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Q&A: ‘Asia Can Set Its Own Carbon Emissions Target’

Mutsuko Murakami interviews MASAHIRO KAWAI, Dean of the Asian Development Bank Institute* - IPS/TerraViva

TOKYO, Dec 7 2009 (IPS) - As the Climate Change Conference opens today in Copenhagen, excitement— even anxiety—is steadily building over the potential outcome of one of the most awaited events of the year.

Masahiro Kawai, dean of the Asian Development Bank Institute Credit: Mutsuko Murakami/IPS

Masahiro Kawai, dean of the Asian Development Bank Institute Credit: Mutsuko Murakami/IPS

No less concerned about the issue of climate change and the results of the Copenhagen talks is Asia, whose cities are among the world’s most vulnerable to the impacts of global warming. Government officials, environmentalists, scholars, and other sectors of society have been engaged in vigorous discussions on how to deal with this environmental bane.

The Tokyo-based Asian Development Bank Institute (ADBI)—a development think tank under the multilateral finance institution headquartered in Manila —is one of the organisations that have been on the forefront of such discussions.

In an interview with IPS, ADBI Dean Masahiro Kawai mulls over the issues involved in the regional efforts toward mitigating the impacts of climate change.

Kawai obtained his Ph.D. from Stanford University and has been a professor of economics at the prestigious University of Tokyo’s Institute of Social Science. He served as chief economist for the World Bank’s East Asia and the Pacific Region and was deputy vice-minister of Finance for International Affairs of Japan’s Ministry of Finance.

IPS: Should Asia aim for an ambitious regional carbon emission target, assuming this is even possible? MASAHIRO KAWAI: Asia can set its own carbon emissions target. The large carbon-emitting countries in the region are China (6.0 billion metric tons), India (1.3), and Japan (1.2), while other developing Asian countries account for 1.7 billion metric tons. Moreover, the combined population of China and India is about 2.4 billion while other parts of developing Asia have 984 million.

In terms of GDP, the three giant countries—China, India and Japan—are much larger than other emerging and developing economies. Hence, excluding any of them from a regional framework does not make much sense.

So, if a regional or sub-regional target is to be set, a regional target for Asia is much preferred to a sub-regional target such as one involving the Mekong region, which does not include Indonesia, a major carbon-emitting country in the region.

IPS: What is a realistic carbon target in Asia? MK: Given that Asia has both developed and developing countries, setting a total emissions target for Asia as a whole is not realistic. First, in developing countries, where per capita emissions are low and many poor people live without access to electricity, their per capita emissions, and hence total emissions could be allowed to rise to some reasonable levels.

Second, in developed countries where per capita emissions are already high, both per capita and total emissions should decline over time. Essentially, the principle of “common but differentiated responsibilities” should be used as criteria for reducing GHG (greenhouse gas) emissions.

Stabilising global emissions to the (target of) 450-550 ppm [parts per million] level would require a 50 percent reduction by 2050 relative to 1990 levels from around 40Gt [gigatonnes] Co2-equivalent to 20Gt CO2- equivalent. This would also require further cuts after 2050 to bring down (carbon emissions) to below 10Gt CO2-equivalent. This means that all countries will have to transform their economies to a per capita level of two tonnes CO2-equivalent.

IPS: What are the levels of emissions across Asia? MK: Asia has varying levels of emissions. Some countries (Vietnam, Nepal and Burma) have levels less than one tonne per person; another group (China, Malaysia, etc.) has two to six tonnes per person; and the high-income group (Japan, Korea, Singapore, etc.) has five tonnes per person. India’s per capita emission is 1.2T, and it is close to the first group of countries.

Making the per capita emission in the range of two to five tonnes could be a realistic approach for Asia over the next few decades. This would allow substantial increases in total emissions for the first group of countries and India. The high income group should make very aggressive reduction efforts.

IPS: Are these targets enough? MK: Developed countries should set high targets for total emission reduction. Japan’s announcement that it will reduce carbon emissions by 25 percent between 1990 and 2020 is a good example.

What developing countries can do is to set targets for carbon intensity reduction—that is, carbon emissions per GDP—such as the one set by China (reduction of carbon intensity by 40-45 percent between 2005 and 2020) and the one considered by India (reduction of carbon intensity by 24 percent during the same period).

In addition, they should make a commitment that once their level of per capita income has reached today’s developed-country levels, they will start reducing total carbon emissions. These moves are quite encouraging though one could always take the view that they are not enough. But I believe this is a good starting point.

IPS: What do you think are the major impediments to achieving an ideal carbon reduction target? MK: There are massive differences in perspectives as well as thoughts. The first type of impediments could be mindset. There is the general belief that there is no “no regret strategy” where economic development comes first and people worry about the environment and climate change later; mission cuts are costly as they deter economic growth and development; adaptation is a more pressing issue than mitigation; and unrealistic optimism, such as that developed countries will find solution and technology and finance, will come along just in time.

Another type of impediments could be at the policy level such as lack of targets (national or sectoral); presence of perverse subsidies for fossil fuel use and raw material use and absence of rational pricing for carbon; lack of institutional mechanisms that measure, verify and report any mitigation action; limited incentives for use of energy efficient technologies such as smart transport systems; and lack of efficiency standards for electric appliances and ICT [information and communications technology] devices as well as buildings.

Finally, there are operational impediments, namely, risk aversion, which is characteristic of private-sector firms; the missing capacity of small- and medium-sized enterprises; limited access to low carbon technologies; and lack of availability of finance for energy efficiency improvements.

IPS: What should the region be doing to address the issue of carbon emission cuts? MK: Developed countries like Japan, Korea and Singapore will have to initiate a cap-and-trade system (an environmental policy that imposes mandatory caps on emissions while allowing flexibility on how sources comply) and then invite developing economies that are ready to adopt such a system to join.

Developing Asia is yet to prepare for that level. Urging them to adopt a cap- and-trade system in a premature way might lead to unduly different responses.

Other market-based mechanisms like carbon tax and one-side trading (e.g., Clean Development Mechanism, where developed countries that provide financing and/or technologies for GHG-reducing projects in developing countries can get a credit for reducing their GHG emissions) as well as regulations and standards could be simultaneously pursued to complement the cap and trade system.

IPS: What else should the Asian region do collectively? MK: The regional efforts could include collaborative action to establish a carbon price at the regional level, scale up near commercial low carbon technologies or develop breakthrough mitigation technologies.

The region could also introduce regional energy efficiency standards and top runner programmes to phase out energy-inefficient products; create a regional climate change fund to reinvigorate investments in mitigation; and focus on deforestation in certain countries as it is related to local livelihoods, by requesting international action to integrate fully deforestation avoidance into global carbon trading.

IPS: How is ADBI dealing with these issues based on its mandate? MK: ADBI is part of the ADB family. ADB is working strategically to help developing member countries advance energy efficiency and low carbon energy sources, among others.

ADBI supports ADB’s activities through research on strategies on energy and resource efficiency as well as capacity-building activities on policies and practices on low-carbon green growth as needed by developing member countries.

IPS: What role should Japan play given the goals of the 15th Conference of Parties (COP15) to the United Nations Framework Convention on Climate Change? MK: Leveraging the G20 structure, Japan can work with other developed countries to promote an institutional framework where a global deal is shaped for technology transfers and financial flows from developed to developing countries.

Japan can also convince the U.S. to make a more aggressive commitment of carbon emission reduction, as the current U.S. proposal is tantamount to only a three to four percent reduction of carbon emissions in 2020 relative to 1990.

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