Imagine a Pan-Asian Energy Infrastructure stretching from China to Australia.

The system would distribute solar, geothermal, wind and wave energy throughout the region. Natural gas and hydro could provide 'load-balancing' power.

The vision is big. So is climate change.

DESERTEC-Asia lays out the plan in "A Pan-Asian Energy Infrastructure."

A hemispheric 'common carrier' energy distribution system would be comprised of bundled electricity, natural gas and fiber optic technology. It would speed the transition to cost-effective, low emission energy sources.

The system would be be funded by a hemispheric carbon levy, universally applied and uncompromised by exceptions and giveaways.

The result would be a multi-decade shift from from high-cost, high-emission energy sources. The market would then pick the lowest-cost, lowest-emission power sources. As it did, energy market reforms would underpin future regional wealth generation.

The benefits would be huge:

1. Lowered Asian greenhouse gas emissions through a shift to low emission energy.
2. Lowered regional energy costs through increased cross border trade.
3. Better investment price signals through market aggregation.
4. Greater energy security through supply diversification.
5. Increased economic growth rates through expanded rural electrification.
6. Increased geopolitical security through deepened multilateralism.

A Pan-Asian Energy Infrastructure would merely apply the 18th-Century economics of Adam 'Invisible Hand Of The Market' Smith and David 'Comparative Advantage' Ricardo to the 21st Century problem of climate change.

In the 19th and 20th centuries, Smith and Ricardo's theories created two centuries of global wealth generation through harnessing economic specialisation and international trade. In battling climate change, we ignore their wisdom at our peril.

That's because climate change is, at bottom, an accumulated failure of applied economics. Fix the economics and climate change will solve itself.

The template for DESERTEC-Asia is Europe's DESERTEC Industrial Initiative (DII).

The DESERTEC Industrial Initiative is a US$700 billion plan to develop concentrating solar power plants in North Africa to partially power Europe through laying high-capacity power lines between the two continents. In Europe, the North Sea would provide wind energy, Scandinavia would provide hydro and Russia would provide natural gas.

In Asia, Australia could provide sun, Mongolia could provide wind, China could provide hydro and Russia could provide natural gas. The key lies in interconnections. The timing is fortuitous and the immediate opportunities real.

Global climate negotiations now largely hinge upon the relative roles to be played in solving the problem by developed and developing countries. The amount of financial transfers from the former to the latter remains a big sticking point.

If developed and developing countries in Asia join together to fund a flexible, economically-rational, pan-hemispheric, common-carrier energy infrastructure, it could offer a regional, market-based solution to climate change.

At the recent East Asian summit, regional leaders agreed poor infrastructure holds Asia back. A Pan-Asian Energy Infrastructure could provide one solution to many problems.

Additional Reading:
"Infrastructure For a Seamless Asia," Asian Development Bank, 2009
"Electric Power Grid Interconnections in the APEC Region," Asia-Pacific Energy Research Center, 2004

DESERTEC-Asia is dedicated to spreading the ideas of the DESERTEC Industrial Initiatve in Europe. The DESERTEC-Industrial Initiative envisages that a series of North African-based solar power plants could provide huge amounts of utility-scale power to Europe over High-Voltage Direct Current Power Lines.

To read more about how the European DESERTEC ideas could be applied elsewhere, please visit:

DESERTEC-Australia
DESERTEC-Asia
DESERTEC-India
DESERTEC-USA
DESERTEC-Europe
DESERTEC-UK

Stewart Taggart is a director of Acquasol Infrastructure Ltd., a developer of environmentally-friendly power and water solutions building a municipal-scale solar desalination plant in South Australia's Upper Spencer Gulf. Stewart is also founder/administrator of DESERTEC-Australia, DESERTEC-USA and DESERTEC-China. DESERTEC promotes the concept of "Clean Power From Deserts."