The gang of six lost in Kyotoland

THE ROTATING VAGARIES of diplomatic timetables decreed that the United States unveil its climate change trump card on the banks of the Mekong River. The new answer to the danger of rising sea levels went public in the tiny capital of landlocked Laos. The voluntary solution to global warming first saw daylight in a communist state still run by the military.

The Asia-Pacific Partnership on Clean Development and Climate issued its manifesto into the cavernous space of the overgrown hangar that serves as the Laotian Convention Centre. The centre sits amid farmland on the edge of Vientiane. So, a hundred metres away, a lone farmer worked his field with a hoe as Alexander Downer chaired the press conference that launched the partnership.

The key point – almost the only fact in the announcement – was the membership. And that list made the splash. The US had found Australia the easiest of catches, the most enthusiastic of volunteers. It was the other members that were the substance of the headlines – India and China, along with Japan and South Korea. India and China, as the coming economic giants and new great polluters, had signed up to a partnership that had no emission targets and no enforcement mechanism.

The science will be endlessly argued. The new geopolitical fact is stark. In the last decades of the twentieth century, Asia-Pacific institutions could be created with an Asian membership based on Japan, South Korea and the ASEAN states of South-East Asia. In the first decade of the twenty-first century, India and China are indispensable.

The partnership announced itself while tepidly pledging not to undermine the 1997 Kyoto Protocol, the treaty to limit global greenhouse-gas emissions. Kyoto's supporters clothed their contempt for the new partnership in condescension.

The birth notice of the partnership was a terse statement issued from the White House by US President George W. Bush a few hours before the press conference in Vientiane on July 28, 2005. With paternity clearly established, the US stepped back and allowed Australia's foreign minister to chair the announcement.

Downer said that, as the six partners "account for about half of the global GDP, population, energy use and greenhouse emissions, our collaboration can make a significant impact". He pointed to the vision statement that "outlines the core principles and our shared vision".

The key element in the one-page document was that it would be a "nonbinding compact" to develop and transfer cost-effective and cleaner technologies. The vision listed seventeen broad areas for possible collaboration. "Possible", mind, and then again there might be other areas they hadn't thought of. The list ran from clean coal to carbon capture, from nuclear power to rural and village energy systems, from home construction to hydropower, and not forgetting the wind and the sun among the renewables.

Downer was the ranking official, the only foreign minister on the podium. Japan's foreign minister was off elsewhere chasing votes for Tokyo's drooping effort to get a permanent seat on the United Nations Security Council. China's foreign minister had already left Vientiane for a more pressing engagement – to offer diplomatic comfort to Burma's military regime.

The US Secretary of State, Condoleezza Rice, hadn't made it to Laos for the annual ASEAN Foreign Ministers' Conference involving more than twenty Asia-Pacific countries. The world's reigning diplomatic superstar doesn't do many remote-country gigs (as Sydney found when it hosted the first full meeting of the partnership in January 2006 without her).

The US representative sitting at the other end of the table from Downer in Vientiane was the US Deputy Secretary of State, Robert Zoellick. He went directly to the line that has become a mantra of the partnership – its nonbinding philosophy will complement, not replace, the rule-based targets of Kyoto. But not only will the partnership complement Kyoto, according to Zoellick, it will be better than Kyoto: "One can't just command other parties to do things. You can try, but it's not going to be effective, so you need to try to develop interests and incentives. The US is a member of the global climate convention – the agreement that was done in 1992. We've stated our differences with the Kyoto treaty. So we're committed to trying to address this effort, we just think that there's a better way to do it than the requirements of the Kyoto treaty."


ONE WAY OF keeping track of the winners and losers in diplomacy is to chart who sits at the table. And as the journalists filed out of the Vientiane conference room, it was clear one country had been snubbed. Diplomats from Canada roamed among the reporters offering an instant response to the creation of the partnership.

The equation was obvious. Canada didn't get new-partner status from Bush because it had refused to join the war in Iraq, turned down a role in the US missile defence program, and some in the Canadian government had been indiscreet in discussing their belief in the "Bush is a buffoon" school of analysis. And Canada was deeply tainted by its support for the Kyoto process. Had Canada followed the lead of the Bush White House and not ratified Kyoto, it could have put the treaty to the sword. Instead, Canada and Japan ratified and opened the way (when Russia eventually joined) for Kyoto to come into force in February 2005.

The modern media rule about applying immediate counter-spin came into play only minutes after Downer wound up the first partnership press conference. On the other side of the Vientiane convention centre, Canada's Foreign Minister, Pierre Pettigrew, strode from the Canadian delegation room to talk to a coven of journalists assembled by his diplomats. It was an exquisite example of praising with faint damns.

Pettigrew measured the members of the new Asia-Pacific partnership against the language of their founding document: "Well, first of all, this is a vision statement. So if the vision acknowledges that there is a problem, this is already progress. Second, I would say that in the vision statement they have acknowledged that this was a complement; it was not meant to replace Kyoto, but it was a complement to Kyoto. So when you want to complement something, you recognise that the real substance is somewhere else. A complement normally is something that adds on to something which is the real thing."

The correspondent from the Australian Broadcasting Corporation thought that an elegantly applied Canadian kick, but went straight to what had been the triumphant underlying note in the Downer-Zoellick press conference. I asked: "Does this, though, deal with the great gap that Kyoto has – this gets China and India to the table in a way that you had not been able to?"

As the microphone swung back to Pettigrew, he summoned up a political line that often runs on both sides of the US-Canada border. When questioning the lack of substance or detail in your opponent's argument, the question to ask is based on an old hamburger ad: "Where's the beef?" The Canadian foreign minister repeated his joy that more countries were preparing to confront the problem of climate change and then swung with gusto: "The words I see in the vision statement are, 'We'll be working on non-binding things'. So I still have to wait for the meat. I mean, I'm pleased with the vision that is there. It is an acknowledgement of this problem we have with climate change. This is an improvement. This is progress, but I am still waiting for the meat."


WHEN LOOKING AT Australia's climate-change policy, the problem is not so much locating the beef, but reconciling the contradictions. Laying out the call and counter-call of Australian policy produces a strange maze.

For instance, the Australian Government strongly believes in market solutions – except the market created by Kyoto. An Australia that now puts its faith in business and technology to solve the greenhouse problem has turned its back on a unique new market. In "Kyotoland", you can trade emissions and also get carbon credits for helping developing countries take up clean technology.

Australia ratified the United Nations Framework Convention on Climate in December 1992, one of the first countries to do so. The Howard Government went to the Kyoto conference in 1997, negotiated hard and signed up to what was to be a mandatory target to deal with greenhouse-gas concentrations in the atmosphere. Australia accepted a target of 108 per cent of its 1990 emissions, averaged over the period 2008-12. This eight per cent increase over the 1990 base year was hailed by the Government as a negotiating victory for Australia because other developed countries agreed to reach targets below their 1990 figure.

Australia says it is committed to its Kyoto target, but has decided not to ratify the Kyoto Protocol. From there, the maze gets worse. The Howard Government says it will not ratify Kyoto because it would hurt the economy and cost Australian jobs. But the Government then says Australia is on track to reach the emission targets set by Kyoto (presumably without killing jobs). The Environment Minister, Ian Campbell, said that "while the Australian economy is expected to almost double between 1990 and 2010, our greenhouse-gas emissions are expected to grow by only eight per cent".

Like many factoids in the global-warming debate, Australia's statement that it will meet its Kyoto target is subject to an argument that can only be called heated. (This qualifies as the standard Kyoto quip.) The claim that Australia will meet its Kyoto commitment (saving eighty-five million tonnes of greenhouse-gas emissions a year by 2010) is dismissed by critics as the product of rubbery figures and funny counting, based on "voluntary" reporting by industry.

The Australian maze really hit the haze at the giant UN climate conference in the frozen streets of Montreal in December 2005 (10,000 delegates, 189 countries). Australia's environment minister headed to Canada, proclaiming that the Kyoto regime of mandatory targets was virtually dead because "the cold, hard reality is that the developing nations will not sign up to targets and timetables". But, at the crunch moment, Australia split with the US and helped launch the next stage of Kyoto – negotiations on a new protocol when the current regime expires in 2012.

The US delegation stormed out of the Montreal talks at the penultimate moment and the meeting looked doomed. Strangely, it was America's allies in the Asia-Pacific partnership that seem to have been decisive in getting the Americans back to the table. Even Australia wouldn't follow the walkout. And, more significantly, China said it was ready to take part in talks about what should be done to deal with climate change after 2012. The isolated US moped back to the conference and an agreement was sealed.


KYOTOLAND WAS BROUGHT into existence with compliance rules and trading of carbon credits across national borders. And those countries already resident in Kyotoland (the developed economies minus the US and Australia) agreed to negotiate on binding emission targets in the second phase beyond 2012.

When the six countries of the Asia-Pacific partnership met for the first ministerial meeting in Sydney a month later, they were not surveying the smoking ruins of Kyoto. Instead, a founding tenet of the charter was that its purpose was "to complement but not replace the Kyoto Protocol". The charter states that the first purpose of the partnership is being to create a "voluntary, non-legally-binding framework for international co-operation". These words are important for the two new giants at the table – China and India – and the other giant denied even observer status in Sydney, the European Union.

Kyotoland is fascinating because it expresses much about how Europe thinks multilateralism should work. Europe breathed life into Kyoto when the US sought to kill off the protocol. The EU's ardent wooing of Moscow (with such carrots as support for Russia's entry into the World Trade Organisation) brought the Kyoto vision into being in February 2005. Russia's enlistment meant the protocol could come into force because it had been ratified by countries covering fifty-five per cent of total 1990 carbon dioxide emissions by developed countries.

Europe, as the ultimate transnational experiment, sees Kyotoland as a new multilateral expression of many of its internal workings. The Australian bureaucracy has spent decades battling Europe over agriculture and the scars explain Canberra's scepticism – even fear – of the European as a behemoth with many heads. Australia has its own version of Kissinger's old question: "If I want to find out what Europe thinks, whose telephone do I call?" The Canberra version today runs: "How do you get Europe to change its mind on anything when all the bargains and concessions have been struck among the twenty-five member states before the EU even starts the negotiation?"

The European Commissioner for External Relations from 1999 to 2004, Chris Patten, expresses Europe's passion for Kyoto when he rails against the US and Australia as energy guzzlers whose "dangerous pitch" to China and India is that the world can confront global warming merely through voluntary action: "We face a common threat; the developed countries have done the most to create it; the rich should bear initially the largest share of responsibility for tackling it. In time, we shall need developing countries to join the effort. That will require persuasion. How do rich countries persuade poor ones to act, if the richest country of all refuses to budge? At this point relative politeness is strained beyond breaking point. US policy is not only selfish but foolish and self-destructive."

Patten, from a different direction, comes finally to the same conundrum confronted by the Asia-Pacific partnership when he concludes: "We all need a Bush conversion on the road to Delhi and Beijing. Unless America is prepared to accept its environmental responsibilities for the future, it is difficult to see how we will ever get India and China to do so."

The twin roads to Delhi and Beijing will complicate Australia's ambition to become the world's largest uranium exporter. When Howard was in Delhi he was pressed on why Australia could sell uranium to China and not to India. And as China's Premier, Wen Jiabao, headed to Canberra in April to witness the signature of the Nuclear Transfer agreement, he gave a mischievous conditional endorsement to the sale of uranium to India. The condition, of course, was adherence to the Nuclear Non-Proliferation Treaty. India, without signing the NPT, was recognised as a "normal" nuclear power by the US. So Delhi has no incentive to sign the NPT for Australia, as it demands uranium equality with China.


DURING TEN YEARS in office, the Howard Government has undergone its own series of conversions on Delhi and Beijing. Those learning curves have been both painful and instructive. The pain with Beijing was really concentrated in 1996. During that first year in power, the Howard Government, almost inadvertently, managed to push just about every wrong button it could in Beijing. Australia was the only country in the region, apart from Singapore, to support the deployment of the US Navy to the Taiwan Straits during the missile crisis. Australia made a symbolic restatement of the ANZUS alliance only a couple of weeks after some significant moves in the Japan-US alliance. The new government sent some positive signals to Taiwan and John Howard cheerfully had a meeting with the Dalai Lama.

Beijing then taught Canberra a valuable lesson – how much pain it could impose. After a few months in office, the Howard Government found itself undergoing the diplomatic death of a thousand cuts. Every single thing that Australia had going through the Chinese system in 1996 ground to a halt. Everything. The Chinese scrapped high-level visits, every Australian doing business in China, whether miner, banker, insurance executive or diplomat, was screaming at Canberra: "Make this pain go away."

So, at the end of 1996, Howard had his Butch Cassidy moment. In the movie, Butch Cassidy is standing on a hill watching the posse that has been pursuing him across the plains of the West. Butch turns to the Sundance Kid and Paul Newman's character says: "If they gave me the money they're spending to stop me robbing them, I'd stop robbing them!" Howard went to his first meeting with China's leader, Jiang Zemin, and delivered a version of Butch's line. The Prime Minister effectively told Jiang: "If you stop imposing the pain on us, we'll stop doing the things which have made you impose that pain on us." And, by and large, the Jiang Zemin-Butch Cassidy pact has held.

When Hong Kong returned to China in 1997, Australia lined up with the Asian states rather than with the US and Britain. Australia, along with the rest of Asia, went to all the ceremonies of the handover. The Europeans and Americans avoided some of them because of the implicit endorsement of the political structure China had designed for Hong Kong. Howard went to Beijing and announced that Australia would no longer take part in the UN human rights process on China. Instead, Australia started a bilateral human-rights dialogue with China. And the next time the Dalai Lama visited Australia, he met no government ministers.

Whenever you hear Howard talk about the Chinese relationship, he will always, somewhere in his default script, put in that line: "We'll concentrate on the things that we can do together and not concentrate on the things which divide us." And, as with so much of the Prime Minister's language, there are a series of meanings and understandings cemented into those words. The "emphasise the positive and sidestep the differences" mantra means Australia has avoided much of the Washington argument about whether China will be a strategic partner or strategic competitor.

The nuances were displayed at the White House in July 2005, when Howard and Bush answered questions on what the rise of China would mean. The US President said he believed that his country and Australia should work together to get China to accept "the same values we share". Australia's leader wasn't interested in joining a values crusade, nor in getting in the middle between America and China: "We don't presume any kind of intermediary role." Australia's relationships with China and the US, he said, were completely separate. Spare us, please, any either-or choices. And the optimistic view put by the Prime Minister is that a "dust-up" between America and China is far from inevitable as a growing China matures and takes its rightful international place.

The differences between Washington and Canberra are often expressed in silence. A key example is the way Australia has quietly sided with China over the biggest economic argument between Beijing and Washington over the past four years. The US has continually harangued China to raise the value of the yuan, saying the artificially low value of the currency gives China an unfair trade advantage and is responsible for much of America's balance of payments crisis. Australia's Treasury, in its 2005 budget strategy, gently dismissed the US position as risible. The Treasury noted that the US current account deficit in 2004 was a record $US666 billion, and offered a series of reasons for this huge imbalance: lack of savings, poor growth in Japan and Europe, and under-investment in some East Asian countries.

Just in case that repudiation of America's China-bashing was too subtle, the Treasury then gave explicit backing to Beijing's position: "The strength of the Chinese economy has led to external calls for greater flexibility in its exchange rate, particularly from the United States. However, a more flexible Chinese exchange rate is likely to have only a limited impact on global imbalances. Broader liberalisation of the capital account should be approached cautiously and coincide with a further strengthening of the Chinese financial system."

No wonder some of the sharper-eyed policy wonks in Washington have started to worry about how far Australia is straying into the Chinese sphere in areas apart from the alliance.


THE LEARNING CURVE Australia has followed with China over the past decade is slowly being replicated with India. Beyond the bromides about the links that run from parliamentary systems to playing fields, the India– Australia diplomatic conversation has been strangely sterile. Australia has been slow to recognise the essential Indian dimension to its Asian strategies. New Delhi's standard view has been of Australia as an obedient member of the Western alliance, happy to act as a cipher for the US. The clash of temperaments and world views reached its low point at the United Nations in 1960, when Nehru took the rostrum to savage an earlier speech by Robert Menzies, arguing that Australia's views on colonialism and the Cold War could not be taken seriously. Menzies wrote furiously to his wife that Nehru was poisonous, sneering and grossly offensive: "All the primitive came out of him."

Four decades later, Australia still had trouble placing India. The Howard Government's first foreign affairs white paper, in 1997, didn't rank India as one of the states that "most substantially engage Australia". And only six months after India announced itself as a nuclear-weapons power with five bomb tests in 1998, Australia's Foreign Affairs Department was able to scrap its separate South Asia and Indian Ocean branch as a budget measure. The contrast between the concentrated focus Australia has given China with the somewhat dilatory nature of the engagement with India is one element in New Delhi's frustration with Canberra. The purpose of Howard's visit to India this March was partly to bury some history as well as lighting the path of future history with one of Asia's pivotal states.

The change in India's significance can be told through two multilateral moments. In 1997, Australia helped ensure that the Asia Pacific Economic Co-operation (APEC) door was closed on India for a decade. By 2005, Australia was slipping into the first East Asia Summit using the diplomatic opening created by India.

At the Vancouver summit of the APEC forum in 1997, India was one of eleven counties seeking to join APEC. Only three got in: Russia (sponsored by the US), Vietnam (courtesy of ASEAN) and Peru (backed by Mexico and Chile). The snub for India was that a ten-year moratorium was then imposed on new APEC members. Closing APEC for a decade was a decision that came out of the daylong leaders' retreat. Howard said he would "very strongly" support the ten-year freeze. The Prime Minister was modest about his own role in ensuring that the moratorium was a decision announced from the summit: "Well, it came up earlier in the discussions and one of the leaders reminded the meeting at the end that it [the freeze] should be included." India's view was that the encouragement it got from some APEC members like Singapore, Malaysia and South Korea had been vetoed by a jaundiced Australia.

By 2005, it was impossible to conceive of the Asia Pacific Climate Partnership or the East Asia Summit without India's involvement. In drawing up the guest list for the first Asian leaders' meeting in Kuala Lumpur in December 2005, China took a narrow view of who should be at the table. Beijing said it preferred the ASEAN-plus-three formula: the three powers from North-East Asia – China, Japan and South Korea – with the ten South-East Asian members of ASEAN. ASEAN could not embrace that formula because it would have excluded India and given China a form of veto over a process supposedly run by ASEAN. Admitting India – a geopolitical must – meant it was easier to invite other states beyond East Asia: Australia and New Zealand.

India, with a middle class that now outnumbers the population of the US, doesn't have to worry anymore about getting invitations. India matters as much as China in everything from clinching a deal at the World Trade Organisation to launching the next stage of the Kyoto process in Montreal.

Indeed, as many of the developed states confront the reality that they can't achieve their Kyoto targets over by 2012, the developing economies on the threshold of Kyotoland have even more room to manoeuvre. The Conservative government that took power in Canada in January 2006 is already showing wobbles about the pain that will be imposed by Kyoto.

Standing outside Kyotoland, the problem for Australia is finding a true role for a non-binding, voluntary partnership. The portents are not good. In that other Asia-Pacific partnership, APEC, the voluntary approach failed spectacularly. Australia championed a fast-track idea in which APEC members would rush to free-trade purity. It was called "early voluntary sectoral liberalisation". That vision died at the APEC summit in 1998 when Japan refused to offer up any voluntary liberalisation in agriculture. Australia's Trade Minister at the time, Tim Fischer, commented that the issue could have destroyed APEC if the argument with Japan had been pushed over the brink.

In trade, Australia has discovered over many decades that the toughest issues can be tackled only when everything is negotiated together in the multilateral system operated by the World Trade Organisation, with binding, legally enforceable rules. In the world of climate change, apparently, different rules can be made to work. Kyotoland is beset by mirages as well as hot air. 

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