Analysis: Energy prices are causing chaos in Asia. Here’s why the rest of the world should worry

These are just some of the more eye-catching scenes playing out in the Asia Pacific region, where various countries are facing their worst energy crisis in years — and grappling with the growing discontent and instability caused by knock-on increases in the cost of living.In Sri Lanka and Pakistan, the sense of crisis is palpable. Public anger has already caused a wave of ministers to resign in Colombo and contributed to Imran Khan’s downfall as prime minister in Islamabad. Yet many suspect the political reckoning has only just begun; both countries have been forced into desperate measures, going cap in hand to the International Monetary Fund and introducing shorter working weeks in an effort to save energy. On Wednesday, Prime Minister Ranil Wickremesinghe said the Sri Lankan economy had “completely collapsed.”Elsewhere in the region, the signs of trouble may be less obvious but could yet have far reaching consequences. Even in comparatively rich countries, such as Australia, economic concerns are beginning to emerge as consumers feel the pinch of higher energy bills. Wholesale electricity prices in the first quarter of 2022 were up 141% from last year; households are being urged to cut down usage and on June 15 — for the first time — the Australian government suspended indefinitely the national electricity market in a bid to bring prices down, ease pressure on the energy supply chain and prevent blackouts. But it is the experience of India, where power demand recently hit record highs, that illustrates most clearly why this is a global — rather than regional — crisis.Having suffered through widespread outages amid record temperatures, the world’s third-largest carbon emitter announced on May 28 that state-run Coal India will import coal for the first time since 2015.And any notion that such problems are a matter only for poorer, less developed nations is dispelled by the experience of Australia — a country that has one of the world’s highest levels of global median wealth per adult.Since May, the “Lucky Country” has been operating without 25% of its coal-based energy capacity — partly due to planned outages for maintenance, but also because supply disruptions and soaring prices have caused unplanned outages. Like their counterparts in Pakistan and Bangladesh, Australians are now being urged to conserve, with Energy Minister Chris Bowen recently asking households in New South Wales, which includes Sydney, not to use electricity for two hours each evening. A bigger problem aheadHow these nations respond may be stirring up an even greater problem than rising prices.Under pressure from the public, governments and politicians may be tempted to turn back toward cheaper, dirtier forms of energy such as coal, regardless of the effect on climate change.And there are signs this may already have started.In Australia, the federal government’s Energy Security Board has proposed that all electricity generators, including coal-fired ones, be paid to keep extra capacity in the national grid in a bid to prevent power outages. And the government of New South Wales has used emergency powers to redirect coal from mines in the state to local generators rather than overseas.Both measures have come in for criticism from those who accuse the government of betraying its commitment to renewable energy.In India, a country of 1.3 billion people that relies on coal for about 70% of its energy generation, New Delhi’s decision to increase coal imports is likely to have even more profound environmental effects.Scientists say a drastic reduction in coal mining is necessary to limit the worst effects of global warming, yet this will be hard to achieve without the buy-in of one of the world’s biggest carbon emitters.”Any country, be it India, be it Germany, be it the US, if they double down on any kind of fossil fuel it will eat up the carbon budget. That’s a global problem,” said Sandeep Pai, senior research lead for the Center for Strategic and International Studies’ Energy Program.While Pai said that India’s decision might only be a temporary “reaction to the crisis,” if in one or two years’ time countries were continuing to rely on coal this would significantly affect the war on global warming.”If these actions happen, it will eat up the carbon budget which is already shrinking in India and the target of 1.5 or 2 degrees will become increasingly hard,” Pai said, referring to the Paris Climate Agreement’s goal of keeping the rise in global average temperature between 1.5 and 2 degrees Celsius. If the rise in temperature exceeds that range, even temporarily, scientists suggest some of the resulting changes to the planet could be irreversible. As Pai put it: “India’s scale and size and demand means that if it really doubles down on coal, then we’ll have a really serious problem from a climate point of view.”Iqbal Athas contributed reporting.