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Policy Proposals  Environment and Energy Towards a Truly Effective International Framework to Combat Climate Change -- Expectations for COP16 --

16 November 2010
Nippon Keidanren

The 15th Conference of the Parties (COP15) to the United Nations Framework Convention on Climate Change in December 2009 issued a decision stating that it "takes note of the Copenhagen Accord". Subsequently almost 130 countries and regions, including the United States, China and other major emitters, expressed their support for the accord, accounting for more than 80 percent of global carbon dioxide (CO2) emissions.#1 Nippon Keidanren has expressed strong hopes for the creation of a single international framework for a unified worldwide approach to combating climate change based on the Copenhagen Accord.

Unfortunately, the series of United Nations climate change negotiations held since COP15 has not made progress in resolving the conflicting stances of developed and developing countries. Moreover, we are deeply concerned by the lack of impetus for creating a single international framework, as indicated by the absence of any prospect of the U.S. passing a climate change bill setting medium-range targets, and by the European Union's references to a second commitment period,#2 signifying the extension of the existing Kyoto Protocol.

Combating climate change is an issue that affects the very fundamentals of human existence. To facilitate negotiations at COP16 in Mexico aimed at creating an equitable and truly effective international framework with participation by all major emitters, Nippon Keidanren would like to make the following proposals to the Japanese government and the governments of all signatories.

1. A Single Framework with Participation by All Major Emitters

As humankind's first accord aimed at combating climate change, the Kyoto Protocol is an important international framework, and its signatories must make every effort to achieve its targets. However, the absence of the U.S. and the rapid growth of China and other emerging economies have meant that countries committed to reductions now account for less than 30 percent of global CO2 emissions, and total global emissions continue to rise rapidly. We must swiftly create a single international framework including countries such as the U.S. and China that have not committed to reductions under the Kyoto Protocol, develop shared global targets for reduction of greenhouse gases (GHG), and work together towards meeting those targets.

As international negotiations on creating a new framework have bogged down, some discussion has emphasised or accepted the setting of a second commitment period under the Kyoto Protocol. However, if the protocol is extended to a second period, no matter what form this extension may take, the momentum for participation by the U.S. and emerging countries including China will be lost. Entrenching the existing international framework would be a backward step for climate change prevention. We renew our call for the Japanese government to maintain a position of only agreeing to a single international framework with participation by all major emitters.

2. Assuring International Equity

Although there is an urgent need to reduce emissions in order to combat climate change, strict targets will have serious effects on economies and employment. To assure equity, international negotiations must take proper account of past reduction efforts and future scope for reductions. Among developed countries in particular, negotiations should assure equivalence of costs required to achieve reductions (marginal abatement costs).

Japan needs to conduct a transparent and open public debate on its reduction targets from the three perspectives of international equity, feasibility, and the appropriateness of the public burden, in order to set medium-term targets that are acceptable to its citizens.

3. The Importance of Technology
(Developing Innovative Technologies and Diffusing Existing Technologies)

Technology is the key to combating climate change while achieving economic growth. Widespread use of best available low-carbon technologies on a global scale will enable the achievement of major reductions in GHG emissions. However, halving GHG emissions by 2050 amid ongoing growth in the world economy will require not only widespread use of existing technologies, but also the development of innovative new technologies.

Some international negotiations have proposed compulsory licensing and purchase of intellectual property rights to ensure the worldwide diffusion of low carbon technologies. However, given that appropriate protection of intellectual property rights is essential to encouraging development of such technologies and facilitating their transfer, we are against purchasing as well as the granting of compulsory licenses.

(1) Developing Innovative Technologies

Since innovative technologies require lengthy timelines and enormous budgets for basic research through to development, commercialisation and diffusion, there is a limit to what can be achieved in a single country. We need a shared international roadmap for development of fundamental technology required to halve GHG emissions by 2050, to act as a basis for cooperation in joint R&D efforts by industry, academia and government.

(2) Support for Reduction Efforts in Developing Countries
(International Contribution through Diffusion of Existing Technologies)

  1. (a) Creating an environment that encourages technology transfer on a commercial basis
    Most transfer and diffusion of low carbon technologies to developing countries is conducted on a commercial basis, such as export of products from developed countries, direct investment, technical cooperation, and patent licensing, yet businesspeople have noted factors in developing countries that hinder technology transfer, including lack of expertise or human resources in recipient countries and inadequate protection of intellectual property rights.

    It would be desirable to remove such obstacles through dialogue between developing countries and developed countries including Japan, and through support via public funds. Together with technical cooperation, particular attention should be paid to human resource development and other forms of capacity building to enable developing countries to smoothly absorb technologies.

  2. (b) Creating new bilateral offset mechanisms that evaluate international contributions
    The Kyoto Protocol introduced the Clean Development Mechanism (CDM) as a way of supporting emission reductions in developing countries, but users have noted various points that could be improved, including rigid procedures for approval of credits.

    As a supplement to the CDM, we welcome efforts to create bilateral offset mechanisms recognising overseas GHG reductions made using Japanese technology as a contribution by Japan. Swift introduction of such mechanisms will require methodology for measuring GHG emission reductions, accelerated inter-government talks aimed at reaching bilateral agreements with developing countries, and the promotion of international understanding of Japan's initiatives.

    The Japanese business community will take every opportunity, including the upcoming COP16, to actively cooperate in raising international awareness of the importance of bilateral offset mechanisms aimed at reducing global GHG emissions and in formulating specific rules for such systems.

"Nippon Keidanren's Commitment to a Low Carbon Society", which is currently being implemented, sets out a vision for the Japanese business community to harness its technological prowess and assume an instrumental role in achieving the target of halving global emissions of GHGs by 2050. The Commitment comprises four pillars: (1) maximising the introduction of best available low-carbon technologies in corporate activities, (2) developing and commercialising products and services that harness world-leading energy-saving technologies for consumers, (3) transferring technology and expertise to other countries, and (4) developing innovative technologies. Through these initiatives, we aim to make an active contribution to achieving a low carbon society of global scale.

In cooperation with the worldwide business community, Nippon Keidanren aims to contribute to building an effective international framework. Forums where government and industry can share knowledge are a crucial element of this process, and we hope that opportunities for public-private dialogue, such as the Mexican Dialogues#3 currently being promoted by the Mexican government, will continue to grow.

  1. CO2 arising from energy use.

  2. On 14 October 2010 the Council of the European Union adopted a number of conclusions relating to its position for COP16, to be held in Cancún, Mexico, including "its willingness to consider a second commitment period under the Kyoto Protocol, as part of a wider outcome including the perspective of the global and comprehensive framework engaging all major economies, while reiterating, in this regard, its preference for a single legally binding instrument..."

  3. A series of public-private dialogues organised by COP16 host country Mexico. Following a general meeting on July 15-16, three subcommittee meetings (finance and investment/carbon markets/technology) were scheduled for September to November. The results of this series of meetings will be reported to COP16.

Environment and Energy