Commentaries (FY2009)
Geoffrey PAKIAM, Benjamin TANG, “The Rise and Rise of Oil Prices”, 22 June 2009
Cheap sources of oil are being inexorably depleted worldwide. The growth of emerging economies provides solid backing for the view that the price of oil will increase in the long run. The same is also likely for other fossil fuels such as coal and natural gas. Singapore will very likely feel the impact of higher prices very soon, translating into higher electricity tariffs, pump prices and air fares. As emerging economies continue to climb up the ladder of economic development, logic would suggest that the populations of developed economies should shift their focus from getting the cheapest price for their energy goods – including oil in all its variants – to using them less wastefully. From both a moral and economic perspective, vast improvements in energy conservation should be entrenched in every country's energy policy. |
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| KHOO Chin Hean, ANG Beng Wah, Zhou Peng, “Making Virtue Out of Necessity? China's Position on Energy and Climate Change”, 16 June 09 |
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Benjamin TANG, “Despite Tariff Formula, still Best to Conserve”, 1 June 09
Energy prices are expected to rise in the near to medium term. Using the new tariff calculation formula, Singapore’s electricity tariff will become more responsive to movements in the energy market. In addition, the averaging out of fuel oil prices across a three-month window will smooth out price volatility.
Singapore is a price-taker with no control over movements in global energy prices (and limited opportunity to tap on renewable sources of electricity). As such, improvements in energy efficiency, and the promotion of conservation are the most appropriate methods for the country to adopt. |
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Benjamin TANG, Geoffrey PAKIAM, ZHENG Cheng, “The Unintended Consequences of Weaning China off Coal”, 8 May 09
China is commonly perceived as a difficult country to persuade into taking measures that mitigate climate change. However, underneath her tough stance could be a surprising willingness to take measures to reduce Greenhouse Gas (GHG) emissions. This could plausibly stem from the intensifying air pollution in China’s cities. To mitigate local air pollution, China has limited recourse but to cut down on her use of conventional coal as an energy source. Foreseeable energy substitutes could be clean coal (a technology which is not fully matured), nuclear (which has a 10-year gestation period), and/or natural gas. We offer a scenario in which China reduces coal’s share of electricity generation from the current 80% to 50%, which is the level that the United States is currently at. This shortfall would have to be replaced by natural gas or uranium supplies. The projected quantity of required resources (based on 2006 figures) is a significant proportion of global supply. As such, one unintended consequence of China weaning off coal is a likely global price increase of non-coal energy resources in the medium to long term. |
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