Is it time for Asia to abandon the dream of an effective multilateral climate treaty and adopt new approach?

For growing economies the stress has to be on patterns of natural resource use and not on the status of natural resources; that is, dealing with the causes rather than the symptoms of the problem of climate change. The time has come for rapidly growing Asia to distinguish between the global, regional and national aspects of climate policy, recognize the linkages and shape the deliberations for the new climate regime by taking substantive measures at home.

The climate treaty was negotiated in 1992 and twenty years later looking back at the approaches that have been adopted by the US, China and India raises questions on whether an effective multilateral treaty is at all feasible, and suggests the need for rapidly growing countries in Asia to review their climate policy. Anthropogenic emissions of greenhouse gases reflect changing patterns of energy use and the issue now is primarily about standards of living, and central to the domestic agenda of all countries.

China and India, because of their large number of poor, are going to be the major users of energy, and emitters, in the future. China has replaced the United States as the global economic powerhouse, plans to double its per-capita GDP in the next ten years, and it is likely its per-capita emissions will also double, reaching levels equal to those in the European Union.  China will continue to account for roughly 30 per cent of global emissions until 2030. The issue is also critical for India, with 650 million less than 25 years of age of whom 400 million are below 15 years, it will continue to grow beyond 2060 whereas all the other major powers will stabilize around 2030, because of aging populations. The national interest now requires the Asian giants to take measures to deal with climate change in line with their energy transition.

The energy path of the United States will also be critical for the trajectory of global emissions. The per capita generation of electricity in India is one-fifteenth and in China one fifth that of the United States, and its transport emissions are expected to rise to half of total emissions by 2030; total U.S. emissions are one-fifth of global emissions, have increased by 10.5 percent from 1990 to 2010 and are expected to continue to rise over the next ten years[2].  Energy use evolves with economic development. In the industrial stages of development an economy largely consumes energy to produce goods. In the more mature stages of its development, energy use becomes more important in supporting urban living and transport. As incomes grow, citizens become more intensive consumers of energy because of their life-styles. At this point, gains in energy efficiency become more important than broader changes in economic mix in reining back growth in energy use, and emissions reduction, and so far the United States has been reluctant to make the needed societal change and bear the costs of climate change.

Even though it is inconceivable that the energy path of China and India will mirror that of the United States, and modifying consumption patterns is central to both countries’ long-term energy planning, they will retain an energy mix dominated by coal ‒ the one fuel of which they have strong natural endowment ‒ because the imperative is securing of affordable energy to support economic growth.

Therefore, the divide between countries is whether international cooperation should efficiently distribute mitigation, measured solely in terms of emissions reduction, or equitably distribute effort, based on stages of growth, and it is not likely to be bridged because of the differentiated impacts on economies of countries.

Is an effective climate regime a dream?

Despite improvements in energy efficiency, leading to energy intensity of GDP in 2030 to be less than one half of the level of 1970, population and incomes are expected to drive a 40% increase in global primary energy use, according to BP’s forecasts as outlined in its latest Energy Outlook 2030. Energy use in the developed countries appears to have essentially peaked, partly as a result of the recession, and China and India are at the heart of this trend. The pace of this growth is likely to moderate over time (80% of the previous 20 years) reflecting efficiency gains and technological advancement, but energy use per capita is predicted to increase at a similar rate to that of 1970-2011 because of infrastructure needs related to standards of living; worldwide more than 1.6 billion people lack access to electricity. Therefore, China and India have to carefully assess whether it will at all be possible to continue the negotiations in the way they were originally conceived around equitable outcomes and whether an agenda can be crafted that respects the concerns of all the Parties to the Convention.

The Climate Convention, 1992, focused on the environmental rather than the sustainable development dimension of the problem. The issue was framed around emissions reductions rather than patterns of resource use, or activities which cause those emissions.  Developing countries accepted this framework because their only obligation was reporting on national actions, and their concerns were limited to transfers of financial resources on concessional terms to pay for monitoring. Twenty years later global emissions reduction to remain within an agreed limit has very different implications for economies where growth has stabilized and those that will continue to grow.

This has led to two opposing perspectives in defining the “mitigation potential”. Developed countries see it in terms of marginal costs of measures because they want to efficiently distribute mitigation, as these costs are lower in developing countries. Developing countries need to equitably distribute effort, and stress that the economic models ignore societal and political factors and the greatest potential is on the demand side in developed countries. The dispute is no longer around responsibility but around defining capability, and, because of differentiated impacts on economies, it is likely that there will be no consensus on agreed criteria for emissions reduction that takes into account equitable access to sustainable development.

As emissions, standards of living and global ecological limits are inter-linked, and cannot be considered in isolation, the new regime has to provide for convergence of global living standards within global ecological limits for it to have any legitimacy in developing countries. Measuring reductions in emissions presents a limited picture, because seeking comparable standards of living for all countries requires considering the trajectory of emissions over a period of time. For example, despite the increase in emissions in developing countries the gap in per capita emissions has narrowed by just one-third and developed countries have not decoupled emissions from growth, and their aggregate GHG emissions increased 4.2 % in the period 2009-2010. The unresolved issue in global climate policy issue is that without developed countries sharply reducing their emissions immediately other countries cannot get their fair share of the carbon budget for raising their standards of living.

Twenty years after the Climate treaty was negotiated there a better understanding of the trajectory of emissions and of measures to deal with climate change. At Rio + 20, in June 2012, a new paradigm has emerged where the global concern is no longer seeking just environmental protection, or ‘risk management’, but a sustainable development perspective focusing on human wellbeing within ecological limits. Since China and India will be making increasing demands on ecological resources as they consume vast quantities of natural resources for infrastructure, urbanization and food security, they must shift their focus to regional, or South-South, cooperation, as the basis for setting the global agenda. For growing economies the stress has to be on patterns of natural resource use and not on the status of natural resources; that is, dealing with the causes rather than the symptoms of the problem of climate change.

The time has come for rapidly growing Asia to distinguish between the global, regional and national aspects of climate policy, recognize the linkages and shape the deliberations for the new climate regime by taking substantive measures at home.

Conflicting objectives at the global level

At Rio, in 1992, President Bush publically stated that “the US way of life is not up for negotiation”, and ensured there were no commitments to reduce emissions of greenhouse gases. The US Senate rejected the Kyoto Protocol, 1975, by a vote of 95 to nil, and resolved that the United States should not be a signatory to any climate agreement which would result in serious harm to the economy. It also resolved that developing countries must also take similar commitments, adding a new conditionality and distinguishing between policy at the national and international levels.

Therefore, in the current negotiations the US recognises historical responsibility but argues that since over 90 percent of the growth in emissions in the future will come from the developing world, the only way to solve this problem is for all countries to take on similar commitments. At the same time, President Obama, in his first press conference after re-election, in November 2012, categorically stated that “to take on climate change in a serious way would involve making some tough political choices….if the message is somehow we’re going to ignore jobs and growth simply to address climate change, I don’t think anybody is going to go for that. I won’t go for that.” In developed countries, because of their mature economies, climate change and growth are rival objectives.

China, as a rapidly growing economy, addresses climate change in the context of sustainable development. Since the release of the Eleventh Five-Year Plan in 2006, China has reduced its energy intensity (energy used per unit of GDP output) by almost 20 per cent, and in 2009 established actions to reduce the per-unit GDP greenhouse gas emission in 2020 by 40-45 percent as compared to 2005 levels. ‘China’s Policies and Actions for Addressing Climate Change”, 2011, states that it will “strive for a win-win situation in both socio-economic development and response to climate change”, and its measures will be based on its “development stage”. According to the Energy White Paper issued in December 2012, China ‘stresses both development and saving of energy resources, with priority given to saving’; the average efficiency of China’s electrical power plants is now higher than the United States, and it possesses shale gas at twice the recoverable resources of the United States. As China’s carbon dioxide emissions grew 3.5 times, whereas GDP increased more than 15 times in the same period, China is prepared to cut its emissions relative to economic growth—that is, the greenhouse-gas “intensity” of the Chinese economy, not total emissions. China is now the largest investor in renewable energy in the world: it has the largest installed wind power capacity of any country, and produces more than half of the world’s photovoltaic solar panels. China has also ensured that in 2020, when it is prepared to make emissions reduction commitments under the new regime, China’s per-capita income will equal that of Europe, while India will still be one-fifth of that level.

India first enunciated a climate policy in 2007, and stated that its per capita emissions will never exceed those of industrialised countries. The central tenet of this policy is equitable sharing of the effort, based on three elements - contribution to stocks of

greenhouse gas emissions, rather than annual flows of emissions, constitute the appropriate metric for assessing responsibility for causing climate change; a per capita allocation of global sinks is the only morally defensible metric, and that a distinction should appropriately be made between ‘survival emissions’ of the poor and ‘luxury emissions’ of the rich, and includes concerns with impacts and adaptation.  As against climate mitigation, energy security enjoys considerable political support, and this linkage forms the basis of the National Action Plan on Climate Change for "achieving national growth objectives through a qualitative change in direction that enhances ecological sustainability, leading to further mitigation of greenhouse gas emissions ….largely "by devising efficient and cost-effective strategies for end-use Demand Side Management".  At Copenhagen, India pledged to reduce the emission intensity of its economy by 20‐25% from 2005 levels by 2020, and to design a process toward meeting that pledge the Government has also established an ‘Expert Group on Low Carbon Strategies for Inclusive Growth’ under the its Planning Commission. The policy has been reactive, influenced by global pressures to demonstrate a commitment to action, because India’s per-capita emissions remain well below the global average.

Contrary to the current framework that international cooperation is a precondition for national action, ‘A Review of Climate Change Legislation in 33 countries’, The GLOBE Climate Legislation Study, released in January 2013, shows that the driver for climate change measures is domestic national-interest - reducing energy use, increasing efficiency and therefore competitiveness, reducing air pollution and increasing energy security, and much of the current legislative activity on climate change is taking place in developing countries, suggesting a new approach to the climate negotiations.

Developing an Asian perspective

In the on-going negotiations, agreement to have equity as the basis of the new climate regime is going to be difficult. As in Durban, the final decision at Doha does not mention the Principles of the Convention and even a reference to the outcome of the Rio+20 Conference, which did endorse them, was deleted at the insistence of the United States. What is left is language that the negotiations will be guided by the principles of the Convention, and in the final plenary the United States noted that in their view this provision had no relation to the mandate of the negotiations and it also opposed discussion on loss and damage, in particular the idea of establishing an international mechanism. The United States has emphasised that while the bindingness of the new agreement and the reporting provisions should be the same for all, the contents of countries’ commitments could be differentiated, while not agreeing to any discussion on the criteria for determining national actions.

The deliberations in the UNFCCC continue to focus on the North-South divide, implementation issues and differentiation whereas the central focus should be on national action and the modification of longer term trends. For example, the World Business Council on Sustainable Development China and India, endorses what numerous studies have shown that the cheapest, easiest and largest reductions in energy demand can be made in buildings - energy used for heating and cooling and also for electrical appliances, in its ‘Vision 2050’[3].

China and India are beginning to recognise the limitations of the agenda of the climate negotiations, and as an effective multilateral agreement is important for them, they should take the stipulations made by the United States as the starting point of the negotiations, and to ensure equity of outcomes their global climate policy should focus on stabilization of concentrations of greenhouse gases in the atmosphere for achieving the Objective of the Convention (Article 2), rather than be limited to annual emissions reduction; the decision in Durban agreed to global peaking in the context of equitable access to sustainable development.

In this framework three elements, or ‘red lines’, should be enunciated. First, the new regime has to provide for convergence of global living standards within global ecological limits for it to have any legitimacy. Second, in shifting the trajectory of emissions the regime must move from short-term reductions to long-term stabilization of concentration of greenhouses gases in the atmosphere as that determines the global increase in temperature, and because of continuing inaction by developed countries developing countries have to shape a new vision of well being and will temporarily overshoot global temperature limits. Third, in light of the scope and scale of the energy and agricultural transformation, the role of societal and technological change should inform international review of national actions.

China and India must also seek to develop an Asian, or regional perspective, and focus on a very different set of questions, instead of the current narrow focus on mitigation, adaptation and burden sharing. It would be necessary, for example, to identify which longer term trends need to be modified, and the best way of doing so at the national level. It is also important to lay out a time-table for joint research and development of new energy and agriculture technologies, to meet the scale and speed of the response. South-South cooperation arrangements outside the UNFCCC, on the model of the OECD, needs to be established to share experiences both within the region and with other developing countries because developed country models and measures are inappropriate for developing countries. For example, current climate-economics analyses model limited income convergence, not sufficient to raise the poorest countries out of poverty.

The national level is going to be critical, because the positions countries take internationally are determined by their domestic political situations, and international negotiations can therefore rarely take decisions that have not previously been prepared nationally. Energy demand management through a societal transformation shaping urbanisation patterns, conserving electricity use in buildings and minimizing transportation needs, growth of renewable energy and creating “technology options”, such as on hybrid and electric vehicles and urban mass transit solutions will result in big reductions in energy intensity of GDP. Nuclear power as a long-term goal of reducing a large reliance on coal, perhaps accounting for more than 35-40% of power generation within 20- 30 years, will also be important. Transformation of the economy toward higher-value-adding light manufacturing and services will follow infrastructure development and employment generating industrialisation. China and India are already focusing on modifying longer term trends and developing a new vision of well-being; they now need to exchange experiences within the region to develop a perspective of a prosperous Asia living within ecological limits.

The focus on patterns, trends and drivers of natural resource use will serve to shape the multilateral assessment of national actions in terms of modifying the trajectory of emissions over the long term, for example 1970[4]-1990-2050, instead of the current short term assessments over five years. A sustainable development approach will also shift the focus from emissions reductions to stabilization of concentration of greenhouses gases in the atmosphere, and achieve the Objective of the Convention.


[1] Ex Director UNEP and UNFCCC. An earlier version of this paper has been published by the Fung Global Institute, Hong Kong.

[2] The US is the only OECD country which, except for a $4.60 highway improvement tax, does not tax energy use, as against $140 for Switzerland.  

[3] U.K. buildings are among the world’s least efficient, accounting for 38 percent of Britain’s greenhouse gas emissions, according to the country’s Department of Energy and Climate Change.

[4] Climate Change first came on the global agenda in the Stockholm Programme of Action, 1972.

 

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