The new Asia Pacific Pact on climate change

What purpose does the new Asia Pacific Pact on climate change serve?

Just last month at the Montreal summit, the biggest polluter in the world, the US, did not even want to discuss climate change action after 2012, such is that government’s antipathy to anything remotely associated with Kyoto. Indeed, the US negotiator, Harlan Watson, walked out of the talks at one stage and then embarrassingly had to return when it became clear that not one country supported the US position.

Another month, another year, and Under Secretary of State for Democracy and Global Affairs Paula Dobriansky will now represent the US at another climate change forum. There’s no chance of her staging a walk-out from this one, however. The newly formed Asia Pacific Pact is the United States’ baby. Not unexpectedly Australia, as the only other developed country not to ratify Kyoto, is a member with China, India, South Korea and Japan making up the numbers.

This latest initiative is described as being “designed to accelerate the development and use of cleaner, more efficient technology in a way that promotes economic development and reduces poverty.”

It’s an obvious attempt by the US and Australia to show that they are actually doing something to reduce their countries’ emissions. Such bilateral and multilateral pacts are important to the US administration as it seeks to show that it is not a rogue state on climate change.
The detail of the actual measures to be adopted under the Pact is yet to be spelt out. The fact that China and India are involved might prove significant. The economic and energy development pathway chosen by those two countries will have a huge effect on global greenhouse emissions. It is noteworthy that the nuclear option is clearly under the ambit of the new Pact.

However it is questionable what the Asia Pacific Pact can achieve in the absence of any binding emission reduction targets and without putting a price on carbon.

The world has already tried a voluntary approach under the UN Framework Convention on Climate Change and it didn’t work. That’s why Kyoto was born. The rest of the developed world is on board with Kyoto precisely because of the perception in the early-mid 1990s that voluntary approaches – similar to the new Pact - were not driving aggressively enough into burgeoning global emissions.

Investing in new technologies such as clean coal and carbon sequestration are, of course, important and offer the prospect of low emission coal fired power generation if the technology works. But governments are already supporting a range of such initiatives and that is to be welcomed. Indeed, New Zealand, which is not part of the new Pact, is itself contributing to geo-sequestration research in Australia.

So it is hard to see what the Pact can add. It would be disappointing if it proved to be nothing more than a climate-spin initiative. We will see.

What December’s Montreal summit reinforced is the fact that the rest of the developed world is convinced that hard targets and emissions trading will best ensure that the huge impact which climate change is having around the world is mitigated.

Australia had its hottest year on record in 2005. Australian temperatures have risen by about 0.9 degree Celsius since 1910 with a rise of one degree Celsius equivalent to Australia moving north by about 100 km. The seriousness of the problem is now widely accepted and an approach of fiddling whilst Rome (or Australia) burns is clearly not viable.

At Montreal nations agreed to start talks about the approach to be adopted after 2012 when Kyoto’s first commitment period ends. More effective measures are required to stabilize greenhouse gases at acceptable levels. Such measures are likely to include continuing with a cap-and-trade approach that is global in its reach. It is very hard to see how an approach that fails to put a price on carbon will encourage the market to invest in new technologies and emission reductions.

Unlike Australia, New Zealand is of course part of the global approach and has ratified Kyoto. It is presumably absent from the new Pact because it has been such a firm advocate of Kyoto that the US and Australia would have felt embarrassed to have it there. However last month the New Zealand government made a spectacular u-turn on its proposed carbon tax, due to come into force in 2007. Is that the beginning of a fundamental rethink of its commitments?

Next month’s 2nd Australia New Zealand Climate Change Conference being held in Adelaide brings together business and political leaders from Australia, New Zealand, Japan, the US and Europe to discuss the greenhouse challenge. From a business perspective, the intention is have the key players all there to provide some clarity about where government policy settings are going. In the end, business will deliver the new approaches required.

ENDS

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