Prospects for Energy Security in Asia-Pacific through Regional Trade

Rio + 20 has reiterated that sustainable development incorporates three dimensions, one of which is economy including trade. Demand for energy in Asia has also been linked to rising trends of trade and production. Trade and investment can also play a key role in mitigating climate change. Increasing growth-driven energy demand, coupled with the increasing price burden of fossil fuels, has made efforts for energy security more important than ever in Asia-Pacific. Despite being home to major energy producers such as Central and South Asian (CSA) countries, regional energy trade and integration have been limited, with countries typically looking outwards to secure either supply or demand. This has led to high import and export dependency and deteriorating trade deficit with the rest of the world. The objectives of this paper is to examine the trends of production and trade in energy in Asia and the Pacific. It therefater explores if countries can cooperate with each other for a more efficient way of energy security through regional trade which is sustainable. This paper looks at energy import and export flows at the regional, sub-regional, and national level to determine the significance of certain Asia-Pacific countries and their main energy security concerns.This paper then analyses if strengthening intra-regional energy trade linkages can help countries of the Asia-Pacific Trade Agreement (APTA) and the CSA to diversify their energy sources and the energy mix. APTA counts three of the largest economies in Asia-Pacific (China, India and South Korea) as members, and they are consistently among the top importers of primary fossil fuels (oil, gas, and coal). Conversely, the CSA countries of Iran, Kazakhstan, Azerbaijan, the Russian Federation, and Turkmenistan are among the top fossil fuel exporters in the region. Both energy importers and exporters are heavily reliant on energy trade to fuel economic development, and this paper thus examines the gains in integrating trade flows. Synergistic gains can be achieved if regional energy trade between CSA and current APTA Participating States were strengthened, with APTA being a suitable vehicle to facilitate this integration.