TOWARD ENERGY SECURITY IN ASEAN: IMPACT OF REGIONAL INTEGRATION, RENEWABLES, AND ENERGY EFFICIENCY

The Association of Southeast Asian Nations (ASEAN) countries share the common challenge of energy security, which consists of meeting rising demand for energy in a secure, affordable, and sustainable manner. This chapter extends the gravity model to estimate the effects of economic integration, renewable energy supply, and energy efficiency on energy security. By extending the gravity model, our model specifications introduce a series of key variables to capture deployment of renewable energy, energy efficiency, and level of regional economic integration. Four measures are crucial to this task — reinforcing regional energy trade, ensuring renewable energy supply, energy efficiency improvements, and stronger economic integration. Using bilateral trade data for most economies in the world over the period 1995–2016, we demonstrate the role of renewable energy supply, energy efficiency improvements, and economic integration in bilateral energy trade. Based on the findings, policy recommendations are provided to help ASEAN decision-makers prescribe future energy security policy.