SECOND MEETING OF APEC ENERGY MINISTERS
"ENERGY: INFRASTRUCTURE FOR SUSTAINABLE DEVELOPMENT"
Edmonton, Canada
August 26-27, 1997
Declaration
The second meeting of APEC Energy Ministers was held on August 26-27, 1997
in Edmonton, Alberta, Canada. Ministers and their representatives from
Australia; Brunei Darussalam; Canada; Chile; the People's Republic of China;
Hong Kong, China; Indonesia; Japan; the Republic of Korea; Malaysia; Mexico; New
Zealand; Papua New Guinea; the Philippines; Singapore; Chinese Taipei; Thailand;
and the United States of America attended. Also present were representatives
from the APEC Secretariat, the Energy Working Group Secretariat, and observers
from the Pacific Economic Co- operation Council.
Ministers welcomed the progress of the APEC Energy Working Group in
advancing the issues discussed at the inaugural meeting of APEC Energy Ministers
in Sydney, Australia on August 28-29, 1996. Ministers reiterated their general
commitment to work together to ensure that the Asia Pacific region's future
energy needs are met in a manner consistent with their respective environmental
and social objectives.
Ministers noted that the Asia Pacific region will continue to be a driver of
world economic growth and that the region's population is expected to continue
to expand into the next century. Ministers further noted that economic growth
in APEC is forecast to average 3.3% per annum over the period to 2010, compared
to 2.5% per annum for the OECD. As a result of this growth, energy consumption
in APEC is expected to grow by an average 2.2% per annum over the period to
2010, compared to 1.0% per annum for the OECD as a whole.
Ministers agreed that the development of energy resources in an
environmentally and socially responsible manner is integral to the sustainable
development of the Asia Pacific region. Sustainable development is necessary to
meeting the region's economic growth potential and achieving the quality of life
benefits flowing from the availability of clean, affordable energy. Ministers
further agreed that the concerted efforts of the region's governments, in
partnership with business and civil communities, are needed to facilitate the
development of efficient and environmentally sound energy infrastructure.
Ministers' discussions focused on the pursuit of the simultaneous objectives
of meeting the region's aspirations for economic growth and social development;
enhancing energy security; and mitigating the impact of energy on the
environment. Ministers agreed that:
a)the economic and social benefits of the region's energy supply and use
will be maximized through efforts to enhance the efficiency and openness of
regional energy markets;
b)the sustainable development of the region would best be achieved through
improved energy efficiency and conservation and the development of the region's
indigenous energy sources, including renewable sources of energy;
c)the facilitation of business investment in the power sector is an
important element in meeting the energy requirements of the region; and
d)the economic, social and environmental aspirations of the region will be
enhanced over time through the development and application by each member
economy of consistent, transparent, and predictable environmental practices as
energy infrastructure is developed.
Ministers noted the importance the private sector places on the openness,
transparency, and predictability of investment rules and trading regimes as key
requisites for increased flows of private capital into the energy sector. They
instructed the Energy Working Group to actively pursue work on those aspects of
the Osaka Action Agenda that would address these concerns.
Major Challenges for Sustainable Infrastructure Development International
Energy Business Symposium
Ministers expressed their appreciation to the participants of the Energy
Business Symposium for their report commenting on the initiatives being taken by
member economies to facilitate investment in energy infrastructure, and trade in
energy goods and services. Ministers also welcomed the recommendations of youth
representatives on potential opportunities for youth within the region's energy
sector. Ministers commended both reports to the Energy Working Group for
further consideration. Ministers thanked the business and youth representatives
for their efforts and expressed their support for future similar exchanges.
Ministers also recognized the valuable contribution that the business sector
was making to the activities of the Energy Working Group. Accordingly,
Ministers instructed the Energy Working Group to look at appropriate mechanisms
to improve and sustain the interface between the Group and the business sector,
and to report to Ministers at their next meeting.
Energy Policy Principles
Ministers agreed that substantial progress has been made in implementing the
Energy Policy Principles adopted at the first meeting of Energy Ministers in
Sydney, and pledged to continue their efforts to incorporate them into their
domestic policy deliberations. Ministers asked the Energy Working Group to
exchange information on a regular basis on members' progress in incorporating
the 14 non binding policy principles into their domestic deliberations.
Ministers discussed an initiative presented by the United States, as well as
proposals from Indonesia and Papua New Guinea, on natural gas and requested that
the APEC Energy Working Group, in close co-operation with business, prepare
recommendations for the next APEC Energy Ministers' Meeting in Okinawa
concerning the acceleration of investment in natural gas supplies,
infrastructure and trading networks as appropriate in the APEC region. Ministers
asked the APEC Energy Working Group to report to them next year on
opportunities, issues and options for APEC actions in this area.
Ministers also recognized the importance of accelerating action to deal with
global emissions of greenhouse gases. Ministers noted that this important issue
was being addressed in the Third Conference of the Parties (COP-3) under the
United Nations Framework Convention on Climate Change (UN-FCCC) in Kyoto.
Ministers agreed on the importance of the efficient use of energy and confirmed
that enhancing energy efficiency is a key element in addressing climate change.
Ministers also noted the importance of the development of market opportunities
related to the reduction of greenhouse gas emissions.
Power Infrastructure
As a result of expected continued economic growth, electricity demand in the
APEC region is expected to increase by between 50% and 80% over the period to
2010, and will require some $US1.6 trillion in investment capital. In Sydney,
Ministers had agreed that such capital could not be furnished by APEC
governments and multilateral financing institutions alone, and that business
sector participation was essential.
Ministers re-emphasized that power sector reform was an important element in
meeting the region's growing power needs, and noted the important benefits of
business sector participation in power infrastructure development.
In order to attract private capital, Ministers agreed that a predictable,
transparent institutional and regulatory framework was required. Ministers
endorsed the non- binding principles contained in the Manual of Best
Practice Principles for Independent Power Producers. The principles cover
institutional and regulatory structures; tender/bid processes and evaluation
criteria; power purchase agreements and associated tariff structures; and
financing and its implications.
Ministers expressed their appreciation for the efforts and advice of the
Energy Working Group, the business sector and regulatory officials in developing
the Manual, and encouraged members to consider the non-binding principles, in
line with their own domestic policies. Ministers noted that these principles,
when applicable, would contribute to the reduction of business costs, facilitate
private sector investment and create conditions for the efficient allocation of
capital to the power infrastructure sector.
Environmentally Sound Infrastructure
Ministers discussed both the environmental challenges and the environmental
opportunities provided by economic growth and development in their economies.
Ministers noted that the rapid increase in power infrastructure, which will
be necessary to meet the economic and social aspirations of the region, will
have impacts on the environment, and that these impacts can be of a local,
regional, or global nature. Ministers further noted that the challenge facing
the region was to attract investment in power infrastructure, while at the same
time ensuring that such infrastructure was established and operated in an
environmentally sensitive way.
Ministers exchanged views on what characterizes good policy practice to
promote investment in environmentally sound infrastructure, including the
principles identified in the report Environmentally Sound Infrastructure in
APEC Electricity Sectors commissioned by Canada on behalf of the Energy
Working Group. Ministers welcomed the report and its recommendations and
referred it to the Energy Working Group for further consultation, including with
the business community, and the development of a work program to advance the
recommendations. Ministers also agreed that the regular exchange of information
on current, efficient and clean technologies would assist member economies to
meet their environmental goals.
Ministers considered and endorsed a set of non-binding principles promoting
the incorporation of good environmental practices into the development of power
projects, and agreed to consider incorporating them flexibly within their
domestic policy deliberations. Ministers agreed that the application by each
member economy of these practices would provide the business sector with
transparency, predictability and consistency in the application of environmental
policies, which would also facilitate investment in the power sector. Ministers
noted that the principles could be applied according to the varying
institutional arrangements in their respective economies, and would also have
relevance to other areas of the energy sector.
Reducing Environmental and Business Costs through Co-operation on Energy
Standards
Ministers recognized that the use of energy efficiency standards and energy
efficiency product labelling will encourage greater energy efficiency and
improved environmental performance. Ministers agreed care should be taken to
ensure that these instruments are not used in such a way as to impair trade.
Ministers further recognized that the development of common or comparable energy
performance test standards and the development of a common framework for the
recognition of laboratory test results can enhance trade in energy-using
products and reduce business costs.
Ministers agreed to pursue a multilateral approach for the acceptance of
results from accredited energy efficiency testing facilities for all APEC
economies. They also agreed to consider, in the first instance, when new
programs requiring the use of energy efficiency test procedures are introduced,
employing test standards already in use. In the event of the adoption of a new
standard within their economy that varies from those already in use, they agreed
to notify other economies and make available the standard to them. Ministers
asked the Energy Working Group to develop proposals for their consideration at
their next meeting in Okinawa.
Ministers noted that the Energy Working Group had developed a work program
to establish the basis for greater co-operation in energy standards, as
requested at the first meeting of Energy Ministers. This included:
a)investigating the utilization of the Asia Pacific Laboratory Accreditation
Co-operation, and similar international entities, as a possible delivery
mechanism for a regional mutual recognition framework.
b)determining the degree of alignment of energy efficiency test procedures
currently in use in the APEC region and developing a process by which a
consensus is promoted among APEC economies to reduce divergence where
practicable; and
c)outlining a mechanism for the development, communication and advocacy of
APEC regional requirements for energy efficiency test methods to international
standards- making bodies so that international standards reflect the specific
needs of APEC economies.
Food, Energy, Environment, Economic Growth and Population (FEEEP)
Ministers discussed the implications of economic growth and expanding
population for meeting the energy demands of the region, bearing in mind the
concerns expressed by APEC Economic Leaders at Osaka in November 1995 that the
Asia Pacific region's fast expanding population and rapid economic growth are
forecast to sharply increase the demand for food and energy and the pressures on
the environment.
Ministers highlighted the work of the Group in facilitating power
infrastructure development; mitigating the environmental impacts of energy
production and use; and improving energy security, particularly through the
comprehensive energy outlook being produced by the Asia Pacific Energy Research
Centre, as being integral to the addressing by APEC of the integrated issues
embodied in the FEEEP initiative.
Ministers also emphasized the importance of sustainable energy development
to the region's longer term welfare and prosperity and agreed that the Energy
Working Group was well advanced in responding to Economic Leaders' concerns.
Ministers thanked Canada for its efforts in organizing a symposium to examine
the interlinkages among these important issues and their implications, and noted
the Energy Working Group's presentation to the symposium.
Energy Working Group Activities
Ministers agreed that the continued information sharing and technology
co-operation is essential to maximizing the energy sector's contribution to the
economic and social well being of the region. Over the longer term, the
objective is to ensure that energy does not become an impediment to the region's
sustainable growth and prosperity. In this context, Ministers noted the
progress made by the Energy Working Group in fostering dialogue and co-operation
within the region on energy matters, and agreed regional co-operation was the
key to understanding and meeting the challenges facing the region.
Ministers welcomed two proposals from Japan and the Republic of Korea on
establishing guidelines for energy efficiency and asked that the Energy Working
Group consider these ideas in developing an expanded work program. Based on the
work by the Energy Working Group, Ministers expect to consider the possibilities
of a voluntary 'pledge and review' system for improving energy efficiency in the
next Ministerial Meeting. Ministers also endorsed the Energy Working Group's
efforts in encouraging the economic use of new and renewable energy sources,
promoting the clean use of fossil fuels and related technologies, and actively
pursuing the development of open, efficient markets for energy in the APEC
region.
Ministers also noted that meeting the mineral needs of the region will be an
important aspect of ensuring its continued economic and social prosperity.
Ministers welcomed the progress the Energy Working Group was making in
developing and fostering cooperative activities aimed at increasing transparency
and energy efficiency within the region's mining industry.
Ministers instructed the Energy Working Group to continue to pursue economic
and technical co-operation in the region, and actively promote multilateral
co-operation in the region aimed at enhancing energy efficiency.
Asia Pacific Energy Research Center
Ministers welcomed the significant progress of the Asia Pacific Energy
Research Center (APERC), which was launched at their first meeting in Sydney, in
the development of its regional energy outlook planned for publication at the
end of 1997.
Ministers emphasized the importance of APERC's ongoing work and agreed that
their next meeting will allow them the opportunity to assess the results of
APERC's regional energy supply and demand outlook, as well as its other research
projects.
Next Meeting
Ministers agreed on the importance of their discussions in helping achieve
their common regional energy, economic and environmental goals, and welcomed
Japan's offer to host the next meeting of Ministers in Okinawa, Japan in
October, 1998. Ministers expect to discuss wide ranging energy challenges and
policies.
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