With China and Japan’s participation in US President Joe Biden’s “Leaders Summit on Climate”, the virtual conference of world leaders held on April 22-23 is a step in the right direction in terms of reducing global emissions in the next decade.

Although much of the summit is rhetorical, Chinese President Xi Jinping’s participation, in particular, is an indication that world leaders are willing to work together despite their differences, recognizing that real success in dealing with climate change can only be achieved through a collaborative approach.

For the United States, the leaders’ summit is a clear repudiation of former president Donald Trump’s isolationist “America First” doctrine, while for China and Japan, it is a signal that even political and economic competitors are ready to cooperate to address a problem of such magnitude. The rest of Asia follows either China or the US in tackling climate change, which is why the event is a key development.

Analysis by the Asia Investor Group on Climate Change (AIGCC), a network of asset owners and financial institutions, shows that the new US target – reduction of emissions by 50% from 2005 levels by 2030 – is one of the strongest commitments in the developed world, while Japan’s pledge to curb emissions by 46% by 2030 from 2013 levels, is a substantial improvement on its previous commitment to a 26% cut.

While China did not offer any new targets during the summit, in his speech Xi said that the country's coal power plants, the main source of pollution, will be strictly controlled then phased out in line with the earlier announced goal of achieving carbon neutrality by 2060.

Striking distance

The strengthened goals set by the US, the United Kingdom, the European Union and Japan are now within a striking distance to the Paris Agreement goal of reaching net zero by 2050.

Other major economies across Asia have more work to do to improve their mid-term ambitions and ensure that they can compete in attracting the trillions of dollars in private capital that is looking for net zero investment opportunities, according to AIGCC.

While both China and the US aim to reduce their carbon emissions, for other Asian countries they represent completely different approaches to achieving the goal. The US apparently wants to get there quickly by setting a 2030 target, while China plans to do it more slowly, aiming to reach peak emissions by 2030 and net neutrality by 2060.

The rationale behind the wide time difference is that the US economy is already developed enough to cut carbon emissions within a shorter time frame while China and most of the rest of Asia need more time to achieve carbon neutrality. There will be political fights and arguments over how to overcome this difference in targets but the important thing is that there is now a platform for collaboration following the summit.

Asian perspectives

“It is encouraging to see the United States not only reassume its global leadership position on this issue, but also to highlight the need for a collaborative approach and to prominently feature Asian perspectives in the discussion.  Asian nations are well-represented at President Biden’s Leaders Summit on Climate and their delegates are highlighting Asia’s diverse range of climate risks and opportunities, from the threat of extreme weather events like flash floods and forest fires in Bhutan to opportunities for technological innovation to help achieve a net-zero economy in Singapore,” says Mark Uhrynuk, partner at Mayer Brown, who handles the firm’s ESG initiatives.

One issue that has been a sticking point for Asian leaders in similar climate discussions in the past is that the developed countries, particularly the US and Europe, tended to dictate what the rest of the world should do in setting climate-related regulations and standards. This is something that should be addressed following the summit.

Uhrynuk says: “It is increasingly important for nations from Asia to have this type of ‘seat at the table’ and make their voices heard as globally-harmonized responses to climate change evolve. This is as true for nationally determined contributions under the Paris Agreement as it is for more tailored initiatives, like the IFRS Foundation’s efforts to develop a global sustainability reporting framework for businesses. The global platform that President Biden has organized should encourage increased cooperation and promote more innovative approaches to developing a full range of climate responses between Asia and the rest of world, as well as among nations within the region.”

Emissions targets

The AIGCC analysis compares the 2030 emissions targets of G20 nations. Some of the findings:

• Commitment to updating targets in line with agreements made in Paris. In advance of COP26 (the 2021 United Nations Climate Change Conference to be held in Glasgow on November 1-12), countries have agreed to review and update their 2030 emissions targets and put in place a long-term strategy to achieve net zero emissions. In Asia, Japan and China have or are committed to enhance their 2030 targets in their formal submission to the United Nations. South Korea has updated its 2030 target from an intensity to an absolute baseline and stated it will enhance its ambition this year. India, Indonesia, Singapore and Saudi Arabia are yet to state if they will enhance their 2030 commitments.

• Per capita emissions and the emissions intensity of the economy if 2030 target is achieved. In 2030, the per capita emissions of the majority of Asian G20 nations would sit in the middle of the pack. Indonesia and India would remain comparably low on this measure among G20 nations, as would Japan. Saudi Arabia would continue to have, by some distance, the highest per capita emissions. The emissions intensity of the economy is a proxy for competitiveness in a carbon-constrained world. On this measure, Japan’s competitiveness joins the likes of the EU, US and UK at the top end of industrialized nations on current G20 commitments. South Korea’s competitiveness is reasonably favourable to many other G20 nations, but behind the leaders. India and Indonesia would maintain a high emissions-intensity in their economy compared to other G20 nations.

• Comparison of targets versus 1990 and 2005 emissions. South Korea and Singapore’s emissions targets are weak-to-moderate compared with other relevant countries within the G20. Japan’s new goal is now more competitive with the EU, US and UK at the top end.

• National record on achieving past international emissions targets and current policy projections against existing 2025/30 targets. Most countries have achieved their past emissions targets and are on track to achieve their 2025/2030 targets. Australia, South Korea, Mexico and the US are not currently on track to achieve their current Paris emissions targets. Canada and Argentina are also currently off track but with new announced policies can achieve current 2030 targets. This does not assess the adequacy of targets against emissions pathways consistent with the objectives of the Paris Agreement. Most countries’ 2030 targets are not consistent with a fair contribution to meeting the objectives of the Paris Agreement.