Countries that buy Chinese exports (hint, hint, America and Japan) should be held responsible for the carbon emissions it took to manufacture those goods in climate change negotiations, according to a Chinese government statement this week. And the debate over what is fair in climate change talks heats up. Shinsuke Sugiyama of Japan's Ministry of Foreign Affairs said 2009 will be a "make or break" year in achieving progress on a new global deal. Some scientists have even said we have passed that point.Last month, when I traveled to Tokyo, I met with one of Toyota's senior executives in charge of climate change issues. He seemed comfortable speaking to the ethical concerns many in Japan have over climate change negotiations, suggesting that the very moral underpinnings of climate change negotiations are in debate.
He questioned the fairness of the Clean Development Mechanism (CDM). In the Kyoto Protocol, Japan has a target of reducing emissions by 6%, and Japan's industries have a "Voluntary Action Plan on the Environment." But Nippon Steel, a highly efficient company in steel production, still has to buy CDMs from less developed countries. Meanwhile, Mittal is the world's largest steel company but doesn't have to buy CDMs even though they bought European steel companies with weaker standards than Nippon Steel. This just goes to show that developing countries, under this scheme, can sell both steel and credits, he said.
Emission trading is a flexible mechanism to get to a target, so we can avoid free riders. In Japan, there are no free riders thanks to business association Keidanren, he said. He argued that Japan is different; it is a country that has other mechanisms to avoid free riding, using pressure through organizations, especially Keidanren. "It's more of a culture than a requirement," he said.
Japan, which sees itself as a nation of seafaring traders, generally questions the ethics of trading the right to emit CO2. This point has come up in multiple interviews, including with METI and Japan's New Energy Development Organization (NEDO). The Toyota official called CO2 a "fragile commodity. We don't like it. It's subprime. CO2 has no value, so any agreements are artificial, so we're doubtful."
A better alternative is proper regulations and harmonization of standards, he said. Toyota takes the "top runner approach" based on vehicle weight. For example, in 1998, JAMA started top runner and set a target, and top runner was the biggest program impact.
Can Japan's approach be used in China? Maybe not, the Toyota official said. The Chinese have no Keidanren and no democracy. Japan started regulations 1500 years ago, but China is always about "great men," not regulations. Also, Japan has a culture of avoiding waste (mottainai).
Many in Japan have questioned the fairness of expectations on Japan to reduce emissions when its industry has already become so efficient. It's not fair to Japan because Japan has already achieved efficiency, he said. Japan's Kyoto Protocol commitment—a 6 percent reduction in greenhouse gas emissions below the 1990 level by 2012—has been described by Japanese officials as akin to trying to wring water out of a dry towel.
The Toyota official asked: How can less developed countries be supported in conjunction with developed countries' targets? We have clean development mechanisms but some negotiators say rich countries should pay for everything, but that's not fair. Less developed countries always ask for money from developed countries, but developed countries can't afford it. We should substantially decrease emissions on our own and contribute to less developed countries. Most Japanese don't know these mechanism, so the government needs to explain it: how much of the target is their own effort or by their taxes? National costs borne by individual countries are hidden.
Finally, there is an intellectual property rights question about climate change mitigation technology. He said China may claim that these technologies are analogous to AIDS vaccines (they should be shared on behalf of the global public good) but watering down the property rights of this privately-developed technology could reduce incentives to innovate.
Photo: "stuffed japanese shop in Nagasaki chinese quarter" by colodio
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This Toyota exec's frankness points out some of the key problems with climate negotiations, specifically how difficult it is to accomplish development and reductions simultaneously. First of all, Japan is unlikely to meet its own Kyoto targets. In fact, their emissions have increased over 1990 levels. So either they're not trying hard enough, or the Kyoto mechanism is simply useless.
Second, it's a little ironic for an automobile executive to be talking about the unfairness of emissions targets and reduction mechanisms, given the enormous contribution of his industry to the problem. I would be curious, though, to see Toyota-specific statistics on whether the company has reduced its own emissions.
Third, I'm highly skeptical of the ability or willingness of a business association like Keidanren to make much of a dent through voluntary cajoling of its members. Though, to be fair, they do have both a charter for ethical behavior and a charter on the global environment. Does this go deeper than greenwash? Tough to say.
Fourth, if Japan is truly a "nation of seafaring traders," then it's likely to resist appropriate taxation of shipping fuel. As Elisabeth Rosenthal reported in the IHT last year, "Under longstanding trade agreements, fuel for international freight carried by sea and air is not taxed." This raises the specter of whether green trade tariffs will be necessary, especially given the recent rumblings in both Chinese and American political circles over trade, consumerism, protectionism, and who should pay for carbon.
Fifth, the Toyota exec is onto something with the concept of harmonized standards. From a trade perspective, cars should meet minimal common standards that would give them access to all similar markets. But this approach might lead to the lowest common denominator dominating.
Sixth, the Japanese culture of thrift often takes some of the blame for the country's economic stagnation, once again highlighting the perils and paradoxes of trying to grow an economy, be ecological, and be generous internationally.
Fundamentally, though, the Toyota exec's gripe about Mittal steel points to a major hiccup in climate negotiations: the clash between internal inequality and international inequality. Because countries are the negotiating bodies, the internal differences of commercial power and social development are smoothed out, and the negotiations become a competition for reaping the rewards of development and avoiding the bill for cleanup.
To solve this in a transparent way, perhaps the responsibility question can be generalized into the following categories:
Historical contribution to emissions (justice)
Current contribution to emissions (severity)
Per capita emissions (development)
Capacity to respond (efficiency)
Domestic inequality (fairness)
Full participation (common sense)
Each of these factors could be weighted in calculations to determine a country's level of cuts, with an inequality measure such as the GINI coefficient used to mediate the inequality problem. The greater a country's internal inequality, the deeper their cuts must be. But all countries would be required to cut. This is a global problem; We're all Annex I countries now. Time is running out.
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