Is it Time for Asia to Take a New Approach to Climate Negotiations?

Author(s): Asia Global Institute

Date: Jan 28, 2013

Theme(s): Uncategorized

Mukul Sanwal argues that Asia needs to focus on patterns of natural resource use and not just 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 India and China to distinguish between the global, regional and national aspects of climate policy, recognise the linkages and shape the discussions of a new climate regime by taking substantive measures at home.

In 1992, the United Nations Framework Convention on Climate Change (UNFCCC) was established to allow countries a platform on which to find an agreement on ways to limit and manage the effects of global warming. However, looking at the divide over whether international cooperation should be about the efficient distribution of mitigation, measured solely in terms of emissions reduction, or about the equitable distribution of mitigation, based on stages of growth, questions are being raised as to whether an effective multilateral treaty is at all possible.

China and India are predicted to be the major users and emitters of energy in the future. The key question for both these countries is how to raise standards of living within ecological limits.

China is currently the second largest economy in the world and its leading emitter. The government plans to double per capita GDP within the next ten years and as such, it is likely per capita emissions will also double and reach current EU levels. For India however, the energy story is different. Other major world powers with aging populations including China will see their energy use stablise by 2030. However, with 650 million people under the age of 25, out of which 400 million are below 15 years, the South Asian giant will continue to grow beyond 2060.

Energy use evolves as an economy grows. During industrial stages of development, energy is consumed to produce goods; in the more mature stages of development, energy is generally used to support urban living and transport; as incomes grow and lifestyles change, energy consumption intensifies. At this point, gains made by energy efficiency become more important than the reining back of energy use and the reduction of emissions. Unfortunately, developed countries such as the United States have so far been reluctant to make much needed societal changes to become more energy efficient.

China and India’s energy path will mirror that of the United States even though 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 a strong natural endowment – because the imperative is securing of affordable energy to support economic growth. 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 Crux of the Issue

The UNFCC framed climate change 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 to report on national actions, and their concerns were limited to transfers of financial resources on concessional terms to pay for monitoring. Twenty years later, the agreement to remain within an agreed limit of global emissions has very different implications for developed and developing economies. 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 mitigation efforts, 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.

Emissions, standards of living and global ecological limits are inter-linked, and cannot be considered in isolation; any new climate 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 limiting picture, as seeking comparable standards of living for all countries requires considering the trajectory of emissions over a period of time.

The unresolved issue in global climate policy is this: if developed countries do not sharply reduce their emissions immediately, other countries cannot get their fair share of the carbon budget for raising their standards of living.

Conflicting Objectives at the Global Level

At Rio, in 1992, US President George W 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 refused to ratify the Kyoto Protocol, 1997, 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 its economy. The United States argued that developing countries must also take on 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 per cent 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, US President Barak Obama, during his first press conference after being re-elected 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. In 2007, China became the first developing country to formulate and implement a national programme to address climate change, and in 2009 China established actions to reduce the per-unit GDP greenhouse gas emission in 2020 by 40-45 per cent as compared to 2005 levels. 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’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 has also ensured that in 2020, when it is prepared to take 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 with measures that ‘promote development objectives while also yielding co‐benefits for addressing climate change effectively’, and since 2010, the central government has also requested states to develop State Action Plans on Climate Change. At Copenhagen, India pledged to reduce the emission intensity of its economy by 20‐25 per cent 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 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.

‘A Review of Climate Change Legislation in 33 countries’, a GLOBE Climate Legislation Study released in January 2013, shows that domestic national interests drive legislation; reducing energy use, increasing efficiency and therefore competitiveness, reducing air pollution and increasing energy security, much of the current legislative activities on climate change is taking place in developing countries; international cooperation is not a precondition for emissions reduction.

Developing an Asian Perspective

In the on-going negotiations, an agreement on 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.

An effective multilateral agreement is important for the growing economies. However, 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 in 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’.

China and India are beginning to recognise the limitations of the agenda of the climate negotiations, but since an effective multilateral agreement is important for China and India, 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 achieving the Objective of the Convention (Article 2), rather than be limited to 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 stabilisation of concentration of greenhouses gases in the atmosphere as that determines the global increase in temperature; 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, owing to the scope and scale of the energy and agricultural transition 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 should 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 convergenceare 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. Electricity demand management through a societal transformation shaping urbanisation patterns, conserving electricity use in buildings and minimising 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 per cent 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 long term 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. Such an approach will also shift the focus from emissions reductions to the stabilisation of concentration of greenhouses gases in the atmosphere, and achieve the Objective of the Convention.