Filed under: International Affairs
The creation of a “low carbon” economy that will provide jobs and clean up industry is now a crucial policy objective for countries trying to spend their way out of the world economic downturn. A recent report by HSBC calculates that the United States is allocating 12 per cent of its fiscal stimulus to the green economy and China, 34 per cent.
There is a compelling scientific, economic and strategic case for low carbon development and the first movers have a lot to gain with worldwide investment in renewable energy having grown by 65 per cent a year since 2004, and projected to reach $600 billion a year by 2020.
China’s 11th Five-Year Plan (2006-10) includes a target to reduce energy intensity by 20 per cent during that period. This would translate to a saving of emissions around four times greater than the European Union’s current commitment under the Kyoto Protocol.
But despite these ambitious objectives China’s total greenhouse gas (GHG) emissions are already on par with those of the US and rising fast. This is clearly driven by the imperative of economic growth for China’s 1.3 billion people. China thus faces a qualitatively different challenge to the one that faced by industrializing nations in the past: of combining rapid industrialization, urbanization and poverty reduction with the transition to a low carbon economy.
No country has ever done this before, but the Chinese appreciate that carrying out the work of energy conservation and emission reduction and coping with climate change is a requirement of the Scientific Development Concept.
In response to the challenge of achieving a low carbon economy in China, a number of research institutes working with Chatham House in London have developed the concept of low carbon zones (LCZs). These will aim to stimulate transformational regional political leadership in a similar fashion to the special economic zones (SEZs) in the early 1980s, which gave certain regions the power to introduce more liberal economic regulations than the rest of the country, with some spectacular results.
Under the LCZ scheme, designated regions could be granted similar powers to experiment with a low carbon policy. To qualify for the LCZ status, regional leaders would have to commit to low carbon standards beyond the existing benchmarks at the national level.
These LCZs could then attract hi-tech foreign direct investment through measures such as strong patent protection, tax incentives and targeted recruitment of skilled workers. They could attract new types of carbon finance, too, by building the institutional capacity required to support local emissions trading schemes, drawing on international experience and underpinned by strong monitoring and reporting systems.
Furthermore, allowing them to pilot harmonization of standards with Europe in key low carbon sectors such as vehicle emissions, energy using products and construction would help facilitate Chinese exports and enhance trade and investment flows in the LCZs.
A second variant of the LCZ can be found in the UK, where there are similar proposals but on a smaller scale and mainly in the context of local rather than regional government. Cities are massive producers of carbon dioxide not just from traffic, but also from more energy use in buildings. So it is not surprising to hear calls to introduce a rolling program of LCZs aimed at dramatically improving the energy efficiency of all buildings — public and commercial premises and especially houses.
Here a precedent exists in the smokeless zones of the 1950s, which reduced pollution arising from the use of coal after the smog of 1952 killed 4,000 people in London. These LCZs could be rolled out across the country incrementally, with local authorities declaring an area to be an LCZ. Private sector partners would then be invited to deliver the actual service.
These partners would assess each building or house for energy efficiency and design and implement individual energy saving regimes. Within a specified time, it would become mandatory for all properties in the zone to reach the minimum ratings of energy efficiency.
A range of technologies and measures is available to ensure that energy efficiency addresses the whole property, and many of the measures will pay for themselves through lower bills. Focusing the zones on neighborhoods has great advantages because there are economies to be made from concentrating on defined areas and scope — for example, by introducing combined heat and power plants. This second form of LCZ was proposed by the last administration at London’s City Hall by the then deputy mayor.
Designing and implementing effective policies to drive the transition to a low carbon economy and share the costs equitably is a major political challenge for governments across the world. As we pursue the low carbon route to future economic development, LCZs both in their Chinese and UK variants offer an important means of dealing with the challenges ahead.
Published in China Daily, 5 May 2009
May 8, 2009
The Indian election will be an impressive spectacle, with 543 parliamentary seats and 4,145 assembly seats being contested in a rolling poll over four weeks from the 16th of April to early May. India has 28 states many of which are the size of a large European nation, with 20 official languages and a demography that covers seven major religions and more than three thousand social groups. This makes the Indian election not only the biggest but also the most diverse exercise in democracy in the world. Furthermore, for the first time, the polls will be all-electronic affair, with the deployment of 1.36 million advanced voting machines which is attracting interest abroad including in the US and Europe.
Now that’s just the process. If we look at the forces in play during the election, the major ones include regionalism, the caste system and finally the internal threat from Maoist guerrillas.
The reality is that the country has only two national parties – Congress and the Hindu revivalist Bharatiya Janata Party (BJP) – which can only come to power on the back of coalitions with regional parties. For example the governing Congress heads a coalition of 13 parties which at the last election replaced a 23-party coalition led by the BJP. This makes government at the centre incredibly difficult, as the compromises required to maintain the ruling coalition can paralyse government from Delhi, leaving the regional parties to rule their fiefdoms much as they desire.
Then we have casteism. A large part of the explanation of the loss of appeal of the national pan-Indian parties is explained by the existence of the thousands of social groups whose political allegiances are reflected in parties that represent their particular social interests. The best example of this is the Bahujan Samaj Party which represents the Dalits who form the “untouchables” at the bottom of India’s caste system, particularly in South India. Their leader is the populist Mayawati who is set to play the kingmaker in this year’s election, and she invariably backs the party at the centre that looks the easiest to blackmail.
And finally we have the threat posed to the elections by the Maoist guerrillas, otherwise known as the Naxalites, who operate in 13 out of the 28 states of India and have control of large swathes of the country. They pose a major security threat, to the extent that India will not be hosting their lucrative IPL Twenty20 cricket tournament as the government can not provide enough security to cover both that event and the month-long general election campaign. The actions of the Naxalites, who are violently opposed to the election, will affect the turnouts in the states in which they operate.
This all makes for an interesting time over the coming month. Watch this space, as we will no doubt see many twists and turns during the election, and unpredictable events during the four weeks from the 16th of April can influence the eventual outcome.
April 15, 2009
The protests by Tamil demonstrators at Parliament Square this week have had the effect of at last drawing the media’s attention to the appalling plight of Tamil civilians caught behind the lines in the war in Sri Lanka.
By contrast, in January a massive 100,000-strong march in London by the Tamil community demanding a ceasefire attracted virtually no media coverage at all. It is depressing to think that the killing of innocent people in Sri Lanka becomes newsworthy here in the UK only when it results in the disruption of traffic across Westminster Bridge.
Tens of thousands of civilians are now trapped by the fighting between the Sri Lankan army and the Liberation Tigers of Tamil Eelam, who launched an armed struggle for an independent Tamil homeland more than a quarter of a century ago.
According to the United Nations, over the last two months more than 2,800 civilians have been killed and 7,000 injured. The army continues to shell the small coastal area still held by the Tigers, apparently without regard for the fate of non-combatants.
Only yesterday it was reported that 22 people, including an 18-month-old child, were killed and 283 injured after shells landed near two health facilities, one of them a mother and baby clinic where 500 people were queuing for milk powder and food rations.
If the Sri Lankan government insists on continuing with its military campaign until the LTTE forces have been destroyed, the number of civilian casualties does not bear thinking about.
Perhaps Sri Lankan president Mahinda Rajapakse calculates that a crushing military victory over the Tigers will enhance the standing of his Sri Lanka Freedom Party among the Sinhalese majority population, thus ensuring a comfortable victory in the parliamentary elections due early next year.
If so, this is not only immoral but extraordinarily short-sighted. The military defeat of the Tigers, accomplished at the cost of so much bloodshed, will only pile up yet more bitterness among the Tamil population and inevitably produce further armed conflicts in the future.
Without an immediate ceasefire, followed by a political solution addressing the long history of oppression suffered by the Tamil minority that is the root cause of the war, Sri Lanka will remain locked in bloody conflict for generations to come.
I am pleased to see that David Miliband has called for a ceasefire and I fully support the proposal by Keith Vaz that the crisis should be debated as a matter of urgency by the United Nations Security Council.
The text of a letter I sent to the Sri Lankan High Commissioner on 18 March can be consulted here.
April 9, 2009
In my last blog l suggested that the most important meeting to be held during the G20 London Summit would be the G2 meeting for the first time between US President Barack Obama and the Chinese President Hu Jintao, a point also made by the Economist.
Now, what do you think is uppermost in the minds of the Chinese? Well, it is not the regulation of global finance, particularly hedge funds, as it is for the French and the Germans. It is not a continued fiscal stimulus to the global economy, as it is for the United States and United Kingdom. Nor is it how the G20 can prevent a retreat into protectionism and promote free trade, in circumstances where many economic historians point out the parallels with the 1930s. Nor is it how the IMF will need more money to bail out countries going bust like Iceland, Hungary and Ukraine – since the Chinese have already agreed to help as long as the IMF is reformed and China has more say. Nor is it a clampdown on offshore tax havens, as governments desperately attempt to bring as much revenue as possible back onshore to boost state coffers. Nor is it environmental and development concerns, as the Chinese are starting to pursue a low carbon future and have already become a major source of funds to the developing world.
No, it’s China’s plan to end the dollar era. In China it appears to be a debate between the likes of Zhou Xiaochuan, governor of China’s central bank, who has put forward a credible proposal for a reserve currency to rival the greenback (Financial Times, 24 March), and the likes of Professor Yu Qiao of Tsinghua University discussing how Asia can protect itself from a dollar default (Financial Times, 1 April). The latter response is not surprising given that the Chinese are the largest holder of US dollar financial assets and they express the same anxiety as savers who fear a run on a bank. So it is understandable that China wants to replace its mountain of dollar assets with heaps of other currencies. It would be in China’s interest to have another safe reserve currency and take an active role in the reshaping the world monetary economy.
So while the focus during the next day or so will be on all the other issues mentioned above, in the long run the G20 London summit is going to be remembered as the beginning of a process, possibly taking up to 20-odd years, to replace the greenback and a world economy working for the Yankee dollar.
April 1, 2009
Boris Johnson demonstrated his neo-liberal credentials once again in his latest Daily Telegraph column by suggesting that the slogan for the G20 protestors (or “the G20 mob” as he prefers to call them) should be “What do we want? Free trade!” My response would be “Jobs, justice and climate” – the banner under which tomorrow’s G20 demonstration in London has been organised.
The dual challenge for the G20 Summit, the main thrust of which is a major fiscal stimulus and banking reform to counter the global recession, is to promote economic recovery without further damaging the environment and to limit the impact of the economic crisis on the developing world.
It is crucial that development assistance should be maintained, at a time when aid and Foreign Direct Investment have fallen and the populations of developing states increasingly rely on money transfers from migrants in the developed world.
Also, the developed world must keep to its commitments made at the 2007 Bali conference on climate change, in preparation for the negotiations over the post-Kyoto agreement in Copenhagen at the end of this year – that is, to trim our own lifestyles while allowing poorer countries to develop without strings and conditions, and assisting them with technology transfer and innovative finance.
As Nicholas Stern and his colleagues have recently pointed out (in An outline of the case for a ‘green’ stimulus), in the developed world the best way to boost employment during a recession while at the same time reducing carbon emissions is to invest in new green industries like renewable energy projects. We should put more money into energy efficiency rather than exporting our waste to the developing world.
Examples already exist. In the USA, Obama’s economic package proposes to put billions of dollars into green jobs. A third of China’s recovery programme is in creating green jobs. And Germany is directing 19 per cent of its recovery expenditure into new green industries.
London needs to show that we can do this as well. With just over 50 per cent of humanity now living in cities, which are responsible for 75 per cent of CO2 emissions, we could make a real difference. The commitment of our current Mayor to the ideology of neo-liberalism is of course a major obstacle here.
That said, the main show at the G20 will be Obama’s first meeting with the Chinese premier. At the end of the day, it’s the G2 who will determine what really happens to the world economy.
March 27, 2009
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