President-elect Barack Obama did not send representatives to the APEC Global Climate Summit but he recorded this message promising “a new chapter of American leadership on climate change.”

Leaders, wearing traditional Peruvian ponchos, wave during the official group photo of 16th summit of the Asian Pacific Economic Cooperation, APEC, in Lima, Sunday, Nov. 23, 2008.

The 21 economies of the Asia Pacific Economic Cooperation (APEC), which represent more than half of the world’s productive power, assured the world yesterday (Sunday) at the end of a 2-day summit in Lima, that the global financial crisis can be quelled in 18 months.  But how they expect this to happen - or how their governments can help remains to be seen.

The 18-month time-line fits with a calculation by the International Monetary Fund (IMF), which forecast that developed economies would grow barely 0.1 percent in 2009, and that the world would emerge from the crisis the following year.

APEC, which groups some of the most open economies in the world, warned that countries should not be tempted to use protectionist measures even if job losses mount. APEC members pledged to work together to ease the turmoil, agreed not to adopt new trade barriers for a year and called for better regulation of the financial industry. Their declaration at the end of a two-day summit in Peru supported a declaration by the Group of 20 (G20) major economies at a meeting in Washington last weekend that pledged to maintain free trade despite pressures to protect domestic industries. They are looking at stimulus plans that include boosting government spending and cutting taxes.

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The Vienna Climate Change talks saw more than a thousand people from government, industry, and research gather in the Austrian capital to discuss ways to fight global warming. This United Nations-backed meeting is preparation for the more high-level talks in New York in September, and Bali in December. The first phase of the Kyoto Protocol will expire in 2012, and nations are scrambling to determine effective next steps that will address climate change mitigation, adaptation, and a global carbon market. Many hope for and expect more participation from nations glaringly absent from the first phase of implementation, like the United States and China.

Yvo de Boer, executive secretary of the United Nations Framework Convention on Climate Change (UNFCCC) said he expects the Vienna meetings to give a good indication as to whether governments are ready to take serious action on cutting emissions.

UN Secretary-General Ban Ki-moon has urged governments to figure out the next phase of Kyoto three years before the first phase expires so there is time to ratify the law and be ready to go in 2012.

Austrian Environment Minister Josef Proell said in his opening remarks:

"Climate change is a huge challenge that can only be tackled at a global level and in an integrated manner… We do not have much time to create adequate framework conditions. Each year without mitigation measures is a year which drives the human and financial cost of adaptation steeply upwards."

On the other side of the world in Singapore, APEC has drafted a declaration agreeing to cut "energy intensity" by 25 percent by 2030 and plant nearly 50,000 million acres of trees. Energy intensity measures an economy’s energy efficiency – but clean energy supporters say this particular wording avoids any sort of serious commitment to cutting emissions. A spokeswoman for Greenpeace told Bloomberg news: "The APEC declaration is clearly ‘Made in the U.S.’ and covered with a thick coating of Australian coal dust."

Next month at a meeting in Sydney, Australia, APEC nations will agree to fund clean technologies and fight illegal logging. China has said it will support the Sydney declaration on climate change, and the U.S. is expected to attend the meetings.

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Market-based strategies, like a cap-and-trade policy used in Europe, were discussed. A cap-and-trade policy sets an overall limit on emissions, and then grants entities (factories, for example) permits that allow them to emit a particular amount of pollution. If they emit less than what is allowed, they can sell the surplus permits to a business that can not or will not meet their emissions requirements. This puts a price on emissions and creates an incentive to lower them. The value of global emissions-permit trading was over $30 billion in 2006, with 81 percent of that in the European Union.

APEC economies represent half of the world’s trade and include the world’s largest emitters, the U.S. and China. Neither country is bound by the Kyoto Protocol: China because it is a developing nation, and the U.S. because it didn’t ratify it. Another APEC member and large emitter, Australia, also didn’t ratify Kyoto but seems to making some progress with the announcement last week that it will start a national CO2 emissions trading system by 2012 and set a global warming emissions reduction target by next year.

China plans to cut energy consumption by 20 percent over the next five years. However, Finance Minister Jin Renqing told APEC members that developed countries have the responsibility to help developing ones with the technology to achieve this. China is the world’s largest user and producer of coal, and just passed the U.S. as the world’s largest emitter of CO2.

Australian Treasurer Peter Costello was encouraged by China’s talk of using market mechanisms to cut pollution. He foresees his country playing a larger role as energy demand increases in the region but traditional supplies dwindle or are unusable because of their global warming impact. He assured China that its development will not be interrupted by energy scarcity and that Australia has “a lot to offer” it in terms of energy security.

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