IGES-ERI Policy Dialogue in Beijing on the Post-2012 Climate Regime: Towards a Sustainable, Low-Carbon Asia
28 September 2009

On 22 and 23 September 2009, the Institute for Global Environmental Strategies (IGES - Hayama, Kanagawa; Chair - Hironori Hamanaka) organised a policy dialogue on future climate regime, entitled "Low-Carbon Development in Asia: Towards a Sustainable, Low-Carbon Asia" The dialogue was held in Beijing, in collaboration with the Energy Research Institute (ERI) of the National Development and Reform Commission (NDRC), China.

Approximately 65 participants attended the dialogue including policymakers, businesses and intellectuals from both countries, as well as participants from Canada, Hong Kong, the Netherlands, Republic of Korea, the United States and international organisations such as the European Commission, IPCC TFI Technical Support Unit (TSU) and the United National Development Programme (UNDP).

The dialogue focused on five key aspects to tackle emissions reductions and achieve low-carbon development, including 1) low-carbon scenarios, 2) domestic actions, and 3) green stimulus packages, 4) a co-benefit approach and 5) measurement, reporting and verification of domestic actions. There was a frank and lively exchange of opinions on current issues and possible options for the future climate regime. In addition to technical presentations on low-carbon modelling and detailed discussions of the architecture of the post-2012 climate regime, the importance of trust building through information sharing of climate actions in developed and developing countries was stressed.

The dialogue coincided with high-level policy statements on climate change at the United Nations from both Japan and China, which served as an interesting backdrop for consultation.

The results of this dialogue will be presented at a side event at the 15th Conference of the Parties to the UN Framework Convention on Climate Change (COP15/CMP5) scheduled for December 2009 in Copenhagen, Denmark.

For enquiries about this press release please contact:
Mr. Kentaro Tamura
Sub Manager, Climate Change Project
Institute for Global Environmental Strategies (IGES)

Ms. Megumi Kido, PR Officer
Institute for Global Environmental Strategies (IGES)
Tel: +81-46-855-3700

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Summary of the IGES-ERI Policy Dialogue

Session 1: Low-carbon development scenarios

- It was suggested that a vision of a low-carbon future in China needs to be based on not only low-carbon/greenhouse gas (GHG) emissions, but also a comfortable life/high welfare and green/eco-friendly development.
- It was reported that China could halve its GHG emissions from a 2050 baseline, while reaching the same quality of life in urban areas as that in Europe in 2030.
- Some prospects for policies for achieving a low-carbon society (LCS) in China, such as carbon tax and emission trading system were discussed. The Ministry of Environment Protection and the Ministry of Finance began to conduct government-funded research projects on a carbon tax in China and various initiatives including a voluntary China Carbon Exchange are also being considered.
- While the importance of energy demand-side management was repeatedly stressed to achieve a low-carbon society in Japan, it was pointed out that policy responses in this area are still lagging.

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Session 2: Domestic actions and implementation

- Prospects for achieving China's 20% energy intensity reduction over the 2006-2010 period were discussed. It was argued that China reduced its energy intensity by 10% between 2006 and 2008, and is expected to achieve the 20% target by 2010. To reach the target, China has been making full efforts including: energy saving action for 1000 large-scale enterprises; closing down backward capacity; and expanding development of renewable energy (e.g. wind power).
- It was pointed out that the 20% energy intensity reduction programme could deliver 190 million t-C reduction of GHG emissions in 2010 compared with the baseline and be regarded as the most significant GHG mitigation actions in the world.
- A question about the precondition of the Japan's 25% emissions reduction target (i.e., Japan's commitment is premised on agreement on ambitious targets by all the major economies) was raised. In this regard, one Chinese participant suggested that a package of various policy indicators (energy intensity targets, renewable energy targets, and fuel economy targets etc.) could be an appropriate form of China's commitment to actions. The participant also highlighted the importance of distinguishing between caps and commitments.
- To achieve the 25% emissions reduction target of Japan, it was pointed out that clear price signals to GHG emissions would be necessary. The governmental support though subsidy was also considered an important policy tool.

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Session 3: Stimulus package

- Green stimulus packages can only have limited impacts on GHG mitigation by themselves; they should be a complement not a substitute for climate and energy policies. Stimulus packages also need to be supported by regulatory frameworks that encourage structural changes at the national level. In addition to building a strong national regulatory framework, better international coordination of green investments is needed.
- The key to a green stimulus is aligning short-term investments with long-term sustainability goals. A framework assessing stimulus packages in terms their effects on low-carbon development; relationship with national sustainable development priorities; alignment with a long-term transition to a sustainable economy; and governance mechanisms, can help determine which stimulating packages have the greatest potential to be sustainable.
- China has evolved from a political and red China (1949-1979) to an economic and brown China (1979 -2009). Beginning with its recent green stimulus, China has the potential to evolve into a harmonious and green China (2009-2049). Its natural resource endowments, strong government and developing green culture suggest that it is in a good position to make that transition.
- A desire to address three problems simultaneously motivated the Republic of Korea's green growth programme: the economic slowdown, energy insecurity, and climate change. Republic of Korea not only allocated a sizable budget to create the green growth programme, but established a supporting legal framework and a strategic plan targeting key investments areas. The green growth programme is expected to have an influence on Korea's national mid-term GHG mitigation target.
- Policymakers are encouraged to look at marginal abatement cost curves to identify options for investing funds from green stimulus packages.
- China's 20% energy intensity reduction target in the 11th five-year plan had many of the elements of a green stimulus. A recently completed three-year study of the energy intensity target concluded that the progress towards realising the target had more to do with investments in energy saving technologies than structural changes.

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Session 4: A co-benefit approach

- Co-benefits are receiving more attention in Asia. To translate this attention into action, there is a need for more research on how environmental governance affects the pursuit of co-benefits; stronger incentives for co-benefits under a future climate regime's mitigation fund; and a UNFCCC work programme on black carbon (a short-term warming agent with potentially significant co-benefits).
- The Ministry of Environment, Japan (MoEJ) has actively promoted co-benefits in Asia, through programmes such as a bilateral co-benefits project in Panzhihua (Sichuan Province), China. The MoEJ has also created a technology map and catalogue to scale-up a co-benefit approach. To overcome barriers to co-benefits, local and non-climate policymakers will need to better recognise climate and development co-benefits at the policy level. To overcome barriers at the project level, stakeholders will need quantitative assessments of co-benefits and adequate resources to implement co-benefit CDM projects.
- A cost-effective global analysis comparing the co-benefits of climate and air pollution concluded that the public health benefits of climate change policies alone do not offer sufficient incentives for developing countries to join a climate regime; rather it would be more cost-effective for developing countries to invest in local air pollution regulations. However, an integrated approach which contains elements of climate and air pollution policies is the option with the greatest welfare enhancing potential.
- The results of a study of the co-benefits of climate and air pollution policies utilising the GAINS-ASIA model in China showed that a cost-effective integrated strategy can reduce costs for air pollution control by up to 80% compared to conventional approaches. A smart mix of measures that includes actions to reduce energy consumption can further cut air pollution control costs, and achieve lower greenhouse gas emissions.
- There are many local level projects that can generate climate and social co-benefits in Asia. One of the more interesting projects focuses on improving energy efficiency of buildings by using locally available strawbales as insulation materials in Heilongjiang, China. The key to enhancing the impacts of a co-benefit approach will be linking locally relevant project activities like the one in Heilongjiang with national and international processes promoting co-benefits.

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Session 5: MRV/GHG inventories

- The objective of "measurement, reporting and verification (MRV)" is to guarantee the environmental effectiveness and integrity of the system and build trust among countries through enhanced transparency and accountability. MRV is therefore an essential component of a Copenhagen Agreement.
- Some participants argued that acquiring time-series data for all countries is crucial to grasp the trend of GHG emissions. In this regard, more regular, detailed and systematic submissions of GHG inventories by non-Annex I Parties similar to what is required for Annex I Parties are encouraged. Other participants, however, emphasised that differentiation in MRV requirements must be ensured in accordance with the common but differentiated responsibility and respective capabilities (CBDR-RC) principle. To reconcile the two views, support for overcoming financial and data-collection barriers should be addressed.
- While all types of nationally appropriate mitigation actions (NAMAs) are encouraged to be MRVed, a MRV framework should be flexible enough to accommodate the intervention in the sectors with both short-term and long-term GHG mitigation potential.
- Making MRV comparable in evaluating the efforts of different developing countries is essential. To do so, creating a matrix to summarise and evaluate similar actions as well as to extract common mitigation actions among developing countries is suggested.

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Panel Discussion: Concluding thoughts and promoting cooperation

- Enhanced information-sharing of both mitigation and adaptation actions is important for building trust between developing and developed nations in climate change negotiations. High mitigation targets by developed countries, voluntary efforts by developing countries, and adequate follow-through on the Bali Action Plan text are some effective trust-building measures.
- Appropriate institutional mechanisms should be established to support NAMAs through transfer of technology, finance and capacity building both at international and domestic levels. NAMAs should be further differentiated and each category of NAMAs should be subjected to different MRV criteria.
- Enhanced coordination between adaptation funding and development assistance, including adaptation fund and ODA, along with a comparable measuring and reporting framework could improve adaptation governance at all levels.
- Technology transfer is an important issue in the climate regime. However, questions such as who owns technologies and how they can be effectively transferred are still bottlenecks for moving forward. Involving the private sector can help move this issue forward.

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