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Published on November 24, 2007

In his keynote speech to the international conference on Asia's Emerging Response to Climate change, hosted by The Nation and Krungthep Turakij yesterday, Han said Asian countries had to shift from the old paradigm of "quantitative growth" to the new paradigm of "qualitative growth".

The shift would, he said, be as fundamental as the "two birds with one stone" strategy, that is to grow fast while at the same time reducing greenhouse-gas emissions.

"Many politicians and government officials, economists and business leaders have long been obsessed with the growth of GDP, the overriding paradigm of the day … The climate change regime after the Kyoto Protocol, the so-called post-Kyoto climate regime, requires something beyond the GDP paradigm," he said.

Han, an economist, referred to the only international agreement on reducing greenhouse-gas emissions. It will expire in 2012.

In order to explore the new approach, Han said, Asian leaders have to address the market-failure aspect of the current GDP paradigm, as well as to design a new market mechanism that is more flexible in controlling the emissions than a mandatory "tapping" and direct control of the quantity of the greenhouse gases.

"Our challenge would then be how to design a market mechanism to present climate-change action as a business and investment opportunity, which will ultimately stimulate further economic growth, employment and technological innovation," said Han, also a former deputy prime minister of South Korea.

Han called for the reform of the Clean Development Mechanism (CDM), initiated by the Kyoto Protocol to allow developing countries to volunteer cutting their emissions by selling carbon credits to industrialised countries through clean-development projects that reduce emissions.

Han believes the current structure of CDM has limited scope and complex procedures that many developing countries have not benefited from. The CDM needs to be improved as a full-fledged market that would enhance the opportunity for a positive-sum game between climate action and greener economic growth, he said.

"Once the CDM is reformed into a full-fledged market mechanism for emission-reduction projects on a broader range of areas, the CDM can then function as an efficient channel for transferring financial resources as well as technology to developing countries."

With the UN meeting on climate change to be held in two weeks in Bali, Indonesia, Han hopes the meeting, which will be attended by leaders of nations that are members of the UN Framework Convention on Climate change (UNFCCC), will focus more on a market approach that can generate net global reductions by developing countries without imposing any targets to reduce emissions.

He argued that for many developing countries a target approach is not only politically unacceptable but also technologically impractical due to the difficulty of making such precise projections.

However, he admitted that he did not expect any serious negotiating to occur at the Bali meeting as he could not see any breakthrough over the "deadlock" between the developed and developing countries.

"It is most likely that we will end up with a lot of hot air or just growth-capping unless we are capable of making precise, long-term projections for major developing countries, which I believe is highly unlikely," he said.

Pennapa Hongthong

 The Nation