the integration of asean and climate change finished

8/8/2019 The Integration of ASEAN and Climate Change FINISHED

1/21

The Integration of ASEAN and Taking Advantage of theASEAN Free Trade in Tackling Climate Change

Written By:

Muchdlir Zauhary

Pradita Astarina

Putera Satria Sambijantoro

Faculty of Economics

University of Indonesia

2010


2/21

1

TABLE OF CONTENTS

ABSTRACT

...2

I. INTRODUCTION

THE CONFERENCES AND TREATIES THAT FAIL

1.1 Environmentalists vs. Industrialists: the failure of reaching the consensus

................................ 3

1.2 When great power is not always followed by great responsibility

....4

II. STUDY AND ANALYSIS

ASIAN FREE TRADE AND CLIMATE CHANGE: HOW UNITING ASEAN CAN BE THE KEY

TO MITIGATE THE CLIMATE CHANGE

2.1. The might from southeast: a high-potential economy underpinned by a huge domestic

market

.......6

2.2. Climate change and its impact to ASEAN countries

.....7

2.3. ASEAN: At the Front Row of Climate Change Issue

..8

2.4. Revisiting and reevaluating ASEAN free trade area treaty

..10

2.5. Adding carbon emission limitation in AFTA treaty: a chance for the environmentalists to

strike back

13

III. CONCLUSION AND POSSIBLE SOLUTION

18


3/21

2

ABSTRACT

This paper will evaluate the failure of coordination efforts in tackling climate change

problem which, because of the lacking commitment from several emission-producer countries,

has seen the problem becomes more neglected from time to time. Still, despite the fact that

these days the climate change issue becomes worse-than-ever, up to present there is no

predetermined agreement among countries yet. We can see from many efforts in solving the

hazardous problem of climate change, such as the Kyoto Protocol or the Copenhagen Summit,

can only end up in a disappointment as there was no tangible resolution established from those

meetings.

The problem of climate change is trapped in a difficult deadlock and therefore we might

well ask whether there is a key or not to break this lingering standstill. Looking at how the world

progresses at the moment, it is clear that so far we simply have not done anything. The major

difficulties in overcoming this unsolved issue is that many countries, especially developing

countries with massive growth like China, fear that the limitation of gas emission will decrease

industries efficiency and eventually engender a slower economic growth

On the other subject, ASEAN free trade issue started to stand underneath the limelight,

as countries with massive export numbers like China, South Korea, and India emerge as the

major players who are being put in the vantage point because of the treaty. It is our idea that

ASEAN should apply a rule that requires specific countries, which enjoy the right of having their

exported goods to be sold to ASEAN countries with zero-tariff policy, to limit their carbon

emission first before they can enjoy such privilege. We decided to come out with an idea of

taking advantage of the ASEAN free trade as we consider it as a possible key in solving the

problem of climate change.


4/21

3

I. INTRODUCTION

THE TREATIES AND CONFERENCES THAT FAIL

1.1. Environmentalists vs. Industrialists: The Failure of Reaching the Consensus

Why cant we even mention our targets? Angela Merkel, German chancellor

During the Copenhagen Summit, Chinas representative insisted that industrialized

country targets, previously agreed as an 80% cut by 2050, be taken out of the deal. In her

words of despair above, the German chancellor expressed her disappointment very clear of

Chinas approach in solving the issue. Also, with backings from India, China took out almost

every specific targets from the agreement a conduct which cost China to be blamed as theperpetrator and major destructive force of the whole Copenhagen Summit. During the summit,

most countries almost agreed to restrain global temperatures to 2C in 2020, yet the agreement

fell through and was eventually replaced by normative goal of as soon as possible. Moreover,

the 50% cut of global emission, which was initially planned to be achieved by the end of 2050,

was vetoed by China as well.

No common ground was established and the end result of the conference was a

shocking loss for all environmentalists. As The Guardiancolumnist Mark Lynas wrote, Had the

Chinese not been in the room, we would have left Copenhagen with a deal that hadenvironmentalists popping champagne corks popping in every corner of the world.

The expectations from the summit is to see whether if countries leaders who set their

foot at Copenhagen can assemble specific numbers of carbon emission cut or anything

necessary to solve the climate change problem. In such predictable end, the output from the

conference turned into zilch, which left many people wonder: if there was no tangible outcome

generated from the summit itself, then why wasting time being at Copenhagen anyway?

Few were surprised when those conferences in Copenhagen as well as at Kyoto or

Bali failed to deliver a solid way out from the climate change issue. Thanks to mankind deedsnow the earth is getting sicker. The doomsdays sign is becoming clearer as global temperature

is becoming hotter, yet human beings who are considered as the most responsible party for

the whole problemstand still and do almost nothing to evade the looming catastrophe.

Also, efforts from countries all over the world were always considered courteousness

and there was actually no such thing as tangible actions from them to cure mother earth. World


5/21

4

leaders who attended such conferences (which were deemed by them as integrated efforts to fix

the climate change problem) walked away from the conferences with huge expectations on their

shoulders yet did almost nothing at home. We must accept a bitter fact that so-called integrated

endeavor from countries all over the world to fix the situation, in fact, is still yet to be defined.

Indeed, there is still clash of interests among both parties involved. On one hand,

environmentalists argue that finding a way out from the hotter-than-ever earth is necessary

before the situation becoming any worse in the long run. The ending of the story of our earth

and all human beings, of course, will be scary if that happens. But the policymakers, especially

those who currently run countries with booming industries like China, still observes things in the

short-run as they think that strict regulations, as carbon emission limitation, will disrupt their

industries and eventually hamper the massive surge of their economic growth.

This is the decade which will be best remembered by the story of how developing

countries are dominating the worlds economy. Economy in China and India are growing at

unprecedented rate, and if the condition remains unchanged, it is only a matter of time before

they take over the lead from developed countries like United States and United Kingdom. The

rise of China and other developing countries as well comes with a predictable repercussion:

as the economy surges, so does the carbon emission which it generates from their booming

industries. It is, indeed, an absolutely distressing fact for the environmentalists.

1.2. When great power is not always followed by great responsibility

When the economy of United States grew rapid in the mid-90s (thanks to the

scrumptious blend of economic policies from Bill Clinton and Alan Greenspan), the country drew

many criticisms from all over the world for the massive pollution it generated as well as its

ignorance in the environmental issues. By the end of 2000, United States generated 24% of the

world emission, making them the worlds largest polluter at that time.

Most of the questions pointed to United States government simply were why it can be so

unaware of the environmental problem amid the fact that it has more than enough power to help

reducing the emission which it produced. Many can understand if developing countries, who

have insufficient funds to apply environmental-friendly technologies to reduce carbon emission,

was lagging behind on the effort of tackling the environmental issue. But people wondered why

it can occur in United States, a well-developed country which was deemed as one of the

economic superpowers during that period.


6/21

5

The abhorrence of the United States unawareness was enormous, and Vexen Crabtree

once put out in the introduction of one of his essays on climate change issue: I have created

this essay just to concentrate on the USA and President Bushs effect on the Kyoto Protocol

because I receive so many emails from people expressing a hatred of the USA because of

these issues (The USA Versus the Environment: Oil, Pollution and Kyoto. 2002)

What happens today is China, not United States, who is actually making headlines on

newspapers like Wall Street Journalor Financial Times. Todays generation are the beholders

of how China is pushing very hard to overtake United States as the new economic superpower:

its economy is growing with a seemingly unstoppable rate, and it seems only economic

overheating can stop its economy from growing as even the financial woes of 2008 could not

curb it.

But as Chinas economy grows, so does its carbon emission or to put it in a better way:

its ignorance to the environmental issue. According to Netherlands Environmental Assessment

Agency, in 2007 the soaring economy of the Chinese saw their carbon dioxide pollution to swell

to the level of 24%, while United States is trailing behind at the second place with the level of

22%, two percent adrift behind the new champion.


7/21

6

II. STUDY AND ANALYSIS

ASEAN FREE TRADE AND CLIMATE CHANGE: HOW UNITING ASEAN CAN BE THE KEY

TO MITIGATE THE CLIMATE CHANGE

2.1 The might from southeast: a high-potential economy underpinned by a huge

domestic market

Other peers on the other parts of the world were not as lucky as ASEAN countries when

a financial crisis struck in 2008. While most of the worlds economies were infected by negative

economic growth disease because of the crisis, what happened in ASEAN can be considered

as unlikely. Except Malaysia and Singapore, whose economies experienced recession because

of their dependence on exports, other economies within the ASEAN region were impressively

stable. Just take a look at countries like Indonesia and Vietnam as they strode forward to be the

fastest growing economies in the world, recording an impressive economic growth of 6.1% and

6.2%, respectively.

ASEANs total population reached the mark of 590 million in 2009, making the region to

hold about 8% of the worlds total population. Without a shred of doubt, ASEAN has one strong

point which has long been perceived as their competitive advantage: a huge domestic market.

Last year the worlds economy can only see slump in their various economic indicators because

of the global financial crisis, but ASEAN region thanks to their gigantic number of populationwas able to stand firm amid the fray.

For industrialized countries like China, Japan, South Korea, or even Australia, ASEAN is

their closest trade companion in the region and with the huge domestic market which they

possess, ASEAN is indeed an indispensable partner that is too important to be overlooked.

Countries like United States and Brazil have great number of population as well, but they just

simply too far away and therefore trading with those countries will be deemed more costly rather

than with ASEAN countries.

Therefore, this also becomes ASEANs bargaining power in international trade: with highimport demand from high-growing economies like Indonesia and Vietnam, indeed the region has

played a significant role in fueling the economy of its neighbors, especially the rocketing

economic growth of China and India.


8/21

7

2.2. Climate change and its impact on ASEAN countries

Climate change clearly poses a major threat to the livelihoods and environments of the ASEAN

region. -Hans Verolme, WWF director

Gradually, the climate change issue is starting to take its tolls across almost all parts of

the earths archipelago. ASEAN, an integration established in 1967 which comprises of ten

countries, is also a vulnerable region to the climate change effects if not among the most

vulnerable. Dr. Surin Pitsuwan, the Secretary General of ASEAN, was quoted saying that

ASEAN countries in recent years have been enduring unusual storms, floods, earthquake, and

other natural calamities, while he also pointed out that ASEAN countries should not turn the

situation from bad to worse.

Let alone the country of thousand islands like Philippines or Indonesia; they will

absolutely absorb the biggest impact of the rising of sea level which is caused by the climate

change. Besides, the ASEANs capricious weather and climate condition these days deserves

more attention. In 2008, the Irrawady Delta of Myanmar was terribly hit by a devastating force of

Cyclone Nargis. In 2009, the people of Vietnam, Cambodia, Laos, and Thailand had to suffer

prolonged ordeal because of Typhoon Ketsana. In Indonesia the situation is quite the same

these days as its people are getting more familiar with Putting Beliung typhoon which,

suprisingly, rarely happened couple years ago.

Those heavy precipitations, unpredictable storms outfitted with strong winds, caused

nothing but humanitarian distress, social unrest, flood, landslide, wrecked infrastructure, even

human tolls. Besides the storms and the typhoons, the hotter-than-ever earths temprature also

caused forests, especially those in tropical countries, to burn easier. If those examples are still

not enough, there is also a report of increasing number of dengue fever cases during the erratic

rainy season. Also, previous research confirmed that warmer temprature today has led to a

mutation of dengue virus, which is very likely to cause an increase in fatalities in the not-so-

distant future. Such case happened in Indonesia, particulary in Java. In Jakarta, February 16

2007, the Jakarta Health Agency reported 498 people were treated at city hospitals for dengue,

14 of which were reported dead. As of mid-January 2007, there were 1,889 dengue fever

patients and 42 people have died in 13 of the 26 regencies or cities in West Java province only.

Meanwhile, Central Java has 2,767 dengue fever patients and 73 fatal casualties per 16

February 2007.


9/21

8

2.3. ASEAN: at the front row of Climate Change Issue

Gradually, the climate change issue is starting to take its tolls across almost all parts of

the earths archipelago. ASEAN, an integration established in 1967 which comprises of ten

countries, is also a vulnerable region to the climate change effects if not among the most

vulnerable. Dr. Surin Pitsuwan, the Secretary General of ASEAN, was quoted saying that

ASEAN countries in recent years have been enduring unusual storms, floods, earthquake, and

other natural calamities, while he also pointed out that ASEAN countries should not turn the

situation from bad to worse.

Let alone the country of thousand islands like Philippines or Indonesia; they will

absolutely absorb the biggest impact of the rising of sea level which is caused by the climate

change. Besides, the ASEANs capricious weather and climate condition these days deserves

more attention. In 2008, the Irrawady Delta of Myanmar was terribly hit by a devastating force of

Cyclone Nargis. In 2009, the people of Vietnam, Cambodia, Laos, and Thailand had to suffer

prolonged ordeal because of Typhoon Ketsana. In Indonesia the situation is quite the same

these days as its people are getting more familiar with Putting Beliung typhoon which,

suprisingly, rarely happened couple years ago.

Given the reality that climate change is vital issue, ASEAN has been making mutual

cooperation and agreement among its member countries to tackle that issue. Dr. Surin

Pitsuwan, as what was noted on the Stern Review on the Economics of Climate Change report,

said that that the cost of action now would only cost 1% of worlds income, while inaction wouldcost more than 20% in the future. He also underlined that the loss of human life and suffering

cannot be economically compensated. The concern of climate change impacts was not only

stressed by the ASEAN Secretary General but also by the whole ASEAN leaders. The ASEAN

leaders recognize the scientific findings in the Fourth Assessment Report of the

Intergovernmental Panel on Climate Change (IPCC), which emphasize the adverse impacts of

climate change, particularly in developing countries. They also admit that high population growth

and urbanization trends in ASEAN region place increased pressure on resources and make

people in cities particularly those who are vulnerable to adverse impacts of climate change.On the regional level, the ASEAN Leaders had issued several joint statements on the

response of climate change issue such as the ASEAN Declaration on Environmental

Sustainability in 2007, Declaration of ASEAN on the 13th session of the Conference of the

Parties to the UNFCCC and the 3rd session of the CMP to the Kyoto Protocol and ASEAN Joint

Statement on Climate Change to the 15th session of the Conference of the Parties to the United


10/21

9

Nations Framework Convention on Climate Change and the 5th session of the Conference of

Parties serving as the Meeting of Parties to the Kyoto Protocol. Based on ASEAN Joint

Statement on Climate Change to the 15th session of the Conference, the ASEAN leaders

further reaffirm that the UNFCCC and its Kyoto Protocol continue to be the basic framework and

legal instrument for the international community to combat global climate change. Well, in fact

the Kyoto Protocol is claimed by protesters as just a statement of hopes since there is no

proper willingness from countries, especially those big carbon emitter countries. ASEAN,

through ASEAN Inter-Parliamentary Assembly (AIPA), recognizes those issues of environment,

climate change, and sustainable development as interrelated and complex and represent a

challenge that must be addressed in a comprehensive manner through individual, regional and

concerted international action. AIPA points out the idea of international cooperation and real

action to combat the climate change problem. AIPA has been making dialogue with countries

including China, European Union, Russia, Japan, Australia, Canada, New Zealand, and the

Republic of Korea, to the regional efforts to address the climate change and environment. The

dialogue and the ongoing cooperation indicates that ASEAN as one of prominent regional

organization in the world has such great initiatives regarding to the climate change.

Based on the report of ASEAN-China Eminent Persons Group, it is stated that ASEAN

and China should focus on enhancing the economic linkages that will support the web of inter-

connected trading systems that they are weaving. Both ASEAN and China should also deal with

trans-boundary challenges such as environmental protection, sustainable development,

conservation of energy resources and human resource development. Furthermore, ASEAN andChina should involve more levels and sectors of society in the economic growth of the region

and the further development of the ASEAN-China relationship.

Those agreements, dialogues and cooperation above show us that ASEAN has rising

awareness toward the climate change problem. Thus, ASEAN as one of prominent regional

cooperation should take advantage of current economic issue such as free trade agreements to

make real breakthroughs for that global problem.


11/21

10

2.4 Revisiting and reevaluating ASEAN free trade area treaty

1 January 2010 marked a new dawn for countries in Southeast Asia region; it is the day

when a zero-tariff policy finally took effect among ASEAN and China (ACFTA), India (AIFTA),

Korea (AKFTA), Australia and New Zealand (ANZCERTA). This could possibly be a difficult test

for ASEAN countries, as the treaty will force their industries to engage in a fierce competition

with countries like China and India who is ready to cram the region with high quality and

cheaper products.

The goal of the elimination of tariff barrier in ASEAN is mainly to enhance

competitiveness of domestic industries, thus increasing productivity and providing ASEAN

domestic consumers with a wider variety of high-quality products. However, because of the

treaty, so far ASEAN countries can only see a major setback in their industry. It is evident that

most of the ASEAN members are not ready yet to be put in such ferocious competition,

particularly with Chinas extremely competitive industry.

We decide to narrow the case in-study more towards the CAFTA rather than other

treaties. Not only because China generates more carbon emission compared to others and thus

is perceived as the party most responsible for the climate change issue, but while the CAFTA is

currently in progress, there is concern that the decision to embark China at the same boat as

ASEAN countries may lead to a downturn for the ASEAN countries itself. The growing fear is

that Chinas massive economic growth, which is predicted to reach a massive tally of 9.4% at

2010, will grow at the expense of the ASEANs economy itself. Thanks to the CAFTA, the regionwill become more and more dependent towards made-in-China imported goods and thus taking

ASEAN countries own domestic industries as its tolls.

First, the Chinese has long been notorious for their hobby of smuggling and trading

goods in the black market, while the activation of CAFTA, unsurprisingly, can increase those

numbers. According to The Philippines Daily Inquirer, about 70-80 percent of shoe shops in

Vietnam are selling smuggled Chinese shoes, a situation which hit Vietnams shoe industry very

bad as it struggle to compete with those illegal Chinese products. In other case in Philippines,

many Philippines companies, even those that are competitive globally, had to close shop orreduce production and employment due to smuggling (Joseph Francia & Errol Ramos of the

Free Trade Alliance). The battered industries include steel, paper, cement, petrochemicals,

plastics, and ceramic tiles.

The Philippines Daily Inquirer also presents a perfect case-in-study how Thailand

suffered from the so-called CAFTA experiment which went into effect in December 2005. Both


12/21

11

Thailand and China agreed to eliminate tariff on 200 vegetables and fruits traded between those

two countries, a treaty that was aimed to, hypothetically, benefit both two countries and their

industries. Yet for Thailand, what happened in practice was far from pleasing and in fact the

country was the eyewitness of how the supposedly two-way beneficially treaty evolved into a

one-sided deal.

The China-Thailand so-called CAFTA experiment did not run smoothly as China failed

to act upon the agreed prerequisites. During that time, various Thai newspapers revealed the

fact that many officials in Southern China refused to bring down tariffs while in Thailand, in

contrast, its government eliminated the tariff for those imported vegetables and fruits of the

Chineses. The failure of the so-called tariff elimination later contributed to the Thais refusal to

involve in broader free trade agreement.


13/21

12

Figure 1: Trade numbers of China and ASEAN countries

Theres a peculiar fact which we can draw from the graphs in figure 1: although the

CAFTA was designed to benefit both parties involved, it is an irrefutable fact that all of ASEAN

countries experienced a trade deficit with China (their imports are more than their exports). If we

go down to the tariff elimination policy included in the CAFTA treaty, surely it will more benefit

China because of its massive exports number. Thanks to ASEANs huge domestic market,

ASEAN countries have became dumping ground for Chinas extremely competitive goods.

It has been only three months after the ASEAN Free Trade finally took effect, yet

ferocious screams from ASEAN countries can be heard regarding how the ASEAN free-trade

agreement, especially the CAFTA, has made their economies to suffer. Analyzing the situation

at the moment, there is a possibility to review and revise the treaty, especially in the situation

when in fact not all ASEAN countries have joined the China-ASEAN Free Trade Area in

imposing a zero-tariff policy countries like Vietnam, Cambodia, Laos, and Myanmar is yet to

join in 2015 and have not applied a zero-tariff policy on Chinas goods.


14/21

13

2.5. Adding carbon emission limitation in AFTA treaty: a chance for the

environmentalists to strike back

If the original purpose of the installment of the Kyoto Protocol was to reduce the global

carbon emission, then we can say that it fails to fulfill the initial expectation. Based on the data

below we can see that irrespective of the limitation from Kyoto Protocol the world has seen a

rise in carbon emission numbers, which are not only driven by developed countries such as

United States and European Countries but also emerging economies like China and India, who

have seen a considerable increase in the global emission they produce.

Figure 2: World Carbon Dioxide Emission by Country 1990-2030

Source: International Energy Outlook 2009, Energy Information Administration.

Today, environmentalists are like cats on the hot bricks and what was shown by the

graphic above may make their blood runs even colder. The earth currently is in a terrible health

and the signs of doomsday caused by global warming are becoming more apparent. As if as An

Inconvenient Truthmovie with its various signs of imminent armageddon are not enough, the

cumulative number of world emission continues to surge for years and, unfortunately, it shows

no sign of stopping for years to come.

In various matters like the olympics and the economy China has been breathing on

United States neck for years and ready to overtake it any time, but in terms of carbon emission

production currently China has become the new leader in the pack, successfully overtaking the

US in 2005. Massive growth of economy in China yields not only rising GDP but also an


15/21

14

increase in carbon emission production, which lately has been deemed as responsible for

environmentalists resentment towards the country. India, according to the Energy Information

Administration, is also predicted to have significant growth rate of carbon emission over the next

20 years. According to the Energy Information Administration's Emissions of Greenhouse Gases

in the United States 2004, carbon emissions are expected to surge in Asia over the next 20

years, and based on the same report, the emerging markets will have the largest growth rate of

carbon emission over the same period of time.

Figure 3: Countries with the Biggest Carbon Emission in 2006

Source: International Energy Outlook 2009, Energy Information Administration.

This 2007 data shown clearly that China, India, South Korea, and Australia (countriesthat are involved in the ASEAN free trade treaty) can become vulnerable preys for

environmentalists condemnation as they go well within the environmentalists shooting range

because of their carbon emission numbers. In addition, the ASEAN free trade treaty will

intensify their trade activities as well as their industries further and thanks to the ASEANs


16/21

15

zero-tariff policy as well, those countries will see their industries rising to an unforeseen level

and it is very likely they will be more ignorant towards the carbon emission which they generate.

Led by BRIC Countries: Brazil, Russia, India and China, the economies of emerging

markets will be growing significantly which is indicated by their rising GDP as what graphed on

the figure 3 above. So, there is question saying that whether the economies activities is the

major cause of carbon emission or not. The answer will mostly yes since economic activities

mean the use of fuel for production activitiesa nd the consumption of products which are

tremendously sources of carbon emission.

In addition to those facts, there is a high possibility that the activation of ASEAN-China

free trade agreement will create an environmental consternation. An insightful article in The

Jakarta Post argued that the CAFTA would provide huge opportunities to increase export

performance by many shipping agricultural products, including palm oil. In Indonesia, palm oil

plantation has long been deemed as the major cause for forest damage in Kalimantan and

Sumatera. The writer also noted that starting palm oil plantations, without doubt, will destroy

forest and farmland as well as other vegetation. The article also presents a fact that according

to environmental experts, the establishment of new palm oil plantations on peat land in

Sumatera and Kalimantan (which surely will see a significant increase in number because of the

surging palm oil demand from China) contributes highly to the increase of the greenhouse

gasses volume, CO2 in particular, in the air.

In fact, there has been debate about the relations between economic growth and the

quality of environment. One of the concepts regarding the issue at hand is the EnvironmentalKuznets Curve (EKC) (Grossman and Krueger, 1991). The EKC is originally derived from the

Kuznets Curve, as demonstrated in Figure 4. This curve elaborates the relationship between

income and environmental quality along the development curve. It also predicts the destruction

of environment that will increase al lower income levels (known as environmental decay). The

environmental damage will increase before reaching a maximum level (known as turning point

income) and then decline thereafter (known as environmental improvement).


17/21

16

Figure 4: the Environmental Kuznets Curve

Source: Economic Development and Environmental Quality: An Econometric Analysis, Oxford

Economic Papers, New Series, Vol. 46, Special Issue on Environmental Economics (Oct.,

1994), pp. 757773.

If we refer to the logic idea of the EKC relationship above, then it can be explained

straightforward. At the early stage of industrialization and economic development, the economyuses a lot of dirty technologies and natural resources for production processes and it will then

cause environmental damage. People will have more concern on environment when the quality

of life and the standard of living improve. This social concern will also put pressure on

government policies to improve environmental quality. The people will prefer on the products

made by environmentally responsible companies that using environmentally-friendly

technologies for its production process.

Most of the empirical studies on the EKC address two big questions. The first question

is: is there an inverted-U relationship between income and environmental degradation? Whilethe second is: if there is any relationship, at what income per-capita level does environmental

degradation start declining? Grossman and Krueger (1995) examined this issue and found that

economic growth brought an initial phase of environmental descent followed by a phase of

enhancement. The turning points for different pollutants varied, but in most cases they came

before a country reached a per capita income of $8,000.9. This concept can also work on the

Issue of China or other countries which are perceived as major pollutants of the world. At the

early of their economic development, China for example, uses dirty technologies. The rapid

growth of its economy is followed by greater concern of environment coming not only fromChinas own society but also from the whole population of the world. This will push that country

to put green technology as priority in any single economic decision it takes.

We decided to come out with an idea of adding environmental prerequisite that countries

must comply in order to gain a zero-tariff policy in the ASEAN region. In the new revised version

of the ASEAN Free Trade treaty, countries engaged in the treaty with ASEAN will have to agree


18/21

17

with the proposed carbon emission limitation numbers. Each countrys carbon emission

limitation can differ (depends on each countrys ability to reduce its carbon emission). For

example, Chinas total emission is said to be measured around 6300 million metrics tons of

CO2, while India in only 1300 million. Therefore, as reducing carbon emission production in

China will be more costly than India, the agreed carbon emission limitation number can be

different. Say that in 2013, China agrees to reduce its carbon emission by 150 million metrics

tons of CO2 (2.5%) to the level of 6150 million; while on the same treaty, India is only required

to reduce by 100 million metrics although it is only 100 million, the carbon emission reduction

rate for India will be greater (7.9%).

During 2013 until 2015 when the new ASEAN Free Trade treaty will finally take effect,

countries like China, India, South Korea, Australia, and New Zealand, are expected to do all the

efforts necessary to reduce their carbon emission production to the agreed level. And in

December 2014, the data for their carbon emission will be generated which will determine

whether the country has bowed to the agreement or not. For instance if India has not

successfully reduce their total carbon emission to the level of 1200 million metrics tons level of

CO2, while China, in contrast, successfully curb its carbon emission production to the level of

6000 million. Then India will not have the privilege of having their goods sold with zero-tariff

policy in ASEAN countries, while China will see a complete elimination of tariff for its exported

goods.

Though, if India eventually succeeds to meet the carbon emission agreement, India can

have their goods sold in the ASEAN region with zero-tariff policy. Lets say that Indiasuccessfully meets the target in 2016, then in 2016 India can enjoy a zero-tariff policy in the

ASEAN region. However, in 2017 the new carbon emission reduction target will be discussed to

be applied in 2019. Therefore, countries which have met the agreed number (such as China)

can have a zero-tariff privilege for four years (2015-2019 until the higher carbon emission

reduction target is set). In this case, India will only enjoy the privilege of zero tariff policy for

three years (2016-2019) because it fails to meet the carbon emission reduction number on time.


19/21

18

III. CONCLUSION AND POSSIBLE SOLUTION:

Earths condition is as worse as ever these days, with countries around the world

continue to pile up carbon emissions because of their rising economies. Given the current

situation, there is an urgent need for the new carbon limitation proposal to lead the efforts in

tackling the climate change issue, and our proposed new system for the revised ASEAN Free

Trade treaty (Figure 4) could be one of the possible breakthrough solutions. In brief, this is how

the system works:

Figure 4: the new system for the revised ASEAN Free Trade treaty

Based on The Agreement on Comprehensive Economic Co-operation (which consists of

18 articles that put concerns upon the trade mechanism between ASEAN and China) there is

still a possibility that the treaty will be revised on condition that one of the parties complainsagainst the loss because of the treaty itself. It is also indirectly stated that the conflicting parties

must comply with the decision of the arbitral tribunal to halt any dispute. Because of the

concerns arising of the CAFTA unfairness, especially towards ASEAN countries, the possibility

of the revision of CAFTA is still likely to occur and adding carbon emission limitation to the new

CAFTA, therefore, will not be impossible.


20/21

19

References

Adam, D. (2008, June 13). Chinas Carbon Emissions Soaring Past the US. The Guardian.

ASEAN-China Eminent Persons Group (2002). The Report of ASEAN-China Eminent Persons

Group. Jakarta: ASEAN Secretariat.

ASEAN Inter-Parliamentary Assembly (2008). Resolution on Environmental Sustainability and

Climate Change. Singapore: ASEAN Inter-Parliamentary Assembly.

Bello, W. (2010, February 14). The China-ASEAN Free Trade Area: Propaganda and Reality.

Phillipines Daily Inquirer.

Bulya, H. (2010, February 12). Between CAFTA and Environmental Considerations. The

Jakarta Post

Carbon Dioxide Emission by Country 2005. Retrieved, February 12, 2010 from

http://rainforests.mongabay.com/09-carbon_emissions.htm.

Climate Change-Impact on Asia. Retrieved February 12, 2010, from

http://www.siiaonline.org/?q=programmes/insights/climate-change-impact-asia.

Energy Information Administration. International Energy Outlook 2009. Retrieved February 13,

2010 from http://www.eia.doe.gov/oiaf/ieo/ieorefcase.html.

Gang, C. & Mingjiang, L. ASEAN Plus 3s New Concern. Retrieved February, 11 2010 from

http://www.speroforum.com/site/article.asp?idarticle=10663.

Lynas, M. (2009, December 22). How Do I Know China Wrecked the Copenhagen Deal? I was

in the Room. The Guardian.

Shafik, N., Economic Development and Environmental Quality: An Econometric

Analysis, New Series, Vol. 46, (pp. 757773). Oxford: Oxford Economic Papers.

The ASEAN Secretariat (2009). ASEAN Joint Statement on Climate Change to the 15th session

of the Conference of the Parties to the United Nations Framework Convention on Climate

Change and the 5th session of the Conference of Parties serving as the Meeting of Parties to

the Kyoto Protocol. Hua Hin, Thailand: The ASEAN Secretariat.
http://rainforests.mongabay.com/09-carbon_emissions.htmhttp://www.siiaonline.org/?q=programmes/insights/climate-change-impact-asiahttp://www.siiaonline.org/?q=programmes/insights/climate-change-impact-asiahttp://rainforests.mongabay.com/09-carbon_emissions.htm


21/21

20

The ASEAN Secretariat (2009). Press Release Act Now on Climate Change. Jakarta: The

ASEAN Secretariat.

Vutha, H., & Jalilian, H (2008). Environmental Impacts of the ASEAN-China Free Trade

Agreement on the Greater Mekong Sub-Region. Winnipeg, Manitoba: the International Institute

for Sustainable Development.

the integration of asean and climate change finished

Documents