Resource information
Drawing on several studies on APEC
economies, this report discusses economic policy choices for
mitigating and adapting to climate change effects. It
highlights that APEC economies will have a central role in
both sides of climate change. These economies include some
of the largest emitters and also those among the most
vulnerable to the impact of climate change. The report
suggests that action on climate change will require a wide
range of economic policy interventions, including most
importantly fiscal policies. These will include setting
carbon prices that cost emissions properly, liberalizing and
strengthening markets so that prices and costs can be
passed- through, offsetting other biases towards capital and
emissions intensive economic growth and supporting
technology based policies. On the adaptation side, the
report emphasizes the importance of fiscal policy and
investment choice tools that incorporate the uncertainty
surrounding the nature and location of climate change
effects. The report discusses how emissions reduction
through appropriate climate friendly technologies (CFTs) can
be an important complement to more politically sensitive
mitigation measures (like carbon pricing). At the same time,
CFTs can provide co-benefits like rural electrification.
The current status of CFTs in APEC economies - their
production, use and trade - are discussed along with
technology neutral and technology specific policies and
trade and investment policies that can support these
technologies. Financing these policy interventions - both
technology based and otherwise - will require various
measures, including efficient market mechanisms that create
incentives to reduce mitigation costs, facilitate financing
of mitigation efforts through crediting mechanism and
emissions trading, and setting up the necessary
institutions. This report also considers policy responses to
extreme climate events and their impact on the poor at the
community level. Finally, since climate change is
inherently of a cross-border, regional and even global
nature, there is substantial scope for regional cooperation
by APEC economies to address climate change issues. This
report concludes with some initial thoughts on some key
areas for this cooperation.
