FEATURE ARTICLE: APEC AND CLIMATE CHANGE
This article was contributed by the Australian Government Department of Foreign Affairs and Trade (September 2007).
The Asia-Pacific Economic Cooperation (APEC) forum was established in 1989 to take advantage of the growing interdependence among Asia-Pacific economies by facilitating economic growth for all participants and enhancing a sense of community in the region. It is based on members’ shared interests in supporting the multilateral trading system, the removal of barriers to trade and investment and strengthening the gains from interdependence, both for the region and the world economy.
APEC currently has 21 ‘member economies’ - Australia, Brunei Darussalam, Canada, Chile, China, Hong Kong (SAR of China), Indonesia, Japan, Republic of (South) Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Chinese Taipei, Thailand, the United States of America and Vietnam. Together, they account for about 41% of the world’s population and 56% of world gross domestic product (GDP).
Since its inception, APEC has helped reduce tariffs and other barriers to trade across the Asia-Pacific region. Over this period, APEC member economies have grown, and developing economies in particular have experienced significant increases in GDP and standards of living. In 1994 APEC Leaders agreed, in the Bogor Declaration, to a common goal of free and open trade and investment in the Asia-Pacific by 2010 for industrialised economies and 2020 for developing economies. Business transaction costs were reduced by 5% between 2001 and 2006 and are scheduled to be cut by a further 5% by 2010.
APEC Leaders have also acknowledged the clear link between security and prosperity, and since 2002 have put in place a cooperative agenda on human security issues. APEC’s human security agenda includes cooperation on counter-terrorism, health and emergency preparedness. APEC has worked to create an environment to ensure the safe and efficient movement of goods, services and people across borders in the region.
APEC is a unique forum operating on the basis of open dialogue, recognition of the diversity of the region, equal respect for the views of all participants and concerted unilateralism. Decision making within APEC is reached by consensus. There are no binding commitments; compliance is promoted through peer pressure and, when appropriate, supported by economic and technical cooperation. This form of decision making enables APEC member economies to consider more challenging issues in a way which forums, operating on the basis of formally negotiated agreements, can not.
APEC priorities and goals are set at annual meetings of APEC Economic Leaders and Ministers. Officials and experts in APEC member economies carry out projects and other work to meet these goals. This work is supported by a secretariat based in Singapore.
Recognising that climate change is a key issue that requires a more effective international response, Australia's Prime Minister John Howard made climate change a priority on the agenda for the 2007 APEC Leaders’ Meeting in September 2007. APEC has not traditionally dealt substantively with climate change. However, as APEC economies already represent around 60% of global greenhouse gas emissions, an APEC Leaders' declaration on climate change is a significant contribution to international efforts to secure a more effective future international climate approach. Prime Minister Howard appointed the Secretary of the Australian Government Department of Foreign Affairs and Trade, Michael L’Estrange and former Macquarie Bank Deputy Chair, Mark Johnson as Special Envoys to develop a Sydney Declaration on Climate Change, Energy Security and Clean Development.
Leaders agreed the Sydney Declaration on Saturday, 8 September. It features agreed principles on future international action, a statement of support for a post-2012 global climate change arrangement and an Action Agenda of practical initiatives.
In the Sydney Declaration, APEC economies agreed that all economies should contribute to a post-Kyoto international framework. The declaration included important principles that APEC economies felt should underpin the new international framework, including comprehensiveness, flexibility, respect for national differences and the need for trade and climate policies to be mutually reinforcing. The declaration also supported the value of a long-term global aspirational emissions target as a key element of a future framework.
Key features of the Action Agenda were agreement on long-term aspirational goals for energy efficiency and forests. On energy efficiency, APEC economies agreed as an aspirational goal to reduce energy intensity (energy used per unit of GDP) by at least 25% by 2030. On forests, the aspirational goal is to increase forest cover in the region by at least 20 million hectares by 2020. Deforestation is currently responsible for around 20% of man-made greenhouse emissions. This forestry goal would store approximately 1.4 billion tonnes of carbon, equivalent to around 11% of annual global greenhouse emissions.
The Sydney Declaration was complemented by bilateral leaders’ statements on climate and energy by Australia with the United States of America, China, the Russian Federation, Japan and Canada.