24 September 2009

Akihiro Sawa on Japan's 25% Emissions Reduction Target

Akihiro Sawa of the 21st Century Public Policy Institute, a think tank in Japan, has written an interesting paper on the new Japanese government's (the DPJ) proposed climate policies. The paper also has some interestingt views on how the United States is viewed in Japan. The paper has just been translated into English as is available here in PDF.

Here is what Prof. Sawa says about Japan's policy, (note that "clear water" refers to Japan's Mamizu climate policy that I discuss in this paper in PDF):
The DPJ has forgotten (or perhaps, are not aware?) that many major developing countries appreciated Prime Minister Taro Aso‟s genuine “clear water” target of reducing 15% compared with 2005 levels (which would be achieved solely by domestic efforts, not employing overseas credits, or offsets), and that these countries have also criticized the EU for including offsets and other developed countries such as Australia for “cheating.” Councilor Fukushima mentioned the possibility that “the 25% target may not be a "clear water" target.” If this is true, Japan may have disappointed South Africa and Bangladesh, which were supportive of Japan‟s “clear water target” as a criterion proving the sincerity of its reduction efforts, and government authorities of China and India, which have been critical of the excessive use of offsets by developed economies. We would hope that a leader of government charged with severe international negotiations would be more prudent of what he says, as any statement he makes, even domestically, is bound to eventually reach all governments via their embassies.

Perhaps the DPJ's intention was to impress developing countries by setting out the 25% reduction initiative as a sign of Japan‟s enthusiasm towards large reductions. However, at the current global negotiation table, developing countries led by China and India are not ready to give up their demands for reductions in developed economies by 40-80% - far beyond 25%. Although Councilor Fukuyama mentioned that reduction efforts are meaningless without the participation of China and India, saying that the government would “strongly urge” their involvement, it is hard to conceive that two countries which have maintained a hard-line stance so far in global negotiations, which are not always based on good intentions, would be so easily “urged” to assume a reduction target.

They are, however, very likely to escalate their demands, applauding Japan's competence - its unprecedented declaration of a high reduction target exceeding the capacity of all other countries and its positive outlook that the more stringent the target is, the more innovation is promoted, and hence a stronger economy. They would suggest that in order to accelerate economic recovery, Japan might seek an even higher target which would fulfill their demands of reductions by 40% or more. Would the DPJ be ready to accommodate such demands? Or, would they respond that 40% would be impossible even in their best efforts? If so, what makes 25% a viable figure, and 40%, not? If in turn, China and India should insist on a 40% reduction target as a nonnegotiable condition for their involvement, would the DPJ assent to the 40% reduction target alone, regardless of US and EU resistance? If not, the DPJ would leave developing countries in great despair.

The major problem with the 25% reduction initiative is that it was announced without any diplomatic strategies to convince developing countries to abandon their severe demands and has unnecessarily raised their expectations.
Prof. Sawa also discusses the implications for the U.S. and the E.U. Of particular importance is his observation that Japan's inability to meet a 25% target means that it will have to rely heavily on offsets, thus propping up beleaguered emissions-trading markets. Here is another excerpt (emphasis added):
With this strategy in mind, we can only imagine the US‟s dismay over the sudden announcement of a new 25% reduction initiative benchmarking 1990, instead of 2005, coming from Japan, with which it had kept close ties, after its painstaking efforts to make EU consent to the new baseline year. Just when an integrated diplomatic strategy was about to be maintained among developed countries including the EU, against unreasonable demands from developing countries, Japan‟s introduction of its 25% reduction initiative could break ranks. EU acclaimed the 25% reduction initiative, not to anyone's surprise; Japan has in effect become the first to offer to be a buyer of excess credits generated in a sectoral crediting mechanism (a scheme in which developing economies that have committed to a intensity-based target or other numerical target are issued credits for achieving their goal but suffer no penalties in non-compliance), EU's dole out scheme for developing country involvement. For scrambling players of the money game, who will enjoying large profits from transactions in a crediting (emissions trading) scheme, any country that sets out targets that are absolutely impossible to achieve are not only valued clients who will purchase emission allowances but also an important source of market information on price forecasts.
Do read the whole ting, here in PDF.

Note: Prof. Sawa and I were among a group of collaborators who co-authored the following piece:

Prins, G., Cook., M., Green, C., Hulme, M., Korhola, A., Korhola, E.R., Pielke, Jr., R., Rayner, S., Sawa, A., Sarewitz, D., Stehr, N., and H. von Storch, 2009. How to get climate policy back on course. Institute for Science, Innovation and Society, Oxford University and London School of Economics, The Mackinder Programme, LSE.

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