Rewriting the Rules in Asia
Edited by M. Ramesh and Michael Howlett
Chapter 7: Power Sector Deregulation and the Environment: Evidence from the Philippines and Thailand
Jessie L. Todoc Power generation, which accounts for the bulk of the investments in electricity supply that include investments in transmission and distribution networks and customer services, has a number of environmental impacts as shown in Table 7.1. However, emissions from fuel combustion that contribute to local air pollution and global climate change are the most important environmental ‘footprint’ of the power sector (Dubash 2003). By one estimate, for example, the electricity sector in East Asia and Pacific account on average for 31 percent of CO2 emissions and 12 percent of NOx emissions, which is just a notch below the estimated world average of 32 percent and 13 percent, respectively (Dubash 2003). The choice of fuel and technology is the most fundamental decision affecting power sector emissions (Hagler Bailly 1998). Similarly, the most important environmental impact of power sector deregulation proceeds directly from the ensuing fuel and technology mix for power generation. ‘The market structure put in place by reforms can affect (fuel and) technology choice by changing the relative attractiveness of capitalcost intensive technologies versus those based on high running costs’ (Dubash 2002). The resulting fuel and technology mix explains the short-term environmental performance of the power sector after deregulation. Over the long-term, the environmental impacts of deregulation will be determined by, among others, its implications on policies and applications of renewable energy and energy efficiency. ‘To mitigate the (global climate change) problem, long-term environmental management within the electricity supply industry involves a continued shift from fossil fuels to...
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