Japanese proposal on differentiation

Mitigation in the developing world according to Japan: Proposes domestic action in different sectors, will lead to taking international commitments

Japan today organized a side event to explain its sectoral approach proposal. The event titled ‘Sectoral approaches for a post-2012 framework and Japan’s support to developing countries’ organized by the Japan’s ministry of environment, interestingly only discussed the sectoral approach, but nothing about the support to the developing countries.

Japan has been promoting its sector approach since Bali but with lots of missing pieces. It has not clarified its position on how the sectoral approach aligns itself with the Bali Action Plan or what kind of financial incentives are available for the developing countries to adopt sector approaches or how sectoral approach can be implemented under an international conventions considering that this proposal is about regulating thousands of industries in each developing countries.

In today’s event also Japan was even less forthcoming on these issues. It was completely non-committal on the issue of finance and technology transfer. What did come out from the presentation was that Japan has a step-by-step plan to commit developing countries to binding emission reduction targets.

Step 1
In the first step it wants countries like India and China to convert its domestic actions into measurable, reportable and verifiable international commitments. The process goes like this. As China has already notified its domestic energy consumption standards for key energy consuming sectors, Japan wants these standards to be converted in to absolute emission reduction targets till 2020. This target then becomes China’s international commitments post-2012, which will be measured, reported and verified internationally.

Step 2
In the second step, Japan would like to set international standards on energy consumption in different sectors under the United Nations Framework Convention, which will be similar for both the developed and the developing countries. This standard will then have to be met by all countries. Japan has also submitted a written submission to the Convention proposing that all major developing countries set economy-wide intensity targets in addition to their sectoral intensity targets for major sectors. There is no mention of financial support or technology transfer in the Japanese proposal.

The sectoral approach proposal has been opposed by the developing countries including India and China. India for instance rejected Japan’s proposal at the contact group on mitigation and its means of implementation, which met on 4 December in Poznan. It said that it was puzzled by Japan's proposal for the sectoral approach with a common matrix for all. There is no basis for this in the Bali Action Plan, said India.

But according to the Japanese representatives at the side event, the European Union has supported the sectoral approach and has even proposed a financial mechanism to implement it. Under the EU’s proposal, developing countries will take sector-wide energy intensity target, which will be a deviation from the business as usual. If they are able to reduce their energy intensity below the target, then the gap between the target and the actual intensity beyond the target will become sectoral carbon credit, which can be sold in the market.

At the event, Japan boasted about the success of the Asia Pacific Partnership (APP) on Clean Development and Climate (which India is also part of). They explained that as this partnership, consisted of both developed and developing countries (members include Australia, Canada, China, India, Japan, Republic of Korea, and the United States) it is the role model for further cooperation. On being asked about the kind of technology transfer being made to India by Japan, under APP, representative replied that there have not been any technology transfers because the partnership is still squabbling about the financial mechanism for technology transfer. If six-nation partnership outside the Convention cannot agree on financial mechanism for technology transfer, then these are ominous signs for the things to come in the Convention.

Rewards for early action: EU’s proposal for a financial mechanism under the sectoral approach, as discussed by the Japanese ministry of environment. Under this proposal, developing countries take sector-wide efficiency targets, and if the countries deviate from the baseline (target) that has been set, the gap becomes the carbon credit for the sector. This carbon credit (amounting to a certain number of units, avoided carbon) can then be sold in the market through a new global trading mechanism or could even be part of the extended CDM.

It said that it was puzzled by Japan's proposal for the sectoral approach with a common matrix for all. There is no basis for this in the BAP, said India. Further, as regards what is deviation from business as usual in GHG emissions for developing countries   as advocated by some Parties, India said that it not simply the case of -15% to 30% from baseline. This assumption is premised on Annex 1 countries undertaking a 25-40% reduction in emissions from 1990 levels by developed countries and this translates to the Non-annex 1 countries undertaking a 23% reduction in emissions from 1990 levels, which is a 60% per capita reduction in emissions for developing countries, it said. Hence, there is a need to move away from this, it added. In response to Japan's proposal for a moving base year, it said that this cannot be so. The 1990 reference is based on levels of GHG emissions which were unsustainable, said India. If the 1990 levels of GHG emissions were unsustainable, then that should be the base year, it added.