Author: Yoichi Funabashi

I was in Washington, DC recently while congressional hearings were held into the massive recalls announced by Toyota Motor Corp. I sensed that public sentiment in the United States was rapidly becoming critical of the auto giant, which is now a synonym with lemons.

An article published in the New York Times on February 21 under the headline, ‘Doubts raised on book’s tale of atom bomb’, drove home the point to me. The newspaper noted that the author of ‘The Last Train From Hiroshima,’ Charles Pelegrino, used quotes from an individual who falsely claimed he was a last-minute substitute on an observation plane that accompanied the Enola Gay on its mission to destroy Hiroshima by atomic bombing. An expert is quoted in the article as saying, ‘This book is a Toyota. The publisher should recall it, issue an apology and fix the parts that endanger the historical record.’ Read the rest of this entry »

Author: Peter Yuan Cai, ANU

On January 27, the Chinese State Council announced the establishment of China’s National Energy Commission under the leadership of Premier Wen Jiabao and the vice-Premier and his heir-apparent, Li Keqiang.  This announcement came as a much-anticipated move by Beijing to coordinate and devise a comprehensive national energy policy.

The members of this commission certainly reflect that grand ambition. They are an all-star cast of the most important and influential ministers from the State Council such as that of the National Development and Reform Commission, Ministry of Finance, and Ministry of Foreign Affairs. Read the rest of this entry »

Guest Author: David Brewster, ANU

The report of the International Commission on Nuclear Non-Proliferation and Disarmament (ICNND) released in Tokyo on 15 December 2009 recommends the establishment of a parallel nuclear non-proliferation system for three non-NPT (Non-Proliferation Treaty) states: India, Pakistan and Israel. The report was jointly commissioned by Australia and Japan with the ostensible purpose of reinvigorating the international nuclear non-proliferation system that has come under severe stress in recent years. The proposals, if implemented, would provide a way of dealing with ‘rogue’ nuclear weapons states that are currently outside the formal system.

Putting aside the many potential benefits of these proposals for international nuclear non-proliferation, the ICNND proposals could also be of significant benefit in Australia’s and Japan’s relations with India. Read the rest of this entry »

Author: Imran Habib Ahmad, Tariq Banuri and Richard Kozul-Wright.

‘There is no plan B for the planet’ remarked Gordon Brown in his recent statement at the Major Economies Forum’s meeting. But while the science on climate change remains unambiguous, a combination of a legacy of mistrust, political inertia, procrastination, and the use of a framework that is designed to polarize and divide countries and people, prevents effective climate solutions. The fundamental problem is that the global discussions on climate change continue to treat climate and development separately, notwithstanding the piecemeal ad hoc and incremental actions linking the two. Any realistic plan must be all about making this marriage work.

There is enough scientific evidence that even a temperature increase of 2 degrees above pre-industrial levels –a convergent threshold in discussions now – is not safe, particularly for some regions and ecosystems, and efforts need to be made to remain sufficiently below this. Read the rest of this entry »

Author: Jane Golley, Crawford

With Copenhagen just under way, there will be much finger-pointing about who is responsible for reducing global CO₂ emissions, and China is likely to be the number one target.

Yet a significant portion of China’s emissions are generated in the production of exports, to the developed world in particular. Should we be shouldering some of the responsibility for reducing these emissions through financial or other means, rather than playing a blame game in which Australia is far from an innocent bystander? Read the rest of this entry »

Author: Eric Knight, Oxford

Financing the transformation of the global economy may yet prove to be a key lever in brokering agreement between developed and developing countries on emission caps and targets in the current international climate negotiations. China, India, and a number of other Asian countries in the G77 are increasingly focusing on multilateral finance for technology transfer and development as a cornerstone to any agreement.

In a report released at the Bonn negotiations in June this year, the Expert Group on Technology Transfer (EGTT) reported that current estimated global expenditure on commercialising mitigation technologies is between US$77-164 billion annually. Read the rest of this entry »

Author: Andy Yee, University of London

On 1 August 2009, Anders Fogh Rasmussen, the new NATO secretary general, took office. Surrounding this are recent debates over how NATO should engage with the recently expanded network of security actors. The Shanghai Cooperation Organization (SCO) is mentioned on several occasions.

In a conference in Brussels on July 7 about NATO’s new Strategic Concept, Carnegie Moscow Center Director Dmitri Trenin pointed out that NATO would be right to engage in a structured dialogue with the SCO, which has risen to become a platform for regional stability in Central Asia. Read the rest of this entry »

Author: Mohammed Saqib, Rajiv Gandhi Foundation, New Delhi

India is currently the world’s fourth largest economy in terms of real GDP (PPP) and the tenth largest economy in terms of nominal GDP. Over the last decade, the country has emerged as a leading actor on the international stage. The outsourcing of services to India has over the past decade redefined the international business environment, and major Indian companies are now moving abroad on a scale never before witnessed.

In a situation where the world requires innovative companies to address the serious global challenges faced by humanity, including high resource consumption, pollution, population growth, demographic and geopolitical changes, India, with its rapidly changing business environment, may indeed prove to be one of the most important countries. Read the rest of this entry »

Guest Author: David Dollar

A few weeks ago I had the unique opportunity to camp out on top of the Great Wall, which was a fitting exclamation mark at the end of my five years as the World Bank’s China Country Director.

It was a cloudy, drizzly day as we started, but then cleared up and turned into a lovely evening. The large group of kids we had with us slept in one of the guard towers along the wall, but I and a few others opted to sleep under the stars. The next morning opened with some mist, but then turned into a spectacular blue day. Some long-term Beijing residents hiking with us noted that they couldn’t recall ever seeing the countryside so green.

Read the rest of this entry »

Guest Author: Eric Knight

As all the talk about carbon emission reduction targets under a trading scheme comes to a head with the release of the Government’s White Paper on the Carbon Pollution Reduction Scheme, it is time to connect the dots and clarify what the climate change debate is really about: investment in carbon-reducing technology.

The driving purpose of any carbon trading scheme is to increase investment in, and the deployment of, technologies which will allow Australia to continue strong economic growth accompanied by a low carbon emissions trajectory. To the extent that the current carbon emissions trading framework distracts us from this end goal, we should be careful not to get carried away by all the political tactics and game playing.

Read the rest of this entry »

Author: Xunpeng Shi

Huw Slater’s careful reading of my paper on the future of coal in China is most welcome. It is good to have his attention and contribution on the issues in such detail.

Huw Slater’s argument on CO2 data is more a misunderstanding than an issue of debate. The current data on CO2 is calculated based on a constant coefficient of emissions intensity. This is reasonable as CO2 emissions have been free from any regulation until now and emission intensity is thus decided by chemical and physical characteristics, not by the regulatory environment. My empirical study tries to show the changing pattern of emission intensity.

Thus, the published CO2 data appears adequate for analysis, but his comments on CO2 emissions are a good reminder for me to be clear in my story.

Read the rest of this entry »

Author: Christopher Findlay

BHP is happy, Rio still wants a higher price or to stay in business, the customers are worried and state governments have their hands out.

That’s the bottom line of yesterday’s decision by the ACCC to approve the merger of Rio with BHP.

We still have to hear from the European and other competition authorities.

The ACCC argument was that the merged entity would have no incentive to hold back (iron ore) supplies in an effort to raise prices in the domestic market.

There would be a competitive response from the global market in the short run and in the medium term if it did so.

Iron ore making looks like a business with big barriers to entry, given the infrastructure involved and the specificity of the product. But the experience of recently rising prices demonstrates the short run supply response from marginal miners, and the scope to set up new projects world wide.  

So BHP might be happy, but what about Rio?

Read the rest of this entry »

Autors: Peter Drysdale and Christopher Findlay

Graeme Dobell (link) and Mark Thirwell (link) have comments on the Lowy site on our paper last week on Chinese foreign direct investment in the resource sector.

Graeme Dobell noted:

…Professor Peter Drysdale and Professor Christopher Findlay…In their view, policy on Chinese foreign direct investment in Australian mining has fallen into confusion over the last year. Or as they pose the problem: ‘It may seem a puzzle as to how we got ourselves into this pickle over Chinese FDI.’ The Drysdale-Findlay solution is for Australia to step back from its effort to place additional hurdles in the way of Chinese state-owned firms.

Mark Thirwell says that we come to ‘pretty much the same conclusion’ as he did in an op ed in The Australian in July when we conclude that: ‘There is no persuasive case for any change in direction over control of foreign direct capital inflows in response [to] the recent surge of interest of Chinese foreign direct investors in the Australian resources sector.’ So there will be no argument from him.

That said, he ventures two ‘additional’ arguments to which we should respond.

Read the rest of this entry »

Author: Peter Drysdale and Christopher Findlay

The last nine months has seen Chinese foreign direct investment in the Australia resource sector become an issue of policy interest. There are two big questions that the prospects of a significant rise in foreign direct investment (FDI) from China into the Australian resources sector have raised. Is the surge of FDI into Australian mining and energy consistent with achieving the traditional gains from foreign investment? And are there any particular problems associated with investment from foreign state-owned enterprises or state managed sovereign wealth funds?

These are among the questions addressed in a paper we presented today at a Crawford School Public Seminar (view the full draft paper here). We argue in the paper that there are no issues that cannot be dealt with under the umbrella of the established test of ‘national interest’ in managing the growth of Chinese FDI into the Australian minerals sector. Confusion has been introduced into Australian foreign investment policy over the questions of state-ownership and supplier-buyer relations in respect of Chinese investments and clarifying these issues is likely to be important to Australia’s capturing the full benefits from the growth of Chinese resources demand and longer term economic and strategic interests in China. Read the rest of this entry »

Author: Jane Golley

While it seems obvious that households in China with higher incomes will emit more – both directly through their consumption of coal, gas, petrol and electricity, and indirectly through their consumption of other goods, all of which require energy in their production processes – it is less obvious whether rich households will be more or less “emissions-intensive”, that is, emitting more or less carbon per yuan spent. My chapter with Dominic Meagher and Meng Xin in the China Update this year investigates variations in energy requirements and carbon emissions across urban households with different income levels. We find that poorer households are more emissions-intensive and that this is mainly due to their relatively high levels of coal consumption, the least “green” form of energy.

In terms of China’s future emissions trends, policymakers need to find ways to reduce the coal dependence of poorer urban, and presumably most rural, households. Income growth may partially solve the problem, given that richer households tend to consume less coal. However, appropriate investments and infrastructure will also need to be directed towards cleaner energy alternatives in the near future. See chapter for further details.