Australia has been involved for a number of years in helping developing countries adapt to the devastating effects of climate change.

But while Australia’s recently passed carbon tax has stimulated much debate, there is little to no scrutiny of how Australian money is being allocated throughout adaptation projects at a grassroots level.

For example, Australia has agreed to raise A$599 million in fast-start financing for developing countries (of which it had already allocated A$498 million by June 2011). It also contributed A$15 million to the Least Developed Countries Fund for capacity building programs in 2011, and established the A$150 million International Climate Change Adaptation Initiative (which will focus mostly on East Timor and the Pacific Islands).

But activity must not be mistaken for achievement.

In the absence of a comprehensive cross-mechanism framework, each fund coordinated under the UN umbrella adopts its own criteria for allocating adaptation assistance. The result is an inconsistent and ad hoc approach in which there is no minimum standard of equality and efficacy. As such, there is no guarantee that the money will be integrated with development processes; no certainty that corrupt politicians will not subvert its use; and no promise that it will be based upon gender-sensitive and participatory strategies.

There is no doubt that developed countries should be spending money to assist their developing partners adapt to climate change. Not only will they be hit hardest by a warming of the earth’s temperatures, but they will struggle to respond. Weak governments, lack of money and gaps in technical knowledge make these states uniquely vulnerable. But money is not the solution in and of itself.

High levels of poverty persist on the African continent, despite massive injections of aid over the decades. In large part this is due to the absence of political accountability which plagues the continent, making it difficult for money to reach the most vulnerable.

This severe lack of fiscal accountability and political transparency in countries receiving financial assistance is equally damaging to climate change-related financing initiatives. A report by Transparency International in 2011 found that where ‘huge amounts of money flow through new and untested financial markets and mechanisms’, there is a strong risk that corrupt leaders will divert such funding toward their own personal interests, undermining the success of adaptation projects.

During the latest round of climate change negotiations in Durban, Australia was quick to capitalise on its recent carbon tax success by positioning itself as a leader in the discussions. But it is now time for Australia to take the lead in developing a comprehensive cross-mechanism framework to guide the disbursement of funds at a project level.

Certainly, without adequate resources, adaptation cannot be achieved. But without guaranteeing minimum standards of quality, this money — no matter how great in quantity, or how well governed at an international level — will not translate into success in the local context.

The Australian government has a responsibility to ensure that its adaptation money is spent effectively and equitably. Domestic imperatives to do so stem from the need to maintain accountability to its taxpayers. But regionally a large number of Australia’s immediate neighbours are either low-lying island states or developing nations. Moral imperatives and the principle of common but differentiated responsibilities aside, if countries such as Tuvalu find themselves underwater or in disarray following an environmental crisis, the likely resulting conflict and exodus of refugees will have significant repercussions for Australia’s security and economy.

In the future, we need to delve beneath the numbers to consider the actual substance of adaptation assistance. By continuing to channel finance through UN mechanisms which show little regard as to how recipient countries spend this money, Australia may as well be pouring money into a black hole.

Amritha Thiyagarajan is a student at the University of New South Wales and a member of the Global Voices Australian Youth Delegation to the recent UN negotiations in Durban.

1. Regional movement on the global problem of climate change
2. Measuring the success of Indonesia’s involvement in Durban
3. Changing the international climate for global climate change negotiations

China’s central government approved Guangdong Province’s plan to build a national-level marine economic-development zone on 20 July, establishing a clear trend in this direction.

Guangdong’s is the third plan approved so far this year, following those for Shandong and Zhejiang. This trend clearly indicates the strength of China’s marine economic strategies within its 12th Five-Year Plan. But with increasing regional competition for marine spaces and shipping lanes, these strategies are bound to impact the international community — and especially the littoral states of the regional seas.

China’s marine-economy initiative is an important part of its strategic reorientation from a traditional export-driven economy, which depends more on hinterland resources. The 2008 global financial crisis accelerated this change in strategy, a change that has since been driven by China’s stimulus packages. The rising inter-provincial competition for more coastal development spaces and preferential policies also act as strong local forces driving the strategy.

China has seen its centres of economic activity shift from the hinterland to coastal regions during its 2000-year history, with coastal economies attaining considerable prosperity during the early Tang and Ming dynasties. The opening of the maritime silk route, as well as frequent maritime trade with Northeast and Southeast Asian countries, generated steady development in China’s coastal regions over the centuries.

Today, the Tumen River Area Development Project (TRADP) is a typical example of multinational cross-border and cross-sea cooperation which has been in play since the early 1990s. It involves three countries linked by the Tumen River — Russia, China and North Korea — as well as South Korea and Mongolia. The experiences of TRADP are of great value for similar projects requiring international cooperation — even though the initiative did not fully realise its initial UNDP-conceived goal of pushing forward Tuman River Triangle cross-border cooperation.

The Guangxi Beibu Bay Economic Zone Development Plan, in operation since the late 1990s, is another ongoing case of cooperation with Southeast Asian countries, namely, Brunei, Indonesia, Malaysia, Singapore and the Philippines. Under the jurisdiction of the Guangxi Zhuang Autonomous Region’s local government, this project is designed to create a regional hub for trade, logistics, processing and manufacturing activities aimed at promoting economic cooperation with surrounding areas.

As China’s first national-level marine economic-development strategy, the Shandong Peninsula Blue Economic Zone has improved cross-sea cooperation with South Korea’s western coastal region. The plan for the project’s first phase comprises the construction of a pilot region for the China-ROK Free Trade Area and a train ferry program.

Zhejiang Province, as the second national-level marine economic zone, takes pride in its human-capital endowments. It also enjoys the privileges of its first national-level oceanic economy district, the Zhoushan Archipelago New Area. With its competitive location adjacent to the Yangtze River Delta, Zhoushan has established steady relations with many overseas partners. Singapore ranked as its second-largest investor in early 2011, for example, with 17 projects in Zhoushan valued at US$215 million. These projects involve marine engineering, ship repairs, ship industrial services, information consultation and tourism development.

And with the implementation of the China-ASEAN FTA, Guangdong gains an edge in facilitating cross-sea cooperation with ASEAN member states, and is expected to achieve far greater success than Shandong and Zhejiang. Guangdong is establishing a trade and economics office in Singapore to help its companies expand their businesses in Southeast Asia. Guangdong’s marine economic strategy will undoubtedly result in bigger business opportunities with ASEAN members, ranging from processing industries and marine tourism to maritime logistics services — and this is a significant step for the province.

China needs to revamp its traditional economic model, which is characterised by extensive utilisation of marine resources and spaces, irrational competition among coastal provinces over developing traditional marine industries, and the rampant establishment of container terminals. This demands a shift to a blue economy that values the management and conservation of marine resources.

In particular, the practice of attracting FDI by means of extensive land reclamation in the coastal zones should be rectified. And the capacity of specific ecosystems to withstand marine and coastal projects must be carefully appraised before these ventures are presented to overseas investors. Greater international cooperation is needed among marine and maritime organisations or clusters, marine research parks and overseas coastal regions to employ marine economic strategies more effectively. More attention should also be paid to offshore activities’ harmful impacts on the environment. Some experts from neighbouring countries like South Korea have expressed concern over increased contamination and deterioration in the Yellow Sea as a result of offshore activities. As such, efforts in monitoring and tackling potential threats in the regional seas should be reinforced.

Liu Shuguang is Professor of Marine Development at the Ocean University of China and a Visiting Senior Fellow at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University.

A version of this article originally appeared here as RSIS Commentary No. 154/2011.

1. China and the South China Sea: Time for a code of conduct?
2. South China Sea dispute: Why China takes a pragmatic stance
3. Is the South China Sea a new ‘Dangerous Ground’ for US-China rivalry?

Indonesia is among the world’s largest greenhouse gas emitters, and it has committed to cut its carbon footprint.

Can Indonesia achieve its goals, what is its role in the region, and how could developed countries assist?  Indonesia’s government has stood by its emissions target announced at a 2009 G20 summit. Just last week the President stated that he would ‘dedicate the last three years of [his] term as President to deliver enduring results that will sustain and enhance the environment and forests of Indonesia’. But, as always with such ambitious announcements, many observers are doubting how much will actually come of it.

The target is for a 26 per cent reduction relative to business-as-usual at 2020  undertaken by Indonesia unilaterally, and up to 41 per cent with international assistance. This is a substantial undertaking when taken at face value, even in comparison with other major countries. But what it actually means will depend on the definition of the business-as-usual baseline. An earlier government document submitted to the UN assumes fast growth in emissions under a business-as-usual scenario. If chosen as the official baseline, this would make the target less ambitious and affect its international credibility.

The overwhelming share of reductions over the next decade is likely to come from the land sector.  This emphasis is reflected in a list of emissions reductions programs to be initiated and financed by the Indonesian government, announced last month.

But if large-scale and sustained carbon savings are to be made, this must go hand-in-hand with a more holistic approach to land-based industries. Greater emphasis would need to be placed on local environmental factors like watershed protection, local economic development that is socially inclusive, and promoting models of land use that are productive over the long run — not just profitable in the short term. ‘Green growth’ thinking along these lines is evident in some provinces, districts and central government ministries. There is even a new national motto which demands development be ‘pro-growth, pro-poor, pro-jobs and pro-environment’.

But this is set against the strong influence of industry and parts of the government and bureaucracy that have a strong vested interest in the status quo. This difficult political economy is, of course, not unique to Indonesia; it has played out in the US and Australia in recent years, with very different results. What counts on the ground though is economic opportunity and enforcement of laws and regulations. Protecting forests and peatlands, for example, will require substantial financial incentives for businesses and local governments. Reforms to the tax system, along with intergovernmental fiscal transfers tied to environmental outcomes and properly enforced regulatory measures, could achieve this — especially if they are coupled with alternative strategies to promote local economic development.

The longer-term challenge is in Indonesia’s energy system. Industrial energy use, electricity use in public buildings and homes, and transport are all growing rapidly as the country moves up the development ladder. The solution involves a shift from coal to gas, expansion of renewable energy like geothermal power, better energy efficiency and better transport systems. But making the shift requires policy reform that is difficult both technically and politically. Power sector reform has been on the agenda for decades and energy subsidies have, to date, only partially been removed. Copious amounts of additional investment will also be needed: what role can developed countries in the region play in helping Indonesia achieve its goals?

Aid can be important, and plenty of donors are (or want to become) active on climate change in Indonesia. The most promising area for aid is targeted capacity building, helping Indonesia reap the opportunities that arise in policy reform and in access to international funding. Trialling implementation options is also important, for example testing payment schemes for better land management. This carries risks, but could have large returns where successful models are identified. Large scale concessional finance, for example through the World Bank, has a role in facilitating clean energy investments. But the big game down the track could be carbon markets. A number of developed countries will be looking to invest in emissions reductions in developing countries, as part of their own climate change commitments. In most advanced countries, emissions reductions at home — beyond a certain point — will come at a higher cost than cutting emissions in developing countries. Australian annual payments for overseas emissions reductions could be as high as AU$3 billion dollars at 2020, according to government modelling. While the actual amount of market flows could be lower, this figure is in the ballpark of what Australia might commit through its Copenhagen climate financing commitment.

Large flows could also become available from Japan, South Korea, California and elsewhere. It will be natural for these and other countries to turn to Indonesia as a key ‘supplier’ of emissions reductions. But more preparatory work needs to be done in Indonesia before this can happen. Trading emissions reductions across borders requires reliable monitoring, confidence in institutional frameworks, as well as sound policies and consistent implementation. After all, investors will want confidence that they are in fact supporting change. And to the extent that Indonesia is successful in addressing climate change, it gives the country a natural leadership position on the issue in Southeast Asia.

Dr Frank Jotzo is Director at the Centre for Climate Economics and Policy, Crawford School of Economics and Government, the Australian National University.

This is an abridged version of a paper presented at the 2011 Indonesia Update Conference, the Australian National University.

1. An important international climate change funding proposal from China
2. Changing the international climate for global climate change negotiations
3. US: Waxman-Markey Bill changes the landscape of international climate change negotiations

We live in a riskier, more uncertain world than just a few years ago.

Climate change, financial crisis and the decline of the West are three issues many put high on their list of ‘Black Swan’ factors, that is, major events that might occur very unexpectedly. China figures centrally in all three. There is now a long list of public goods that the world badly needs China to deliver at an accelerated rate — stability, growth, green energy, peace. Given China’s politics, size, appetite for recognition, resources, and security, none of these public goods  are easy to deliver.

Take the demand for recognition. Much commentary over the past year or so points to a more assertive China. Scholars note escalating claims of nationalism, or ‘statism’, in policy circles. In this view, China, in attempting to overcome its deep sense of humiliation caused by events in recent centuries and regain status as a great civilisation, will challenge the western world order and the ‘universal values’ it claims to embody.

Yet this is but one face of today’s rising China. Whether or not it is assertive abroad, it is plagued by a lingering sense of insecurity at home. The National People’s Congress (NPC) in March placed ever-greater emphasis on maintaining stability (weichi wending, often shortened to weiwen). The shift was one of relative emphasis. Stability is a repeated theme in contemporary ideology. Formulations like that of the Fourth Plenum of the 17th National Party Congress, that ‘development is the highest priority task, and stability the highest priority responsibility,’ are common.

In February, President Hu Jintao addressed the Central Party School on the related theme of ‘social management’, a higher-level abstraction within which the mechanisms of weiwen are now packed. Despite its reference to improving redistributive social security measures, there was a close relation between this policy statement and external events.

The strongest voice in support of Hu Jintao was the Minister for Public Security, Zhou Yongkang, and the underlying message was about nipping social protests in the bud, especially the ‘mass events’ that have been steadily increasing in number since the late 1990s. Following the early successes of Middle East democracy movements in early 2011, China struck hard at dissidents at home, arresting hundreds of activists and putting stringent limits on liberal discourse. A high-level Party instruction in late May extended these limits to virtually all public contention.

Weiwen policies were often successful when first applied earlier in the Hu-Wen era. Involving carrots as well as sticks, weiwen is thought of in public security circles in China as a more nuanced set of policy instruments than the yanda (‘strike hard’) repressive measures of the past.

In recent years there have been many accounts of overuse of weiwen. It is liable to take on a life of its own, escaping central control and embedding itself in local political games. Warnings against ‘stability’ being invoked as a barely disguised tool for uncompensated takeovers of land and other assets, providing fertile soil for local mafias along the way, have appeared in Party documents. Overemphasis on weiwen is paradoxically damaging to government legitimacy. It uses a variety of extra-legal means to lower the level of reports of ‘incidents’ and petitioning that higher authorities demand. It damages the credibility of the China model: a model underwritten by ever-larger budget allocations to buying off protests, an approach which is unlikely to be sustainable.

Autonomous organisations, resembling the civil societies found elsewhere, are kept within narrow bounds. Lacking critical mass, they are easily targeted as destabilising elements. But this is not the end of the story. Overdriven weiwen generates a perception at significant levels within the party-state that it is dangerous, particularly when it damages other tools of social management. According to the sociologist Sun Liping, overcentralisation of control, of which weiwen is an expression, leads to acceleration of social disorganisation.

Above all, it runs against the objective of modernisation of governance institutions, and the interests of sizeable sectors of the elite. Middle managers, not merely the putative middle class, have a lot to lose in the long run from the escalating cost of maintaining stability. From where they stand, it is a backward step, arbitrary and counter-productive. It downgrades their entire stock of tools in governance. Many regulatory areas — notably the newly installed social security mechanisms — are recognised by this class of officials and managers as requiring more bottom-up participatory management.

If anyone is likely to push back against overdriving this approach to stability maintenance, it is the middle-manager stratum of Chinese society that has its own vested interest in modernising governance. Prospects of any alternative to the stability maintenance model are not good, but the fact remains that weiwen does not have the floor to itself.

David Kelly is Professor of China Studies at the China Research Centre, University of Technology Sydney.

This article also appeared in the most recent edition of East Asia Forum Quarterly, ‘Governing China’.

1. A shift towards social governance in China
2. Restructuring China to promote social stability
3. China, reinventing social management

How India will negotiate the issue of trade and sustainable development at international fora with its new environment minister, Ms Jayanthi Natarajan, is a question that concerns many.

Former environment minister Jairam Ramesh had fought the issue tooth and nail in different international platforms, blaming both developed and developing countries for their brazen exploitation of the environment in the guise of public good. But he made it clear that international trade and sustainable development are inseparable, and something no nation can afford to lose sight of — especially at a time when both reinforce each other. Ramesh recently said: ‘We need both and need to establish a trade-off between the two’.

Jayanthi Natarajan, Ramesh’s successor, will echo the same view but perhaps like to handle the issue in a different manner. The important point is that international trade is still a viable medium for fostering sustainable development. And the economic argument that ‘trade promotes growth and growth reduces poverty’ remains fresh in the minds of politicians and policymakers.

Growth of international trade is a significant tool for attaining sustainable development. Acceleration of trade requires the creation of new markets, exposure of domestic firms to international practices, introduction of new investment and adoption of new technology. These initiatives create opportunities for sustainable growth and development for large numbers. But the application of such technology and investment in becoming eco-compliant and environment-friendly remains a matter of concern. In major fora it is argued that the adoption of new and more efficient technologies help reduce pollution and the production of waste. This also increases the efficiency of resources and consequently expands trade.

Today the issue of trade and sustainable development faces a number of challenges. Unresolved trade and sustainable development issues, coupled with the challenge of implementing an equitable rules-based global trading system, are proving difficult to resolve through negotiation. Such an exercise demands compliance with national, bilateral and regional policies and agreements which ultimately present enormous challenges for all countries.

Challenges of this nature need greater urgency for developing and developed countries to generate capacity and strategy for pursuing sustainable development in trade and investment policy and practice. Objective and accurate research, analysis and capacity building for policymakers of developing and developed countries need to be acheived. This would expose them to policies that address social issues such as poverty alleviation, access to health and education and income opportunities — all while ensuring environmental management that works in balance with economic and trade development.

If environmental challenges are left unmitigated, it will inevitably affect the poorest, rendering trade unsustainable. The moot point is how to ensure the benefits of trade percolate down to the bottom. There is a worldwide increase in globalised economic activity, huge environmental degradation and widening income inequality. So achieving sustainable development will critically depend on proactive resolution of the issues at domestic and international levels.

The task before India’s new environment minister is daunting. India’s population is likely to reach 1.6 billion by mid-century. This would create massive pressures on land use for mainly-rural livelihoods, urban planning, public health, energy and food production. The convergence of these human pressures with those of climate change and sustainability will propel India to think of a green-growth path, like what Jairam Ramesh had in mind. It would require careful consideration of the trade-offs between development and conservation on a case-by-case basis. The social and political pressure from communities having to contend with the vagaries of environmental degradation is slowly forcing the government to tilt its policies towards adopting greener development. This would mean putting a cap on speedy industrialisation. Besides, international pressure is also building on India to reduce emission levels, indirectly hinting at slowing down its process of industrialisation.

Confronted with all this, will Natarajan be as bold and steadfast as her predecessor in standing up to the pressure of domestic industry? And how will she address India’s position globally? What is clear is that India will need to tread carefully on a path representing a balance between international trade and sustainable development.

Dr Anil Kumar Kanungo is a member of the Indian Institute of Foreign Trade, New Delhi.

1. India: Are we isolated on climate change?
2. India-ASEAN FTA Agreement: Challenges Ahead
3. Global challenges from China’s rise

The Supreme Court of India seems to have created a crisis after imposing a large-scale ban on iron ore mining in the Bellary district of Karnataka.

Although the Supreme Court has subsequently allowed the public sector entity National Mineral Development Corporation to continue operations, its imposition of a ban on iron ore mining in Bellary remains an extreme step. The decision was meant to demonstrate the Court’s anger and disappointment at the gross violation of rules and environmental laws by miners in the Bellary region, show the Court’s resolve to bring these rapacious and illegal operators to book, and push the government into taking corrective steps.

The economic losses resulting from the continuation of the ban on private sector units could be enormous and aggravate the slowdown that has already gripped the Indian economy. Nearly 21 million tons of steel-making capacity located in Karnataka is dependent on local iron ore supplies. Of the total production in Karnataka, which provides 24 per cent of the country’s iron ore output, 75 per cent comes from the Bellary-Hospet region. Shutting down the Bellary mines will force a closure of the steel plants located in Karnataka, as they can neither use the low-grade ore from Goa, nor bring in the required quantities from Jharkhand or Chhattisgarh as the transports costs are too high.

The closure of Karnataka’s steel plants will result in huge commercial losses to these companies, but the far bigger impact will be on the loss of production and employment in downstream industries such as automobiles, consumer durables, machine tools and engineering products. The direct employment loss alone could cost around 80,000 jobs, with hundreds of thousands of other jobs being jeopardised in downstream industries.

The government stands to lose Rs 100 billion (US$2.17 billion) in revenues and commercial banks could suffer an asset deterioration of up to Rs 500 billion (US$10.85 billion). Even after excluding other relatively minor losses to railways, state governments and utilities, the negative economic impact of a continued ban on mining in Bellary may be too large for the economy to absorb at this stage given that investors’ sentiment is already frail and global conditions are uncertain. The ban, if continued, will bring the Indian economy to the edge of an avoidable precipice.

In imposing the ban, the Supreme Court is presumably acting on the basis of its past experience. The Court saved Delhi from choking to death from noxious transport exhaust fumes by insisting on a cut-off date for the introduction of compressed natural gas in public transport vehicles. This created a mini-crisis with Delhi’s transport system grinding to a halt for a few weeks. The necessary executive action then followed.

The Court realises that India follows a practice of ‘management by crisis’. Far from acting in anticipation of emerging situations, action is postponed until time has virtually run out. This creates avoidable pressures and incurs unnecessary costs.

But given the predominant culture of management by crisis, the Court, acting on practical logic, has again decided to create a crisis — one which is far larger in its coverage and impact than stopping the Delhi public transport system in its tracks. Executive action will hopefully follow.

Can India really afford such repeated crises? And are they really a necessary condition for generating the required policy response and action?

The impending crisis will extend to all mining, including iron ore, coal, bauxite, copper and other minerals. This would result in India foregoing the use of its very large reserves of these natural resources that are essential for industrialisation and growth. Such an outcome would be disastrous. India would have to import massive volumes of these minerals, putting unsustainable pressure on its balance of payments, rendering its industries uncompetitive and generating a massive loss of employment.

The Court would do well to put together a group of relevant experts and industry personnel to find a way out of this impending disaster. There are two practical steps that could be taken. First, immediately establish three technically-competent and independent regulators, one each for iron ore, coal and other minerals. These regulators, by drawing up the necessary regulations and enforcing them strictly, will de-politicise the sector and minimise violations of environmental laws and the rights of indigenous peoples.

Second, the government has to ensure that its policy framework attracts large, organised, technologically well-equipped and socially- and environmentally-conscious mining companies which are more susceptible to public pressure and less prone to corrupt and illegal business operating practices. Such companies could effectively develop those mineral reserves which lie either under forest cover or lands populated by indigenous peoples without causing environmental or social damage.

There are some elements in the draft mining law, as it exists today, which could have the unintended effect of driving out large and organised miners from the sector and encouraging those who are rapacious and have zero concern for indigenous peoples rights or the environment. As it stands, the law will only result in India being unable to take advantage of its own natural resources. This will effectively deny India its natural advantage simply because of an inability to jettison the culture of management by crisis.

Rajiv Kumar is Secretary-General of the Federation of Indian Chambers of Commerce and Industry.

1. North Korea’s mining prospects
2. Indian economy hardly misses a beat
3. Chinese interests in Pacific nations: mining ventures in PNG

Looked at from the outside, it’s a little difficult to understand why the political leadership in Japan is now under such intense pressure about its handling of the Tohoku earthquake, tsunami and nuclear disaster.

The approval ratings of Prime Minister Kan’s DPJ government plummeted after an initial lift and created an opportunity for enemies within his own party to challenge his leadership — a challenge he managed to fend off by declaring that the time was not right for him to resign but that he would do so later.

Superficially at least, the Kan government appears to have done well in the face of the triple catastrophe with which Japan was confronted in March. It was quick to deploy emergency services — quite unlike during the Kobe earthquake when the Murayama government bumbled over the constitutional issues surrounding dispatch of the Japanese Self-Defence forces and seemed frozen into inaction. Japan responded readily to international offers of assistance, and worked effectively with the US military, government and non-governmental organisations in getting them into quake and tsunami devastated areas. With US military and civilian assistance, a piece of powerful pumping equipment was airlifted from Australia to help at the Fukushima nuclear power plant. Japanese officials communicated to the Japanese and global publics effectively, through the Chief Cabinet Secretary Yukio Edano, about developments as they unfolded. And the Kan administration represented with dignity Japan’s national plight to the world.

Measured by any reasonable international benchmark, the Japanese government and people stand tall in their response to the Tohoku crises.

There were bound to be problems under the pressure and spotlight that such an enormous catastrophe visited on Japan and its government. Both the media and (of course) the political opposition have been unrelenting in its criticism of Prime Minister Kan’s handling of the crisis. The public is less antagonistic, but support for Kan now is running at less than 30 per cent. More than 70 per cent disapprove of the way he has been dealing with the disaster. At the same time a majority of the public does not want to see Kan resign. That reflects their lack of confidence in the ability of any other DPJ leader or the LDP to do a better job.

In this week’s lead essay, Gerry Curtis, no distant observer of Japan, also laments the failure of political leadership and lost opportunities.

At one point, Curtis notes, the government couldn’t figure out how to override regulations that prohibited helicopters from dropping dry clothes, food and supplies from the air. In the emergency that Japan faced, Curtis reckons, ‘a self-confident and determined prime minister would have ordered the air drop and worried about the legal ramifications later. Or he would have asked the Diet to immediately pass a law to give him the emergency powers to do so’.

There were more serious failures in governance. As the Fukushima nuclear power plant crisis unfolded, a paralysis in decision making (chiefly a product of distrust between the political leadership and the bureaucracy) left the hapless TEPCO (the nuclear power station owner) to interpret the government’s vaguely stated will on how to control a nuclear meltdown. Fortunately, as it turned out, Masao Yoshida, the TEPCO plant manager on the ground at Fukushima, saved the day by taking matters into his own hands and disobeying his company’s interpretation of government instructions on whether to persist with seawater cooling of the damaged reactors. This incident is not idiosyncratic, but symbolic of the deeper problems of national and industrial governance in Japan that are yet to be resolved.

On reconstruction, Curtis argues, ‘Prime Minister Kan has not succeeded in convincing the public that he has a vision for Tohoku reconstruction and for Japan’s future. He should have appointed a reconstruction minister immediately and tasked him with producing a basic reconstruction plan for urgent consideration. Instead Kan created a reconstruction commission consisting of several academics with little relevant expertise. The Commission’s final report is not even due until near the end of the calendar year. Reliance on this Reconstruction Design Council will delay decisions. The report that finally emerges is certain to be a consensus document, and not offer the hard-hitting, bold and precedent-breaking approach needed’.

And, Curtis concludes, ‘Prime Minister Kan seems to have little idea about how to structure a coherent policy-making process — and he gets no help from bureaucrats who want to see him fail. He seems incapable of delegating responsibility, and the crisis spawned by the catastrophe of 11 March deprived him of the luxury of time to figure out how to develop a sensible decision making system’.

Whether the Japanese people do face, as Curtis suggests, ‘the dismal political reality that there is not likely to be a strong and effective government anytime soon, and the opportunity that the Tohoku tragedy presents to open a new and dynamic era probably will be lost’ is yet to be seen.

Certainly the resilience of the Japanese people, their competence, and order in the face of the enormous tragedy in Tohoku — a testament, as is widely recognised, to the fortitude of Japanese institutions and traditions — deserves better reward.

Personal Tales from Tokyo

April last year I was on a rather hectic mission in Japan for the IMF that involved travel up and down the country. Getting back to Tokyo one evening on the Toyoko Line from Yokoyama, no sooner had I made the rapid change across the platform at Naka Meguro onto the Hibya Line than I realised I’d left my computer (my life, my inadequately backed-up files of everything, plus my wallet in the side pocket!) on the overhead rack of the train pulling out of the station across the platform. I reported my loss to the station master at Roppongi (different line; different company) who took my name and details and said he’d call me back if anything could be found. Two hours later I got a call. The train had been to Tokyo and back to Yokohama, and my computer recovered, all intact; I could come to Yokohama and collect it now or have it delivered in the morning!

Two weeks ago, in Tokyo again, I took a taxi back from an unfamiliar part of Tokyo to my lodgings at Kokusai Bunka Kaikan. The taxi driver wasn’t sure of the best route (GPS system absent) and I only knew the end bit. At one point he took a wrong turn — not much of a diversion but an obvious one at the end of the journey. He refused to take any of my $40 fare, no matter how much I remonstrated, because he should have known the best way to my home. Imagine that in Melbourne or New York or anywhere, except in Tokyo!

These are only two among many stories I could tell like this.

That’s Japanese social infrastructure for you.

Peter Drysdale

1. Japanese leadership fails at post-disaster reconstruction test
2. After the Tohoku earthquake, Japan’s new beginning
3. The political and policy fall-out from the Japanese earthquake and tsunami

The Kan cabinet is facing a defining moment in Japan’s postwar nuclear debate.

With the bulk of nuclear reactors now offline, the country is holding its breath over how Prime Minister Naoto Kan will proceed. Difficulties continue at the Fukushima Daiichi nuclear power plant. Dangerous levels of radiation have been reported in the No. 1 and No. 2 reactors, and new sources of food, this time beef, have been taken off the market by the Japanese government with dire consequences for livestock producers in the stricken regions.

The short-term prognosis for Japan’s electricity supply is uncertain, yet it is the longer term effort to reform Japan’s energy policy that is the key to resolving the current impasse. Public confidence in Japan’s nuclear industry was shattered by the disaster at Fukushima, and until the reactors are fully cooled it is unlikely that the full impact of this disaster will be appreciated. In the meantime, decisions need to be made, and Japan’s energy supply needs to be assured.

The current political malaise in Tokyo will make reforming government oversight of the nuclear industry a prolonged — and highly charged — political fight. Japan’s government is hoping for a political compromise with local leaders as they seek to rewrite the procedures and the oversight mechanisms that will ensure a Fukushima-scale accident will not be repeated.

But the effort to persuade local communities to restart nuclear reactors has faltered. Kan himself derailed this effort when he suggested that past practices of safety testing were insufficient, and that Japan ought to develop a ‘stress test’ similar to those used in Europe to ascertain the safety of Japan’s aging nuclear reactors. And making matters worse are revelations public polls have been rigged by the Kyushu Electric Power Company, also implicating a local governor.

Thus, the government’s hope that Japan’s nuclear reactors would be brought slowly back online this summer has been dashed. Moreover, instead of working with the government, opposition party leaders seem hell bent on painting Kan as an anti-nuclear activist and hurling personal insults at Banri Kaieda (Minister of Economy, Trade and Industry) in Parliament.

Such politics are likely to intensify further. There is deep public anger with the nuclear policies of the past and the inability of the Kan government to bring an end to the Fukushima dangers.

Partisan politics aside, public confidence in industry and government has plummeted. A broader debate in Japan is unfolding, and the temptation is to draw the battle lines so that industry and government are on one side and Japan’s citizens are on the other. But this would be a flawed — and from a policy perspective, deeply damaging — premise.

Japan has been here before. As Japan’s business and government leaders consider how to move forward today, it might be helpful to look back and remember that the trade-off between Japan’s economic vibrancy and the health of Japan’s citizens has already been demonstrated to be a false dichotomy. In the early 1970s Japan confronted a similar moment of reckoning when environmental damage created serious health risks for communities in proximity to industrial sites. At that time, the national government refused to mediate the conflict, writing it off as a local problem. Eventually Japan’s courts weighed in on the liability of companies that had polluted the streams and waters by filling them with mercury and other poisons, destroying the health of Japanese citizens. The end result was a reformulation of industrial regulation, and some of the best technologies and practices for environmental protection to emerge in the 20^th century.

But the 1970s also produced evidence of proactive leadership in Japan. During that decade, Japan’s economy was buffeted by extraordinary ‘shocks’ emanating from the global market. The world’s currency markets were upended, the US embargoed soybean exports, and, perhaps the greatest blow, oil prices skyrocketed. Yet Japan’s industry and government initiated wholesale reforms — restructuring the industry and introducing the energy conservation measures that today have made Japan one of the leading global forces in environmental technologies. Japan demonstrated its capacity to be far more resilient and innovative than any other advanced industrial society in energy conservation approaches, all while assiduously implementing new environmental protection policies. The quality of air and water in Japan was largely restored within a decade, and new and globally-competitive technologies emerged.

Today, the imperative for devising better safeguards for nuclear energy is abundantly clear. With transparent safeguards, and robust oversight mechanisms, local leaders and communities may be better positioned to sign on to the short-term energy needs of the country. Japan’s nuclear industry has a major role to play in the national effort to ensure the safety of its reactors.

Global efforts to devise a scientific standard for evaluating radiation exposure are also long overdue. Here Japan must lead the way. Falling back on political expediency, cutting corners and rehashing yesterday’s politics — the very practices that many think may have led to this crisis — is no solution. Innovation in policy management, coupled with a credible demonstration that safety and efficiency can go hand-in-hand, offers a more constructive approach to reassuring Japan’s citizens that nuclear power is safe.

Underneath the heightened emotions on display in Japan’s nuclear debate, the nation is deeply divided over what Fukushima Daiichi means for Japan’s future. Most Japanese understand that the development of nuclear energy was indispensable to their economic development strategy in the past, but the role of nuclear energy in Japan’s future remains to be seen. For the moment, devising factually correct assessments of the state of Japan’s reactors is paramount. Beyond that is a broader global conversation on how to ensure the safety of nuclear power.

We should not forget that Japan’s nuclear debate is not simply about energy policy. The anniversaries of the atomic bombing of Hiroshima (6 August) and Nagasaki (9 August) force a moment of deep and troubling reflection for many Japanese, and are national memorials that continue to produce unequivocal statements about Japan’s continued commitment to rid the world of nuclear weapons. This year, crafting Japan’s nuclear message will be far more difficult. The entire nation will be listening. We should be, too.

Sheila A. Smith is a senior fellow for Japan studies at the Council on Foreign Relations. This is an adapted version of an article first published here on the Council on Foreign Relations’ Asia Unbound blog.

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2. Nuclear power in Asia after Fukushima
3. Japan’s nuclear power plant crisis

While many Chinese pundits and scholars are applauding for China’s Twelfth Five-Year Plan (2011-2015) as a milestone for China’s green revolution, the country’s march to low energy consumption and low carbon economy is not going to be a smooth or straight one.

China’s five-year plans, albeit strategically sound, are not likely to change the short- and medium-term energy and climate landscapes. Challenges will remain.

In the last decade China’s economic growth has skyrocketed, expanding at around 10 per cent annually in real terms. But China’s soaring appetite for energy and increasing greenhouse gas emissions, incurred by its rapid development, suggests China’s growth is unsustainable from these perspectives.

In the foreseeable future, much more oil will not only be used in industry and agriculture but also by the phenomenal expansions in passenger vehicles. Increasing world oil prices will also add to already elevated inflation in China, which worries China’s leadership. China is also expected to continue its coal-dominated energy portfolio since coal is the cheapest and most readily available bulk energy source in the country. Although China has shut down a large number of small-sized old coal-fired plants, and built some new ones using the best coal technologies available, many of China’s power stations still burn coal with inefficient, outdated technologies, which might result in energy consumption surge and carbon emissions. Moreover, China’s energy consumption and carbon emissions are influenced by its gross domestic growth. If China could limit its economic growth rate to 7 per cent over the next five years, then energy consumption and carbon emissions would be controlled significantly. Still, China’s actual economic growth rates have always exceeded targeted ones, so energy consumption and carbon emissions will likely increase more than expected.

Worse yet, China still does not perform very well in collecting and reporting energy and carbon emissions data, despite attempts to improve their monitoring of energy use and emissions. There are two major reasons behind such problems. At the national level, official data records suffer from periodic revisions from a variety of agencies in China, leading to inconsistency and uncertainty. At the local level, Chinese local officials sometimes misreport data or inhibit transparency so as to please higher-ups or make for more favourable employment evaluations. Notably, among all of China’s energy use data, coal is well known as the least accurate, partly because China has more than 1,100 counties with operating coal mines. Take coal data in 2002: after two revisions,  the final consensus increased coal consumption by more than 9.2 per cent from the original estimate.

Over the long term, China’s best bet is to scale up clean technology development and deployment — particularly solar, wind, electric vehicles, carbon capture and storage, and biofuels. Increasing non-fossil energy to 11.4 per cent of China’s total energy mix by 2015 and to 15 per cent by 2020 is plausible yet insufficient to decrease overall energy consumption and carbon emissions in the next two decades. Notably, China’s current non-fossil energy development strategies rely too much on nuclear power, a troublesome reliance particularly in the aftermath of the Fukushima.

In addition, China cannot control or decrease energy consumption and carbon emissions growth without accelerated structural reform. It is best for China to reach the peak of its energy use and carbon emissions in the 2020s rather than 2030s under the business-as-usual scenario. Energy-intensive industry, including steel, cement, chemical, power, transport and manufacturing sectors, is expected to decline significantly as share of gross domestic growth. But the current phase of industrialisation and urbanisation make such changes very difficult unless China’s service sector booms quickly.

Finally, China needs to continue to enhance its capacity to collect, verify and report energy use and emissions. China does poorly in monitoring energy data and even worse for carbon data. On the one hand, China should look for a wide array of national and international organisations to collect and report a range of complementary information on China to cross-check the data. On the other hand, China should collaborate with foreign government agencies to obtain know-hows and other relevant skills. If China is to adopt a smart and comprehensive policy portfolio, then only by looking beyond the initiatives of the current Five-Year Plan will it find meaningful solutions.

Yuhan Zhang is an International Fellow at Columbia University and a former research fellow at the Carnegie Endowment for International Peace.

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Does the recent upturn in grain prices, or more generally food prices, signal a permanent reversal of the long-term downward trend in the real prices of foodstuffs?

This question seems to underlie most comments on the recent food price increases — and, incidentally, commentary on the 2006–08 upturn in primary commodity prices.

Adverse weather events such as droughts in China, Russia, Ukraine, Kazakhstan and Australia, and floods in Australia, India and Pakistan, and the nonsensical subsidising of bio-fuels by the EU, US and Australia have been at least partly responsible for the high level of volatility in food prices since 2006. Disruptions of food supplies due to adverse weather will no doubt continue. Likewise, irresponsible policies by major food producers, which have caused sharp fluctuations in food prices in the past, will no doubt continue.

The real price of foodstuffs (as measured by indices published by the IMF and World Bank) has been trending upwards since 2000 — except during the financial crisis. But this recent upturn is in the context of a downtrend in the index over the past century or so. During this time there have been fairly prolonged upturns: between 1910 and 1920; from the Great Depression to the end of World War II; and in the early 1970s. Is the 2000–2011 period any different? Does it point to a reversal of the century-long downtrend in real prices?

Factors that have been suggested as contributing to a long-term uptrend in the real prices of foodstuffs are the following: higher incomes in large developing countries leading to increased demand for income-elastic foods such as high-protein meats, dairy products, fruits and vegetables, edible oils, and seafood; increased demand for bio-fuels as substitutes for fossil fuels (in competition with their role as food stuffs or feedstuffs); reduced agricultural productivity growth (blamed largely on reduced funding of agricultural research); larger populations and higher incomes — particularly in developing countries — leading to agricultural land being drawn into urban and industrial uses (which means that lower quality arable land is being used in agriculture); higher long-term prices of increasingly scarce water and energy (important agricultural inputs); and the highly uncertain impacts of climate change.

Despite this forbidding list of factors, there is hope that the long-term downtrend in the real prices of food stuffs will continue — largely because the productivity increases that have driven the century-long downtrend will continue. It is noteworthy that over the latter half of the past century — the period of the most rapid growth ever in the world’s population — that agricultural output grew even faster than population growth. The rate of global population growth is slowing down rapidly and future population numbers are not likely to be as dire as the UN Population Division is projecting. I estimate that due to the UN’s propensity to under project the decline in fertility rates across the world that the global population will peak at 500 million to one billion less than what is currently projected. The declining populations now experienced in some countries in East Asia and southern Europe (with Total Fertility Rates close to 1.0, half the replacement rate) will be more of a future concern for many other countries, rather than increasing populations.

Because of the slowdown in the global population growth rate, the world does not need food output to increase as rapidly as it has over the past half century or so. Concerns about the slowdown in agricultural productivity growth are thus not as serious as many make out and should not be used to argue for sharply increased research funding. What is of more concern for agricultural research is that the main research tool in the agricultural researchers kitbag — bio-technology research — is being restricted by the Luddite actions of people trying to prevent such research. Governments need to develop some courage and support bio-tech research strongly.

The continuing slowdown in global population growth will also reduce the concerns about the loss of arable land and the increasing scarcity of water and energy. Water-saving and energy-saving agricultural research will also help to ameliorate such concerns, if allowed, as well as assist in adaptation to any adverse impacts from climate change.

Hopefully incomes in developing countries will continue to increase, leading to greater demand for income-elastic foods. Agricultural research and open trade around the world should allow these demands to be met without permanent increases in real prices. But bad policies, including export bans — which have contributed to the recent price increases — will no doubt remain a continual threat to cheaper, more available foods.

Ron Duncan is Emeritus Professor at the Crawford School of Economics and Government, The Australian National University

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