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Finance has become a crucial agenda in climate change negotiations in recent years. Meanwhile, multilateral negotiations on climate change as a whole are making meager progress, and increasingly observed are activities by national governments and transnational non-state actors. The purpose of this paper is to illustrate how investment towards low-carbon development could be materialized in Asia. A thorough review of current financial assistance for developing countries in Asia was conducted, and the amount of funding proved to be relatively modest to achieve the aim. We then examined financial policy instruments that could be implemented in the region. We estimated that USD125–149 billion per year would be needed to reduce greenhouse gas emissions in the region by 2035. We also estimated that more than a half of this amount of funding could be achieved by public sector if several key policy instruments were agreed upon and enacted at regional and national levels in Asia. The role of private sector investment was also found to be indispensable in fulfilling all the long-term investment needs related to climate mitigation in the region.

In order to deal effectively with any type of environmental problem, it seems quite obvious that concrete targets must be set for activities that are to be implemented pursuant to the goals. The aim of this study was to investigate Article 2 of the UNFCCC on the “ultimate objective” and to clarify the specific role attributed to it. By comparing the objective article with those of other multilateral environmental agreements (MEAs), it became clear that articles on objectives in MEAs can only be found in those agreed upon during or after 1991 and that the role of the articles differ from each other depending on the negotiating process and circumstance of each agreement. The UNFCCC is unique among agreements that have similar articles containing objectives. This uniqueness proved to be a result of the negotiation process during 1991 and 1992, where some countries proposed the insertion of long-term targets by individual countries in the article. Article 2 of the UNFCCC has not been very effective in the past in inducing governments to negotiate ambitious emission reduction targets, not merely by insufficiency of scientific knowledge related to a concrete level of the ultimate objective, but also because of the nature of the article that was matured during the negotiating process by adding the word “ultimate” before “objective”. With increasingly robust scientific evidence and findings on climate change, however, the article has been rapidly gaining attention. It is suggested that the objectives contained in MEAs have the potential to be utilized as a necessary condition for the determination of short- to mid-term commitments for each country.

Under the Paris Agreement, parties set and implement their own emissions targets as nationally determined contributions (NDCs) to tackle climate change. International carbon emissions trading is expected to reduce global mitigation costs. Here, we show the benefit of emissions trading under both NDCs and a more ambitious reduction scenario consistent with the 2 °C goal. The results show that the global welfare loss, which was measured based on estimated household consumption change in 2030, decreased by 75% (from 0.47% to 0.16%), as a consequence of achieving NDCs through emissions trading. Furthermore, achieving the 2 °C targets without emissions trading led to a global welfare loss of 1.4%–3.4%, depending on the burden-sharing scheme used, whereas emissions trading reduced the loss to around 1.5% (from 1.4% to 1.7%). These results indicate that emissions trading is a valuable option for the international system, enabling NDCs and more ambitious targets to be achieved in a cost-effective manner.