China likely bright spot in Asia climate action

* Cancun talks send positive climate signal to Asia
* China likely to include CO2 target into 2011-15 plan
* Domestic pressures in other nations key risk -analyst
David Fogarty, Reuters AlertNet 31 Dec 10;

SINGAPORE, Dec 31 (Reuters) - The outcome of U.N. climate talks in Mexico this month should boost steps in Asia to curb greenhouse gas emissions, with China a likely bright spot in 2011, a senior analyst at a leading U.S. think tank said.

The talks helped put the troubled U.N. negotiations back on track but failed to agree on a broader pact meant to avert every more extreme droughts, floods, heat waves and rising sea levels.

Across the region, China, India, Japan, South Korea, Australia and Taiwan are working on myriad policy steps to put a price on carbon emissions, drive more investment in solar and wind as well as greater energy efficiency.

But domestic pressures, such as resistance from big business lobbies fearing higher costs, has led to some plans being put aside for more study, such as Japan's decision this month to shelve, although not scrap, its planned scheme. [ID:nTOE6BR023]

"The outcome from Cancun should hopefully boost the prospects of action in Asia as it does show a level of collective will in tackling the climate problem," said Jennifer Morgan of the World Resources Institute in Washington.

There was cause for some optimism in the United States, she told Reuters in an email interview, despite Congress's failure to pass emissions trading legislation in the world's second largest carbon polluter.

Morgan, director of WRI's Climate and Energy Program, pointed to California moving ahead with emissions trading and the federal Environmental Protection Agency stepping up efforts to regulate emissions of power stations and refineries as mandated by President Barack Obama. [ID:nN23440737]

"WRI analysis shows that, if the Obama Administration pursues its authority thoroughly, it can get close to its 17 percent commitment," she said, referring to the government's commitment to cut emissions by 17 percent from 2005 levels by 2020, a target many green groups still regard as weak.



CHINA RISING

China, the world's top greenhouse gas emitter, has pledged to reduce its carbon intensity, the amount of carbon dioxide (CO2) emitted for each dollar of economic activity, by 40 to 45 percent by 2020 compared to 2005.

The government is likely to include this in its 12th five-year plan from 2011 to 2015 and could outline fledging market-based steps to curb carbon emissions from burning fossil fuels.

"It has begun to engage provinces and municipalities in strategies to achieve the target. This is very exciting and shows the level of focus of the government on reducing carbon intensity," Morgan said.

But China's emissions are still set to grow for some time, as the economy burns more coal, oil and gas to fuel growth and drive factories that export goods around the globe.

Despite the policy set-back in Japan, the world's fifth-largest emitter, Australia has pledged to announce in 2011 how it will put a price on carbon, most likely a tax and then a limited CO2 trading scheme, after initial efforts stalled.

But the emergence of unconnected schemes also had risks.

"Having different national schemes to meet targets is not an issue and provides flexibility for countries to develop the best policies and measures for their economies," Morgan said.

The challenge occurred if countries wanted to join an international carbon market.

"If so, then international accounting standards are needed to ensure that all credits are robust and not "junk credits". In addition, international accounting standards are essential to be able to compare level of effort and actions across countries," she said.

Over time, policies would also need to ramp up to achieve deeper emissions cuts, she added.

"If those targets and policies are not strong enough then a high-carbon infrastructure will be built which will be much more costly to replace later. It is thus essential that countries increase ambition now to save resources and funds later".

(Editing by Ramthan Hussain)