Climate Change: Developing Asia Drives Industrial Heat Demand

February 25, 2018

By Élie Bellevrat and Kira West

https://www.asiasentinel.com/econ-business/climate-change-developing-asia-drives-industrial-heat-demand/

 

Industrial heat makes up two-thirds of industrial energy demand and almost one-fifth of global energy consumption. It also constitutes most of the direct industrial CO2 emitted each year, as the vast majority of industrial heat originates from fossil-fuel combustion.

Yet despite these impressive figures, industrial heat is often missing from energy analyses. That is why this year’s World Energy Outlook takes a deep dive in this important segment of our energy system.

While industrial heat demand – at all temperature levels – grows in the central scenario of the World Energy Outlook 2017, the underlying drivers are different depending on temperature requirements. Low- and medium-temperature heat (below 400C) is expected to account for three-quarters of the growth in heat demand in industry by 2040, driven by less energy-intensive industries.

This is a reversal of historical trends: in the last 25 years, high-temperature heat represented two-thirds of overall heat demand growth, driven by China’s rapid development of heavy industries such as steel and cement. That said, developing Asia continues to drive industrial heat demand growth in our outlook: the growth in low- to medium-temperature needs in this region alone represents about half of the global industrial heat demand increase in use to 2040.

Low-temperature heat use grows in most regions through 2040, except in the European Union and Japan. The outlook for high-temperature heat varies even more across regions, including among developing countries. It decreases in China with the country’s shift to a less energy-intensive development pathway, while it increases in India as the country becomes, by large distance, the main global driver.

 

As industrial heat demand continues to grow so does its share in energy-related CO2 emissions, accounting for a quarter of global emissions by 2040. Any efforts taken to reduce this global trend face unique challenges. First, industrial heat is often generated on-site, making it more difficult to regulate than a more centralized sector such as large thermal power generation. There is also limited policy focus in this area compared with other sectors.

Second, while heating needs for residential and commercial buildings are fairly standard, industrial heat encompasses a wide variety of temperature levels for diverse processes and end-uses. For instance, cement kilns require high-temperature, while drying or washing applications in the food industry operate at lower temperatures.

 

Different technology and fuel options are available depending on the required temperature level, but these are often not interchangeable. For example, low-temperature heat from a heat pump cannot be substituted for high-temperature heat from a gas boiler.

Today’s industrial heat demand relies mainly on fossil fuels, biomass and electricity, and only very small shares of renewable resources in certain sectors. Therefore decarbonisation would require a dramatic shift in how industrial heat is generated. Yet this goal is instrumental to following a low-carbon development pathway as defined in the Sustainable Development Scenario, a new global scenario providing an integrated way to achieve three critical policy goals simultaneously: climate stabilisation, cleaner air and universal access to modern energy. The best option for reducing energy use of industrial heat will depend on the specific use and required temperature.

In his seminal classic, Geopolitics of Technology, prof. Anis H. Bajrektarevic states: “…, the main problem with Green/Renewable (de-carbonized) energy is not the complexity, expense, or the lengthy time-line for fundamental technological breakthrough; the central issue is that it calls for a major geopolitical breakthrough. .. Ergo, oil (and gas) represents far more than energy. Petroleum (be it a finite biogenic mineral or not) is a socio-economic, psychological, cultural, financial, security and politico-military construct, a phenomenon of civilization … In a broader historical, more vertical or philosophical sense, the hydrocarbons and its scarcity phychologization, its monetization (and related weaponization) is serving rather a coercive and restrictive status quo than a developmental incentive. That essentially calls not for an engagement but compliance…”

Fuel switching can provide some benefit, for instance substituting gas for coal, but for more ambitious climate targets more transformative solutions are needed. For example, under certain conditions, electrification can be a low-cost and sustainable option ­– heat pumps can be economical solutions for low- and medium-temperature needs. Electrification may also be possible for specific high-temperature industrial processes, such as electricity-based steel production. However the sustainability of electrification depends on broad decarbonisation of the power sector to actually reduce emissions at the system level.

Direct renewable heat sources such as solar and geothermal can also be economical for applications below 400 degrees Celsius, but they are not easy to integrate in all industrial facilities. Bioenergy can be used for high-temperature heat demand, but is resource-constrained and only economical and sustainable under certain operating conditions and in certain regions.

Industrial heat can be decarbonised through the deployment of carbon capture, utilization and storage (CCUS). This can include, for instance, technologies to remove CO2 emissions from flue gas before recycling the CO2 in industrial processes, such as for methanol production, or storing it permanently.

Finally, end-use efficiency, through the use of modern equipment, improved insulation or heat recovery, can reduce final demand before the heat is even generated – often, limiting overall heat requirements is the first strategy adopted, before taking actions to decarbonise remaining heat use.

Ultimately, widespread deployment of energy efficiency and a least cost mix of these options can point to a more sustainable future for industrial heat. Putting the appropriate regulatory framework in place will be key to ensuring that investments are targeted in a way that makes this future possible.

Élie Bellevrat and Kira West are World Energy Organization analysts. An early version of this was published by the International Energy Agency

 

Fact-checking critics of Chinese aid

November 29, 2017

by Alvin Camba, John Hopkins University

http://www.eastasiaforum.org

Pundits and journalists have often argued that Chinese loans are expensive and harmful to recipient countries. But they fundamentally misunderstand how Chinese aid and investment works across different countries.

Criticisms of Chinese aid suffer from four crucial problems. First, Chinese interest rates have been higher than comparable loans from other OECD Development Assistance Committee (DAC) countries because China lends to states with low investment grades. Interest rates vary across different donors but loan parameters depend on the recipient country’s investment grade and the donor state’s funding program. Put simply, DAC interest rates could have also been higher had these states funded similar projects.

Second, DAC countries follow one set of criteria for loans while China follows another. For the DAC, a loan becomes a concessional project when interest rates and the grace period are about 25 per cent cheaper than a comparable market loan. Although China’s concessional loans operate according to some DAC criteria, China’s Export–Import Bank often subsidises the interest of the project. As a result, the interest is charged to the Chinese government’s external assistance budget. In this loan agreement, the recipient country pays for the actual price of the project instead of the interest on the loan, departing from the DAC’s model. In other words, some of China’s loans are cheaper than the DAC alternatives.

Third, because the World Bank and other DAC countries have moved away from funding large-scale infrastructure while Japan has been wary of funding energy-intensive schemes, there are no other external funders willing to finance such projects in developing countries. China was the only willing financier of some crucial infrastructure projects in many sub-Saharan African and Latin American states. Those arguing that Chinese interest rates have often been higher fail to acknowledge that unless a similar offer was put forward by alternative funders, ‘base’ market rates cannot be used for comparison. It is misleading to compare Japanese, Chinese and World Bank loans directly because the funding parameters of these projects were calculated under vastly different conditions.

And last, for all the criticisms that China gets, Western countries have been equally guilty of sending developmental aid and investment when these actions suit their national interest. The United States sends aid to states with questionable human rights records, including Saudi Arabia, Israel and Pakistan. Similarly, when they need to acquire strategic resources or cheap labour, the French and British invest in the Western Sahara and former colonies despite their questionable human rights and governance records. Indeed, the West remains the biggest source of debt, aid and investment for African countries.

Despite all this, China has been disproportionally painted as a ‘bad investor’ by major Western newspapers while drawing the public’s attention away from the involvement of Western companies.

Rather than a downward impact on GDP per capita or nominal growth rates, China’s rise in the global economy has pushed more countries from the periphery into the semi-periphery. Chinese companies invest in developing countries that are ignored by other major investors and target key sectors that have been overlooked by Western aid. China’s participation often increases competition among investors for key development projects, allowing recipient countries to bargain more effectively for better returns.

This is not to say that China is the saviour of the developing world. Chinese aid brings potential negative implications, but it is important for recipient governments and their constituents to recognise the evidence-based dangers rather than popular arguments with minimal empirics.

While pundits often misunderstand aspects of China’s economic engagements, academics and researchers have long recognised and debated three main dangers of China’s aid and investment.

China has asked for political returns in exchange for debt forgiveness. Apart from territorial expansion, China has been interested in acquiring ports located in the participant states of the Belt and Road Initiative, including in Sri Lanka, Djibouti and Malaysia. China’s territorial interests and port acquisitions have and will continue to elicit responses from competing states.

Another danger of Chinese investments and deals lies in the multiple actors involved in the process. China is not a monolithic actor, but comprises multiple state departments, state-owned enterprises, private corporations and citizens. While Chinese foreign direct investment has funded key strategic infrastructure, it has also spurred de-industrialisation and environmental degradation. Chinese aid and investors can be good or bad depending on the type of Chinese actor and the recipient governments’ response.

Finally, Xi’s China presents host states with a greater risk of falling into a debt trap. In previous cases when developing countries could no longer repay loans, China has allowed debt forgiveness and loan restructuring or has asked for specific and negotiable political or economic returns. Ironically, this is distinct from the policies of the World Bank and Western countries that put much of the developing world in a vicious debt trap in the 1980s. But with China’s economic slowdown, changes of leadership and geopolitical ambitions, China may not be as forgiving in the future.

Alvin Camba is a doctoral candidate at the Department of Sociology, Johns Hopkins University. He also writes at the Alitaptap Collective.

 

The American Dream: Detroit’s resuscitation

April 4, 2016

by Shrey Srivastava

If one could epitomise the phrase “could have been” in one simple image, it would indubitably be the image of Detroit. The unyielding forces of time have taken a once great city and denigrated it to the status of one of not only one of America’s most economically destitute, but also one of its most dangerous regions. Nowadays, Detroit carries many of the hallmarks of the lesser developed countries of the world, especially with roughly 47% of the population being described as “functionally illiterate” by The National Institute for Literacy, a rate only 13.8% higher than that of Afghanistan. Despite this, Detroit still carries as much, if not more potential as it did in the 20th century, and is simply crying out for some economic solutions to its varied and diverse range of problems. Much of Detroit’s high crime rate can, in truth, be narrowed down to a high unemployment rate, leading to a lack of jobs for people to occupy themselves with, so even this ailment, is, at its core, financial. What this means is that there is still hope for this long-suffering city, as long as the relevant American policymakers act in a fashion that is both effective and sustainable; alas, it is clear to see that this has not happened thus far. Nevertheless, what I endeavour to achieve with this article is to perhaps shed some light on how Detroit can again become the bustling, cosmopolitan hub that it once was, through, primarily, the introduction of a special economic zone.

Special economic zones, which seem like a highly unusual step for a developed country such as the USA, may in fact be a simple and effective solution to revitalise the city of Detroit. The step of making the city a special economic, or more specifically, an industrial zone could potentially be the catalyst for a holistic revitalisation of the Detroit economy. In a nutshell, an industrial zone is a zone specifically made out for industrial development, where tax cuts and tax holidays, among other financial incentives, would incentivise corporations to set up operations in Michigan’s largest city.

Detroit’s unemployment rate was a whopping 29% during the worst that we saw of the 2008 recession, meaning that more than 1 in 4 people were unemployed at the time. Despite having reduced somewhat due to, among other causes, a steady outflow of people from the city, unemployment rates are still grossly high, and if Detroit wants to reverse its fall from grace, this is one of its first facets that need changing. The only way to do this, in truth, is by somehow persuading businesses to come to this dilapidated zone of urban decay, and invest in the revitalisation of the area. Now, feasibly, the only way in which this can happen is by supplying them with the aforementioned financial incentives to encourage them to locate in Detroit, supplying jobs for a great proportion of the population. This is the intuitive first step to Detroit’s regeneration.

If Detroit is to see great financial development, this landscape would need to fill with industry.

Functional illiteracy, as alluded to above, is also a major proverbial roadblock to the future success of Detroit. The solution to this is almost as obvious as its problems itself; to invest more in education. Despite politicians’ repeated assertions stating the importance of education, they themselves seem not to believe in what they say, the evidence of which lies in Detroit’s astonishingly abysmal literacy rates. Regardless, education is quite frankly one of the most important facets of any developed region, so for Detroit’s schools to be in the state they are in (as repeatedly shown by the mass media) is frankly shocking. Needless to say, this can only be solved through an increase in education spending in the city, which would give a better education to many residents of the city, thus giving them more transferable skills with which to work and earn money. In addition to this, education has a vital role to play in keeping school-aged adolescents off the streets, thus reducing crime rates, and making the city overall more attractive for people to relocate to. With the low house prices across the whole of Detroit nowadays, it could prove a popular location for many individuals desiring a lower cost of living, if only there was a basic level of security and educational services in the area. By spending more on education, many of Detroit’s fundamental problems could perhaps be ameliorated or even eradicated altogether.

A crucial step Detroit that now needs to take towards renewal is to upgrade its educational facilities.

To make sure that Detroit does not fall prey to the same evils which caused its dilapidation decades ago, they need to learn from their various mistakes. The biggest of these was to rely far too much on the car industry, which turned into its Achilles heel when Ford Motors, among other corporations, left the city. Diversification is the key here to financial prosperity, as Detroit needs to ensure that when one industry perhaps fails in the city, there are many others to continue to back up the city financially. This was exactly the problem with the city before; they did not have a backup plan for when demand for automobiles lessened. The conversion of Detroit into an industrial zone and a renewed focus on education will only be sustainable if the city manages to provide wide-ranging sources of income; otherwise, they will simply consign themselves to the same fate as before. In addition, without diversification, a great deal of brain drain would occur, with talented residents leaving the city due to lack of opportunity in their chosen field of expertise. As such, it is crucially important for Detroit to spread its roots far, not deep, if they want to ensure their continued financial prosperity. Of course, in addition to the 3 economic reforms outlined here, much social reform needs to take place in the city before we can truly say that it has been regenerated, but these financial steps provide the building blocks to restore Detroit, again, into a great pillar of the USA.

 

 

Message to Malaysian Civil Servants–Stand Up and be Counted

February 27, 2016

by Pola Singh

 Malaysian Civil Servants–Pak Turuts and  Pak Hunggoks

FOR some unexplained reason, civil servants are reluctant to be seen with the rakyat in championing certain causes; no matter how worthy they are. Something is preventing them from showing their support.

Take for instance preserving and protecting the remaining green lungs in KL city; Bukit Kiara (BK) located in the heart of the city is a good example.

At the national level, the Cabinet in 2007 agreed to gazette 189 hectares to turn it into a public park. But things moved at a snail’s pace with parcels of land being given out to the well-connected through the years.

We now learn that the Government will finally gazette Bukit Kiara next year and not surprisingly only 159ha will be gazetted. The rakyat is also not sure whether this hectarage figure will remain intact when it comes to crunch time.

So in order to send a strong message to the powers that be to uphold their promise to gazette Bukit Kiara speedily, Friends of Bukit Kiara (FoBK) has so far organised three “Save Bukit Kiara” walks. Although a sizeable crowd turns up, there are hardly any civil servants participating in such an event. Why? If they don’t seem to be interested, why are the heads of departments not encouraging their officers and staff to support such worthy causes especially when they are in line with their own policies and what they expound.

For instance agencies such as the Economic Planning Unit (EPU) and ministries such as the Natural Resources and Environment Ministry have formulated clear green and environmental policies while City Hall (DBKL) and Jabatan Landskap Negara have developed the KL Master Plan to implement.

When announcing the sound policies, promises are made and assurances given that they will actively engage the key stakeholders to ensure the successful implementation of the policies.

But when such opportunities arise they are nowhere to be seen. It appears as if they are disinterested to push forward their policy agenda.

Now it looks like that only the NGOs and public support such causes while the policy formulators who should be actively involved at the ground level appear indifferent.

Why are the civil servants so reluctant to turun padang but instead seem content watching from a distance? After all it is their cause that the rakyat is supporting. By right they should be turning up in full force as well as helping in organising such events.

Is it fear? Are they afraid for reasons best known to them, to be seen mingling with personalities from NGOs? Or could they think that they might incur the wrath of certain well-connected people? Or is it simply a case of plain apathy?

Whatever it is, the mind-set has to change. Heads of departments should encourage their officers and staff to take part in such meaningful events as well as intermingle with like-minded rakyat. More importantly these departments and agencies must walk the talk.

On an individual personal basis and as a concerned citizen, aren’t they prepared to play their part to protect and preserve the green lungs so that their children, grandchildren and future generations can enjoy what they are currently enjoying.

http://www.thestar.com.my/opinion/letters/2016/02/26/stop-being-indifferent/

Apandi, The Legal God, clears Prime Minister Najib Razak of Any Criminal Wrongdoing

January 26, 2016

by V. Anbalagan, Assistant News Editor

http://www.themalaysianinsider.com

Dato’ Seri Najib Razak has been cleared of any criminal wrongdoing, the Attorney-General said today, after close to six months of investigations into the RM2.6 billion channelled into the prime minister’s bank accounts and into Finance Ministry-owned firm, SRC International Sdn Bhd.

Tan Sri Mohamed Apandi Ali, who is also public prosecutor, today told a packed press conference at his office in Putrajaya there was “insufficient evidence” to implicate the Prime Minister.

“Based on facts and evidence, no criminal offences have been committed by the PM in relation to three investigation papers. I hereby order the MACC (Malaysian Anti-Corruption Commission) to close the investigation papers,” Apandi said.

The three papers are one on the RM2.6 billion donation and two on SRC International which had taken a RM4 billion loan from the Retirement Fund Inc or KWAP. Apandi today also cleared Najib of any wrongdoing in relation to SRC International.

Apandi said that based on evidence from witnesses and supporting documents submitted by the MACC, the sum of US681 million (RM2.08 billion) deposited into the personal accounts of the prime minister between March 22, 2013 and April 10, 2013 was a personal donation to Najib from the Saudi royal family which “was given to him without any consideration”.

“MACC in their investigation personally met and recorded statements from witnesses, including the donor, which confirmed that the donation was given to the PM personally,” he said.

Apandi said he was satisfied that there was no evidence to show that the donation was a form of gratification given corruptly.

No Case to Answer–NFA

“Evidence obtained from the investigation does not show that the donation was given as an inducement or reward for doing of forbearing to do anything in relation to his capacity as a Prime Minister,” said Apandi who read a statement from a prepared text.

Furthermore, the A-G said the Prime Minister returned US$620 million (RM2.03 billion) to the Saudi royal family in August 2013 because the money was not utilised.

“There (is) no evidence to show that Yang Amat Berhormat PM had any knowledge and, or was informed that the monies had been transferred into his personal accounts from the accounts of SRC International.There (is) no evidence that YAB PM had given any approval for the transfer of monies from the account of SRC International into his personal accounts,” Apandi said.

Based on the evidence, the A-G said he was satisfied that no criminal offence had been committed in relation to the said RM2.08 billion.

MACC last year opened investigations following reports in The Wall Street Journal and Sarawak Report in July last year alleging that of the RM2.6 billion donation, RM42 million had originated from SRC International, a subsidiary of Najib’s brainchild, 1Malaysia Development Bhd (1MDB).

This was according to documents on the money trail provided by Malaysian investigators, WSJ and Sarawak Report said.A larger tranche of US$681 million was also transferred ino Najib’s accounts, originating from a British Virgin Islands company and going through Falcon Private Bank in Singapore, they reported.

MACC had recorded statements from more than 100 witnesses, including Najib and the individual who allegedly gave RM2.6 billion. The agency first submitted investigation papers to the A-G on December 31, and had the papers returned with requests for more explanations on January 18. It resubmitted the papers last week.

MACC’s Deputy Director of Operations Dato’ Séri Mohd Shukri Abdull earlier said the RM2.6 billion probe was still incomplete as investigators needed to collect documents and statements from individuals from several overseas financial institutions. Shukri added that the commission filed a request with the A-G to obtain mutual legal assistance (MLA).

Apandi said today since no criminal offence had been committed, there was “no necessity” for Malaysia to make a request for an MLA to any foreign states to complete the investigation by the MACC in relation to the donation.

 

The Poorest Among the Poor in Kuala Lumpur

October 22,2014

What is their Future?

I got this from a friend who is living abroad. I can now understand why he chose to make a living overseas. I thank him for taking the trouble to send this SABM article (below) and for reminding me that we have plenty to do to eradicate poverty.

This thread is an eye open opener for all us regardless of colour, race and religion. We have the poorest among the poor in our midst right here in Kuala Lumpur. The pictures you see tell a sad story. Our country which hopes to be a developed nation in 2020 cannot deal with the plight of our poor citizens. See how they live. Sorry to spoil the Divali party.–Din Merican

http://sayaanakbangsamalaysia.net/index.php?option=com_content&view=article&id=808&catid=40&Itemid=76