The coal advantage that India and China have, would be offset by global warming concerns over the usage of the cheaper fossil fuel. According to a report by Standard & Poors, China accounts for 40% of total world coal usage and has already overtaken the US in carbon emissions as a result.
The report says India and other emerging Asian economies have an advantage that they depend more on coal and less on oil. “Although liquids are 37% of world energy production, they are only 29% for non-OECD Asian production. Coal is 55% of current Asian energy production compared to 27% of the world,” the report said. Although China is likely to increase nuclear production eight-fold by 2030, it will still depend largely on coal.
According to the US Energy Information Agency (EIA), non-OECD Asian demand will rise at 3.2% annually to 2030, a total rise of 119%. About half of the increased usage is expected to come from coal; by 2030 Asia will use nearly double the amount of coal the OECD uses. “But, although the use of liquids will rise slightly less than total energy use, non-OECD Asia will still account for 73% of rise in oil use over the period.”.
Developed countries in Asia will, however, record subdued growth in demand, which is expected to rise by only 0.7% per year. Japan will remain one of the world’s most energy-efficient nations. “With population growth negative and GDP growth soft, energy demand will be nearly flat, up an average of only 0.1% per year. Korea, Australia and New Zealand, however, will still increase energy usage over the period,” the report said.
According to S&P, India is an inefficient user of energy. The rating agency has highlighted that the practice of controlling electricity and petrol prices has left the country’s trade position exposed and made the overall energy efficiency lower.
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