As nations implement clean energy solutions to combat climate change, multilateral institutions like the Asia-Pacific Economic Cooperation (APEC) remain an important tool in facilitating regional collaboration. On November 1, Shorenstein APARC presented a panel discussion on Asia-Pacific Energy Challenges and the Role of APEC. It was the third installment in the Center's autumn 2023 seminar series on APEC, complementing the forum's summit in San Francisco.

The panelists included Larry Goulder, Professor in Environmental and Resource Economics and Director of the Stanford Center for Environmental and Energy Policy Analysis; Larry Greenwood, Chairman of the Board of the Japan Society of Northern California, Senior Adviser at BowerGroupAsia, and U.S. Ambassador to APEC from 2000-2003; Gita Wirjawan, Former Minister of Trade and former Chairman of the Investment Coordinating Board of the Republic of Indonesia and Visiting Scholar at Shorenstein APARC. Shorenstein APARC Fellow Thomas Fingar moderated the conversation.

Goulder opened the discussion with an analysis of energy supply and use in China, what the Chinese government is doing on the climate front, and how the nation’s infrastructure projects connect with its energy use and consumption. He reminded the audience that China has emerged as the largest emitter of carbon dioxide for greenhouse gases and indicated that “if we're going to make a significant dent in dealing with climate change, China's action is going to be indispensable.”

Goulder noted that although China’s growth has slowed in recent years, its energy demands continue to grow, as does its reliance on coal-fired power plants. Coal still represents about 50% of the country’s total energy mix, whereas the other 50% is from non-fossil power, namely, wind, solar, hydroelectric, and nuclear. According to Goulder, the current energy mix is “good news for those concerned about climate change, the share of renewable energy is increasing.”

To help meet UN emissions commitments, China has implemented a nationwide emissions trading system, a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants. The system is expected to more than double the CO2-covered emissions worldwide by the time it is fully implemented. "By 2026, [the system] is expected to contribute to about half of the reductions of CO2-acid, which would be needed for China to meet its pledge of net zero by 2060,” said Goulder. He advocated for linking China's emissions trading system to emissions trading in a multinational market.

Greenwood then outlined some of APEC’s history as it relates to energy issues and indicated that energy was an early and enduring focus of the forum. In 1990, a time of fluctuations in the global oil market, APEC founded its Energy Working Group. Since then, the group's scope has expanded to address renewable energy needs. According to Greenwood, the working group is responsible for conducting workshops, seminars, studies, and creating discussion venues to facilitate exchange between working-level officials — something APEC does more broadly.

Greenwood discussed the voluntary emissions targets of the working group, in which APEC members set targets and then monitor them and “use peer pressure to drive or to encourage compliance and action to make those targets.” Member nations are largely focused on energy intensity targets, he explained. In addition, APEC has maintained a target to double renewable energy generation between 2010 and 2030. “Mainly because of China, APEC is easily on track to meet that goal,” said Greenwood.

For Greenwood, energy security and climate change are the two prevailing interests of the APEC working group, but another area the forum is increasingly interested in is energy emissions trading and carbon capture. “According to the studies, it looks like we're not going to reach carbon zero, so we need to find ways, not only natural change but technology, to capture carbon and store it.”

Wirjawan proceeded to discuss energy security in the context of global development. He highlighted a paradox of the sustainability narrative, namely, that the aspiration to attain carbon neutrality by 2050 can seem too elitist because it resonates with the 15 to 20 percent of the world’s population living in developed countries. The remaining 80 to 85 percent of the global population, however, “are still concerned about putting food on the table, irrespective of how energy is sourced.”

Wirjawan also illustrated how large developing economies like Indonesia and India struggle to increase electrification on a per capita basis and argued that “it's probably going to take around 90 to 100 years. This duration is significantly irreconcilable with the 27 years left until 2050, when and where we have to attain carbon neutrality. So the question is, how do we narrow the gap?”

Wirjawan noted that “on the demand side, it is a lot easier to socially re-engineer, socially re-architect somebody's behavior in a developing economy so that he or she would stop using fossil fuel. The million dollar question is whether the alternatives will be as affordable.”

From a technological standpoint, said Wirjawan, we have all the necessary solutions to decarbonize. ”The problem for many developing economies is the economics of what it would take for all of us to bring down the cost from 20 cents per kilowatt to 5 cents.”

To achieve such goals, massive amounts of capital and organization are required, concluded Wirjawan. APEC's value, he said, is its ability to facilitate and accelerate information sharing and organization and reduce the win-lose dimension between environment and economic development.

The panel highlighted the need for multilateral cooperation in addressing climate change and energy security issues. The participants agreed that APEC has a significant role in bridging the divide between different constituent groups in the Asia-Pacific region and directing energy and economic policy that may accelerate the pace towards a more sustainable future. 

This article originally appeared in the Stanford Report.

The future of clean energy, quantum technology, and innovation were among the topics of discussion between Japanese Prime Minister Kishida Fumio and South Korean President Yoon Suk Yeol at an event held at Stanford University.

The historic meeting, which took place on Nov. 17 during the last day of the Asia-Pacific Economic Cooperation (APEC) summit, was hosted by the Walter H. Shorenstein Asia-Pacific Research Center (APARC), the Freeman Spogli Institute for International Studies (FSI), and the Hoover Institution. It was one of seven convenings between the two leaders this year to strengthen bilateral relations between their countries. Such a meeting would have been unthinkable just over a year ago because of decades of tense relations. Since Yoon and Kishida took office, they have taken steps towards rapprochement and building trust that their predecessors could not achieve.

“We at Stanford are deeply honored to be hosting these two leaders on the same stage for another historic chapter in relations between their two countries,” said Michael McFaul, the director of FSI, in his opening remarks.

Condoleezza Rice, the Tad and Dianne Taube Director of the Hoover Institution, moderated the discussion, which centered around innovation and the future of science and technology.

“Democratic allies need very much to discuss both the challenges and the opportunities that technologies bring,” said Rice, who served as the 66th secretary of state of the United States.

The event was one of several visits that saw dignitaries from Asia visiting the Stanford campus while they were in the Bay Area for the APEC summit in San Francisco.

Calls for collaboration

Balancing the risks and opportunities of technology was a recurring theme during the discussion between the leaders of Japan and South Korea, with each of them calling for increased collaboration and cooperation among countries with shared values.

“In the field of science and technology, no one country alone can drive innovation that will change the world,” said Kishida in his opening remarks.

For example, Kishida said, various countries now contribute key elements to innovations such as semiconductors, quantum computing, and generative AI.

“If there is one element missing, there will be no innovation,” Kishida said. “New ideas emerge through a multi-layered exchange between diverse people.”

Convening at Stanford

In Yoon’s opening remarks, he reflected on how Stanford is entwined with Korea’s own efforts to expand educational opportunities in the field of science and technology.

Yoon shared how in the 1960s, then-President Park Chung Hee reached out to the U.S. for help in cultivating South Korea’s engineering talent.

Frederick Terman – who served as dean of the School of Engineering from 1944 to 1958 and provost from 1955 to 1965 and is known as “the father of Silicon Valley” – visited Korea and compiled his observations in The Terman Report. This report, which included contributions from four other experts, led to the creation of the Korea Advanced Institute of Science in 1971, which later was renamed Korea Institute of Science and Technology, or “KIST.”

“At that time, Korea was one of the poorest countries in the world, but policies for establishing a scientific and technological state with KIST at the core has resulted in Korea achieving the current status of freedom and prosperity,” Yoon said. “Just like the motto of Stanford, the winds of freedom blew all the way across to Korea.”

Now, Yoon said he and Kishida are expanding the scope of Korea-Japan relations to include cultivating collaboration in science and technology in their diplomacy.

Technology can propel economic growth, creating new jobs and opportunities, Yoon said. But he also warned that technology can leave some people behind.

Yoon emphasized that the three countries must work together to reduce the digital divide and ensure that the world has fair access to new technologies – “and thereby contribute to the sustainable peace and prosperity of the international community through such trilateral cooperation,” he said.

Yoon also urged for trilateral cooperation in accelerating the pace of advancement towards carbon neutrality goals with carbon-free energy technologies such as nuclear power and hydrogen. Yoon also said he “is looking forward to proposing the establishment of a hydrogen ammonia global value chain in which Japan and Korea will be the main participants.”

Addressing the climate challenge

The leaders referenced equity, carbon neutrality, and clean energy again when Rice asked them about their plan to address the current climate challenge.

Yoon shared his concerns about the uneven effects of carbon emissions, pointing out how advanced economies have emitted more carbon dioxide compared to developing or low-developed countries, yet it has been the developing nations that are most negatively impacted.

“We have to cooperate internationally to help bridge the climate divide,” Yoon said.

Kishida cited the Doerr School of Sustainability – which was made possible through a generous gift by the engineer and venture capitalist John Doerr – as an example of entrepreneurs making investments in innovative, sustainable solutions to the climate crisis.

The potential in quantum technology

Rice also asked the leaders about quantum technology, which the Biden administration has invested over $1 trillion in advancing.

Kishida said how the full transformation of quantum technology has yet to be imagined – “quantum technology is a complete game changer,” he said.

For example, Yoon said, quantum technology has the potential to disable encryption systems or wiretapping. He also pointed out how it can also lead to improvements in the detection of submarines – prompting new implications for national security.

Yoon and Kishida both saw opportunities for Japan, Korea, and the U.S. to work together, emphasizing how each country has strengths and weaknesses that can complement one another.

“Quantum technology, I believe, is the area where global cooperation is the most crucial because there is no one country in the world that has a complete understanding of it,” Yoon said.

New mindset to advancing carbon neutrality

During the Q&A portion of the event, the leaders were asked how their countries are ensuring the world is united in solving the global climate crisis.

“Climate change is the biggest global challenge we face today and I think all countries share a common sense of crisis,” Kishida responded. Kishida emphasized Yoon’s earlier point about how each country experiences climate change differently – therefore, there must be “diverse pathways” to innovation that “transcend national borders.”

Yoon said that transitioning to carbon-free energy should not be viewed as a cost but rather as an investment in a new market and industry.

“It should be understood as an asset or an industry that would translate into this becoming a market,” said Yoon, who reiterated the need for cooperation to be fair and just. “We need to change our mindset.”

The event closed with remarks from Gi-Wook Shin, the director of APARC and a professor of sociology in the School of Humanities and Sciences.

“This momentous occasion has built on deepening ties between Japan and the Republic of Korea,” said Shin. “We are so honored to be part of this journey.”

In the Media

The historic meeting of the Japanese and South Korean leaders on the Stanford campus received wide coverage in the media. Selected coverage includes:

• KTVU
• ABC News
• Bloomberg News
• Reuters
• Nikkei Asia
• Mainichi Shimbun
• Japan Times
• Dong-a Ilbo
• Korea Herald
• Korea Times
• Korea JoongAng Daily
• Yonhap

See also the report by the Ministry of Foreign Affairs of Japan.

Since its formation in 1989, the Asia-Pacific Economic Cooperation (APEC) has functioned as a platform for economic engagement and cooperation across the Pacific Rim. The forum, which expanded to include 21 member economies, emerged following the success of other regional trade blocs, aiming to draw upon the increasing level of interdependence of Asia-Pacific economies to make progress on multiple member-defined priorities. Traditionally trade-focused, APEC has expanded its cooperation to other areas such as human resources, marine conservation, and public health.

On October 6, 2023, Shorenstein APARC kicked off its fall 2023 seminar series, Exploring APEC’s Role in Facilitating Regional Cooperation, to accompany APEC’s upcoming convening in San Francisco on the week of November 12. Meetings between the member economies will cover trade, innovation and digitalization, energy, and other related issues, with a special emphasis on fostering sustainable economic growth and prosperity across the region.

The first event in the series, APEC’s Role in the Evolving Asia-Pacific Order, featured panelists Aida Safinaz Allias, the minister for economic affairs at the Embassy of Malaysia to the United States and a former APEC senior official for Malaysia; Ambassador Kurt Tong, a managing partner at The Asia Group, former U.S. Ambassador for APEC, and former U.S. consul general and chief of mission in Hong Kong and Macau; and moderator Michael Beeman, a visiting scholar at APARC and former assistant U.S. trade representative for Japan, Korea, and APEC at the Office of the U.S. Trade Representative.

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Beeman opened the session by acknowledging that “these are very complicated and often tense times in the Asia-Pacific region.” APEC has been charged with being a facilitator for economic cooperation in the region and “current challenges in the region have impacted and, in many ways, limited the ambition that APEC held at its inception,” said Beeman.

Beeman recognized that there are many who question the value of multilateral groupings like APEC, but said that “APEC is in its 34th year and the level of activity and work in APEC going on under the surface is as high as it's ever been…although it has faded from public attention, it is still valued by its members and there are hundreds of meetings going on every year in APEC, with thousands of participants joining.”

Throughout the session, participants examined the extent to which APEC still has value in the region, can still shape the region and its future, and whether APEC is “worse for wear.” The panelists investigated the degree to which the forum remains a flexible way of maintaining cohesion on economic cooperation and setting an agenda while promoting ongoing engagement “under the surface.” For Beeman, APEC still maintains its usefulness because of its flexibility, and “in many ways, APEC has bent but not broken, which is an important attribute in this day and time, and it may be more valuable today in the current environment.”

Speaking from her experience as a former APEC official, Aida Safinaz Allias outlined the relevance of APEC over the years and its distinct mechanisms that separate it from other multilateral groupings. Allias discussed the unique elements of APEC’s mission and its voluntary, non-binding, and consensus-building principles.

Allias referenced the three pillars of APEC's agenda: Trade and investment liberalization, business facilitation, and economic and technical cooperation. “APEC’s three pillars are very important for a country like Malaysia because it balances out things like liberalizing trade and investment, but it also builds [Malaysia’s] capacity to work out its own issues further…It's not just liberalizing the digital regime but upgrading skills and infrastructure in many parts of the Pacific.”

In 2020, during the height of the COVID pandemic, Malaysia hosted APEC and members agreed upon the tenets of a new 20-year plan, Putrajaya Vision 2040. Allias outlined the initiative to establish an open, dynamic, resilient, and peaceful Asia-Pacific community by 2040. The Vision is predicated upon the goals of driving trade and investment to ensure that the Asia-Pacific remains a dynamic and interconnected regional economy driven by innovation and digitalization to empower people and businesses and promote sustainable and inclusive growth to increase resilience to shocks, crises, and pandemics.

Ambassador Kurt Tong further elaborated on some of the prevailing challenges facing APEC member economies and forecasted that such challenges would dominate the upcoming forum discussions in San Francisco. First and foremost, according to Tong, is the issue of global supply chain resilience, which “is not really a liberalization issue but rather an information issue.” Tong questioned whether solutions to global supply chain interruptions might be found and made useful through coordination between economies at the upcoming APEC convenings.

Tong also listed green growth as a top priority for member nations and asked, “Can APEC capture the desire of every economy to have less of an environmental impact while still growing rapidly?” He indicated that the primary impediment to energy transformation is the question of “who's going to pay for it, and can APEC make a contribution?” Tong listed other pressing issues including the mobility of people between economies, educational coordination, and cooperation between economies in the digital age.

The participants agreed that APEC still has an important role to play in bridging the divide between different constituent groups in the Asia-Pacific and directing economic policy that may lead to genuine public-private cooperation across boundaries, not just within economies but across economies. For Ambassador Tong, “APEC is well organized to accomplish that kind of discussion… [which is] very important if you want to try and drive things forward.”