Youngho Chang

Oil price fluctuations and Singapore economy

This study finds that the impact of an oil price shock on the Singapore economy is marginal. Both impulse response and variance decomposition analysis provide reasonable grounds to believe that the impact only had an insignificant adverse effect on Singapores gross domestic product (GDP), inflation and unemployment rates. Further analysis on two oil vulnerability measures supports the finding: the declining trend of oil intensity in Singapore since 1989 and the declining shares of the Singapores expenditure on oil consumption as a percentage of its nominal GDP. This study identifies, however, that the impact of an oil price shock on the Singapore economy should not be considered negligible even though it is small.

Oil price shocks and gold returns

This study investigates the impact of oil price fluctuations on gold market returns using monthly data from May 1994 to April 2011. A structural vector autoregressive approach is employed to examine the dynamics between oil price shocks and gold returns. Various oil price proxies are used in the empirical examination to capture potential nonlinearities in the dynamics between oil price shocks and gold returns. Oil price shocks appear to have a statistically significant and positive impact on real gold returns contemporaneously. The impact is found to be symmetric but nonlinear. These findings imply that observing oil price fluctuations can help predict movements in gold price, which would significantly help monetary authorities and policymakers in monitoring the price of major commodities, as well as investors and managers in optimizing portfolios.

Electricity market deregulation and energy security: a study of the UK and Singapore electricity markets

This study seeks to examine whether deregulated electricity markets can provide energy security. Conceptualising energy security as that of having adequate, reliable and reasonably priced energy, this study proposes a set of indicators that can serve as an approximate gauge to determine whether a particular electricity market is robust enough to provide energy security. These chosen indicators are applied for both the UK and Singapore electricity markets in particular, and the outcomes provide evidence to believe that both markets are capable of providing energy security.

HUMAN CAPITAL AND ENERGY: A DRIVER OR DRAG FOR ECONOMIC GROWTH

This paper examines a causal relationship between energy consumption, human capital and GDP for the ASEAN-5 (namely, Malaysia, Indonesia, Thailand, Singapore and the Philippines) over the period 1965–2011. It differs from the existing energy-growth nexus literature greatly by taking into consideration the role of human capital across countries. Both the single-equation estimation and the Johansen’s cointegration analysis suggest the presence of a long-run relationship among these variables. The exclusion test finds that human capital is a crucial factor in the cointegration space as much as conventional inputs of physical capital; and energy seems to play a less important role when human capital increases, indicating a possible substitution effect between the two variables. Using the Toda–Yamamoto test, it finds no long-run Granger causal link between energy use and economic development in the two net energy-exporter countries Malaysia and Indonesia and the city state Singapore, while in the Philippines e...

Price responsiveness in the new electricity market: a Singapore experience

When electricity prices are allowed to fluctuate freely the price could transmit valuable market information and send the right signal to rate-payers for consumption and to generation companies for production and investment. This study briefly discusses the deregulation of the Singapore electricity sector before employing a log-linear form for estimating the coefficient of price-quantity relationships in the electricity demand. Two-stage least squares regression method is used and the estimation would yield the elasticity of demand. The more elastic is the demand, the more consumption efficient is the new electricity market. This is because consumers who are allowed to choose their retailers or purchase electricity on their own behalf will be able to choose the best package and also to make more efforts to respond to price fluctuations. The analysis reveals that the market would bring about some consumption-efficiency gains. However, more research needs to be done to quantify the extent of the gains.

Deregulation in the national electricity market of Singapore: competition and efficiency

The National Electricity Market of Singapore (NEMS) is a horizontally unbundled electricity market under an industry regulator. It sustains competition and regulation in its market structure. Its deregulation reform has started in 1995, and generation is fully open to competition and wholesale and retail markets are gradually being opened to competition. At the end of 2003 the contestable market covers 75 percent of the total electricity demand and is expected to increase as more consumers become contestable in 2004. Concentration measures like CS4 and the HHI show that the generation market of the NEMS is highly concentrated but the market has more than effective numbers of competitors. The NEMS has seen a 9.5 percent reduction of the electricity tariff during 2002/2003 and it remains to be seen whether the benefits continue to come as the NEMS moves to a full competitive market.

Rapid Growth at What Cost? Impact of Energy Efficiency Policies in Developing Economies

This chapter gives an overview of electricity demand growth in developing economies from the Association of Southeast Asian Nations (ASEAN), and provides estimates of how electricity conservation measures and policies will make a difference. The projection of demand is first developed under a Business As Usual (BAU) scenario and contrasted with alternative scenarios where demand growth is managed or reduced by measures and policies such as appliance efficiency standards, building codes, pricing, and mandatory quotas. The results show that the eight ASEAN economies covered in the sample can together save 40 percent of future electricity consumption compared to the BAU scenario. In level terms, this is a saving of 782.2 billion kWh of electricity. Implications are also derived as what measures and policies should be adopted by learning from the Japanese experience, which has effectively contained Japan’s electricity consumption growth without restraining its economic growth. Examples of specific measures and policies targeting each sector of major electricity users are discussed in the case studies on Singapore and Indonesia to show feasible moves in the near term that ASEAN economies can reduce electricity consumption.

Energy Security and Climate Change in ASEAN: Implications and Policies

This chapter presents a quantifiable definition of energy security and the various indicators generally used to measure it. These indicators are then applied to Association of Southeast Asian Nations (ASEAN) countries in order to evaluate their past energy security policies and activities, which include cross-border infrastructure building and hydropower exploitation projects in the region. ASEAN’s efforts at enhancing energy security are analysed relative to its efforts for climate change mitigation, as energy security and climate change have profound impacts on each other. The chapter also suggests alternative approaches for addressing issues related to energy security and climate change in the region.

The Non-Traditional Security Perspective on Energy Security Policies in Singapore

The Singapore government treats energy security as a means of achieving sustainable economic growth. The state’s 2007 National Energy Policy Report (NEPR) underlines the belief that an efficient energy market would drive economic growth and ensure the security of the state and its people. However, seen through a non-traditional security (NTS) lens, energy security must also encompass human security, that is, the welfare and development of individuals, households and communities. Building upon the NTS discourse, this chapter unpacks Singapore’s energy policies and explores their implications for human security, focusing in particular on the challenges faced by the country’s urban population.

Rethinking Market Governance and Energy Security

Energy security is no longer just a matter of securing access to adequate energy supplies—it is concerned with other aspects as well, such as the environmental and social costs of energy use. This chapter presents the principles of good market governance and argues that proper market governance in the energy sector, combining government regulatory measures and the workings of the free market, would be instrumental in ensuring long-term energy security. Japan is presented as a case country. The chapter illustrates that Japan, by adopting proper market governance in the energy sector, has not only ensured the sustainability of energy supplies but also mitigated accompanying environmental and sociopolitical risks of energy use, albeit the Fukushima accident, which has forced it to review and upgrade its market governance.