Over six nights recently I attended the Our World in Crisis? course run by Professor Jospeh Camilleri.
The course website can be found here
The course was very informative, challenging, and very well run. Thanks to Professor Camilleri for his organisation of the course and many interesting lectures and guest speakers.
The course covered the following:
Making sense of ‘our times’:
It is often said that we live in a globalising world? What does this mean? How different is today’s world from that of our parents or grandparents? Is the Modern world ushered in by the Renaissance and the revolutions of the 16th to the 18th centuries coming to an end? If so, what is taking its place?
The global financial crisis: why, where and how?
How do we explain the unprecedented growth of international finance? What factors have led to the current global financial crisis? What are the long-term implications of the crisis? What do we make of the responses of governments? Of the major international organisations? Where does the crisis leave the rich-poor divide? What are the prospects for greater international regulation?
Climate change: after Copenhagen
What are the key issues at stake in international climate change negotiations? Why are governments finding it so difficult to come to terms with the challenges posed by climate change? What are the prospects for stabilising global warming? Has Australia’s position on climate change shifted significantly since the election of the Rudd Government?
Arc of conflict: from Algeria to Afghanistan:
How do we account for the conflicts that have dotted the recent history of this part of the world? What lies behind the conflicts in the Middle East, Iraq, Iran, Afghanistan, Pakistan? How do we make sense of the relationship between Islam and the West? Are international terrorism and the ‘war on terror’ here to stay?
Conflict resolution and the dialogue of cultures:
Are the world’s major civilisations on a collision course? With the decline of the world’s colonial empires, is Western dominance coming to an end? Are we seeing the rise of new centres of power and influence? Can collision be avoided? What are the prospects for dialogue and conflict resolution? How can dialogue be approached internationally? In Australia?
The puzzle that is Australia:
How well are Australians coping with the pressures of a rapidly changing world? How well is Australia managing cultural and religious diversity at home and in its relations with Asia and the Pacific? Does multiculturalism have a future? What of our relations with the United states on the one hand and China on the other? What are the options facing Australia over the next decade and beyond?
The assignments that I produced for the course and some of the research that I conducted on the topics can be found at the links below:
Globalisation, here and here.
Assignment letter to the editor here.
My notes on the Copenhagen conference here.
Assignment on the Global Financial Crisis here.
The Political Philosophy of Malcolm Fraser here.
Showing posts with label World_in_Crisis. Show all posts
Showing posts with label World_in_Crisis. Show all posts
Tuesday, August 3, 2010
Saturday, July 31, 2010
The Political Philosophy of Malcolm Fraser
In week four of the Our World in Crisis? course we held a hypothetical. The basic scenario was that the Pacific Island Leaders called on Australia for a guarantee of access by Pacific Islanders and to accept claims of Environmental Refugee status for those who feel that their human security is at risk and medium term survival impossible because of the effects of cliamte change.
I played the role of Malcolm Fraser.
In my research for this role is discovered an inteview of Malcolm Fraser by his biographer, Margaret Simmons, which can be found here. The fact that I can now feel sympathy and interest in Fraser (who I hated for most of the 1970s) is a sign of how far the the right Australian politics has strayed in the last 30 years.
Here are my notes from the intervies - most of which are verbatim.
What is a Liberal?
Somebody:
• who has respect for other people no matter who or what that other person is.
• who believes in a fair go.
• who wants to maximise freedom for individual people so long as that freedom doesn’t trample on the rights and freedoms of other people in society
A government that will not seek to maximise actions but will seek to maximise opportunity for individuals to follow their own path but also a government that recognises that there are some things which governments just have to do which individuals can’t do for themselves. To establish a fair market place, to hold the ring to see that the world is fair and that people are treated justly, that the rule of law and due process are followed.
Sometimes I think in more recent times when people have said “market deregulation, self-regulation, corporations can do anything, banks can do anything” well it was that attitude that led to the crash of a year or so ago. Not so much in Australia where we behaved more sensibly, but certainly in a number of European countries and the United States. So while a liberal will want to maximise freedom for individuals there are obviously limits to that freedom because you start to jeopardise the future of all of us. A government that above all respects the rule of law and that’s something we haven’t had in recent times”
Where do we find the liberals today in politics?
Well I don’t know many. Petro Georgio is a liberal …
Children in detention and terrorism legislation is illiberal
Children in detention is a classic example of what a liberal ought not to do, indeed what any politician ought not to do, but the Labor Party didn’t seem to mind all that much, it supported the Howard government in totally illiberal anti terrorist legislation which could result in anyone of you being arrested as you leave this hall and you won’t know why you have been arrested and you can’t tell anyone, you just disappear, that’s not fantasy its in the law. And they only have to believe that you have observed something that might help them in their anti-terrorist enquiries. They don’t have to believe that you are guilty of anything, they know you are innocent, but they still have the power to detain you secretly, and if you talk about it afterward you go to jail for five years. If a journalist writes about it the journalist can go to jail for five years. I think such laws really promote the cause of terrorism, I don’t think they help in the fight against terrorism. But Labor and Liberal parties supported that sort of law. Well that’s not a liberal law in my book anyone who voted for it is not a liberal.
Is Malcolm Turnbull a liberal?
I think he is, yes. I think his attitude about people . I’m not sure when he was leader that he was able to define this adequately. I think he should have. One of the reasons why I think he was beaten. Those who opposed Turnbull wanted to get rid of him because he is a liberal, and the liberals turned tail and ran.
Is Tony Abbot a liberal?
Well he is the leader of the Liberal Party. He is proud of the word Conservative, he describes the party as conservative. People want to pick up Robert Menzies mantle and think that they are under his umbrella, but Menzies quite deliberately rejected the name conservative. If he would have been called a Conservative he would have taken that as an insult. As indeed I would have. He wanted a liberal party, which was liberal in philosophic terms, forward looking, progressive, willing to make experiments, willing to create opportunity. The Liberal party is very good at denigrating people who should be its heroes. Later Liberal party leaders distanced themselves from Menzies. When you look at Menzies education policy, his health policy, arguably the best health scheme that we have ever had certainly one that was designed to cover everyone in the community, and at a reasonable cost. Without his education policy, there are hundreds and thousands of people who wouldn’t have gone through University without Menzies education policies. He turned the Commonwealth into the biggest funder of universities. In more recent years, governments have been trying to pull money back. A liberal will want to invest in the future of the country and the best investment is in the future of young Australians. And to compete they need the best education available.
Asylum Seekers
Menzies government signed the UN refugee convention in 1954 – another one of the liberal things which Menzies did.
In the 1970 “we had no option but to take as many (indochinese) people who wanted to come here. The policy was thoroughly successful. Whitlam has originally made a decision not to take refugees from Indochina but when my government overturned that very early in the peace he did not oppose it, so it was a bi-partisan policy. We gained a very large number of very good Australian citizens as a consequence. A lot of whom have a sense of thanks to Australia, many of whom want to put something back into the community at large and who are doing so.
Was Gough Whitlam a socialist?
He has aspirations for Australia, he had a sense of Australian identity, he had a sense of Australian independence, he would not willingly wanted to go along with America but he would have recognised the importance of the American Alliance. I don’t want to say it in an unkindly way but in some respects, especially in economic matters he was disorganised. One year the Federal Budget increased by over 40% the next year it increased by 22% and that year the economic writers said “this is a responsible budget.” No one would regard a 22% budget increase as in any way responsibe.
Did John Kerr do the right thing and did he do it in the right way?
He did the right thing. He was in the very unfortunate position of being condemned or going to be condemned for doing the right thing or the wrong thing. There are many myths about 1975. John Kerr didn’t have fully frank and open discussions with Gough Whitlam because he would be sacked and a puppet would be put in his place and that Australia would be very much at risk. I think he had an obligation to speak openly to the Prime Minister and point out the dangers as he saw them. If John Kerr was right and he was sacked that would have immediately brought Her Majesty into the brawl because the monarchists would have said that the Queen should have been a backstop and therefore not remove John Kerr from the office. But ever since the appointment of Isaac Isaacs as Governor General the Monarch has accepted that the Monarch has no option but to accept the recommendation of her Australian Prime Minister. But the Queen would have been brought into the brawl by Monarchists who believed that she should have been a backstop. John Kerr knew this, and one thing for which he has not got credit is that he was determined to keep Her Majesty out of the brawl. He did that absolutely, the Palace was kept informed, but never once was the Palace asked for advice
Appartheid
In terms of just basic justice I couldn’t stomach a situation where a very small number of whites in South Africa wanted to keep total dominance over an overwhelming majority of black Africans.
Climate Change
For the first time the human race in two different areas has the capacity to destroy, not only the human race but the planet. I all of the history of people on this planet, human kind has not had that power before. Today we have it wrong decisions on climate change and we can do it wrong decisions in relation to nuclear weapons and we can do it through a nuclear contest. Other civilisations have destroyed themselves from internal decay. I hope Australia is going to play a constructive role in making sure that today’s people of the world make the right decisions, especially about nuclear weapons because I thing that danger is probably more urgent than the other.
Border protection
Opposition plays politics with border protection.
The government has got a two headed policy, claiming to be more compassionate than Howard was and to an extent they are but on the other head of their policy they’re saying “we’re just as tough as Howard was”. They can’t have it both ways.
The opposition saying “You’re lost control of the borders" is arrant, absolute, bloody nonsense. (They) claim that 4 or 5 thousand people a year represent a threat to Australia. It’s not so. What we desperately need in this area is a government and an opposition that will develop a unified, sensible, compassionate, firm if you like policy, but one which they then take outside the realm of politics, because playing politics with this issue is playing politics with people’s lives, playing politics with people very often fleeing the most terrible tyranny or distress, and that’s the most unseemly thing we could do and it is something which is noticed right around the world and which just makes people wonder have we really put Tampa behind us and more extreme people will ask have we really put the white Australia policy behind us.
I almost feel like going to South Africa or Zimbabwe organise a boat load of white farmers, and I’d sail them into Fremantle harbour and that would expose the policy for what it is in one blow.
I played the role of Malcolm Fraser.
In my research for this role is discovered an inteview of Malcolm Fraser by his biographer, Margaret Simmons, which can be found here. The fact that I can now feel sympathy and interest in Fraser (who I hated for most of the 1970s) is a sign of how far the the right Australian politics has strayed in the last 30 years.
Here are my notes from the intervies - most of which are verbatim.
What is a Liberal?
Somebody:
• who has respect for other people no matter who or what that other person is.
• who believes in a fair go.
• who wants to maximise freedom for individual people so long as that freedom doesn’t trample on the rights and freedoms of other people in society
A government that will not seek to maximise actions but will seek to maximise opportunity for individuals to follow their own path but also a government that recognises that there are some things which governments just have to do which individuals can’t do for themselves. To establish a fair market place, to hold the ring to see that the world is fair and that people are treated justly, that the rule of law and due process are followed.
Sometimes I think in more recent times when people have said “market deregulation, self-regulation, corporations can do anything, banks can do anything” well it was that attitude that led to the crash of a year or so ago. Not so much in Australia where we behaved more sensibly, but certainly in a number of European countries and the United States. So while a liberal will want to maximise freedom for individuals there are obviously limits to that freedom because you start to jeopardise the future of all of us. A government that above all respects the rule of law and that’s something we haven’t had in recent times”
Where do we find the liberals today in politics?
Well I don’t know many. Petro Georgio is a liberal …
Children in detention and terrorism legislation is illiberal
Children in detention is a classic example of what a liberal ought not to do, indeed what any politician ought not to do, but the Labor Party didn’t seem to mind all that much, it supported the Howard government in totally illiberal anti terrorist legislation which could result in anyone of you being arrested as you leave this hall and you won’t know why you have been arrested and you can’t tell anyone, you just disappear, that’s not fantasy its in the law. And they only have to believe that you have observed something that might help them in their anti-terrorist enquiries. They don’t have to believe that you are guilty of anything, they know you are innocent, but they still have the power to detain you secretly, and if you talk about it afterward you go to jail for five years. If a journalist writes about it the journalist can go to jail for five years. I think such laws really promote the cause of terrorism, I don’t think they help in the fight against terrorism. But Labor and Liberal parties supported that sort of law. Well that’s not a liberal law in my book anyone who voted for it is not a liberal.
Is Malcolm Turnbull a liberal?
I think he is, yes. I think his attitude about people . I’m not sure when he was leader that he was able to define this adequately. I think he should have. One of the reasons why I think he was beaten. Those who opposed Turnbull wanted to get rid of him because he is a liberal, and the liberals turned tail and ran.
Is Tony Abbot a liberal?
Well he is the leader of the Liberal Party. He is proud of the word Conservative, he describes the party as conservative. People want to pick up Robert Menzies mantle and think that they are under his umbrella, but Menzies quite deliberately rejected the name conservative. If he would have been called a Conservative he would have taken that as an insult. As indeed I would have. He wanted a liberal party, which was liberal in philosophic terms, forward looking, progressive, willing to make experiments, willing to create opportunity. The Liberal party is very good at denigrating people who should be its heroes. Later Liberal party leaders distanced themselves from Menzies. When you look at Menzies education policy, his health policy, arguably the best health scheme that we have ever had certainly one that was designed to cover everyone in the community, and at a reasonable cost. Without his education policy, there are hundreds and thousands of people who wouldn’t have gone through University without Menzies education policies. He turned the Commonwealth into the biggest funder of universities. In more recent years, governments have been trying to pull money back. A liberal will want to invest in the future of the country and the best investment is in the future of young Australians. And to compete they need the best education available.
Asylum Seekers
Menzies government signed the UN refugee convention in 1954 – another one of the liberal things which Menzies did.
In the 1970 “we had no option but to take as many (indochinese) people who wanted to come here. The policy was thoroughly successful. Whitlam has originally made a decision not to take refugees from Indochina but when my government overturned that very early in the peace he did not oppose it, so it was a bi-partisan policy. We gained a very large number of very good Australian citizens as a consequence. A lot of whom have a sense of thanks to Australia, many of whom want to put something back into the community at large and who are doing so.
Was Gough Whitlam a socialist?
He has aspirations for Australia, he had a sense of Australian identity, he had a sense of Australian independence, he would not willingly wanted to go along with America but he would have recognised the importance of the American Alliance. I don’t want to say it in an unkindly way but in some respects, especially in economic matters he was disorganised. One year the Federal Budget increased by over 40% the next year it increased by 22% and that year the economic writers said “this is a responsible budget.” No one would regard a 22% budget increase as in any way responsibe.
Did John Kerr do the right thing and did he do it in the right way?
He did the right thing. He was in the very unfortunate position of being condemned or going to be condemned for doing the right thing or the wrong thing. There are many myths about 1975. John Kerr didn’t have fully frank and open discussions with Gough Whitlam because he would be sacked and a puppet would be put in his place and that Australia would be very much at risk. I think he had an obligation to speak openly to the Prime Minister and point out the dangers as he saw them. If John Kerr was right and he was sacked that would have immediately brought Her Majesty into the brawl because the monarchists would have said that the Queen should have been a backstop and therefore not remove John Kerr from the office. But ever since the appointment of Isaac Isaacs as Governor General the Monarch has accepted that the Monarch has no option but to accept the recommendation of her Australian Prime Minister. But the Queen would have been brought into the brawl by Monarchists who believed that she should have been a backstop. John Kerr knew this, and one thing for which he has not got credit is that he was determined to keep Her Majesty out of the brawl. He did that absolutely, the Palace was kept informed, but never once was the Palace asked for advice
Appartheid
In terms of just basic justice I couldn’t stomach a situation where a very small number of whites in South Africa wanted to keep total dominance over an overwhelming majority of black Africans.
Climate Change
For the first time the human race in two different areas has the capacity to destroy, not only the human race but the planet. I all of the history of people on this planet, human kind has not had that power before. Today we have it wrong decisions on climate change and we can do it wrong decisions in relation to nuclear weapons and we can do it through a nuclear contest. Other civilisations have destroyed themselves from internal decay. I hope Australia is going to play a constructive role in making sure that today’s people of the world make the right decisions, especially about nuclear weapons because I thing that danger is probably more urgent than the other.
Border protection
Opposition plays politics with border protection.
The government has got a two headed policy, claiming to be more compassionate than Howard was and to an extent they are but on the other head of their policy they’re saying “we’re just as tough as Howard was”. They can’t have it both ways.
The opposition saying “You’re lost control of the borders" is arrant, absolute, bloody nonsense. (They) claim that 4 or 5 thousand people a year represent a threat to Australia. It’s not so. What we desperately need in this area is a government and an opposition that will develop a unified, sensible, compassionate, firm if you like policy, but one which they then take outside the realm of politics, because playing politics with this issue is playing politics with people’s lives, playing politics with people very often fleeing the most terrible tyranny or distress, and that’s the most unseemly thing we could do and it is something which is noticed right around the world and which just makes people wonder have we really put Tampa behind us and more extreme people will ask have we really put the white Australia policy behind us.
I almost feel like going to South Africa or Zimbabwe organise a boat load of white farmers, and I’d sail them into Fremantle harbour and that would expose the policy for what it is in one blow.
Friday, July 30, 2010
The Global Financial Crisis
In the second week of the Our World in Crisis? course, we investigated the Global Financial Crisis. Here is my contribution:
Introduction
Poor regulation of financial markets played a role in the development of the Global Financial Crisis, particularly in the investment decisions that were taken, but there were a range of other issues relating to investment decisions and the development of excessive liquidity that led to the market failure.
Excessive Liquidity
As Paul Krigman has noted, in the years before the global financial crisis the “ world [was] awash in cheap money, looking for somewhere to go. Most of that money went to the United States …” (Source here)
There are three main explanations for this huge amount of money in the US economy.
1. Excessively low interest rates
After the terrorist attacks on September 2001, the Federal Reserve, let by Allan Greenspan reduced interest rates fairly rapidly to historically low level of 1%. These low rates led to a housing bubble.
2. The increase in inequality in the US
Income inequality has been increasing in the US for the last thirty years. The incomes of the very wealthy have increased significantly while the wealth of the Middle and Working Classes has stagnated.
“Such enormous wealth could not be used for consumption only. There is a limit to the number of Dom Pérignons and Armani suits one can drink or wear. … So, a huge pool of available financial capital—the product of increased income inequality—went in search of profitable opportunities into which to invest.” (Source here)
3. The imbalance between deficit countries and surplus countries
Some countries manage to run a trade surplus. The main examples of surplus countries are China (and a few other East Asian countries) and Germany. Many countries operate a trade deficit. The US, UK and some European countries are examples of deficit countries.
The problems of this imbalance were recognised before the financial crisis became obvious. The Chairman of the US Federal Reserve, Ben Bernanke, described it as “the Global Savings Glut” in 2005. (Source here)
Paul Keating traces this issue back to the Asian Financial Crisis of the late 1997-8. (Source here) The IMF stepped in to try to stabilise the currencies of some South-East Asian countries. According to Keating, the Chinese Government decided that it would not be subject to such heavy handed intervention, and set about to “build its own IMF”, by establishing large foreign currency reserves.
Investing the Savings Glut
The huge amount of money generated by the three processes described above needed to be invested somewhere. Usually such funding flows would travel from the developed countries to the developing ones, but in this instance the flow was in the other direction – from the developing countries to the developed ones. Effectively poorer countries were financing the lifestyles of the richer countries.
One reason for this unusual state of affairs was the increasing inequality in the US and other western countries discussed by Milanovic. Middle class incomes had stagnated. According to Milanovic: “A way to make it seem that the middle class was earning more than it did was to increase its purchasing power through broader and more accessible credit. People began to live by accumulating ever rising debts on their credit cards, taking on more car debts or higher mortgages.” (Source here)
New investment products, such as collateralized debt obligations (CDOs), made this situation more unstable. CDOs are investments that consist of a group of assets (for example, mortgages) that are bundled together into one product. The level of risk of the different underlying assets varied, and made it difficult to determine the overall value of the product. This type of investment was generally sold by the originating bank or financial institution to another institution, which “lessened the incentive to of banks to screen borrowers carefully. This opens the credit-markets doors to poor quality borrowers. “ (Source here) This led to many NINJA loans – No Income, No Jobs, No Assets.
Wall St. bankers were involved in such risky behaviour because there was no incentive to reduce risk and every incentive to increase it. Their rewards were short term, and they could receive their bonuses and stock options, move on and when the system collapsed after they had left it wasn’t their fault. This led to “rational / irrationality” according to John Cassidy of the New Yorker magazine (Source here) . It was rational for the Wall St. bankers to do things that turned out to be irrational. As “Chuck” Prince, CEO of Citibank, said “When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.” (Source here)
Poor regulation was a factor in the bad investment decisions. As John Mack, Chairman of Morgan Stanley has stated:
(Source here)
The lack of effective government regulation of the financial system (ie of a “systemic risk regulator” was an important element in the irrational investment decisions taken that led to the financial crisis, but there were a range of other reasons for the development of excessive liquidity in the financial system. It is unlikely that surplus / deficit imbalance in the world financial system will be solved by regulation. A more likely solution will be found by negotiation in international forums such as the G 20.
Introduction
Poor regulation of financial markets played a role in the development of the Global Financial Crisis, particularly in the investment decisions that were taken, but there were a range of other issues relating to investment decisions and the development of excessive liquidity that led to the market failure.
Excessive Liquidity
As Paul Krigman has noted, in the years before the global financial crisis the “ world [was] awash in cheap money, looking for somewhere to go. Most of that money went to the United States …” (Source here)
There are three main explanations for this huge amount of money in the US economy.
1. Excessively low interest rates
After the terrorist attacks on September 2001, the Federal Reserve, let by Allan Greenspan reduced interest rates fairly rapidly to historically low level of 1%. These low rates led to a housing bubble.
2. The increase in inequality in the US
Income inequality has been increasing in the US for the last thirty years. The incomes of the very wealthy have increased significantly while the wealth of the Middle and Working Classes has stagnated.
“Such enormous wealth could not be used for consumption only. There is a limit to the number of Dom Pérignons and Armani suits one can drink or wear. … So, a huge pool of available financial capital—the product of increased income inequality—went in search of profitable opportunities into which to invest.” (Source here)
3. The imbalance between deficit countries and surplus countries
Some countries manage to run a trade surplus. The main examples of surplus countries are China (and a few other East Asian countries) and Germany. Many countries operate a trade deficit. The US, UK and some European countries are examples of deficit countries.
The problems of this imbalance were recognised before the financial crisis became obvious. The Chairman of the US Federal Reserve, Ben Bernanke, described it as “the Global Savings Glut” in 2005. (Source here)
Paul Keating traces this issue back to the Asian Financial Crisis of the late 1997-8. (Source here) The IMF stepped in to try to stabilise the currencies of some South-East Asian countries. According to Keating, the Chinese Government decided that it would not be subject to such heavy handed intervention, and set about to “build its own IMF”, by establishing large foreign currency reserves.
Investing the Savings Glut
The huge amount of money generated by the three processes described above needed to be invested somewhere. Usually such funding flows would travel from the developed countries to the developing ones, but in this instance the flow was in the other direction – from the developing countries to the developed ones. Effectively poorer countries were financing the lifestyles of the richer countries.
One reason for this unusual state of affairs was the increasing inequality in the US and other western countries discussed by Milanovic. Middle class incomes had stagnated. According to Milanovic: “A way to make it seem that the middle class was earning more than it did was to increase its purchasing power through broader and more accessible credit. People began to live by accumulating ever rising debts on their credit cards, taking on more car debts or higher mortgages.” (Source here)
New investment products, such as collateralized debt obligations (CDOs), made this situation more unstable. CDOs are investments that consist of a group of assets (for example, mortgages) that are bundled together into one product. The level of risk of the different underlying assets varied, and made it difficult to determine the overall value of the product. This type of investment was generally sold by the originating bank or financial institution to another institution, which “lessened the incentive to of banks to screen borrowers carefully. This opens the credit-markets doors to poor quality borrowers. “ (Source here) This led to many NINJA loans – No Income, No Jobs, No Assets.
Wall St. bankers were involved in such risky behaviour because there was no incentive to reduce risk and every incentive to increase it. Their rewards were short term, and they could receive their bonuses and stock options, move on and when the system collapsed after they had left it wasn’t their fault. This led to “rational / irrationality” according to John Cassidy of the New Yorker magazine (Source here) . It was rational for the Wall St. bankers to do things that turned out to be irrational. As “Chuck” Prince, CEO of Citibank, said “When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.” (Source here)
Poor regulation was a factor in the bad investment decisions. As John Mack, Chairman of Morgan Stanley has stated:
The financial crisis laid bare failures of risk management at individual firms across the industry and around the globe. But, more significantly from a policy perspective, it made clear that regulators simply didn’t have the tools or the authority to protect the stability of the financial system as a whole. That’s why we need a systemic risk regulator with the ability and responsibility to ensure that excessive risk-taking never again jeopardizes the entire financial system.
(Source here)
The lack of effective government regulation of the financial system (ie of a “systemic risk regulator” was an important element in the irrational investment decisions taken that led to the financial crisis, but there were a range of other reasons for the development of excessive liquidity in the financial system. It is unlikely that surplus / deficit imbalance in the world financial system will be solved by regulation. A more likely solution will be found by negotiation in international forums such as the G 20.
Thursday, July 29, 2010
My Summary of Copenhagen Conference
In the third week of the Our World in Crisis? course we discussed Climate Change with special reference to the Copenhagen conference. Here are the notes that I prepared on Copenhagen.
The major outcome at Copenhagen was the Copenhagen Accord. The text of the accord can be found at this post.
1. What were the key issues under negotiation in Copenhagen?
• Stating importance of climate change
• Setting a long term temperature target
• Indicating methods of reaching target
• Considered how the responsibilities of developed and developing countries would differ
• Considered the status of the Kyoto Protocol
• Deadlines for country statements of mitigation targets
• Funding of developing countries to assist them in mitigation planning and processes
2. What was the outcome of the negotiations?
The meeting:
• Made strong statements about the reality of climate change
“climate change is one of the greatest challenges of our time” (Accord point 1)
• Set a temperature target
-- “To prevent dangerous anthropogenic interference with the climate system, recognizes "the scientific view that the increase in global temperature should be below 2 degrees Celsius”
-- Mentioned the possibility of revising the long term goal to 1.5 degrees Celsius (Accord point 12.)
-- Note that the meeting (unfortunately) did not set a parts per million of CO2 target
• Indicated that temperature target would be achieved by cutting CO2 emissions
-- “We agree that deep cuts in global emissions are required according to science, and as documented by the IPCC Fourth Assessment Report with a view to reduce global emissions so as to hold the increase in global temperature below 2 degrees Celsius” (Accord point 2)
• Indicated methods to reduce emissions
-- No direct reference to cap and trade emissions trading schemes but possibly an indirect reference: “We decide to pursue various approaches, including opportunities to use markets, to enhance the cost-effectiveness of, and to promote mitigation actions” (Accord point 7)
-- “We recognize the crucial role of reducing emission from deforestation and forest degradation and the need to enhance removals of greenhouse gas emission by forests” (REDD+) (Accord point 6)
-- ”Developing countries, especially those with low emitting economies should be provided incentives to continue to develop on a low emission pathway.” (Accord point 7)
• Indicated that as responsibility and capability varied between countries then mitigation efforts required will vary between different countries
-- Developed countries (Annex 1 countries) commit to reducing emissions by committing “ to implement individually or jointly the quantified economy wide emissions targets for 2020” (Accord point 4)
-- Developed countries that have signed the Kyoto Protocol “further strengthen the emission reductions initiated by the Kyoto Protocol. (ASccord point 4)
-- Developing countries produce plans to slow emission growth (Accord point 5)
-- The poorest countries (Least Developed countries and Small Island Developing States) participate voluntarily (Accord point 5)
• Indicated that Kyoto Protocol continue to operate as shown in previous dot point
• Gave countries a deadline (31 January 2010) for submitting CO2 mitigation plans
-- 138 countries, including the 27-member EU, are likely to or have engaged with the accord, representing 86.76% of global emissions1 (Accord point 5)
-- 8 countries will not engage with the accord, representing 2.09% of global emissions (http://www.usclimatenetwork.org/policy/copenhagen-accord-commitments)
• Agreed that countries report their mitigation efforts every two years to the U.N. climate change secretariat (accord point 5)
• Developing countries to be assisted in the development of mitigation by considerable funding from developed countries (Accord point 8)
-- “The collective commitment by developed countries is to provide new and additional resources … approaching USD 30 billion for the period 2010 – 2012”
-- “developed countries commit to a goal of mobilizing jointly USD 100 billion dollars a year by 2020 to address the needs of developing countries” (Accord point 8)
• That a Copenhagen Green Climate Fund be established to help fund the climate mitigation efforts of developing countries. (Accord point 10)
• Established a technology mechanism “to accelerate technology development” (Accord point 11)
• Assessment of the implementation of this accord to be completed by 2015. (Accord point 12)
3. Who were the key stakeholders in the negotiations?
192 countries were involved. Most countries were part of larger groupings such as:
G77 + China – the developing countries, though this group was quite divided with Alliance of Small Island States (AOSIS) and Least Developed Countries (LDCs) taking a much tougher line than others especially China, India and Brazil.
European Union – the countries of the EU
Umbrella Group - the Group is usually made up of Australia, Canada, Iceland, Japan, New Zealand, Norway, the Russian Federation, Ukraine and the US.
There were many Non-governmental Organisations (NGOs), companies and environmental groups in attendance attempting to influence the result.
4. What were the specific obstacles to a more substantial agreement?
COP 15 specific issues.
According to Tim Flannery “it was a big ramshackle festival.”
(source : "After Copenhagen in conversation with Robert Mann" April 2010)
Flannery also noted that:
Danish government was poorly organised. The person who had put it in place, the Danish PM, had gone off to chair NATO and was replaced by Lars Rasmussen who is a domestic politician, inexperienced on the international stage. He chaired the meeting badly.
The way the major elements of the Accord were determined is illustrative of the poor organisation of the meeting:
There was a private meeting of the BASIC countries – China, India, Brazil, and South Africa which Obama “gatecrashed” and it was at that meeting that the fundamental elements of the “Copenhagen Accord” were determined. According to Flannery, whatever success there was at Copenhagen is down to Obama.
G77 + China – the developing nations – has a rotating chair currently held by Sudan. A week before the Sudanese president was expected to come to the meeting Amnesty International called for his arrest for crimes against humanity. Sudanese president did not turn up and his deputy was out to wreck the meeting from the beginning. In a democratic poorly chaired meeting it is easy to wreck things.
Todd Stern the American negotiator managed to annoy the Chinese prime minister, Wen Jiabao by talking about “transparency”. Some members of the G77 attacked China directly for not agreeing to 1.5 degrees warming. After that Wen did not effectively participate in the negotiations. China had expected to have been praised for their work on climate change were attacked which dismayed them.
Denmark is a small country without much clout in the world so not a good choice to hold the meeting.
An unrealistic expectation that a binding treaty would be agreed to at this meeting had developed, making the end result seem very disappointing.
General issues
The UNFCC process is quite unwieldy, for instance, requiring all members to agree in order for a document to be official UNCCC policy.
Progress through the COP process is incremental, for example, the REDD (Reducing Emissions for Deforestation in Developing Countries) process was started at COP 11 in 2005. Gradual improvements have been negotiated over the intervening years, and the current proposal is significantly better than that previously suggested, but more work is required before a final arrangement is developed.
Reconciling the differences of 192 countries with a wide variety of circumstances and histories is an extremely difficult process.
An international treaty on Climate Change is very complex. It will be very difficult to develop such a treaty – but incremental progress is occurring.
5. What was Australia’s position in Copenhagen?
Australia chaired the Umbrella Group and it is most likely that Australia’s aims were commensurate with the opening statement of the Umbrella Group, given by Louise Hand, Australian Ambassador for Climate Change
In summary:
• Recognising the science
• Two degrees should be the upper limit
• A published emissions target which will substantially reduce our emissions by 2020
• Financing to assist developing countries in mitigation efforts
• Actions to be transparent, reported and reviewed
Since the conference the Australian Government has reaffirmed that it will commit to 5% reduction on 2000 levels by 2020 in the absence of an international treaty and will agree to a 25% cut if a strong treaty is negotiated.
Full Umbrella Group statement is below:
Chair,
This morning I have the privilege to speak on behalf of the Umbrella Group, namely Canada, Iceland, Japan, Kazakhstan, New Zealand, Norway, Russian Federation, Ukraine, United States and Australia.
Chair,
We the Umbrella Group want a success at Copenhagen. We want a resounding success. We are committed to bold action, we are committed to a strong outcome, and we are committed to maximizing credibility and trust among the citizens of the world. Our vision is simple: we recognise the scientific view that the increase in global average temperature above pre-industrial levels ought not exceed 2 degrees Celsius. We want a global outcome that puts the world on a path to a 50 per cent reduction in emissions by 2050 and peaking emissions as soon as possible. We want all countries to act according to their national ability.
Chair,
The Umbrella Group countries are ready to act to make this vision a reality. First, on mitigation, as part of a post-2012 outcome, every Umbrella Group member is prepared to put on the table an emissions reduction target that will substantially reduce their emissions by 2020. We are also willing to subject these actions to robust measurement, reporting, review, and verification.
Second, in the context of a post-2012 outcome, we are resolved to support quick, substantial, and high-impact financing to assist the most vulnerable developing countries, in particular the least developed countries and vulnerable small island developing states.
The Umbrella Group also supports a substantial increase in financial and investment flows for climate change as part of the final post-2012 outcome, both from public and private funding sources, including the carbon markets. There is an emerging consensus that a core element of the Copenhagen accord should be to mobilize $10 billion a year by 2012 to support adaptation and mitigation in developing countries, particularly the most vulnerable and least developed countries that could be destabilized by the impacts of climate change.
Chair,
We welcome the announcements by many countries, developed and developing, regarding the emission reduction commitments and actions they are preparing to take. It is now time for countries to stand behind their announcements, internationalize their offerings, and craft a comprehensive outcome that sets the world on the path to a low-carbon future. If this is to be environmentally effective, the actions of countries should be transparent, reported, and reviewed internationally. Then we will have an enduring outcome, and the world can assess its progress credibly. Copenhagen can not be a business-as-usual outcome.
Chair,
At Copenhagen, we must agree to a global vision for climate action up to and after 2012. This vision should cover all aspects of the road map that we set in Bali two years ago. Mitigation, adaptation, finance and technology cooperation are all necessary parts of a successful post-2012 outcome. Our collective task for Copenhagen is to forge a political vision that will guide the world’s actions into the future, and to cement this vision into a new legally binding treaty as soon as possible. This vision would be the Copenhagen accord.
Chair,
All governments have a responsibility to combat the threat of climate change. The countries of the Umbrella Group stand ready to play our full and fair part in a Copenhagen accord.
We thank the Danish Government for the great effort it is making to host this conference. But most of all, we welcome and applaud the efforts made by the Danish Prime Minister and his team to lead us, in a bold and courageous way, toward a success at Copenhagen.
Opening statement by Louise Hand, Australian Ambassador for Climate Change and Chair of the Umbrella Group, COP15 on Monday 7 December
The major outcome at Copenhagen was the Copenhagen Accord. The text of the accord can be found at this post.
1. What were the key issues under negotiation in Copenhagen?
• Stating importance of climate change
• Setting a long term temperature target
• Indicating methods of reaching target
• Considered how the responsibilities of developed and developing countries would differ
• Considered the status of the Kyoto Protocol
• Deadlines for country statements of mitigation targets
• Funding of developing countries to assist them in mitigation planning and processes
2. What was the outcome of the negotiations?
The meeting:
• Made strong statements about the reality of climate change
“climate change is one of the greatest challenges of our time” (Accord point 1)
• Set a temperature target
-- “To prevent dangerous anthropogenic interference with the climate system, recognizes "the scientific view that the increase in global temperature should be below 2 degrees Celsius”
-- Mentioned the possibility of revising the long term goal to 1.5 degrees Celsius (Accord point 12.)
-- Note that the meeting (unfortunately) did not set a parts per million of CO2 target
• Indicated that temperature target would be achieved by cutting CO2 emissions
-- “We agree that deep cuts in global emissions are required according to science, and as documented by the IPCC Fourth Assessment Report with a view to reduce global emissions so as to hold the increase in global temperature below 2 degrees Celsius” (Accord point 2)
• Indicated methods to reduce emissions
-- No direct reference to cap and trade emissions trading schemes but possibly an indirect reference: “We decide to pursue various approaches, including opportunities to use markets, to enhance the cost-effectiveness of, and to promote mitigation actions” (Accord point 7)
-- “We recognize the crucial role of reducing emission from deforestation and forest degradation and the need to enhance removals of greenhouse gas emission by forests” (REDD+) (Accord point 6)
-- ”Developing countries, especially those with low emitting economies should be provided incentives to continue to develop on a low emission pathway.” (Accord point 7)
• Indicated that as responsibility and capability varied between countries then mitigation efforts required will vary between different countries
-- Developed countries (Annex 1 countries) commit to reducing emissions by committing “ to implement individually or jointly the quantified economy wide emissions targets for 2020” (Accord point 4)
-- Developed countries that have signed the Kyoto Protocol “further strengthen the emission reductions initiated by the Kyoto Protocol. (ASccord point 4)
-- Developing countries produce plans to slow emission growth (Accord point 5)
-- The poorest countries (Least Developed countries and Small Island Developing States) participate voluntarily (Accord point 5)
• Indicated that Kyoto Protocol continue to operate as shown in previous dot point
• Gave countries a deadline (31 January 2010) for submitting CO2 mitigation plans
-- 138 countries, including the 27-member EU, are likely to or have engaged with the accord, representing 86.76% of global emissions1 (Accord point 5)
-- 8 countries will not engage with the accord, representing 2.09% of global emissions (http://www.usclimatenetwork.org/policy/copenhagen-accord-commitments)
• Agreed that countries report their mitigation efforts every two years to the U.N. climate change secretariat (accord point 5)
• Developing countries to be assisted in the development of mitigation by considerable funding from developed countries (Accord point 8)
-- “The collective commitment by developed countries is to provide new and additional resources … approaching USD 30 billion for the period 2010 – 2012”
-- “developed countries commit to a goal of mobilizing jointly USD 100 billion dollars a year by 2020 to address the needs of developing countries” (Accord point 8)
• That a Copenhagen Green Climate Fund be established to help fund the climate mitigation efforts of developing countries. (Accord point 10)
• Established a technology mechanism “to accelerate technology development” (Accord point 11)
• Assessment of the implementation of this accord to be completed by 2015. (Accord point 12)
3. Who were the key stakeholders in the negotiations?
192 countries were involved. Most countries were part of larger groupings such as:
G77 + China – the developing countries, though this group was quite divided with Alliance of Small Island States (AOSIS) and Least Developed Countries (LDCs) taking a much tougher line than others especially China, India and Brazil.
European Union – the countries of the EU
Umbrella Group - the Group is usually made up of Australia, Canada, Iceland, Japan, New Zealand, Norway, the Russian Federation, Ukraine and the US.
There were many Non-governmental Organisations (NGOs), companies and environmental groups in attendance attempting to influence the result.
4. What were the specific obstacles to a more substantial agreement?
COP 15 specific issues.
According to Tim Flannery “it was a big ramshackle festival.”
(source : "After Copenhagen in conversation with Robert Mann" April 2010)
Flannery also noted that:
Danish government was poorly organised. The person who had put it in place, the Danish PM, had gone off to chair NATO and was replaced by Lars Rasmussen who is a domestic politician, inexperienced on the international stage. He chaired the meeting badly.
The way the major elements of the Accord were determined is illustrative of the poor organisation of the meeting:
There was a private meeting of the BASIC countries – China, India, Brazil, and South Africa which Obama “gatecrashed” and it was at that meeting that the fundamental elements of the “Copenhagen Accord” were determined. According to Flannery, whatever success there was at Copenhagen is down to Obama.
G77 + China – the developing nations – has a rotating chair currently held by Sudan. A week before the Sudanese president was expected to come to the meeting Amnesty International called for his arrest for crimes against humanity. Sudanese president did not turn up and his deputy was out to wreck the meeting from the beginning. In a democratic poorly chaired meeting it is easy to wreck things.
Todd Stern the American negotiator managed to annoy the Chinese prime minister, Wen Jiabao by talking about “transparency”. Some members of the G77 attacked China directly for not agreeing to 1.5 degrees warming. After that Wen did not effectively participate in the negotiations. China had expected to have been praised for their work on climate change were attacked which dismayed them.
Denmark is a small country without much clout in the world so not a good choice to hold the meeting.
An unrealistic expectation that a binding treaty would be agreed to at this meeting had developed, making the end result seem very disappointing.
General issues
The UNFCC process is quite unwieldy, for instance, requiring all members to agree in order for a document to be official UNCCC policy.
Progress through the COP process is incremental, for example, the REDD (Reducing Emissions for Deforestation in Developing Countries) process was started at COP 11 in 2005. Gradual improvements have been negotiated over the intervening years, and the current proposal is significantly better than that previously suggested, but more work is required before a final arrangement is developed.
Reconciling the differences of 192 countries with a wide variety of circumstances and histories is an extremely difficult process.
An international treaty on Climate Change is very complex. It will be very difficult to develop such a treaty – but incremental progress is occurring.
5. What was Australia’s position in Copenhagen?
Australia chaired the Umbrella Group and it is most likely that Australia’s aims were commensurate with the opening statement of the Umbrella Group, given by Louise Hand, Australian Ambassador for Climate Change
In summary:
• Recognising the science
• Two degrees should be the upper limit
• A published emissions target which will substantially reduce our emissions by 2020
• Financing to assist developing countries in mitigation efforts
• Actions to be transparent, reported and reviewed
Since the conference the Australian Government has reaffirmed that it will commit to 5% reduction on 2000 levels by 2020 in the absence of an international treaty and will agree to a 25% cut if a strong treaty is negotiated.
Full Umbrella Group statement is below:
Chair,
This morning I have the privilege to speak on behalf of the Umbrella Group, namely Canada, Iceland, Japan, Kazakhstan, New Zealand, Norway, Russian Federation, Ukraine, United States and Australia.
Chair,
We the Umbrella Group want a success at Copenhagen. We want a resounding success. We are committed to bold action, we are committed to a strong outcome, and we are committed to maximizing credibility and trust among the citizens of the world. Our vision is simple: we recognise the scientific view that the increase in global average temperature above pre-industrial levels ought not exceed 2 degrees Celsius. We want a global outcome that puts the world on a path to a 50 per cent reduction in emissions by 2050 and peaking emissions as soon as possible. We want all countries to act according to their national ability.
Chair,
The Umbrella Group countries are ready to act to make this vision a reality. First, on mitigation, as part of a post-2012 outcome, every Umbrella Group member is prepared to put on the table an emissions reduction target that will substantially reduce their emissions by 2020. We are also willing to subject these actions to robust measurement, reporting, review, and verification.
Second, in the context of a post-2012 outcome, we are resolved to support quick, substantial, and high-impact financing to assist the most vulnerable developing countries, in particular the least developed countries and vulnerable small island developing states.
The Umbrella Group also supports a substantial increase in financial and investment flows for climate change as part of the final post-2012 outcome, both from public and private funding sources, including the carbon markets. There is an emerging consensus that a core element of the Copenhagen accord should be to mobilize $10 billion a year by 2012 to support adaptation and mitigation in developing countries, particularly the most vulnerable and least developed countries that could be destabilized by the impacts of climate change.
Chair,
We welcome the announcements by many countries, developed and developing, regarding the emission reduction commitments and actions they are preparing to take. It is now time for countries to stand behind their announcements, internationalize their offerings, and craft a comprehensive outcome that sets the world on the path to a low-carbon future. If this is to be environmentally effective, the actions of countries should be transparent, reported, and reviewed internationally. Then we will have an enduring outcome, and the world can assess its progress credibly. Copenhagen can not be a business-as-usual outcome.
Chair,
At Copenhagen, we must agree to a global vision for climate action up to and after 2012. This vision should cover all aspects of the road map that we set in Bali two years ago. Mitigation, adaptation, finance and technology cooperation are all necessary parts of a successful post-2012 outcome. Our collective task for Copenhagen is to forge a political vision that will guide the world’s actions into the future, and to cement this vision into a new legally binding treaty as soon as possible. This vision would be the Copenhagen accord.
Chair,
All governments have a responsibility to combat the threat of climate change. The countries of the Umbrella Group stand ready to play our full and fair part in a Copenhagen accord.
We thank the Danish Government for the great effort it is making to host this conference. But most of all, we welcome and applaud the efforts made by the Danish Prime Minister and his team to lead us, in a bold and courageous way, toward a success at Copenhagen.
Opening statement by Louise Hand, Australian Ambassador for Climate Change and Chair of the Umbrella Group, COP15 on Monday 7 December
Copenhagen Accord
The Heads of State, Heads of Government, Ministers, and other heads of delegation present at the United Nations Climate Change Conference 2009 in Copenhagen,
In pursuit of the ultimate objective of the Convention as stated in its Article 2,
Being guided by the principles and provisions of the Convention,
Noting the results of work done by the two Ad hoc Working Groups,
Endorsing decision x/CP.15 on the Ad hoc Working Group on Long-term Cooperative Action and decision x/CMP.5 that requests the Ad hoc Working Group on Further Commitments of Annex I Parties under the Kyoto Protocol to continue its work,
Have agreed on this Copenhagen Accord which is operational immediately.
1. We underline that climate change is one of the greatest challenges of our time. We emphasise our strong political will to urgently combat climate change in accordance with the principle of common but differentiated responsibilities and respective capabilities. To achieve the ultimate objective of the Convention to stabilize greenhouse gas concentration in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system, we shall, recognizing the scientific view that the increase in global temperature should be below 2 degrees Celsius, on the basis of equity and in the context of sustainable development, enhance our long-term cooperative action to combat climate change. We recognize the critical impacts of climate change and the potential impacts of response measures on countries particularly vulnerable to its adverse effects and stress the need to establish a comprehensive adaptation programme including international support.
2. We agree that deep cuts in global emissions are required according to science, and as documented by the IPCC Fourth Assessment Report with a view to reduce global emissions so as to hold the increase in global temperature below 2 degrees Celsius, and take action to meet this objective consistent with science and on the basis of equity. We should cooperate in achieving the peaking of global and national emissions as soon as possible, recognizing that the time frame for peaking will be longer in developing countries and bearing in mind that social and economic development and poverty eradication are the first and overriding priorities of developing countries and that a low-emission development strategy is indispensable to sustainable development.
3. Adaptation to the adverse effects of climate change and the potential impacts of response measures is a challenge faced by all countries. Enhanced action and international cooperation on adaptation is urgently required to ensure the implementation of the Convention by enabling and supporting the implementation of adaptation actions aimed at reducing vulnerability and building resilience in developing countries, especially in those that are particularly vulnerable, especially least developed countries, small island developing States and Africa. We agree that developed countries shall provide adequate, predictable and sustainable financial resources, technology and capacity-building to support the implementation of adaptation action in developing countries.
4. Annex I Parties commit to implement individually or jointly the quantified economy wide emissions targets for 2020, to be submitted in the format given in Appendix I by Annex I Parties to the secretariat by 31 January 2010 for compilation in an INF document. Annex I Parties that are Party to the Kyoto Protocol will thereby further strengthen the emissions reductions initiated by the Kyoto Protocol. Delivery of reductions and financing by developed countries will be measured, reported and verified in accordance with existing and any further guidelines adopted by the Conference of the Parties, and will ensure that accounting of such targets and finance is rigorous, robust and transparent.
5. Non-Annex I Parties to the Convention will implement mitigation actions, including those to be submitted to the secretariat by non-Annex I Parties in the format given in Appendix II by 31 January 2010, for compilation in an INF document, consistent with Article 4.1 and Article 4.7 and in the context of sustainable development. Least developed countries and small island developing States may undertake actions voluntarily and on the basis of support. Mitigation actions subsequently taken and envisaged by Non-Annex I Parties, including national inventory reports, shall be communicated through national communications consistent with Article 12.1(b) every two years on the basis of guidelines to be adopted by the Conference of the Parties. Those mitigation actions in national communications or otherwise communicated to the Secretariat will be added to the list in appendix II. Mitigation actions taken by Non-Annex I Parties will be subject to their domestic measurement, reporting and verification the result of which will be reported through their national communications every two years. Non-Annex I Parties will communicate information on the implementation of their actions through National Communications, with provisions for international consultations and analysis under clearly defined guidelines that will ensure that national sovereignty is respected. Nationally appropriate mitigation actions seeking international support will be recorded in a registry along with relevant technology, finance and capacity building support. Those actions supported will be added to the list in appendix II. These supported nationally appropriate mitigation actions will be subject to international measurement, reporting and verification in accordance with guidelines adopted by the Conference of the Parties.
6. We recognize the crucial role of reducing emission from deforestation and forest degradation and the need to enhance removals of greenhouse gas emission by forests and agree on the need to provide positive incentives to such actions through the immediate establishment of a mechanism including REDD-plus, to enable the mobilization of financial resources from developed countries.
7. We decide to pursue various approaches, including opportunities to use markets, to enhance the cost-effectiveness of, and to promote mitigation actions. Developing countries, especially those with low emitting economies should be provided incentives to continue to develop on a low emission pathway.
8. Scaled up, new and additional, predictable and adequate funding as well as improved access shall be provided to developing countries, in accordance with the relevant provisions of the Convention, to enable and support enhanced action on mitigation, including substantial finance to reduce emissions from deforestation and forest degradation (REDD-plus), adaptation, technology development and transfer and capacity-building, for enhanced implementation of the Convention. The collective commitment by developed countries is to provide new and additional resources, including forestry and investments through international institutions, approaching USD 30 billion for the period 2010 . 2012 with balanced allocation between adaptation and mitigation. Funding for adaptation will be prioritized for the most vulnerable developing countries, such as the least developed countries, small island developing States and Africa. In the context of meaningful mitigation actions and transparency on implementation, developed countries commit to a goal of mobilizing jointly USD 100 billion dollars a year by 2020 to address the needs of developing countries. This funding will come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources of finance. New multilateral funding for adaptation will be delivered through effective and efficient fund arrangements, with a governance structure providing for equal representation of developed and developing countries. A significant portion of such funding should flow through the Copenhagen Green Climate Fund.
9. To this end, a High Level Panel will be established under the guidance of and accountable to the Conference of the Parties to study the contribution of the potential sources of revenue, including alternative sources of finance, towards meeting this goal.
10. We decide that the Copenhagen Green Climate Fund shall be established as an operating entity of the financial mechanism of the Convention to support projects, programme, policies and other activities in developing countries related to mitigation including REDD-plus, adaptation, capacity building, technology development and transfer.
11. In order to enhance action on development and transfer of technology we decide to establish a Technology Mechanism to accelerate technology development and transfer in support of action on adaptation and mitigation that will be guided by a country-driven approach and be based on national circumstances and priorities.
12. We call for an assessment of the implementation of this Accord to be completed by 2015, including in light of the Convention.s ultimate objective. This would include consideration of strengthening the long-term goal referencing various matters presented by the science, including in relation to temperature rises of 1.5 degrees Celsius.
In pursuit of the ultimate objective of the Convention as stated in its Article 2,
Being guided by the principles and provisions of the Convention,
Noting the results of work done by the two Ad hoc Working Groups,
Endorsing decision x/CP.15 on the Ad hoc Working Group on Long-term Cooperative Action and decision x/CMP.5 that requests the Ad hoc Working Group on Further Commitments of Annex I Parties under the Kyoto Protocol to continue its work,
Have agreed on this Copenhagen Accord which is operational immediately.
1. We underline that climate change is one of the greatest challenges of our time. We emphasise our strong political will to urgently combat climate change in accordance with the principle of common but differentiated responsibilities and respective capabilities. To achieve the ultimate objective of the Convention to stabilize greenhouse gas concentration in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system, we shall, recognizing the scientific view that the increase in global temperature should be below 2 degrees Celsius, on the basis of equity and in the context of sustainable development, enhance our long-term cooperative action to combat climate change. We recognize the critical impacts of climate change and the potential impacts of response measures on countries particularly vulnerable to its adverse effects and stress the need to establish a comprehensive adaptation programme including international support.
2. We agree that deep cuts in global emissions are required according to science, and as documented by the IPCC Fourth Assessment Report with a view to reduce global emissions so as to hold the increase in global temperature below 2 degrees Celsius, and take action to meet this objective consistent with science and on the basis of equity. We should cooperate in achieving the peaking of global and national emissions as soon as possible, recognizing that the time frame for peaking will be longer in developing countries and bearing in mind that social and economic development and poverty eradication are the first and overriding priorities of developing countries and that a low-emission development strategy is indispensable to sustainable development.
3. Adaptation to the adverse effects of climate change and the potential impacts of response measures is a challenge faced by all countries. Enhanced action and international cooperation on adaptation is urgently required to ensure the implementation of the Convention by enabling and supporting the implementation of adaptation actions aimed at reducing vulnerability and building resilience in developing countries, especially in those that are particularly vulnerable, especially least developed countries, small island developing States and Africa. We agree that developed countries shall provide adequate, predictable and sustainable financial resources, technology and capacity-building to support the implementation of adaptation action in developing countries.
4. Annex I Parties commit to implement individually or jointly the quantified economy wide emissions targets for 2020, to be submitted in the format given in Appendix I by Annex I Parties to the secretariat by 31 January 2010 for compilation in an INF document. Annex I Parties that are Party to the Kyoto Protocol will thereby further strengthen the emissions reductions initiated by the Kyoto Protocol. Delivery of reductions and financing by developed countries will be measured, reported and verified in accordance with existing and any further guidelines adopted by the Conference of the Parties, and will ensure that accounting of such targets and finance is rigorous, robust and transparent.
5. Non-Annex I Parties to the Convention will implement mitigation actions, including those to be submitted to the secretariat by non-Annex I Parties in the format given in Appendix II by 31 January 2010, for compilation in an INF document, consistent with Article 4.1 and Article 4.7 and in the context of sustainable development. Least developed countries and small island developing States may undertake actions voluntarily and on the basis of support. Mitigation actions subsequently taken and envisaged by Non-Annex I Parties, including national inventory reports, shall be communicated through national communications consistent with Article 12.1(b) every two years on the basis of guidelines to be adopted by the Conference of the Parties. Those mitigation actions in national communications or otherwise communicated to the Secretariat will be added to the list in appendix II. Mitigation actions taken by Non-Annex I Parties will be subject to their domestic measurement, reporting and verification the result of which will be reported through their national communications every two years. Non-Annex I Parties will communicate information on the implementation of their actions through National Communications, with provisions for international consultations and analysis under clearly defined guidelines that will ensure that national sovereignty is respected. Nationally appropriate mitigation actions seeking international support will be recorded in a registry along with relevant technology, finance and capacity building support. Those actions supported will be added to the list in appendix II. These supported nationally appropriate mitigation actions will be subject to international measurement, reporting and verification in accordance with guidelines adopted by the Conference of the Parties.
6. We recognize the crucial role of reducing emission from deforestation and forest degradation and the need to enhance removals of greenhouse gas emission by forests and agree on the need to provide positive incentives to such actions through the immediate establishment of a mechanism including REDD-plus, to enable the mobilization of financial resources from developed countries.
7. We decide to pursue various approaches, including opportunities to use markets, to enhance the cost-effectiveness of, and to promote mitigation actions. Developing countries, especially those with low emitting economies should be provided incentives to continue to develop on a low emission pathway.
8. Scaled up, new and additional, predictable and adequate funding as well as improved access shall be provided to developing countries, in accordance with the relevant provisions of the Convention, to enable and support enhanced action on mitigation, including substantial finance to reduce emissions from deforestation and forest degradation (REDD-plus), adaptation, technology development and transfer and capacity-building, for enhanced implementation of the Convention. The collective commitment by developed countries is to provide new and additional resources, including forestry and investments through international institutions, approaching USD 30 billion for the period 2010 . 2012 with balanced allocation between adaptation and mitigation. Funding for adaptation will be prioritized for the most vulnerable developing countries, such as the least developed countries, small island developing States and Africa. In the context of meaningful mitigation actions and transparency on implementation, developed countries commit to a goal of mobilizing jointly USD 100 billion dollars a year by 2020 to address the needs of developing countries. This funding will come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources of finance. New multilateral funding for adaptation will be delivered through effective and efficient fund arrangements, with a governance structure providing for equal representation of developed and developing countries. A significant portion of such funding should flow through the Copenhagen Green Climate Fund.
9. To this end, a High Level Panel will be established under the guidance of and accountable to the Conference of the Parties to study the contribution of the potential sources of revenue, including alternative sources of finance, towards meeting this goal.
10. We decide that the Copenhagen Green Climate Fund shall be established as an operating entity of the financial mechanism of the Convention to support projects, programme, policies and other activities in developing countries related to mitigation including REDD-plus, adaptation, capacity building, technology development and transfer.
11. In order to enhance action on development and transfer of technology we decide to establish a Technology Mechanism to accelerate technology development and transfer in support of action on adaptation and mitigation that will be guided by a country-driven approach and be based on national circumstances and priorities.
12. We call for an assessment of the implementation of this Accord to be completed by 2015, including in light of the Convention.s ultimate objective. This would include consideration of strengthening the long-term goal referencing various matters presented by the science, including in relation to temperature rises of 1.5 degrees Celsius.
Saturday, July 17, 2010
Letter to the Editor
I am currently participating in a course called Our World in Crisis?. One of the assignments is to write a letter to a newspaper. My letter, was published today in The Age.
I have reproduced the letter below:
The Deep Horizon oil well may finally have been capped (Age 16/7/10). The leak is a disaster for the Gulf of Mexico states but also has important implications globally. The reason why BP drilled in such a difficult and dangerous place is that all of the easy to get at oil has been found. As we have known for more than forty years oil supply will peak some time. It seems that the “some time” has finally arrived as global oil production has remained flat for the last six years.
Many experts think, that as the global economy comes out of recession in the next year or so, oil demand will exceed supply (as happened in 2008) and the consequent sharp increase in oil prices will choke off economic growth. We are likely to face low economic growth into the foreseeable future. Peak Oil is having serious effects even before the oil supply starts declining!
What is amazing is that there is no discussion of this prospect from our political leaders. If world growth is likely to be anaemic then the rosy claims of the return to the black of Australia’s budget may be excessively optimistic.
Stephen Spencer, Tarneit
It was an interesting task, writing something vaguely comprehensible in just 200 words. The topic was peak oil and its potential dangers. I hooked the larger theme into two current issues - the Deep Horizon spill and the prospects of economic growth in Australia.
UPDATE 03/08/10:
After I wrote the letter and posted here, I found the following video which expresses in some more detail the conserns that I was expressing in the letter:
Richard Heinberg is the author of nine books including The Party’s Over: Oil, War and the Fate of Industrial Societies (2003), Powerdown: Options and Actions for a Post-Carbon World (2004), and Blackout: Coal, Climate, and the Last Energy Crisis (2009). He has authored scores of essays and articles,is featured in many documentaries, and has appeared on numerous television and radio programs. Heinbergis Senior Fellow-in-Residence at Post Carbon Institute.
The video, and many other resources can be found at this site.
I have reproduced the letter below:
The Deep Horizon oil well may finally have been capped (Age 16/7/10). The leak is a disaster for the Gulf of Mexico states but also has important implications globally. The reason why BP drilled in such a difficult and dangerous place is that all of the easy to get at oil has been found. As we have known for more than forty years oil supply will peak some time. It seems that the “some time” has finally arrived as global oil production has remained flat for the last six years.
Many experts think, that as the global economy comes out of recession in the next year or so, oil demand will exceed supply (as happened in 2008) and the consequent sharp increase in oil prices will choke off economic growth. We are likely to face low economic growth into the foreseeable future. Peak Oil is having serious effects even before the oil supply starts declining!
What is amazing is that there is no discussion of this prospect from our political leaders. If world growth is likely to be anaemic then the rosy claims of the return to the black of Australia’s budget may be excessively optimistic.
Stephen Spencer, Tarneit
It was an interesting task, writing something vaguely comprehensible in just 200 words. The topic was peak oil and its potential dangers. I hooked the larger theme into two current issues - the Deep Horizon spill and the prospects of economic growth in Australia.
UPDATE 03/08/10:
After I wrote the letter and posted here, I found the following video which expresses in some more detail the conserns that I was expressing in the letter:
Richard Heinberg is the author of nine books including The Party’s Over: Oil, War and the Fate of Industrial Societies (2003), Powerdown: Options and Actions for a Post-Carbon World (2004), and Blackout: Coal, Climate, and the Last Energy Crisis (2009). He has authored scores of essays and articles,is featured in many documentaries, and has appeared on numerous television and radio programs. Heinbergis Senior Fellow-in-Residence at Post Carbon Institute.
The video, and many other resources can be found at this site.
Sunday, June 27, 2010
Positive Effects of Globalisation
In the first week of the Our World in Crisis? course, each group held a debate on Globalisation. The topic was "Globalisation is a good thing". I chose the affirmative because I thought it would be a more difficult issue to argue.
The first task was to define Globalisation.
Definitions
(Source here)
A criticism of Globalisation is that it disadvantages developing countries. Although there is some truth to this it has also led to the spectacular economic development of some undeveloped countries particularly China, India and Brazil. China has become the workshop of the world and consequently many hundreds of millions of people have been lifted out of dire poverty to a modicum of prosperity.
On a personal note: I first travelled to China in the early 1980s and noticed that the main method of transport was the bicycle. During my 2009 visit I noticed that most of the bikes had been replaced by motor scooters and that there was a large fleet of modern cars on the road.
This Chinese development is assisting other areas of the World. China is giving African countries more aid for Infrastructure that the IMF and World Bank combined, according to Joseph Stiglitz, Nobel Prize Winning Economist.
As an American foreign policy analyst, Deborah Brautigam, noted:
This is an opportunity for African states to ride into the global economy on China's shirt tails rather than remain natural-resource suppliers to the world.
(Source here )
Although economic globalisation has had some detrimental effects they are far outweighed by its advantages.
The first task was to define Globalisation.
Definitions
Economic globalization refers to increasing economic interdependence of national economies across the world through a rapid increase in cross-border movement of goods, service, technology and capital. [1] It is the process of increasing economic integration between countries, leading to the emergence of a global marketplace or a single world market[2].
Or to put it another hopefully clearer way:
... the integration of national economies into the international economy, through the exchange of goods and services across national borders, the ownership of businesses and organisations in other countries, the movement of money internationally, the spread of modern technologies, particularly computer and communications products and the movement of people between countries.
Economic Globalisation Processes
A major element is the promotion of free trade. International free trade involves:
• elimination of tariffs; (ie a tax on imports) creation of free trade zones with small or no tariffs
• Reduced transportation costs, especially resulting from development of containerization for ocean shipping.
• Reduction or elimination of capital controls such as limitations on buying currency, taking currency from the country, taxing of monetary transactions
• Making intellectual property laws across the majority of countries similar
• International recognition of intellectual property restrictions (e.g. patents granted by China would be recognized in the United States
Arguments supporting Globalisation
The main advantages of Globalisation relate to free markets:
• It enhances the general economic welfare by allowing savings to be channelled to their most productive use.[17]
• By encouraging foreign direct investment it helps developing economies to benefit from foreign expertise.[17]
• Allows states to raise funds from external markets to help them mitigate a temporary recession.[17]
• Enables both savers and borrowers to secure the best available market rate.[4]
• When controls include taxes, funds raised are sometimes siphoned off by corrupt government officials for their personnel use.[4]
These processes haven’t always worked out the way the initial backers expected. Economic globalisation was initially pushed by Western Countries particularly the US, because they thought that it benefited them.
As Mark Thirlwell noted in a Lowy Institute publication called “Second Thoughts on Globalisation” :
It is the developed world that is now having second thoughts about
globalisation. [Although] discontent with globalisation is apparent in much of the developed World … most of the current re-evaluation of globalisation is being spurred not by its failures but by its successes, in particular the economic emergence of China and (to a lesser extent) India.
(Source here)
A criticism of Globalisation is that it disadvantages developing countries. Although there is some truth to this it has also led to the spectacular economic development of some undeveloped countries particularly China, India and Brazil. China has become the workshop of the world and consequently many hundreds of millions of people have been lifted out of dire poverty to a modicum of prosperity.
On a personal note: I first travelled to China in the early 1980s and noticed that the main method of transport was the bicycle. During my 2009 visit I noticed that most of the bikes had been replaced by motor scooters and that there was a large fleet of modern cars on the road.
This Chinese development is assisting other areas of the World. China is giving African countries more aid for Infrastructure that the IMF and World Bank combined, according to Joseph Stiglitz, Nobel Prize Winning Economist.
As an American foreign policy analyst, Deborah Brautigam, noted:
This is an opportunity for African states to ride into the global economy on China's shirt tails rather than remain natural-resource suppliers to the world.
(Source here )
Although economic globalisation has had some detrimental effects they are far outweighed by its advantages.
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