Action or distraction?

Bold declarations on climate by Asia-Pacific countries may not be all that they seem, writes Murray Griffin

As the leaders of the 21 members of the Asia- Pacific Economic Cooperation (APEC) grouping flew home last month from their meeting in Australia, they left many unimpressed with their efforts. Greenpeace dismissed APEC’s Sydney Declaration as the “Sydney Distraction”. The Australian Conservation Foundation (ACF) agreed, describing it as “a sober reminder … that refusing to ratify Kyoto carries a high cost”. For these groups and others, APEC’s emperors had no clothes.

However, the summit did have its fans. James Connaughton, chairman of the White House Council on Environmental Quality, described it as “a fairly remarkable display of constructive and cooperative diplomacy”.The outcome had demonstrated the growing convergence on the shape of a post-2012 framework for an international climate change agreement and, for the first time, had set regional climate-related goals supported by “practical actions”, he said.

Best foot forward? APEC leaders in Sydney

While assessments of APEC outcomes differ, everybody agrees that what happens in the Asia Pacific region is crucial. APEC economies account for more than half the world’s energy use, economic output and greenhouse gas emissions, and over a third of the world’s population. They also have stewardship of about 54% of the world’s total forest cover. Trends in the region are worrying. In China, energy consumption grew by 28% between 2003 and 2005, according to the Tokyo-based Asia Pacific Energy Research Centre. Over the same period, China’s coal consumption grew 28%, its consumption of petroleum products increased 20%, and its electricity consumption grew by 31%. Region-wide, energy consumption is set to increase by about 139% between 2004 and 2050, according to Australia’s economic research agency ABARE. The bulk of this energy demand will be met through fossil fuels, it says.

The aspect of the summit declaration emphasised by APEC 2007’s host, Australia’s Prime Minister John Howard, was agreement on the need for a global emissions reduction goal. The declaration does not suggest what this goal should be, although leaders said they “appreciate the efforts of Japan and Canada” on this front. (Japan has previously proposed a goal of a 50% reduction from current levels by 2050 and Canada has advocated a goal of a 60–70% reduction off 2006 levels by 2050.)

The meeting represented “for the first time, the Americans and the Chinese having something to say about an aspirational goal”, Howard told the closing press conference.“To get China, Russia, the United States – major polluters – agreeing on the need for an aspirational goal is a big step forward.”

Yet all APEC’s major emitters – Australia, Canada, China, Indonesia, Japan and Russia – were already on the guest list for the US-convened meeting of major economies announced the previous month. And President Bush’s invitation had proposed that they “seek agreement on the process by which the major economies would, by the end of 2008, agree upon a post-2012 framework that could include a long-term global goal”. Moreover, the phrasing of the APEC declaration is somewhat circumspect in its talk of an aspirational global emissions reduction goal. APEC’s leaders agreed only to work towards achieving “a common understanding” on such a goal, a form of wording that leaves plenty of wriggle room.

"There is no doubt there is tremendous need and scope for energy efficiency improvements with APEC"

While the pronouncement on a global goal might simply have given formal approval to a task already agreed, the goals on regional forest cover and regional energy intensity were new. Leaders agreed to aim for a reduction in energy intensity of at least 25% by 2030, with 2005 as the base year. They also agreed to increase forest cover by at least 20 million hectares by 2020. Yes, the goals are aspirational. But are they also ambitious?

Deforestation and forest degradation around the world account for about 20% of total carbon dioxide emissions. Native and managed forests cover more than a third of the APEC region. Forest area in four APEC countries alone – Canada, China, Russia and the US – accounts for more than 40% of the world’s total forest area.There has been a net increase in forest areas in the region in recent years – thanks largely to a massive reforestation programme in China, which over the past several years has increased its forest cover by more than 4 million hectares a year. But some Asia Pacific countries have among the highest rates of deforestation in the world. Agus Sari, Indonesia country director for emissions reduction project developer EcoSecurities, ruefully told APEC’s business summit that half of the world’s deforestation-related emissions are associated with just two countries – Brazil and “Indonesia, my own country”. The World Bank’s director of strategy and operations Kristalina Georgieva recently noted that deforestation accounts for 80% of Indonesia’s greenhouse gas emissions.

There is huge potential to mitigate emissions by tackling deforestation. Unlike tree planting, where sequestration can take years to materialise, reducing rates of deforestation and forest degradation delivers large benefits in the short to medium term. Australia’s ABARE has concluded that if APEC was able to halve current deforestation rates in tropical Asian member economies over 2009 to 2050, this would lead to an estimated 70% fall in forestry-related emissions in these economies in 2050, compared with business as usual.

The UN Food and Agriculture Organisation this year estimated APEC’s total forest cover in 2004 as 2,145 million hectares. Between 2000 and 2005 it experienced a net increase in forest area of about 1.5 million hectares a year, compared with a net loss of forest cover of slightly more than 500,000 hectares a year in the region during the 1990s.

The figures mean the APEC aspirational goal, if met, requires only slightly more than maintenance of the current rate of increase. However, the more that is achieved by slowing deforestation in countries such as Indonesia – rather than simply through afforestation – the more useful it will be in terms of its immediate greenhouse gas abatement benefit and its biodiversity protection benefits.

Given that energy efficiency gains are a climate change initiative that almost always carry economic benefits, they are widely lauded within APEC, as elsewhere. Energy efficiency “is truly the best new energy source that we have,” David O’Reilly, chairman and CEO of US-based global energy company Chevron, told APEC’s business summit. “It is helpful from an energy security perspective and it’s also helpful from a carbon emissions perspective.”

"While China has set a tough goal, it is by no means on track to meet it"

There is no doubt there is tremendous need and scope for energy efficiency improvements within APEC economies as income growth, urbanisation and industrialisation trigger a massive increase in energy demand. And various initiatives are already under way in the region. In China, for example, an energy conservation programme targeting the top 1,000 industrial energy users aims to save 100 million tonnes of coal equivalent by 2011. Japan’s New Energy Strategy calls for a 30% improvement in energy intensity by 2030. In 2006, the Korean government mandated regular energy audits for buildings consuming more than 2,000 tonnes of oil equivalent per year. And Australia’s Energy Efficiency Opportunities Act requires large energy users to conduct regular energy audits and publicly report the findings.

However, environmental groups are dismissive of the regional energy intensity goal set by leaders. “The 25% energy intensity goal sounds like an achievement, but it is all smoke and mirrors,” ACF executive director Don Henry says. “APEC would achieve that goal 13 years ahead of time, without any change in policy. China’s own 20% by 2010 goal is more demanding.”

However, the ACF concedes its claim that the goal requires nothing more than business as usual is based on ‘back of the envelope’ calculations. And while China has set a tough goal, it is by no means on track to meet it. Asked about the level of ambition involved in the intensity goal, Australia’s ambassador for the environment Jan Adams says that it would require “ongoing improvements in energy efficiency across the APEC region”.

Bjoern Stigson, WBCSD: important role for forums such as APEC to forge post-2012 agreement

“Reductions in energy intensity would lead to reductions in greenhouse gases compared with scenarios where there was no reductions in energy intensity,” she says, adding that the goal was significant not only because it was the first time APEC governments have agreed action should be taken on this front, but also because “the goal is shared by a large and diverse group of developed and developing countries on a common basis, ie all recognise that they should contribute to shared goals”.

While the outcomes are the main criteria by which APEC will be judged, its strengths and weaknesses as a negotiating forum must also be taken into account.

Björn Stigson, head of the World Business Council for Sustainable Development, says APEC is one of several forums that is significant because it brings together many of the major emitters in a smaller, more manageable setting than the UN climate change negotiations.

Stigson told Environmental Finance that the Kyoto Protocol represented “a great achievement” and had delivered “a tremendous amount of learning”. And he emphasises that a carbon price must be central to efforts to fight climate change. But he says the next phase of global climate policy will be formulated in a different way to the Kyoto Protocol – and forums such as APEC will play an important role.

“My personal view is that I don’t think we will see a continuation of the Kyoto Protocol in its present form post-2012,” Stigson says.“I don’t think it will be possible for governments to sit down and negotiate another top-down, cap-based agreement,” he said, “because that cap is basically defining the space for economic growth and I don’t think there is the political platform for governments to do that.” Stigson says the issue of an appropriate long-term goal and burden-sharing was “going to be decided by 10, 12 maybe 15 leading countries. It’s not going to be decided by a negotiation of 200 countries in the UN context.”

"Many officials and ministers are focused on a desperate race for economic growth to drag large portions of their populations out of poverty"

Discussions in forums such as APEC, the G8, G8+5 and the US major emitters initiative would be critical, Stigson says. These forums “are all labels for the same thing, namely the 10, 12 biggest economies are coming together”, he says. “In all of these circles it’s the same guys that are trying to advance the issue and come to some kind of common understanding, [asking]: ‘how do we share the burden between us?’,” Stigson says. “The formal negotiations will then be inside the UN, but that will be creating the formalities around the facts.You need the UN structure to make this work. But the UN will not be able to deliver the substance of what this should be. It will have to be a negotiation between the key countries and that’s what is starting to happen.”

But Stigson nominates the US major emitters initiative – not APEC – as perhaps the most likely of these smaller forums to dominate the policy- making process.“At the moment it is the G8,” he says. But the US initiative “might be a more neutral platform” because nations like China and India (the latter not in APEC) get to participate on an equal footing, rather than in a ‘G8 plus 5’ add-on meeting. “My gut feeling is this could potentially, if managed properly by the White House, be a very powerful initiative to bring the key guys together and try to broker some kind of an understanding.”

Whatever one makes of the climate change commitments that emerged from APEC 2007, there is no doubt the meeting focused the minds of ministers and officials from the region who are more used to concerning themselves with trade and economic development – the matters that are APEC’s raison d’être.

These are, perhaps, people unlikely to have fully familiarised themselves with climate change science. Many are instead focused on a desperate race for economic growth to drag large portions of their populations out of poverty. Having these officials and politicians in a room with climate change high on the agenda no doubt helped put economies in the region on the same page about the enormous task that lies ahead. But the outcomes also highlighted that abatement measures which could conceivably impede growth are measures that many governments in the region still find difficult to wear.