IEEJ：May 2021 © IEEJ 2021
Special Bulletin
A Japanese Perspective on the International Energy Landscape (534)

May 26, 2021

Accelerated Decarbonization Trend and North-South Issue
Ken Koyama, PhD
Chief Economist, Managing Director
The Institute of Energy Economics, JapanAs Japan, the United States, the European Union, China and other major economies in theworld announced since last year that they would seek to realize carbon neutrality by 2050 (2060 forChina), an accelerated decarbonization trend has been emerging globally. Following an online
climate summit sponsored by U.S. President Joe Biden in April, the United Kingdom will host theannual Group of Seven summit in June, where the top leaders of the G7 industrial democracies areexpected to reaffirm the thorough enhancement of climate change countermeasures. In November,the 26th Conference of Parties to the United Nations Framework Convention on Climate Change, or
COP26, will take place in the United Kingdom for international discussions on how to accelerate
decarbonization. In response to such global initiatives, each country will consider domestic policies
to promote decarbonization.
Responses to climate change are efforts to prevent global warming and secure thesustainability and survival of the entire earth and mankind. They represent the entire international
community’s initiative to serve global interests. In this sense, the acceleration of global
decarbonization efforts is desirable for global interests. In the real world, however, global interests
occasionally conflict with national or regional interests. The enhancement of climate change
countermeasures may be accompanied by adverse economic and industrial impacts, energy choicechanges and social life transformation. As energy resources endowment, economic and industrialconditions, social development phases and income levels differ by country, each country, eventhough understanding the importance of global interests, frequently gives greater priority to national
interests from the viewpoint of protecting its economy, industry and people. Therefore, international
negotiations over climate change have been not easy but tough, associated with complex anddifficult coordination.
The history of global interests’ conflicts with national or regional interests over climatechange indicates a key argument emerging from the viewpoint of the North-South issue. The
argument is that advanced economies or the north side are primarily responsible for global warmingthat has been attributable mainly to greenhouse gas emissions through their massive fossil fuelconsumption since the industrial revolution. Since developing economies (the south side) are seeking
future economic growth and social development, it is unfair for them to be required to implement
climate change prevention measures at the cost of economic growth or social development,
according to the argument. From the viewpoint of responsibilities for climate change, it has beenargued that advanced economies should take leadership in enhancing climate change
countermeasures thoroughly and help developing economies financially and technologically toenhance such countermeasures. Advanced economies, while admitting their past massive GHGemissions, have sought cooperation in the enhancement from developing economies that are set tobecome the center of GHG emissions in the future. In this way, advanced and developing economies
have conflicted with each other. The key word “common but differentiated responsibilities” indicatesa compromise between advanced and developing economies.
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In the history of international negotiations on climate change, the first internationalagreement, called the Kyoto Protocol, became a framework requiring a few parties including theEuropean Union and Japan to cut GHG emissions. The Kyoto Protocol adopted a top-down approachto oblige participants in negotiations to cut emissions to some extent. Negotiations on aninternational agreement for a longer term than for the Kyoto Protocol had initially tried to explore a
top-down approach agreement. However, the approach failed to get consent from developing
economies. From the COP15 meeting in Copenhagen in 2009, negotiation participants sought toformulate an international agreement under a different approach. Eventually, they struck the ParisAgreement in 2015. It is important that the agreement adopted not only the target of limiting global
warming to well below 2℃ but also a bottom-up approach where countries would voluntarily set out
and implement climate change countermeasures and GHG reduction targets. Since each country wasallowed to implement voluntary initiatives, the North-South issue did not arise in the negotiations.
Finally, nearly 190 countries including developing economies participated in the agreement. The
principle of voluntary initiatives allowed the negotiations to overcome the North-South issue andachieve a global agreement. However, voluntary initiatives are expected to fall short of realizing the2℃ target. To address this point, a mechanism has been included into the agreement to update
national targets every five years. However, it is important that the agreement is based on voluntary
initiatives.
Recently, however, we have seen a great global change, in which advanced economies
have set out carbon neutrality targets for 2050 and launched campaigns urging developing
economies as the main future GHG emitters to achieve carbon neutrality at an early date.
Symbolized by U.S. climate envoy John Kerry’s visits to major countries for such campaigns, theUnited States and the European Union are leading an attempt to enhance initiatives to globallyaccelerate decarbonization. Such campaigns are significant for global interests but could trigger
global interests’ conflicts with national or regional interests. Developing economies would welcome
advanced economies’ promotion of carbon neutrality but complain that such campaigns would
impede developing economies’ growth and development. The North-South issue could resurge.
A carbon border adjustment (CBA) mechanism, which has been under discussion in theEuropean Union and attracted interests from the U.S. Biden administration, has also potential torekindle the North-South issue as well. The CBA is a tool for a country to make adjustments forimports from foreign countries with laxer climate change policies to protect manufacturing and otherdomestic industries that see cost hikes due to tough climate change policies. From the viewpoint ofdeveloping economies, however, the CBA may be taken as a measure to exert adverse impacts on
their industries, growth and development for the purpose of protecting business corporations andindustries in advanced economies that have grown while emitting massive GHG in the past. The
CBA thus could face opposition from developing economies.
As advanced economies enhance requests to and pressure on developing economies towhich the decarbonization trend spills over, the North-South issue that has calmed down thanks tothe bottom-up approach adopted in the Paris Agreement could emerge as a significant challenge.
While climate change countermeasures serve global interests and must be enhanced globally, theNorth-South issue is feared to escalate into a confrontation to complicate the climate change issue tothe disadvantage of global interests.
The North-South issue is also feared to be linked to the U.S.-China confrontation. If
Western advanced economies confront developing economies by calling for the latter’s excessively
rapid decarbonization, China seeking carbon neutrality in 2060 may side with developing economies
to hold advanced economies responsible for global warming. The intensification of the North-South2

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issue at international climate change discussions amid deepening confrontation between Westerneconomies and China could become subject to strategic consideration for Western economies
regarding international politics and geopolitics.
In such situation, Japan having close relations with the Association of Southeast Asian
Nations as a future growth center and other developing economies should adequately support theirdecarbonization. Instead of imposing requests on them for excessively rapid decarbonization, Japanshould strategically provide them with available and advantageous options such as the promotion ofenergy efficiency improvements, the acceleration of renewable energy diffusion, nuclear energy, theexpansion of natural gas and LNG, the mixed combustion of CO2-free hydrogen and ammonia incoal thermal power plants and support and join their initiatives to minimize costs for transition todecarbonization. Japan is required to support their acceleration of decarbonization, contribute toglobal interests and prevent the North-South issue from intensifying.
Contact: report@tky.ieej.or.jp
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