A Multi-Stakeholder Consultation Meeting on Climate Regime Beyond 2012 in Beijing
19 September 2007
On September 13-14 2007, the Institute for Global Environmental Strategies (IGES), Japan held a multi-stakeholder consultation on climate regime beyond 2012 in Beijing, China, in collaboration with Energy Research Institute (ERI) of China and Keimyung University (KU) of Republic of Korea. Approximately 70 participants including policy makers, academics, and representatives from NGOs and businesses from China, and other selected Asian developing countries (Republic of Korea, India, and Indonesia) and experts from international organizations (e.g., IEA) and developed countries (e.g., Canada, Finland, USA, UK, Germany) attended the consultation and actively contributed to discussions.

The consultation was the third in a series of “the Asia-Pacific consultations on climate regime beyond 2012”, held annually since 2005*1 . The Beijing consultation followed a similar meeting held two weeks ago on August 29-30, 2007 in New Delhi, India .

The consultation had two goals: -To promote new and constructive thinking in the Asia-Pacific region on future actions against climate change beyond 2012; and -To contribute to the shaping of a future climate regime that adequately reflects the concerns and developmental aspirations of countries in the Asia-Pacific region.

The consultation featured discussion on four themes related to the post-2012 climate regime: (a) sectoral approaches, (b) low carbon technologies, (c) adaptation to climate change, and (d) co-benefits/development dividend approach. The consultation also aimed to elucidate the differences in developing and developed country perspectives on each of these four themes and to promote further discussion on ways to bridge these often divergent perspectives. Based on the outcomes of consultations, practical and effective options for a future climate regime that reflects Asian concerns and developmental aspirations will be presented at a side event in the COP13 scheduled for December in Bali as well as at various meetings on the future climate regime.

Please refer to the appended materials for a summary of the consultations.

*1. The outcomes of the 2005 and 2006 consultations were published as reports and disseminated at COP11 and COP12 of the UNFCCC and the 14th and the 15th UN Commission on Sustainable Development.
- Asian Aspirations for Climate Regime Beyond 2012 (2006)
- Asian Perspectives on Climate Regime Beyond 2012: Concerns, Interests and Priorities (2005)

For enquiries about this press release please contact:
Dr. Ancha Srinivasan, Principal Researcher and Manager,
Climate Policy Project
The Institute for Global Environmental Strategies (IGES)
Tel: +81-46-855-3818 Fax: +81-46-855-3809

Ms. Kido, PR Officer,
The Institute for Global Environmental Strategies (IGES)
2108-11 Kamiyamaguchi, Hayama, Kanagawa, 240-0115 Japan
Tel: +81-46-855-3700 Fax: +81-46-855-3709

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1. Summary of Consultations

(1) Overview session

- After welcome remarks from Prof. Hironori Hamanaka (Chair of the Board of Directors, IGES), Dr. Kejun Jiang (ERI), and Dr. Inhwan Kim (Keimyung University), Dr. Ancha Srinivasan of IGES summarized the findings of the 2005 and 2006 consultations and reviewed the four themes covered in previous consultations: (a) energy security and development needs, (b) the clean development mechanism [CDM], (c) technology development and transfer, and (d) adaptation to climate change. The scope and objectives of the third round consultations and the outcomes of meeting in India were also reviewed.
- A representative from Republic of Korea (ROK) noted that there is growing international pressure on ROK to take on some form of a commitment in the post-2012 regime. He noted that future commitment must not constrain sustainable development of ROK and that ROK might take on binding commitments when its share of energy intensive industry is stabilized. He also highlighted the ROK’s domestic efforts to address climate change including the innovative approach of Korean CDM (K-CDM), and possibilities for its linkages with other voluntary carbon markets worldwide.
- A representative from China observed that the much of the current climate change problem is due to unsustainable levels of “luxurious” consumption. He suggested that the future regime establish a new set of carbon standards based on minimum levels of “human development” needs; individuals would then be assessed a progressive carbon tax for “luxurious” consumption in all countries.
- Another representative from China noted that current climate regime is addressing mitigation aspects reasonably well, while progress on issues such as adaptation, technology transfer and financing was far from satisfactory. She asserted that China might prefer a whole package of measures to address all of these issues collectively rather than focusing solely on long term targets for mitigation. She noted that final deal for the post-2012 regime should be feasible, fair and equitable based on historical and future responsibilities, and that research institutions should assess the implications of various post-2012 climate regime proposals on China.

(2) Sectoral approaches
- Participants discussed the various options under the sectoral approaches for the post-2012 regime, and recognized that sectoral approaches could serve as a potentially important first step to more effectively engage countries without binding commitments in the current regime. The progress in adopting sectoral intensity targets by various industrial associations (e.g., cement), and policy and technical challenges in adopting sectoral approaches for deforestation avoidance in developing countries were also discussed. A few participants cautioned that sectoral approaches could only be a part of a solution and could not replace the emissions reduction targets of the Kyoto Protocol.
- Participants noted that the sectoral approach could be institutionalized through pledge and review system to be administered by the UNFCCC, but the lack of expertise among the UNFCCC negotiators was considered a critical barrier. Lack of data, harmonization of sectoral approaches within and among countries, financing, and potential anti-trust/competitiveness issues were also identified as major barriers for moving forward.
- Diverse views were expressed on crediting modalities of sectoral and policy-based approaches, including the need to identify beneficiaries, prospects for making such credits fungible with Kyoto credits, and safeguards that would be required to avoid double counting of credits from sectoral/policy-based approaches and CERs from CDM projects.

(3) Low carbon technologies
- Participants discussed the importance of political feasibility to facilitate the transfer of low carbon technologies, and agreed that widespread use of such technologies could produce often unrecognized co-benefits. Participants, however, also noted that global research and development efforts in low carbon technologies and the mechanisms to facilitate the transfer of such technologies in the current climate regime were woefully inadequate. In particular, the impact of CDM and various non-UNFCCC initiatives such as the Asia Pacific Partnership on Clean Development and Climate (APP) was considered to be negligible on technology development and transfer the region.
- The need for enhancing the flexibility of Intellectual Property Rights (IPRs) for low carbon technologies in the future climate regime was discussed in depth. Some participants suggested that it would be useful to draw lessons from compulsory licensing of technologies under the United States Clean Air Act, and cross-licensing of information and communication technologies.
- To avoid the lock in to high carbon technologies, participants emphasized that governments will need to play an active role, generating the right policy push to ensure that low carbon technologies are both economically and politically feasible. The right kind of push can lead to technology leapfrogging, as is becoming increasingly evident in China’s use of solar power water heaters. Discussion also focused on the need for addressing adaptation technologies in the future regime.

(4) Adaptation to Climate Change
- Participants noted the huge gap between the necessary levels of funding to address adaptation in developing countries and the available funds under the current climate regime. A few new proposals on adaptation financing were introduced, but it was recognized that none of these proposals was likely to raise sufficient amount of funds in the near future.
- Several participants stated that there was a need for effective private sector participation through employing the “climate-change winners pay” and “emitters pay” principles. Some participants claimed that the insurance industry has the potential to play a major role, given that industry can benefit from climate changes. Catastrophe bonds (an insurance product associated with events that occur only rarely but can cause catastrophic damages) were mentioned as an example. However, some participants expressed doubts about the roles that the private sector can play, citing the public goods nature of adaptation. They instead stated that public resources must play larger role in financing adaptation projects. ODA was proposed as a promising tipping point, since significant synergies exist between adaptation activities and ODA-supported initiatives.
- Many participants recognized the need to integrate adaptation concerns into development planning, and argued that the future climate regime should facilitate adaptation mainstreaming by providing practical examples and improving the technical skills required for mainstreaming at both policy and operational levels. The need for developing national strategies for adaptation in various Asian countries, and the advantages of toolkits for adaptation such as CRYSTAL were also emphasized.

(5) Co-benefits/development dividend approach
- The current climate change regime’s failure to formally recognize and reward the developmental co-benefits of climate policies led to considerable discussion over the methods and tools necessary to evaluate co-benefits. Some participants noted that it would be extremely difficult to develop a standardized measure of co-benefits, while others cautioned that if these benefits are counted from existing policies and measures there needs to be due consideration of double counting and other points of conflict with the CDM.
- Participants noted that the vast majority of CERs come from CDM projects with low developmental dividend?that is, low levels of contribution to the social, environmental or economic welfare of local communities. While some participants expressed concern about geographical inequity in the CDM, others noted that it was not necessarily inequitable when one considers GDP or population. There was also an argument that development dividend of large CDM projects (e.g., HFC and N2O projects) could be increased if part of the income from such projects is used to support social and economic development of local communities.
- The co-benefits of solar photovoltaic systems in Korean housing complexes and the appropriate set of policies that were needed to capture the co-benefits from these interventions were also discussed. On a broader scale, there was also a discussion of the Japanese government’s interest in promoting co-benefits in the developing world.

(6) Panel discussion on China’s role in the future climate regime
- After noting that recent progress on post-2012 climate regime discussions has been very slow, a leading negotiator from China remarked that there is a growing recognition to avoiding a gap between the first and second commitment periods and that the basic principles (e.g., common but differentiated responsibilities) underpinning the current regime should continue to apply for the future regime. He then noted that several developed countries, which have considerable financial resources and technological capacity to address climate change, failed to show demonstrable progress in reducing GHG emissions. He emphasized that the continuing wide gap between per capita emissions of developed and developing countries is a cause for concern and suggested that developing countries can only play a limited role in the post-2012 regime until three key areas of concern -technology, finance, and adaptation - are addressed. He also highlighted the need for international recognition of China’s efforts to address climate change through domestic policies and measures, as well as large investments made to identify and prepare several CDM projects.
- Another panel member suggested that adaptation to climate change is critical for China and that innovative approaches to change China’s mode of economic growth to both satisfy living standards and protecting the environment are crucial. He noted a positive trend in China of growing financial investments in energy conservation and renewable energy sectors.
- A panel member emphasized that China is paying greater attention to social benefits of CDM projects and noted that financial support for CDM projects should be further strengthened. She also highlighted China’s progress in creating domestic institutions which could be potentially useful for carbon trading in the future.
- Another panel member suggested that development of transparent information system for enterprises would be crucial for expanding the carbon market in China. The need for strengthening the laws governing emission reduction purchase agreements were also emphasized as important. Another panel member noted the need for holistic thinking on energy security and climate change for China and expressed concerns about the real intentions and attitudes of developed countries.
- Participants questioned about China‘s willingness to take some initial steps to become involved in the post-2012 regime, especially in terms of converting domestic targets for energy conservation into no-lose international commitments and adopting sectoral intensity targets. The panel member replied that developed countries, which have both the needed financial resources and technologies, should first show demonstrable progress in mitigating GHG emissions. Only then, he argued, would it be feasible and prudent for China to consider such initial steps. He mentioned that China, despite the fact that it has some advanced technologies, lacks adequate resources to enable widespread deployment of technologies and that international support would be crucial.
- In response to a query on ways to convince the US to more effectively participate in the future climate regime, the Chinese representative noted that China is not in a position to impose obligations and hoped that the US would effectively contribute to efforts to address climate change. He also hoped that Japan would make serious efforts to meet its Kyoto targets.

(7) Conclusion
Conclusion The IGES-ERI-KU consultation provided a useful platform for discussions on four themes (sectoral approach, technology transfer, adaptation, and co-benefits) that are crucial to addressing the concerns and developmental aspirations of Asian countries in the future climate regime. The consultations helped generate balanced views on future climate regime options and may help reconcile differences in perspectives of developing and developed countries.

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