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Market News

 October 07, 2014
Planet racing towards catastrophe and politics just looking on

 If ever there was a need to prove that we are faced with a total lack of global governance, the U.N. Climate Summit, extraordinarily called by U.N. Secretary-General Ban Ki-moon on Sep. 23, makes a very good case.

The convocation of the climate summit -- albeit just for one day -- appeared to indicate that it had finally dawned on political leaders that there is a problem, in fact an urgent problem, about the impact that climate change is having on our planet.

And yet, the array of leaders gathered together in New York, although full of general platitudes, gave another impressive display of failure to come up with a concrete answer. While acknowledging the problem, many leaders found a way to duck their responsibility, indicating domestic constraints.

Thus U.S. President Barack Obama made it clear that the U.S. Congress would not be ready to ratify an international climate treaty. Of course, this line of reasoning applies to the U.S. approach in general -- Congress does not accept binding the United States to any international treaty because of its exceptional destiny, which cannot be brought under scrutiny or control by those who are not U.S. citizens.

Furthermore, the United States has become a dysfunctional country, where the judicial, legislative and executive powers cannot cooperate, even on crucial issues.

Anant Geete, India's new Ministry of Heavy Industries and Public Enterprises, stated that growth in his country has priority over anything else, and therefore India will continue on its path towards industrialisation and energy fully based on coal, while other renewable energies will be brought in progressively, even if this will eventually make India the world's biggest polluter.

The European Union could not make any commitment, because a new Commission was due to take over the following month (i.e. October) and the person earmarked for the post of Commissioner for Climate Action and Energy was Spanish Conservative Miguel Arias Canete, who was a major shareholder in two Spanish oil companies -- Petrolifera Ducal and Petrologis Canarias -- until he sold his shares to garner support for his nomination

No problem, say his critics, Canete's wife, son and brother-in-law did not follow suit and remain shareholders or even occupy positions on the boards of the companies.

In line with this same political sensibility, the new and more conservative European Commission has brought in a well-known City lobbyist, Lord Jonathan Hill, to the portfolio of Financial Services.

Such a system of political compromises is like bringing Count Dracula in to run a blood bank -- hardly a system that is likely to appeal to blood donors!

What is sad is that there was no lack of background papers for the U.N. Climate Summit.

Beside one prepared by the Intergovernmental Council on Climate Change, bringing together 3.200 scientists from all over the world, there was, for example, a report prepared by the Spanish Ministry of Agriculture (clearly not part of a leftist government), based on a detailed study of Spanish coastal areas which found that by 2050 the level of the Mediterranean Sea will increase by a minimum of 30 centimetres (if climate control measures are taken now) up to a maximum of 60 centimetres (if no action is taken).

That means that the coastline will recede by between 20 to 40 metres, with an obvious impact on tourism, ports and costal settlements. One hundred years ago, only 12 percent of the coast was used, rising to 20 percent in 1950, 35 percent in 1988 and 75 percent in 2006. In Spain, 15 million people now live in area which will be affected by the climate change.

Obviously, France, Greece , Italy, Tunisia and all other Mediterranean countries will share that same destiny.

Another more global study conducted by Climate Central, a U.S. research group, based on more detailed sea-level data than has previously been available, reports that about 1 person in every 40 in the world lives in an area which will be susceptible to flooding in the next 100 years -- about 177 million people.

Even if immediate measures were taken for climate control, 1.9 percent of the population of coastal countries would be affected. At worst, the figure would be 3.1 percent. To give a concrete example, four percent of the Chinese population, 50 million people, would be affected. Eight of the 10 large countries most at risk are in Asia.

The voice of Abdulla Yameen, president of the Maldives, who reminded leaders at the Climate Summit that small island countries -- which would be the first to suffer from any rise in sea levels -- have formed a federation to defend their right to exist, went largely unheeded.

An entire new generation has been born since the debate over climate change started but there are no signs that the situation is improving.

In the decade up to 2012, global emissions of CO2 rose by an average of 2.7 percent. In 2013, emissions were the highest in the last 30 years. And yet, the energy sector is mounting a strong campaign to deny that there is any climate change.

If anything, say the deniers of climate change, what is happening is part of a normal historical cycle, not the result of human activity. All data demonstrating the contrary are being ignored, and the upshot of this campaign is that many people believe that debate on the issue is still open.

Perhaps what happened a few days ago between Google and the American Legislative Exchange Council (ALEC) is symptomatic of this "normal historical cycle"?

On Sep. 22, Google chairman Eric Schmidt announced that the high-tech company was withdrawing from ALEC, saying: "Everyone understands climate change is occurring and the people who oppose it are really hurting our children and our grandchildren and making the world a much worse place. And so we should not be aligned with such people -- they're just, they're just literally lying."

ALEC is a conservative organisation that has urged repeal of state renewable power standards and other pro-renewable policies. It drafts proposals for regulations that it submits to politicians, asking them to make just the effort of passing them into law.

Reacting to Google's decision, Lisa B. Nelson, CEO of ALEC, said: "It is unfortunate to learn Google has ended its membership in the American Legislative Exchange Council as a result of public pressure from left-leaning individuals and organizations who intentionally confuse free market policy perspectives for climate change denial."

So, if you are worried about climate change, you are left-wing and against the market!.

The fact is that executives from many large corporations are well ahead of political leaders. They can take decisions unencumbered by political constraint, and they have found out that working in the direction of climate controls makes sense not only in terms of public relations but also economically.

For example, forty major companies, including l'Oreal and Nestlè, issued a declaration on Sep. 23 pledging to help cut tropical deforestation in half by 2020, and stop it entirely by 2030. Some of these companies work with palm oil, profitable production which is at the expense of tropical forests, especially in Indonesia.

In fact, it was only corporations that made any concrete pledges at the New York Summit.

Apple CEO Timothy Cook said that his company was committing itself to focusing on the emissions of its main suppliers, which account for around 70 percent of the greenhouse gases that come from production and use of the company's products.

Cook rejected the idea that society must choose between economic growth and environment protection, giving as an example a huge solar farm that his company built in North Carolina to help power a data centre there. "People told us this couldn't happen, it could not be done, but we did it. It is great for the environment, and by the way it is also good for economics."

Not to be outdone, Cargill, the huge U.S. commodity processor, pledged to go even further with an existing no-deforestation commitment on palm oil and extend it to cover all its agricultural products. And, together with other companies processing Indonesian palm oil, Cargill called on the Indonesian government to get tougher on deforestation.

In the meantime, it is not that voices worldwide have been silent on the issue. Safeguarding the environment has long been a rallying banner for a large part of civil society worldwide, and a major cause for concern among the younger generations.

The hundreds of thousands of people who took to the streets throughout the world ahead of the New York Summit in solidarity with the need to do something about climate were no mere figment of the media's imagination. So why were they clearly invisible to the planet's decision-makers?

The next important date for the climate on their agenda is the U.N. Climate Change Conference (COP21) to be held in Paris in 2015. Will our political leaders again waste the chance to do something concrete -- will they continue to stand by and watch as time runs out for the planet, and for humankind?