Climate Regime and the Cobenefits from Regional Cooperation

Regional cooperation, as promoted by the principle 9 of the Rio Declaration on the Environment, may be supported by compelling arguments. However, countries are so diverse in terms of institutional capacities and political structure that deploying complementarities can become a very complicated business. In the South Asia region,7 for example, there are diverse endowments in energy resources: coal in India, gas in Bangladesh, hydro potential in the Himalayan nations of Bhutan and Nepal, and strategic location of Pakistan for the transit routes linking South Asia with the vast gas and oil resources of Central Asia and the Middle East (Nair et al. 2003; Heller and Shukla 2004). Still there is little energy and electricity trade in the region.

Assuming a regional cooperation, Heller and Shukla (2004) show that the energy trade would yield direct economic benefits due to energy savings from improved fuel and technology choices and would lower investments in energy supply. The benefits are valued at US$319 billion from 2010 to 2030. The economic growth of the region would increase by 1 percent each year, benefiting an overwhelming number of the world's poor. Such cooperation would in addition deliver a cumulative carbon saving of 1.4 GT for the period 2010 to 2030, or 70 percent of the global mitigation by the 1997 Kyoto Protocol standard over the estimated baseline emissions (Chandler et al. 2002), including the original commitment by United States at Kyoto. The energy changes would also reduce loads of SO2 in the region by nearly 30 percent. In addition the balanced hydro development would yield spillover benefits that are synergistic with adaptation needs, among which are enhanced water supply and flood control.

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