Energy Policy 33 (2005) 499–509 Energy and environment in the ASEAN: challenges and opportunities Shankar K. Karki, Michael D. Mann*, Hossein Salehfar School of Engineering and Mines, University of North Dakota, P.O. Box 7101, Grand Forks, ND 58202-7101, USA Abstract The Association of Southeast Asian Nations (ASEAN) is one of the most dynamic economic regions of the world. Its economy is linked with its diverse energy resources, high-level urbanization, and rapid industrialization. ASEAN’s growing economy in the last two decades has increased the concern of sustainable development in the face of deteriorating energy security, environmental pollution, and economic hardship in energy investment. However, opportunities exist to tackle these issues. Increasing energy efficiency (both supply and demand side), exploitation of renewable energy resources (mostly hydro), and an integrated approach on energy resource management are some of the important approaches toward the sustainable energy path. Because the options are capital-intensive, cooperation and development of appropriate institutional structures and decision mechanism across the region are urgently needed. r 2003 Elsevier Ltd. All rights reserved. Keywords: ASEAN energy policy; Sustainable energy; Resource development 1. What is ASEAN? The Association of Southeast Asian Nations (ASEAN) includes almost all of the southeast Asian countries. Its key position in the Asian Pacific proclaims dedication toward peace and stability in the region, providing significant economic input through integrated energy management. ASEAN was first officially estab- lished in 1967 in Bangkok, Thailand, with the signing of the Bangkok declaration by the five original member nations: Indonesia, Malaysia, Philippines, Singapore, and Thailand. Brunei Darussalam, Vietnam, Lao People’s Republic, Burma/Myanmar, and Cambodia joined, making the ASEAN a group of 10. The ASEAN is one of the most dynamic economic regions of the world. Over the period from 1980 to 1999, its economy grew by nearly 5 percent a year and energy consumption by 7.5 percent. The economy is expected to continue to grow at this rate over the period from 2000 to 2020, and it is estimated that annual energy supply must increase by 4.2 percent a year to sustain this growth (Balce et al., 2001). The ASEAN makes up one of the largest regional markets in the world, contributing a combined gross domestic product (GDP) of US$578 1 billion in 2000 (ACE, 2002). The region hosts approximately US$53 billion in direct US investment, and it is the third largest overseas market for US exports with two-way ASEAN– US trade totaling US$120 billion in 2001. Hence, the environmental, social, and economic issues in the region are very significant and widespread for the rest of the world. 2. Energy management objective After the severe oil crisis in 1973, Asian countries thought of forming a smaller energy cooperative net- work to make strategies for energy management in crisis situations. In this regard, the heads of the ASEAN countries formed an association called ASEAN Council on Petroleum (ASCOPE) on October 15, 1975. The aim of this association is to establish cooperation among the member countries to navigate the energy problems and issues in times of emergencies due to shortage or oversupply of petroleum. Because of this principal, the ‘‘Emergency Petroleum Sharing Scheme in Circum- stances of Shortage and Oversupply’’ was adopted in July 1977 by the member countries (Balce et al., 1999). ARTICLE IN PRESS *Corresponding author. Department of Chemical Engineering, University of North Dakota, P.O. Box 7101, Grand Forks, ND 58202-7101, USA. Tel.: +1-7017773852; fax: +1-7017773773. E-mail addresses: shankar.karki@und.nodak.edu (S.K. Karki), mike mann@mail.und.nodak.edu (M.D. Mann), hossein salehfar@ mail.und.nodak.edu (H. Salehfar). 1 Current price. 0301-4215/$-see front matter r 2003 Elsevier Ltd. All rights reserved. doi:10.1016/j.enpol.2003.08.014