By signing up to partnership agreements ASEAN members can gain a share of the net benefits of the projects, that is, the lower costs of reducing emissions that their projects offer.
But more than this. ASEAN participation is of great strategic significance. The Australian debate is bogged in the fear of unilateralism. An ASEAN offer would help pull it out of that bog.
Offer or wait to be asked? That might be an ASEAN question. But the context, again, is important. An offer of the type we suggest helps manage the risk that ASEAN even with an upcoming FTA with CER could become a target for anti-trade measures by the adjusting Australian industries on the grounds of ASEAN’s non-participation.
Just as importantly, participation would help the ‘green’ countries of ASEAN to focus on the many opportunities that will arise from being part of the global solutions to climate change rather than just seeing the cost side. The ASEAN vision and Australia’s thinking should go well beyond the idea of becoming a carbon sink. Countries like Indonesia should aspire to partnership in a wide of innovations and developments associated with sustaining the environment. This should also include education, research and training. As far as possible, all of these developments should be sustained by an emphasis on private sector development.
And for what its worth, a grateful Prime Minister might be a useful ally in other forums.
To get going, the offer could be kept simple, even for instance a suggestion that the parties meet to talk about how a cooperative program might be implemented, were that approach adopted. Finding clarity on acceptable projects (see p. 238 of the Green Paper, which rules out forestry-based projects in any case) and on the greenhouse accounting issues are good places to start.
To get going, the offer could be to set up the work within the second track systems around the region, which are ever-expanding. Let them bid for the work!
And that is what those systems should be for – to build confidence in integration and in the role that markets and investors can play.
The Australian debate creates new opportunities, therefore, for ASEAN members and in the relationship.
But the window must be kept open.
Years ago, shortly after I became a public servant in Canberra, an old hand who had been a Division Head for years said to me, “In government, where you sit is where you stand.” What he meant, quite simply, is that the way the world looks largely depends on where you happen to sit. And the issues you choose to take a stand on depend on how you see things.
Against this background, one wonders to what extent it is really correct that ASEAN members have a strong interest in the outcome of Australia’s great carbon debate. After all, they don’t seem to be taking much interest. Are they missing something – or, which is perhaps also possible, are we?
On the face of it, the interests and priorities of rich countries (like Australia) and poor developing countries (much of ASEAN) are sharply different. Developing countries in ASEAN are strongly focused on the need to tackle issues of mass poverty. They aim to promote domestic peace (mainly in the form of internal security and stability) and prosperity (in the form of strong growth, including rapid expansion of domestic energy supplies and consumption). Rich countries are little uneasy with the domestic emphasis on stability in ASEAN (human rights issues can be a problem) but are keen to discuss regional military issues. And rich countries are also uncomfortable with the idea of unlimited economic growth which promises to generate lots of carbon emissions across the region.
It’s not obvious that these sharply differing priorities can be easily accommodated. The climate debate in Australia reflects the “blue and green” international environment agenda. But the environmental debate in Asia is focuses on the “brown” agenda – of what to do with local garbage and sanitation, how to provide clean water, and severe degradation of air quality in cities. Boats in the bays off the huge cities of Manila and Jakarta are delayed because their propellors get clogged up with plastic bags. Millions of poor people in Manila dispose of their personal sanitation waste by wrapping the stuff up in newspaper each night and dumping it in nearby parks.
One suggestion which Christopher and David canvass is that the sharply differing interests of rich and poor countries can somehow be reconciled by market-based arrangements that involve international emissions tradeoffs. Hopefully something along these lines can be worked out one day. However for many reasons, the chances of setting up effective mechanisms in the foreseeable future seem slim. The devil is in the detail with schemes of this kind. Christopher and David invite ASEAN countries to join in the Australian debate. But one wonders why should they? Australia is not offering much at present. For the time being, it seems much easier for ASEAN countries to sign large soft-loan agreements with China to develop their domestic coal-fired power sectors.
ASEAN countries are in this whether they like it or not. Will they fight and kick and focus on the costs and difficulties or will they see an opening and some of the opportunities? Peter is probably right about the first response from ASEAN countries. But they might start listening more carefully after more global pressure and after some offers from global investors. International cooperation and development assistance will not come as a free lunch on this issue.
ASEAN countries are already engaged in emissions offset projects, under the Kyoto Protocol clean development mechanism (CDM). What the Green Paper suggests is more or less that Australia enter that market too.
CDM means that rich countries pay for emissions credits from individual projects in developing countries, where something is done to reduce emissions below what they are deemed to have been otherwise. Note the counterfactual, it’s impossible to determine what the actual reductions are (or in fact whether there are any) because we cannot know what would have been without a project. It’s a pretty patchy mechanism, but really the only thing there is right now to tap those low cost greenhouse gase abatement options in the developing world. It does result in financial flows to developing countries, estimated in the tens of billions until 2012, which is its attraction. A share of it goes to ASEAN countries – not a large share though, the big destinations are China, then India, and Brazil.
Much more comprehensive mechanisms are needed though. And to make them work, the basic principle needs to apply: rich countries need to put the cash on the table.