How has Globalization Shaped Energy Systems in Emerging Economies: A of India - Case Study Example

?How has Globalization shaped Energy Systems in Emerging Economies and the Global South? A Case Study of India Globalization has become a defining process of the present age due to opportunities and threats it poses to across the globe (Sparks, 2007). All the policy makers are now benchmarking their strategies with the impact of globalization. Globalization is widely facilitated and influenced by technological developments both in North and in the South (Bradshaw, 2010). Economic globalization is a new concept whereby firms in advanced economies have increasingly extended their trading activities to all corners of the globe. Economic globalization has accelerated due to several factors such as technological advancements and market liberalization. Globalization of policymaking The most important and unique feature concerning globalization is that issues are viewed under the lens of international interests (Cooper, 2001). National policy issues such as economic, social, cultural and trade are increasingly coming under the influence of international agencies. This has resulted to erosion of national sovereignty as states barely make their own decisions. The developing counties and the south have seen their independence eroded since their economic, cultural, and social choices are highly subjected to international agencies (Bradshaw, 2009). This has forced them to adopt policies made by other entities, which in most cases they are never comfortable in accommodating. The developed countries are better placed since they are able to formulate their own policies with less interference and exert pressure on other developing countries (Bartelson, 2000). The developed countries are advantaged since they control international institutions and the global systems and are thus able to make major decision to their advantage. The liberalization of markets and the developments in technology are the major contributors to the erosion of national policy making in most countries (Turner, 2009). The big flow of capital and the huge chunks of money involved are making it cumbersome to control check the power of the big players in the global economy. The global institutions have become major policy makes and most countries are forced to conform to their set standards (Foster, 2007). Another major initiative is the proposed multilateral agreement on investment where attempts are being made at world trade for international investment agreement. The World Bank, International Monetary Fund, and World Trade Organization are some of the most powerful international bodies with immense control on major world policies (Communications Deloitte, 2004). Globalized banking According to Turner (2009), the demand for financial services has led to continuous expansion of international banking leading to globalization of the financial systems. The liberalization of trade and the growth of international markets have led to increased banking activities between the north and the south. The role of international banks in the global economy is closely related to international markets and thus has great impact on the market dynamics (Bank of International Settlement, 2010). Internationally active banks have assisted to exploit the world economic development as they control the major financial decisions. The financial crisis highlighted the risks associated with globalized banking and the potential threats it pose economic setting (Robinson, 2002). The deficiencies of the globalized banking facilitated the rapid transmission of shocks across the global financial system leading to downfall of several economies. The first growth of international banks has increased the vulnerability of the financial systems in most countries due to reduced risk management structures (Communications Deloitte, 2004). Rising inequalities The results of globalization are the uneven distribution of profits and losses due to various factors at play. Globalization, polarization, and wealth creation is thus linked through the same process whereby investment, growth, and modern technology are focused on few countries (Communications Deloitte, 2004). The uneven nature of globalization is resulting into a state where the gap between the rich and the poor counties continue to widen. Weaknesses of the South Developing counties are economically weak due to lack of domestic economic capacity, weak social infrastructure, and weak political system developed over the years (Fulcher, 2000). This is mainly because of the effects of the colonial experience that weaken their social and economic capabilities. The south are made poor by the low export prices and high debt crisis, most of which result from their relationship with the north. The difference in technological development is also a major factor, which contributed to the slow pace of growth in the south. Most of the south countries have negatively suffered from poor leadership coupled with lack of democracy leading to dictatorships. Lack of strong bargaining strength in international matters is also blamed for the slow pace of growth of the developing countries. The powers of the United Nations where the south have a great say have been greatly reduced at the expense of IMF, WTO and World Bank, in which the north have a great say. This has greatly reduced the influences of the South in matters of global economic interests. Globalization and energy supply Energy demand is ever growing on the global scene, energy demand is more in the South as it is in the North. The process of modernization needs more fuel and this is the main reason why there is increased thirst for more energy solutions (Glemorec, 2012; Gunningham, 2013). The paradox is that the places with high demand can barely supply their own leading to demand for energy from other countries. Massive infrastructure will mean that most countries will have to invest heavily on their energy supplies to sustain their growth (Moe, 2010). The policy makes both at national and international level are faced with the difficult problem of balancing the supply of energy against the demand side. The impact of globalization will mean that investment in energy is distributed in all corners of the globe according to shared interests and values. Globalization and the effects of international policy translate to more regulation and confrontation thus influencing how capital and energy supplies are apportioned. The political dynamics and power plays also determine the access to energy resource rich areas in various regions of the globe (Phillips and Newell, 2013). Globalization of energy markets Energy market globalization is widening everyday through internal trade and cross investments because of new global political economy (Sparks, 2007). The energy industries have greatly transformed thus offering great economic and technological promises. The globalization of energy has resulted into energy security issues, however the perception of the problem differ from country to country. In japan, about 60% of the energy policy makers have a huge concern of the energy security issue and the pattern is witnessed in other countries in different magnitudes. The biggest danger in energy security concerns is mainly in developing countries and the conflict of the Middle East (Bradshaw, 2010). Energy in South Countries Since the south is experiencing a rapid development, their energy consumptions is also increasing at an alarming rate. The demand for Asian Pacific Economic Cooperation projects electricity is projected to increase by 60 percent by 2015 (Moe, 2010). The South is part of the global energy systems hence are greatly influenced by the global energy policies. The problem with the south is that most of the countries lack adequate investment infrastructure for them to exploit their energy reserves fully. The overdependence of the Middle East oil is especially from the south is posing a series of global challenges. The United States and other north countries are highly concerned of the security issues brought about by over reliance of oil reserves in the Middle East. (Source; Glemarec, 2012) A Case study of India Background of India India is the second largest population with over 1.2 billion people and the world second largest in land mass, making it one of the biggest countries in the world. India is one of the counties in the south that has recorded a massive and remarkable economic development over the past decades and is projecting a bright economic future. The rate of population growth in India is very high and is projected to overtake China in the nest 10 years if all factors remain constant. The country had a nominal GDP of 1847 billion dollars by 2011 making it the tenth largest economy in the world. The purchasing power of its enormous population stood at 3976 billion dollars, making it t the third position after U.S and China (Ahn and Graczyk, 2012). The population growth in India coupled with modernization of lifestyles that has led to ever increasing energy demands to fulfil the widening gap. The increased supply of energy in India is strongly linked to their economic stability and development. The erosion of global energy security is also affecting India on both its production and consumption of energy. India has enormous potential of producing nuclear energy but it is under keen watch of global power brokers. The ever-increasing population of India requires sustainable energy within its reach so that it can avoid overdependence on energy imports (Trudean et al, 2011). (Source; Glemarec, 2012) India Energy Framework The government of India throughout the decades has played an indispensable role in promoting policies designed to improve the reforms in energy sector. The government of India is in the forefront for promoting market regulations and direct guidance to energy sectors with the aim of promoting their enormous growth. The government of India has adopted extensive energy subsidy programs aimed to promote energy supplies (Ahn and Graczyk, 2012). The main policy for India energy sector addresses three key areas, which are energy access, energy security, and climate change mitigation. Technological Challenge India is moving ahead of her peers as an energy development conscious nation. Currently, India is the only country developing potential of thorium fuel cycles as safer than uranium based energy. This is likely to attract global attraction to thorium-based technology due to its perceived advantages over other forms of energy sources. The global community is likely to learn from India and explore thorium based energy activities in large scale to revolutionize the energy sector. India is thus setting the pace for global competitors on its commitment in revolutionizing the global energy supplies (Trudean et al, 2011). Nuclear energy The atomic bomb incident in Japan is still fresh in memories of most people due to its negative impact that lasted for years. India is thus concerned of the safety of its people and the global population as it delayed the opening of tis two nuclear plants due to protests from the people. The nuclear plant of India had the potential of endangering the lives of millions of people and animals, in both land and the aquatic creatures. The international community is also vigil on any country in the south that tries to invest in nuclear energy due to security concerns. United States of America in particular is very vigil on the acquisition and use of nuclear related products (Trudean et al, 2011). Investment in India The private investment in India has increased tremendously after the liberalization of the energy sector, which paved way for efficient and reliable energy systems. The private investment also improved the further investment in the energy sector of India due to numerous benefits realized. These private investments are not only for local citizens but also for international investors. The rate of doing business improved greatly in various sectors of India because of increased energy supply. The small and medium sized businesses are really emerging courtesy of increased energy infrastructure in India (Sparks, 2007). Transition to low carbon future India is part of the global environment with potential threats to negative effects of global warming; increased industrialization in India has led to increased emissions of greenhouse gases. The global integration of energy technology has enabled India to design strategies of addressing the intertwined energy related challenges. India has realized that for it to achieve rapid economic development with less threat, she has to reduce its carbon dioxide emissions. Thus, India has laid out strategies aimed at reducing the amount of carbon transmission to reduce environmental damage (Ahn and Graczyk, 2012). The development of energy breakthroughs will enable industries design their production processes in a manner as to reduce greenhouse gases. The three largest industry sectors, which are iron and steel, chemicals and cement, are responsible for above 25% of overall carbon dioxide emissions in India. Conclusions Globalization brings opportunities and challenges in equal measure concerning energy issues. The increased development activities of the south are stretching the energy demands to its limits. Continuous investment in energy is also posing environmental threats to animals and human beings a like. Energy issues are of great concern to major global players due to security issues related with it. In years to come, India and other countries in the globe will have to cope with potential energy crisis related to supply and price due to depletion of natural sources. Bibliography Ahn, S and Graczyk, D. 2012. Understanding Energy Challenges in India: Policies, Players and Issues. 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