China and India together are expected to account for 45 percent of the increase in global primary energy demand by 2030. Coal and imported oil are expected to be the primary drivers of this energy growth, with a far-reaching impact on climate change and global energy security. It is crucial that Asia adopt a common policy on climate change, according to a new 40-page report by the Hong Kong-based Civic Exchange and the Singapore Institute of International Affairs.

The report assumes added significance with talks in Bali over the past 10 days, where the senior ministers of some 190 nations are meeting in an attempt to hammer out a new greenhouse gas emissions accord to replace the Kyoto Protocol, which expires in 2012. It appears problematical where the talks will go, with the United States and Japan, two of the world’s biggest emitters of greenhouse gases, rejecting the emission targets in the proposed document, as does Canada.

According to the Civic Exchange/Singapore Institute report, agreement on a post-2012 accord will only be possible if each participating country believes the final document to be fair and equitable. Some 25 countries – China and the United States at the top of the list – account for some 83 percent of greenhouse gas emissions, the report says. However, it adds, the developing world is no more ready than the developed one agree to a specific goal stabilising emissions or binding national targets.

Other findings, according to the executive summary of the report:

Understand Urgency and Uncertainty: Asian states must recognise that the need for urgency in addressing climate change is paired with an uncertainty that means the impacts may be more severe and come sooner than presently projected.

Align Interests for Low-Carbon Development: The greatest short-term gains are likely to be found if the negotiations focus on areas where developing countries’ existing approach to grow their economies are aligned with the goal to cut GHG emissions, so that they can achieve low-carbon development.

Reform CDM, Link SD-PAMs and Discount CERs: The most effective ways to achieving low-carbon development for developing countries is not through pressuring them to accept binding targets. Instead, good results can be achieved by linking SD-PAMs to the Kyoto Protocol’s CDM, which could enable more funds from Annex I countries to flow to non-Annex I countries to support sustainable low-carbon projects with environmental, climate and development benefits for the planet. CDM projects may include reforestation (and arrested deforestation) and adaptation projects. Furthermore, by discounting CERs, overall emissions reductions can also be achieved instead of just shifting them from developed to developing countries.

Provide Incentives, Investment and Markets: At the same time, developed countries must establish strategies and institutions, particularly policies, regulations and carbon markets that can provide all economies with incentives to apply innovative practices and technologies that can reduce GHGs. On the investment front, there must be robust support to avoid locking-in carbon intensive investments, whether in the developed or developing world. On the trade front, by tightening energy and fuel performance standards and requirements for products in developing countries (such as electrical goods, energy transformation equipment, and vehicles), exports from developing countries to developed countries can contribute to achieve energy efficiency worldwide. Tariffs can also be removed or lowered for carbon-free or low-carbon products.

Set-up Clearing House for Technology: Technology holds the promise of helping Asian states develop without worsening climate change. However, different technologies need to be assessed in many parts of Asia, where technological expertise and experience in research and development may well lag behind the levels of the USA and Europe. Setting-up a clearing house for technologies and best practices would help Asian states better understand and evaluate the many possible paths forward.

Let States with Capacity Lead: Asian states are starkly diverse in their levels of development, governance, administrative and regulatory capacity, and expertise in technology and know-how. Given this, it is unrealistic to expect Asian states to move at a uniform pace. The same rules or targets should not be applied to all developing countries, as this would hinder progress among states that already have greater capacity. Instead, the post-2012 framework should encourage some states to take the lead, and move ahead of others. Large, developing states should think through climate change issues and seek their own paths and targets that can be achieved in tandem with economic growth and sustainable development on an urgent basis, rather than proceeding with “business as usual”.

Co-ordinate Multi-dimensional Governance: Climate change shows an interlocking and complex triangle of relations between environment, the economy and the use of energy. To respond effectively, states have to create frameworks for evaluating and co-ordinating policies and action across different sectors like energy, trade, finance, infrastructure, city planning, security and technology.