The first commitment period of the Kyoto Protocol that started in 2008 will end in 2012. It is not likely going to deliver much as the world’s largest emitter, the United States, has not ratified it, essentially because developing countries were exempted from commitments. To produce an improved, successor agreement to the Kyoto Protocol in Copenhagen at the end of this year, parties to the UNFCCC have entered into a full negotiating mode in 2009, particularly since the second session last June in Bonn to be followed by three other sessions. An improved agreement is understood to be one that is seen as fair by all parties and goes beyond the narrow focus on mitigation.

President Obama has pledged to provide U.S. leadership within the multilateral effort to produce a new international climate agreement. The U.S. House of Representatives has recently passed the American Clean Energy and Security Act, and the U.S. Senate is developing its own bill, the American Clean Energy and Leadership Act, to tackle climate change. It remains to be seen whether the final legislation will help or hamper the US to effectively play that role. Many developing countries are now giving greater attention to the issue of climate change mitigation and adaptation and are participating more actively than before in the global negotiations, as they have better appreciation of the risks of climate change. These are positive developments.

The economic crisis could have some positive effect if it leads to the adoption of ‘green’, low-carbon growth strategies in pursuing economic recovery and beyond. But it could negatively affect the negotiations that are currently underway as governments tend to hold back on their climate agenda. The crisis has weakened the resolve in many developed countries to introduce meaningful GHG emissions reduction measures as concerns are mounting that these could further erode the international competitiveness of their industries. This is especially so, since major emerging developing economies are not seen to be willing to make similar commitments. The UNFCCC commits developed countries to ‘move first’, justified on the basis of their ‘historical responsibility’. In the recent G8 Summit developed countries failed to agree on specific targets to reduce GHG emissions in the near term (2020). The G5 leaders that met in parallel have urged developed countries [pdf] ‘to pledge to fulfill quantifiable, ambitious and comparable goals to reduce emissions, through the reduction of their combined emissions in 2020 to a level that is at least 40 per cent lower than those of 1990’, as proposed by the Intergovernmental Panel on Climate Change (IPCC).

The crisis also affect the ability, if not the willingness, on the part of developed countries to provide substantial resources to finance the efforts by developing countries to undertake meaningful mitigation and adaptation efforts. The UNFCCC also commits developed countries to compensate developing countries for ‘the agreed full incremental costs’ that they will bear for any action they should choose to take to mitigate climate change (Article 4.3). China, for instance, has argued [pdf] in its May 2009 submission to UNFCCC that developed countries should provide funding, mainly through the public sector, of 0.5 to 1 per cent of GDP on top of existing ODA. Without securing such a commitment from the developed countries, the developing countries are not likely going to make a major move.

If anything, the crisis merely reinforces and accelerates a trend that is already happening, that is the decline in the ability of key developed countries (the US, the EU, and Japan) to lead in the crafting of new global agreements, whereas the newly emerging economies (China, India, and Brazil) that aspire to play a greater role in global governance are not ready as yet to make the big leap and to take on a greater share of the responsibility in accordance with their increased international profile. They conveniently place one foot within the grouping of developing countries (G77) to avoid having to make binding commitments by using UNFCCC’s principle of ‘common but differentiated responsibility’. They are holding on to this as a first principle for fear that making binding commitments could obstruct economic growth, the catching-up process and poverty reduction efforts.

The US position is that all countries should be put on an equal footing. Going into the negotiations, developing countries have pledged to take mitigation measures, but will do this on their own, and they have agreed to submit so-called nationally appropriate mitigation actions (NAMA). The US and other developed countries no longer insist on binding emission targets for developing countries but demand that the actions (instead of the outcome of actions) be made binding, and that they are transparent, subject to measurement, reporting and verification.

Four months into Copenhagen, there are some improvements in the negotiations agenda, such as the inclusion of deforestation issues which was previously left out in Kyoto. Yvo de Boer, Executive Secretary of UNFCCC has outlined [pdf] four ‘political essentials’ to unleash action that will ‘make or brake’ a deal. They are, clarity about: (a) willingness of developed countries to reduce their GHG emissions; (b) willingness of major developing countries such as China and India to limit the growth of their emissions; (c) availability of financing from developed countries to assist developing countries in mitigating emissions and adapting to climate change; and (d) the governance (institutional) framework to deliver the support for mitigation and adaptation.

The negotiations have hardly moved beyond statements by leaders and ministers as expressed in the media. It seems that the situation has become very polarized. Todd Stern, the US climate envoy, sees this divide between the developed countries and the developing countries as ‘deeply woven into the fabric of climate change diplomacy’.   Some have described this situation as the ‘climate trap’.

The outlook is not promising. But perhaps there is a way out of this trap.

Major emerging economies have placed only one foot in the G77. The other foot is still stepping and tapping on different stones to explore options for moving ahead outside of the UNFCCC. Here, China is clearly at the forefront. It is trying to develop a strategy to overcome its dilemma. Since its ability to make binding commitments under the UNFCCC is limited, it will need to demonstrate real efforts to respond to the challenge of global warming. It has embarked on ‘unilateral actions’ involving major economy-wide efforts to improve energy efficiency and to increase the use of renewable energy resources. As a member of the G5, China actively participates in the efforts to promote cooperation with G8 members, in a somewhat awkward ‘minilateral’ setting, in such areas as energy technology transfers, R&D, and the development of biofuels, through the Heiligendam process. China is also a party to an ad-hoc multilateral process, the Asia Pacific Partnership on Clean Development and Climate, launched in 2006, which focuses on the development of less carbon-intensive technologies.

But China appears to put greatest emphasis on bilateral cooperation with key developed countries, in particular the United States. Indeed, there seems to be a shift towards ‘bilateralization’ of negotiations between major developing countries and developed countries on climate issues. China’s multi-pronged strategy accords with that of the United States, which is being pursued on three fronts: (a) the UNFCCC negotiations process; (b) the establishment of the Major Economies Forum (MEF) on Energy and Climate to facilitate an informal dialogue process; and (c) a focus on key bilateral relationships, especially with China. Thus the G2 is something that would seem to emerge logically, and should be seen in this light. It may, in fact, hold an important key to the crafting of an international climate regime.

In parallel to China’s efforts, other developing countries in East Asia could make similar initiatives, individually or as a group, to produce a concerted regional action plan that contributes to increasing the chances of success of the emerging multi-pronged strategy towards an international climate agreement. Elsewhere, a similar initiative has been proposed to make Asia a ‘game changer’ in global climate change negotiations. The suggestion is for the regional countries to use their national energy efficiency and sustainable development plans and targets to demonstrate initial commitments to GHG reductions.

In line with this initiative, a set of medium-sized countries in the region could come forward to agreeing on setting unilateral emissions reduction targets with a pledge to make further cuts if others follow suit. Australia has indicated its readiness to do so. Korea and Indonesia can do the same.

These initiatives will complement the many other efforts outside of the UNFCCC such as G5, G8, MEF, and G20. Climate change will become a more prominent item in the agenda of G20 as G20 finance ministers have been asked to come up with a global climate financial framework. But the East Asian initiative should primarily be seen as a strategic effort to change the international climate for global climate change negotiations.

The UNFCCC process of negotiations may indeed resemble the process of multilateral trade negotiations under the WTO. Kyoto was the first round, Copenhagen the second round, to be followed by further rounds of negotiations that hopefully will take place under a progressively improved climate for negotiations.

East Asia should help ensure that these rounds of global climate change negotiations do not end up in a Doha Round type of situation.

This piece is drawn from a presentation at the Senior Policy Seminar of the East West Center, ‘The Global Economic Crisis and Implications for Asia Pacific Region’, Honolulu, Hawaii, 3-5 August 2009