rpr-29-10 is not listed on IDEAS
    12. Li, Yingzhu & Shi, Xunpeng & Su, Bin, 2017. "Economic, social and environmental impacts of fuel subsidies: A revisit of Malaysia," Energy Policy, Elsevier, vol. 110(C), pages 51-61.
    13. Yazdani, Mehdi & Pirpour, Hamed, 2020. "Evaluating the effect of intra-industry trade on the bilateral trade productivity for petroleum products of Iran," Energy Economics, Elsevier, vol. 86(C).
    14. Yu SHENG & Yanrui WU & Xunpeng SHI & Dandan ZHANG, 2014. "Markket Integration and Energy Trade Efficiency: An Application of Malmqvist Index to Analyse Multi-Product Trade," Working Papers DP-2014-20, Economic Research Institute for ASEAN and East Asia (ERIA).
    15. Shi, Xunpeng & Yao, Lixia, 2020. "Economic Integration in Southeast Asia: The Case of the ASEAN Power Grid," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 35(1), pages 152-171.
    16. Shi, Xunpeng & Variam, Hari M.P., 2017. "East Asia’s gas-market failure and distinctive economics—A case study of low oil prices," Applied Energy, Elsevier, vol. 195(C), pages 800-809.
    17. repec:era:chaptr:2013-rpr-29-05 is not listed on IDEAS
    18. Zhang, Dandan & Shi, Xunpeng & Sheng, Yu, 2015. "Comprehensive measurement of energy market integration in East Asia: An application of dynamic principal component analysis," Energy Economics, Elsevier, vol. 52(PB), pages 299-305.

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