The need for optimising our energy consumption

Energy prices can significantly impact a country's economy worldwide, as they are a crucial input for almost all economic activities. High energy prices can lead to inflation, lower economic growth, and trade inequalities, while low energy prices can boost economic growth, stimulate demand and investment, and enhance competitiveness. 

It is important to note that the impact of energy prices on the economy can vary depending on the country's energy mix, level of energy efficiency, and dependence on energy imports. For example, a country that relies heavily on oil imports may be more vulnerable to oil price shocks. 

In contrast, a country that has diversified its energy mix and invested in energy efficiency may be less affected. For example, in recent years, energy price fluctuations have significantly impacted the global economy. 

The Covid-19 pandemic triggered a sharp decline in energy demand and prices, as travel restrictions and lockdowns led to a massive reduction in transportation and industrial activities. 

This decline in energy prices had a mixed impact on the global economy, with some countries benefiting from lower costs of production and consumption, while others suffering from reduced export revenues and investment.

Energy prices can have a significant impact on the economy of a developing country like Bangladesh, which heavily relies on energy imports to meet its growing energy demand. 

The cost of energy imports can affect the country's trade balance, inflation, and growth, which can have a ripple effect on various economic sectors and the overall well-being of the population.

In recent years, Bangladesh has experienced a significant rise in energy prices due to various factors such as global market trends, geopolitical tensions, and domestic supply and demand dynamics. 

In 2021, the price of crude oil, which is the primary source of energy for Bangladesh's power generation, reached its highest level since 2014, exceeding $82 per barrel. 

This increase in energy prices has put significant pressure on the country's balance of payments, as energy imports account for a substantial portion of its import bill.

The rising energy prices have also affected the cost of production and transportation in various sectors, such as agriculture, industry, and services, which can lead to higher prices of goods and services, reducing consumers' purchasing power. 

Moreover, the increased cost of energy can discourage foreign investment and trade, as it reduces the country's competitiveness and profitability.

To mitigate the adverse effects of energy price hikes, the Bangladeshi government has taken various measures such as promoting renewable energy, increasing energy efficiency, and diversifying energy sources. 

In 2020, Bangladesh installed its largest floating solar power plant, which has a capacity of 50 MW and is expected to reduce the country's dependence on fossil fuels and greenhouse gas emissions.

The impact of energy prices on a developing country like Bangladesh can be significant, and policymakers must design appropriate policies to mitigate their adverse effects and promote sustainable economic development. 

This requires a comprehensive approach that considers both the short-term and long-term impact of energy prices on various economic sectors and the environment.

Optimising energy consumption in Bangladesh is crucial for promoting economic expansion, ensuring energy security, and reducing greenhouse gas emissions. 

To achieve this goal, policymakers can implement various measures that promote energy efficiency, renewable energy, and sustainable consumption patterns. One of the most effective ways to optimise energy consumption in Bangladesh is through energy-efficient building designs and practices. 

Buildings account for a significant portion of the country's energy consumption, and improving their energy efficiency can significantly reduce energy bills and greenhouse gas emissions. 

For instance, the Bangladesh Energy Regulatory Commission (BERC) has developed building energy codes and standards that promote energy-efficient designs, materials, and equipment for new and existing buildings.

Another way to optimise energy consumption in Bangladesh is by promoting renewable energy sources such as solar, wind, and hydropower. 

Bangladesh has considerable potential for renewable energy, and the government has implemented various policies and incentives to promote their use.

Furthermore, promoting sustainable consumption patterns can also contribute to optimising energy consumption in Bangladesh. 

The government can encourage consumers to use energy-efficient appliances, reduce waste, and promote public transportation and walking/cycling. The use of electric vehicles can also contribute to reducing the country's dependence on imported fossil fuels.

ESG, which stands for Environmental, Social, and Governance, refers to a set of criteria used by investors to evaluate the sustainability and ethical impact of a company's operations. 

In Bangladesh, there are several ways in which investors can practise ESG through energy products.

One recent example is the use of renewable energy sources such as solar power. The government had set a target to generate 10% of the country's electricity from renewable sources by 2021, though the country aims to generate 40% of electricity from renewables by 2041. 

To achieve this goal, the government has implemented several initiatives to promote the use of solar power, including providing subsidies to households and businesses that install solar panels. 

This has created possibilities for investors to invest in companies that produce and distribute solar panels and related equipment.

Energy can be both a curse and a fortune for humanity, depending on how it is managed and used. 

On the one hand, access to energy can improve people's lives, drive economic growth and development, and increase productivity. 

On the other hand, the production and use of energy can also have negative impacts on the environment, public health, and social wellbeing.

A recent article published in The Guardian on 21 February 2022, titled "How air pollution is harming India's children – and why the crisis isn't going away" highlights the negative impact of energy use on public health. 

The article demonstrates that India is currently facing a severe air pollution crisis, with children being the most vulnerable and affected group. 

The pollution is caused by the burning of fossil fuels, such as coal and oil, for energy production and transportation. Like India, Bangladesh has been facing severe air pollution problems, particularly in its capital city, Dhaka. 

The high levels of air pollution in Dhaka have profound health consequences for its residents, particularly for children and the elderly. 

Again, according to a recent report by the World Health Organization, Dhaka ranks as the second-most polluted capital city in the world.

In conclusion, optimising energy consumption in Bangladesh requires a multi-faceted approach that considers various economic, social, and environmental factors. 

By promoting energy efficiency, renewable energy, and sustainable consumption patterns, Bangladesh can achieve its economic growth objectives while reducing its carbon footprint and ensuring energy security. 

Policymakers, businesses, and civil society must work together to develop and implement effective energy policies that support this vision. 

Lower energy prices can support overall supply chain exercise and enhance the competitiveness of Bangladeshi industries while optimising energy consumption can lower energy bills, greenhouse gas emissions, and reliance on imported fossil fuels.

Mohammad  Ashraful Islam Khan is the Head of Supply Chain Advisory Services, Management Consulting, KPMG Bangladesh. 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.