Bric countries, now long being touted as the most promising of the emerging economies, obviously have many challenges before turning these hopes into reality. The priorities for overcoming the various hurdles may vary across these economies. But one of the most formidable challenges, that has to be tackled, is the improvement in energy efficiency.
The Bric countries? record on energy efficiency shows that there is a large gap that has to be bridged if these countries have to improve competencies and catch up with the developed countries. But what is more striking is the considerable disparity in the energy intensity among the different Bric countries.
Figures for 2006 show that Brazil, which consumed 12,561 Btu of energy for every dollar of GDP output at market exchange rates, was the most efficient energy user. In fact the energy intensity levels obtained is only marginally higher than the global energy intensity of 12,385 Btu for every unit of dollar GDP. Brazil?s record on the energy front, however, is still lagging on some counts. Even some of the other South American countries like Argentina have a better record in energy consumption. But it is still credible that the energy intensity in Brazil is almost a third lower than that of Venezuela, the largest source of oil in South America.
The only disconcerting note in Brazil?s record of energy use is that the annual average of 0.6% increase in energy intensity since the nineties has been almost six times that of the Latin and Central American region as a whole. But it can also be argued that Brazil has been fairly successful in reducing energy intensity of output in the current decade.
Second on the list of the most energy efficient countries among the Bric nations is India. The 24,616 Btu of energy used to produce each dollar unit of GDP in India was more than a third higher than in the Asia Pacific region as a whole. The only consolation is that neighbouring Pakistan has an equally unimpressive record, though it is still a few units lower. The potential for gains are significantly large given that an economic power like Japan produces one dollar GDP using just 4,467 Btu of energy, which is just about a fifth that of India.
Malaysia and Indonesia, which have equally big or even larger manufacturing sectors, also manage to use significantly lower amounts of energy. Among smaller countries only Vietnam has a worse record than India in this region. And the energy intensity in South Korea, which caters to global markets is a third lower than that of India.
However, what makes India?s case somewhat outstanding to an extent is its relatively greater success in boosting energy efficiency both among Bric countries and also those of that in the Asia Pacific region. This is significant though the numbers show that the gains posted are of a more recent vintage. In the nineties, when the energy intensity went up by an annual average rate of 0.5% in the Asia Pacific region, India restrained its use by holding down the increase in energy intensity to just 0.1% per annum. Though this record pales before other countries in the region like Malaysia and Singapore, which reduced the energy intensity of production, it was significantly much better than that of most other Asian countries.
What is more laudable is India?s record in the first five years of the current decade. Numbers till the year 2006 show that India was able to reduce the energy intensity of output by an annual average rate of 2.4%, which was indeed significant given that energy intensity in the Asia Pacific region as a whole was stagnant during the period. But it should be pointed out that India was not notable on this front. In fact, the record shows that other countries like Indonesia and Philippines did a notch better by reducing energy intensity by as much as around 4% annually during the period.
China has a surprisingly mixed record on the energy front. The energy intensity of output in China has been the worst historically, both in the nineties and also in the current decade. Though one can attribute the high energy intensity to the exceptionally large share of the manufacturing sector in the Chinese economy, it is also likely that the bloated estimates of the GDP make the energy intensity figures equally larger. But what is more surprising is its mixed record in making efficiency gains.
Numbers show that China made vast gains in reducing energy intensity of output in the nineties. The 6.5% annual average reduction in energy intensity of the Chinese economy during the period was the most exemplary achievements made in recent times. But what is more surprising was the 2.6% annual growth of energy intensity in the Chinese economy during the current decade. One should note that the bloated use of energy happened even as other competing nations like Japan, India, South Korea and Philippines were cutting down on energy intensity. It is a big question of how Chinese products could gain in the international markets even as its energy intensity rose much faster when global energy prices were on a roll.
The most lacklustre record among Bric countries on the energy front is that of Russia, which guzzles energy much faster than its reputed consumption of much stronger spirits. The most inefficient among the major economies across the globe, Russia used up as much as 1,09,929 Btu of energy for each dollar output of GDP at market exchange rates in the early nineties, which was almost 10 times the global average. Although Russia has cut down on the relative consumption of energy by reducing the energy intensity at an annual rate of 2.1% since the nineties, and by an accelerated pace of 4.4% in the current decade, it still tops the list of the most energy inefficient economies.
p.raghavan@expressindia.com