With the recent publicity over the outstanding Congestion Charge payments due from embassies in London (see pdf document here), triggered by the arrival of the new US ambassador representing the Obama administration, once again we have to rehearse the arguments why the diplomats should shut up and pay up.
Firstly, and contrary to the claim by the US embassy, the Congestion Charge is clearly a user-charge – not a tax, from which diplomats are exempt under the Vienna Convention on consular relations. The Congestion Charge requires drivers to pay to use a small geographical area in central London during specific hours, and as such it is no different in principle from the charge made to drive along an American toll road, which British and other foreign diplomatic staff in the US are all required to pay.
And let’s not forget that the diplomats who refuse to pay the charge neverthless benefit from its results – not only from the freer movement of traffic in central London but also from the local and global environmental impact of the reduction in CO2, PM10 and NOx levels.
It should be remembered that the US embassy paid the congestion charge for more than two years following its introduction in February 2003. It was only in July 2005, after the charge increased from £5 to £8, that they announced they were not going to pay it any more. Quite how a £3 increase transformed a user-charge into a tax they did not explain.
The refusal of embassies to pay the charge means that Londoners are having to carry the burden of a total of £30 million of embassies’ debts on their shoulders during a recession – over £3 million of which is owed by the US embassy alone. If any of us behaved like that we would have had the bailiffs around a long time ago. l don’t think that’s acceptable at all, and it stretches our hospitality too far.
The US embassy’s refusal to pay the Congestion Charge was exactly the sort of regressive political decision we had come expect under the presidency of George Bush. Now that we have a new administration, which has emphasised its green credentials, particularly in the build-up to the Copenhagen climate change negotiations in December, we expect something different. Hence my letter to President Obama (pdf here) urging him to reverse the decision made under his predecessor.
Everyone in the UK with progressive politics, myself included, greeted the election of President Obama with enthusiasm, hoping that it represented a change in direction for the US. One straightforward way the President can demonstrate to Londoners that his administration has indeed broken with the politics of the Bush period is to instruct the US embassy to start paying the Congestion Charge and clear its outstanding debts to Transport for London. Otherwise this one is not going to go away and will be a continuing source of political embarrassment to the US government. It’s not as though the richest country on the earth can’t afford to pay up.
During my recent trip to China to attend a conference on air quality in Shanghai it became quite clear to me that, while the first phase of the recession has not yet come to a close in the UK, with possible further economic gloom still ahead, along its east coast China is still booming. That is not surprising given that China’s annual GDP growth rate stands at 6-8 per cent while our economy is undergoing potentially a 4 per cent contraction.
From what I saw during my brief stay there, street life in the evenings in Shanghai seemed very lively, and the confidence in evidence on the street was also expressed by the politicians l met on the trip. They pointed out how we had been forced to bail out our banks when they did not have to, despite years of western complaints about the lack of transparency in China’s banking system. This is a clear sign that the world is moving away from the Washington consensus to a new paradigm of development where state intervention is more acceptable.
But what does China’s boom mean for London? Clearly Shanghai is a serious challenger to our status as a global financial centre and will be even more so after the Shanghai Expo, which will take place between May and October 2010. Some 70 million people are expected to attend this event, which is being promoted around the theme of “Better City and Better Life”.
The sad thing is that the UK is not part of China’s boom nor are we likely to be, a reflection of the global shift in economic power from the West to the East (see Anthony Hilton’s recent article in the Evening Standard). We certainly need to be out there promoting ourselves during the Shanghai Expo at the very least. We also have to be prepared to learn from China, as l did on the environmental front from their use of electronic street signs to inform the public about levels of noise and air pollution. This is something l hope we can duplicate on the streets of London.
Last Thursday I went to the US Embassy as invited guest to listen to Barack Obama’s Cairo address. And I came out mightily impressed by the depth and scope of his speech. Drawing on his own personal experience of Muslim-majority countries, which greatly helped convince his audience, the US President outlined the seven crucial issues that in his view need to be resolved for a new beginning in relations between the West and the Muslim world.
Though l do have two concerns. Firstly that, by defining the debate in religious terms, Obama didn’t include those in both the West and Muslim world who have no faith or do not regard their religious affiliation as the primary focus of their life and identity. Many such people exist and have an important contribution to make to this discourse. And secondly, while he touched on almost everything else, he didn’t address the importance of development aid, which has always been a major tool of foreign policy.
We should all welcome Obama’s comments on the occupation of the West Bank and illegal settlements, as this change in language is in itself very significant. In reality, though, he will be judged by his follow-up actions and not simply by his fine words. He needs to make it clear that aid to Israel will be cut if the construction and expansion of illegal settlements continues, as the Economistrecently suggested. Many US citizens will be amazed to hear that the biggest recipient of US aid is affluent Israel and that it has not been going to those in desperate need around the world. Obama also needs close the tax loophole that allows the private funding of illegal settlements by US-based charitable organisations.
Equally, continued US aid to Egypt should be made contingent on moves towards genuine democracy. The Mubarak regime has become much discredited, with its dictatorial nature having been exposed by dissidents, many of whom now live in London. The existing political system does not leave much space if any for those who disagree with Mubarak, and it would in everybody’s interest to democratise Egypt and allow its lively civil society to play a full role in politics. Otherwise, the political vacuum after Mubarak eventually leaves the scene could be filled by an even more repressive regime. Better for Obama to press for democratic reform now rather than leave it till it is too late.
Finally, while l feel much more comfortable with a USA led by Obama, I haven’t forgotten that the key issue for many Londoners with the US Embassy here is that it should pay its outstanding congestion charge bill. That will be something to pursue with the new US ambassador when he arrives. In the meantime, l think it’s time for me to pay a trip to the Al-Azhar, in Cairo.
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.
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.
