Report on ANU Australia and China Climate Change Forum

A workshop and a public forum in Canberra on April 14 and 15, 2009, helped to clarify Chinese and Australian perceptions of and approaches to mitigating climate change. Australian academic and government presenters were joined by Chinese researchers (programs of the sessions and some presentations are available at the ANU’s Climate Change Institute page).

The presentations explained the current and expected drivers of emissions of greenhouse gases (GHGs) including population growth, combined with potential changes in the GHG intensivity of income growth.

Evidence from scientists warns that a temperature rise of more than 2 degrees celsius would create serious risks for the planet and society. Both China and Australia are particularly vulnerable to climate change. Recent changes in temperatures and sea levels are at the highest edge of the range of projection in the last available report of the International Panel on Climate Change (IPCC). Even with very rapid reductions in GHG emissions, it will be extremely hard to prevent a 2 degree temperature rise.

Economic models suggest that the cost of reducing emissions to stabilise the proportion of GHGs in the atmosphere at 450 parts per million would be well under 1 per cent of global GDP per year – a potential cost which is dwarfed by the cost of failing to act. Nevertheless, it will be hard to agree on how to share the cost of mitigation.

A progress report on the global negotiations leading up to the Copenhagen climate change summit in December 2009 noted that the process had been significantly invigorated by the willingness of the United States to contribute to a solution. A global target to limit the proportion of GHG in the atmosphere may be agreed, with all major emitters making some commitments within a legal framework. While developed economies are expected to make commitments to reductions in emissions to 2020 or beyond, developing participants are expected to commit to specific measurable, reportable and verifiable mitigation, rather than economy-wide targets.

Australia’s position is based on the legislation the Government intends to submit to Parliament shortly. An unconditional commitment to a 5 per cent reduction from 2000 emissions is combined with an offer to reduce them by 15 per cent if there is an ambitious international agreement as well as as preparedness to accelerate reductions beyond 2020 as part of a potential global agreement to stabilise the proportion of GHGs in the atmosphere at 450 parts per million. Reductions of 5 and 15 per cent per head from 2000 emissions represent 34 and 41 per cent, respectively, from “business as usual”.

Responding to criticism of free emissions permits and/or subsidies to electricity generators and trade-exposed polluters, Australian officials noted all industries would have a clear financial incentive to reduce emissions as fast as possible.

Chinese presenters accepted the need for China to contribute to a global solution and drew attention to the significant commitment they have made and are making as announced in a recent White Paper. If these were translated to international commitments, they would be a creditable contribution to the ongoing negotiations.

At the same time, they acknowledged that a durable approach to stabilise the proportion of GHGs in the atmosphere will need to allocate the burden of adjustment more precisely than measurable, reportable and verifiable mitigation commitments. will be essential to agree on economy-wide commitments.

In the absence of such an agreement, there would be no guarantee that economy-by-economy actions add up to a sustainable outcome. Moreover, tensions caused by potential carbon leakage to some economies were likely to cause severe damage to the international trading system.

Two papers from Chinese think-tanks introduced the concept of a global budget for GHG emissions derived on the basis current accumulation and future stabilisation. This budget would then be allocated to all significant emitters. The basic principle was that no economy had the right to emit more than the sustainable global average. Actual emissions could vary if economies were willing to trade entitlements.

Such an approach is very welcome, since it would set the broad modality of global negotiations which can lead to a fair and sustainable global outcome. On the other hand, it will remain quite difficult to agree on the basic parameters for sharing a global emissions budget.

The papers from China propose that the shares of the right to emit should be based on the total emissions, from a historical starting point, with some possible adjustment to factors such as geography and resource endowments. This contrasts with the approach proposed by the Garnaut Review for the Australian Government, which proposes sharing a global budget leading to a gradual curtailment and convergence by each economy to the same and sustainable emissions per head by 2050.

Some participants noted that the more parameters used, the harder it would be to reach a burden-sharing agreement. An attempt to take account of long-term historical emissions before the establishment of the United Nations International Framework Convention on Climate Change will not be either workable or acceptable. It would not be possible to measure the source of past net emissions (human-made or otherwise) or to assign the responsibility for these to the current populations of economies.

There may be no need to agree on time paths for reductions of emissions per head for economies to a global average. Some could be permanent purchasers or sellers of rights to emit in excess of entitlements. While global trading of emissions rights was a crucial component of climate mitigation, individual governments could take different approaches to limit emissions over time to their budgets, adjusted for traded emissions rights.

In practice, trading would result in large financial flows from currently high emitters to currently less developed economies, even without any adjustment for past emissions. These flows to developing economies could be augmented by developed economies accepting a fair, therefore high, share of the responsibility for financing costs of technological change and adaptation to already inevitable climate change.

While the inevitably difficult negotiations proceed, it will be desirable to devise means for encouraging governments to meet their commitments. It may be possible to avoid undue reliance on sanctions, such as trade sanctions. One option is to make access to a large pool of funds dedicated to support technology and adaptation subject to evidence that emissions are consistent with commitments.