IEEJ: January 2011

Special Bulletin
A Japanese Perspective on International Energy Landscape (23)

December 14, 2010

COP 16 Cancun Agreement and Future Domestic/Overseas Challenges Regarding
Global Warming Issue
Ken Koyama, PhD
Director
Strategy and Industry Research Unit
Institute of Energy Economics, JapanOn December 11, the 16th Conference of Parties to the United Nations Framework
Convention on Climate Change, known as COP 16, ended with the adoption of the "CancunAgreement." As expected earlier, the parties fell short of agreeing on a new international frameworkfrom 2013 after the 2012 expiration of the Kyoto Protocol due to the structural confrontation
between industrial and developing countries, complicated national interests, and the current
international political and economic situations, postponing the matter and other controversial
problems (including a possible extension of the Kyoto Protocol) to the COP 17 meeting in South
Africa's Durban and later negotiations.
While key problems have been left unsolved, postponing critical discussions, the Cancun
Agreement and COP 16 discussions might have made the following important achievements. First,
the COP 16 meeting prevented post-Kyoto framework negotiations from breaking down,
maintaining the momentum for future international talks on global warming measures. In a situationof various structural confrontations and conflicts of interest, accumulated considerations andcompromises may inevitably result in agreements that are equivocal and postpone problems for
future talks, including the latest Cancun pact. But the COP 16 meeting avoided a negotiation failure
or breakdown and secured future talks among all of the participants without leading to any causes offailure or blackening any party. This is significant for the future.
Second, the COP 16 conference upgraded the framework and contents of the Copenhagen
Agreement of which the parties took note at the COP 15 meeting, incorporating them into an official
document. Although the Cancun Agreement has no legal binding power unlike the Kyoto Protocol, it
is important for such major greenhouse gas emitters as the United States and China to have been
incorporated into the negotiation framework. According to data for 2007, the Copenhagen
Agreement participants account for 85% of global CO2 emissions, against only 28% covered by thecountries that are required to cut emissions under the Kyoto Protocol. The coverage has increased
substantially. Irrespective of GHG reduction targets to be worked out in the future, the present1

IEEJ: January 2011

negotiation framework is “better” to address the global warming issue that the entire world must
tackle. The Cancun Agreement is expected to become one of the focuses of discussions toward theCOP 17 meeting.
Other important points of the Cancun Agreement are: (1) that the parties should act so that
there is no “gap” between the Kyoto Protocol’s first emission reduction commitment period endingin 2012 and the next one, (2) that the parties should consider and quickly build a new emission
reduction framework covering all major GHG emitters, (3) that industrial countries should reduce
GHG emission based on their planned reduction targets and report emissions every year, (4)developing countries should reduce GHG emissions in 2020 from levels for the baseline caseincluding no emission reduction measures and report emission reductions every two years, and (5)that global warming measures include fund and technology transfers from industrial countries todeveloping nations, forest protection and enhanced efforts for adaptation to warming. All of thesepoints include very important elements. This report may not be suitable for discussing all suchelements. Regarding the first point, however, I would like to point out that the agreement sets adeadline for efforts to avoid the gap while providing no suggestions about how to do so.
The Cancun Agreement has no legal binding power. International negotiations toward theCOP 17 meeting will remain sandwiched between the goodwill to promote global warming
prevention as a global interest, and national interests and motives. No agreement came on the KyotoProtocol's simple extension to which Japan maintained its persistent, firm opposition. I would like toexpress my respect for the Japanese delegates' persistent negotiations based on right arguments. As
far as the Cancun Agreement is concerned, however, no optimism may be warranted about future
discussions, trends of international arguments and public opinions, and various pressures toward theCOP 17 meeting. Given that China, India and other emerging countries are expected to further
increase their presence and influences and that the United States is not in a position to unify
domestic initiatives to positively tackle the global warming issue, the situation is expected to remain
tough for Japan. Even just after the COP 16 meeting, Japan may have to begin again to collect andanalyze relevant information, devise strategies and enhance international approaches toward the nextmeeting.
Meanwhile, discussions will grow more important about how to promote domestic
measures against global warming based on the Cancun Agreement. While the domestic political andeconomic situations will grow more uncertain, Japan may have to consider a domestic emissions
trading system, an environmental tax, a complete feed-in tariff system for renewable energy-based
electricity and other measures that are significant for preventing global warming. It is important forJapan to get back to the basics to consider the best mix of policies for the “three E” goals – energy
security, environmental protection and economic efficiency – with the duration of specific measuresand their effects taken into account, while watching global discussions and trends.

2

IEEJ: January 2011

A future international framework for global warming measures is still uncertain, with any
agreement on such framework being postponed at least until next year. No optimism can bewarranted on future negotiations on the matter. The current situation means that uncertainties willcontinue lingering about world politics and economy and the energy problem. Energy policy makers
and industry people around the world including in Japan will remain forced to make tough policy orinvestment decisions even under high uncertainties. Under the situation, our institute, specialized inenergy and environment problems, must contribute to finding solutions to global warming andenergy problems in Japan and in the world by collecting and analyzing information in a timely,
accurate manner and by providing objective and rational messages based on such analysis. Given thedifficulty and complicatedness of these problems, we may have to establish and implement an
arrangement for comprehensive cooperation among policy, industry and research sectors.
Contact: report@tky.ieej.or.jp

3