The costs and opportunities of climate change in Southeast Asia

Chapter 2 summarizes many of the broad anticipated effects of climate change. The second section of this book illuminates many of the concerns and policy-making challenges faced by the world's largest developing country: China. In Chapter 11, Joy V Galvez helps us appreciate the impacts of climate change - and their implications for policy making - in a much smaller and arguably even more vulnerable developing country of East Asia: the Philippines. Her summary of many key issues and concerns in the Philippines highlight some possible differences in perceived interests and strategies of the poorer countries in East Asia. As Galvez points out, the Philippines is a hot spot for natural hazards. As such, it is particularly vulnerable to climate change, and she describes in some detail many of those vulnerabilities first introduced in Chapter 2. The sectors in the Philippines projected to suffer the most from climate change-related impacts are water resources, agriculture, coastal resources, and human health. Galvez reminds us that these impacts worsen conditions in an already very underdeveloped country, and they will cause further suffering among a population that is already largely destitute.

Galvez shows how government and private actors have worked together to assess the Philippines' contributions to global warming and the implications of climate change for the country. At the international level, the Philippines was one of the first countries to discuss and develop positions on climate change. It aligned itself with other developing countries. At the national level, the government developed an interagency group, composed of national agencies, academic institutions, and civil society actors, that has contributed to scientific research related to climate change vulnerability of smaller countries like the Philippines, as well as to the strong legal position of developing countries in relation to the responsibilities and commitments of developed countries. But Galvez believes that these actions have been inadequate. Without a greater response from the national government, international organizations and the Filipino people, she says, the Philippines will suffer markedly from the projected impacts of climate change. Her chapter shows that if the Philippines is to cope with this problem, the government must develop programs for massive information campaigns, educating the populace about the issue and how they contribute to it; review existing national and local environmental laws based on their relationship and congruence with international environmental laws, particularly on biodiversity conservation and climate change; and impose stiffer penalties on violators of existing environmental laws (e.g. strengthening the country's logging ban and clean air act) so as to curtail abuse and wanton environmental destruction. Having said this, the necessary resources to actualize Galvez's recommendations are far too limited. Implementation of these strategies will require substantial additional assistance from the world's developed countries.

In Chapter 12, Frank Jotzo, Agus P. Sari, and Olivia Tanujaya use the case of Indonesia to demonstrate some possible fallacies in current thinking on international efforts to offset GHG emissions in developing countries. The Kyoto Protocol requires the developed industrialized countries to limit their GHG emissions as well as to enhance "sinks" for them (e.g. possibly including growing trees, which at least temporarily absorb carbon dioxide). One of the protocol's unique characteristics is the provision for carbon emissions-offset mechanisms, where countries can trade emissions quota permits. At present, the CDM is the only mechanism for this that can include developing countries. The issues under negotiation include potential restrictions on buyers and sellers, and the inclusion of sink projects (largely forestry programs) under the CDM.

Using a quantitative model developed specifically for policy issues in the implementation of the Kyoto Protocol (the Pelangi Emissions Trading model), Jotzo, Sari and Tanujaya analyze the implications of including sinks projects under the CDM. They find that assuming these projects will increase the volume of the CDM may be incorrect. This is because the increase in low-cost sinks projects leads to a fall in the price paid for emissions credits, which can outweigh the quantity gains, and lead to lower revenue and lower financial gains for developing countries. However, equity between countries and between regions within countries may be enhanced by the inclusion of sinks, as shown by the authors' study of Indonesia. At the very least, their work shows that the "devil is in the details," and that proposals for dealing with climate change absent detailed analyses of their impacts may have unforeseen implications for social and international equity, as well as for the practical goal of reducing climate-changing emissions.

In the final chapter, Tim Forsyth discusses the implications of climate change investment and technology transfer for countries in Southeast Asia. He argues that technology transfer is crucial to international environmental agreements, and that it is viewed by many developing countries as a prerequisite for their adherence to treaties. Yet many investing countries see technology transfer as a lengthy and costly process that threatens intellectual property rights. Forsyth argues that such views need to be rethought. Technology transfer should instead be perceived in terms of so-called "horizontal" transfers (including long-term sharing of technological expertise) and "vertical" transfers (in which technologies are relocated without this long-term sharing). Forsyth illustrates how vertical transfer may occur, using evidence from Thailand, Vietnam, Indonesia, and the Philippines. His key argument is that integrating technology transfer with international investment offers a powerful way to overcome disagreements in the climate change negotiations. But, for this to happen technology transfer must be seen as a function of international investment and national and regional technology policy. If technology development is still seen in conventional terms as a linear process, to be controlled by indigenous companies, the prospect for enhancing international climate technology transfer is reduced because the process will be perceived as too costly and a risk to competitiveness. However, if it is seen as a chance to invite new technology investment from international companies that do not expect to give up intellectual property rights, it is possible to have a win-win situation in which environmentally sound technology is increased, local development is assisted through the introduction of new investments, and investors are allowed into new markets. Technology transfer can therefore fully complement both international environmental agreements and international private-sector investment.

Redefining technology transfer away from the conventional view, which suggests that it can only assist potential economic competitors, has ensured that foreign policy objections have acted against moves to enhance technology transfer in the past. In contrast, viewing technology transfer in terms of "vertical transfer," or the relocation of economic activity without the sharing of intellectual property rights, can lead to an integration of foreign policy objectives with activities to mitigate climate change. Seeing the relationship between technology transfer and other important aspects of foreign and economic policy may lead to more optimistic and successful negotiations under the FCCC. However, Forsyth cautions that there is a need for careful monitoring of all international investments under the CDM to ensure that new investments in technology actually reduce GHG emissions.

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