Category: Daily Maverick

Daily Maverick, 16 November 2011- 

With less than two weeks to the start of the Cop-17 conference in Durban, consensus on the most critical issues remains elusive. One of the most contentious issues is the perceived divide between the interests and obligations of developed countries and those of developing countries. 

The lead-up to the United Nations Framework Convention on Climate Change (UNFCCC) Conference of the Parties (COP 17) has been drowned out by the drama of the eurozone debt crisis. To be fair, the back of Berlusconi does make for more compelling viewing than the circles in the climate change debate. Speaking at a conference of climate-vulnerable countries in Bangladesh on Monday, UN. Secretary General Ban Ki-moon said, “We are in the middle of a serious economic crisis. But even in these difficult times, we cannot afford delays. We cannot ask the poorest and the most vulnerable to bear the costs.”

Expectations of COP-17 have dwindled. So low is the current expectation of the Durban conference that global justice activists in Durban have dubbed the event the “conference of polluters”.

Reports so far indicate that there has been a severe lack of progress in pre-conference negotiations. In the preparatory round of talks in Panama last month, ambassador Jorge Arguello of Argentina, speaking on behalf of the Group of 77 and China, said, “although there has been indubitable progress in the work in Panama”, the group had “concerns over the uneven progress in the negotiations and called for decisive leadership to ensure that all submissions from the parties are discussed and that there is a positive basis for successful negotiations in Durban.”

According to Article 2 of the United Convention on Climate Change, the objective of international climate change policy is the “stabilisation of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system”.  To this end, the Kyoto Protocol, which was adopted in December 1997, and later amended at several COPs, originally required 39 developed countries to bring about an average 5.2% cut in greenhouse emissions by 2012 relative to their 1990 levels.
The emission cuts required vary from country to country. The EU, for example, which accounts for roughly 21% of current global emissions, must reduce its emissions by 8%, while Russia, which accounts for 17% of global emissions, is permitted to emit the same amount in 2012 as it did in 1990. It all makes sense to the UN.

The principle distinction between the Kyoto Protocol and other well-meaning UN-sponsored climate conventions is that instead of exhorting the developed world to cut emissions of greenhouse gasses, Kyoto commits them to do so. While the protocol has been ratified by 140 countries, its scope remains limited.

The greatest obstacle to receiving a binding commitment from the developed world to implementation is the continued exemption of developing counties from mitigation targets.  This gulf between the obligations of developed and developing countries, dubbed “equity” in the Kyoto Protocol, has hindered progress in pre-COP 17 talks.

Equity demands that developed countries, the source of most past and current emissions of greenhouse gases, act first to reduce emissions.

Developed countries argue that CO? emissions of a number of developing countries are expanding rapidly. And with good reason too. China, for example, is now the world’s third largest greenhouse gas emitter after the US and the EU, but enjoys exemption. But the pre-conference talks have so far failed to garner enough support for a binding commitment on emerging economies as well.

The US, which of course is not a signatory of Kyoto, demands that emerging economies be subject to the same stringent mitigation targets. At the same time, the US refuses to accept responsibility for its historical emissions. Instead, the US proposes “graduation criteria” that would break the current differentiation between rich and developing countries and set up a process of including emerging economies in the group that bears binding commitments. Importantly, however, the US has indicated that even if other developed countries agree to a new phase of the Kyoto Protocol in Durban, it will not be ready to formally match the mitigation targets.

Developing economies argue they will feel the impact of climate change more acutely than the developed world. At the recent Climate Vulnerable Forum in Bangladesh 26 countries, mostly from the group called the Least Developed Countries, highlighted the palpable effects of climate change on the developing world.  The CVF members – Antigua, Barbuda, Bangladesh, Barbados, Bhutan, Costa Rica, Ethiopia, Ghana, Grenada, Guyana, Kenya, Kiribati, Liberia, Maldives, Marshall Islands, Micronesia, Nepal, Philippines, Rwanda, Saint Lucia, Samoa, Solomon Islands, Tanzania, Timor-Leste, Tuvalu, Vanuatu and Vietnam declared that the displacement of people due to climate change has become a major concern. They point out that the relocation and rehabilitation of these displaced people is placing an inordinate strain on the overburdened infrastructures and service facilities, as well as causing tremendous social stresses.

For many of these countries emission reduction is not a viable option in the near future. With income levels far below those of developed countries, and per capita emissions on average just one-sixth those of the industrialised world, developing countries will continue to increase their emissions as they strive for economic growth and a better quality of life.

At a recent energy briefing,  Jackie Chimhanzi, of the strategy division of Deloitte’s Africa, pointed out there is not yet the funding, will or policy to create greener energy in Africa. Mitigation is not yet an urgent enough issue for the developing world. Yet, without a unanimous commitment to a final, full, legally binding international treaty, COP-17, like its predecessors, will continue to be disregarded as a global circus. DM

Daily Maverick 4 November 2011-

President Jacob Zuma has travelled to this year’s G20 summit in Cannes to highlight the need for global governance reforms as well as enhanced growth, jobs and infrastructure development on the African continent.

Established in the tumultuous aftermath of the 1997 Asian Financial Crisis, the purpose of the G20 is to give advanced and emerging economies an equal say over the creation of a global financial market. Every year G20 leaders meet to discuss the vagaries of the world economy and evaluate their own fumbling attempts at correcting the evils of their ways.

Integral to the workings of the G20 is the International Monetary Fund. The IMF was founded to stabilise international exchange rates and influence the development of emerging economies through loans, restructuring or aid. Last year, Zuma travelled to the G20 summit to insist on reforms to the IMF that would force it to better serve the African continent. At the end of the summit in Gyeongju, Korea, G20 finance ministers and central bank governors agreed to move voting shares towards the developing world. Brazil, China, India, and Russia all progressed up to the top 10 shareholders of the IMF. The deal was lauded as a “historic” move for the IMF, signalling a shift of power to the developing world. But still, Zuma went to this year’s G20 summit, looking for reforms to the IMF once more.

This time, Zuma is seeking better representation of sub-Saharan Africa on the board of the IMF.”The reform of international financial institutions remains a critical point for South Africa,” a statement from the presidency said. “On IMF reform, South Africa has a specific objective: To increase the voice and participation of sub-Saharan Africa and the creation of a third chair for sub-Saharan Africa.”

Addressing business leaders at the G20 Summit in Cannes on Thursday Zuma said, “The least developed countries are innocent bystanders, who have been caught up in the economic turmoil” of the global financial crisis.

A recent report on Uganda illustrates the vulnerability of fledgling economies in the crisis.  The Ugandan currency, the shilling, has fallen dramatically this year. While the shilling has started to recover from that fall, the impact of the fall is still tangible. The cost of importing fuel has risen sharply, pushing up the cost of transporting items such as meat, which in turn has exacerbated rising food prices in Uganda.

Zuma rightly points out that the world’s least-developed countries remain at risk unless a unified solution to the global financial crisis is reached. As Europe continues to dither on a solution to the crisis, policymakers around the world are searching for ways to improve the structure of the international financial system so that it benefits countries like Uganda. The G20 are of course integral to determining such processes.

South Africa, as the only African representative on G20, seeks to ensure that the IMF is transformed into a fully-inclusive forum.

Riaz Tayob of the South African chapter of the Southern and East African Trade Institute (SEATINI) explains that South Africa has a close affinity with the IMF. “South Africa has played an important role at the IMF, with Trevor Manuel having chaired the development committee,” he says.  Tayob notes that the IMF availed to South Africa its allocation of special drawing rights – an international reserve asset to supplement its member countries’ official reserves – in case it needed it due to the global economic crisis.

Tayob, however, explains that, while measures have indeed been taken to achieve more inclusive governance of the IMF, “there are many reasons why South Africa would want to increase the power of sub-Saharan Africa at the IMF.”

Structural changes to the voting powers of IMF members can be traced back to September 2006 when the IMF changed its voting arrangements to increase the voting power of four principle developing countries, China, South Korea, Turkey, and Mexico. Tayob notes this was achieved despite substantial opposition. In the meanwhile, “Africa gained a paltry 0.5%,” he says, taking its collective vote to 6.5%. In contrast, “The rich countries’ share of votes dropped from 60.6% to approximately 59%,” Tayob says.

When he addressed the IMF last year, Zuma said, “The developing world has an equal right to direct the work of these institutions.” He added that the emphasis on reform of global governance institutions should not be construed as a special concession. “When we raise these issues, we should not create the impression that we have come cap-in-hand to ask for favours,” he said.

Tayob believes that the prominence of reform on Zuma’s G20 agenda is laudable.  “What the Zuma administration is doing is commendable,” he says, “As it joins other developing allies in seeking reform of the IMF and a more just global economic architecture.”

For now however, the IMF is unlikely to be swayed by Zuma. Tucked away in the Frequently Asked Questions section of the IMF website is an answer to Zuma’s entreaties. “Will the reform have any discernible impact on countries in Africa? Will there be a 25th chair in the executive board?” the question reads.  “The G20 proposed moving ‘to an all-elected board, along with a commitment by the fund’s membership to maintain the board size at 24 chairs, and following the completion of the 14th General Review, a review of the board’s composition every eight years.’ It also proposed a review of the quota formula by January 2013.”

Tayob notes that the drive towards reform will be a protracted one. “This will be a long battle given that the rich countries seek to maintain their privileges in the IMF and it seems like good governance is an issue only to be applied to poor countries, but not the international institutions that are dominated by the rich countries,” he says. “Zuma exposes this double standard and it is no doubt costly in diplomatic currency to pursue this option. It would enhance our position much more if South Africa also pushed for debt cancellation for other African countries.”

As the world watches the G20 and Greece with some mixture of anticipation and trepidation, it is clear that the international monetary system and the global imbalances that have resulted from it are indeed in dire need of reform.  DM

Daily Maverick, 18 October 2011-

Environmental activist group, Earthlife continues to protest the inclusion of representatives from Sasol and Eskom on South Africa’s COP17 negotiation committee. Earthlife accuses both Eskom and Sasol of a conflict of interest but Business Unity South Africa and the Department of Environmental Affairs disagree. 

As the 17th Conference of the Parties (COP17) to the United Nations Framework Convention on Climate Change (UNFCCC) draws closer, so too are protest actions being rehearsed. Environmental activists have begun to target South Africa’s two greatest emitters of greenhouse gases, Eskom and Sasol, with a renewed vigour. Last Wednesday, Earthlife followed up a protest at Eskom’s headquarters with a protest against Sasol in Rosebank. Earthlife points out that the inclusion of representatives from Eskom and Sasol on South Africa’s negotiating committee is an anomaly.

“It is rather simply absurd and gigantic potential conflict of interest,” Earthlife contends. “Therefore, in the spirit of good corporate governance, we call on Sasol to voluntarily recuse itself from South Africa’s negotiating team at UNFCCC conferences such as COP17. Failing that, the Department of Environmental Affairs needs to remove Sasol and Eskom from its negotiating team and ensure that public servants and not corporate interests represent South Africa and its people”. Makoma Lekalakala, programme officer at Earthlife Africa Johannesburg says, “Sasol is a major emitter of greenhouse gases and is expanding its operations across the globe. With a breakpoint of USD35 a barrel of oil from its coal-to-liquids operations and a selling price of over USD100 a barrel, how can anyone actually think that Sasol won’t put its financial interests of its high-carbon growth path over the low-carbon interests of the globe?”

Sasol responds that its employee on the committee is not there as a representative of Sasol but rather acts in a personal capacity. Jacqui O’Sullivan, general manager for group communication for Sasol explains, “The negotiating team was selected by, amongst others, Business Unity South Africa (Busa) to ensure technical experts were on the panel, to represent the interests of business. Individual companies are not represented on that negotiating team. Earthlife Africa’s demand may make a good sound bite but unfortunately it’s not based on facts.”
Tristen Taylor, project coordinator for Earthlife Africa in Johannesburg told iMaverick that South Africa was unique in its inclusion of business interests on its negotiating committee. “No other country does this,” he said.  Taylor believes that the need to outsource technical expertise is an indictment of the lack of such expertise within the Department of Environmental Affairs. “Government should have the necessary expertise,” he says. “South African people did not elect Sasol and Eskom to make decisions for this country,” he continued.

Spokesman for the Department of Environmental Affairs Albi Modise defends the make-up of the committee. “Many countries have representatives from sectors of society other than their national government,” he said. “The approach that the South African government has taken in the negotiation of international climate change policy is informed by the fact that climate change affects society as a whole. Therefore … the negotiating delegation is constituted not only by representatives of government, but also includes representatives from organised business, civil society, labour and Salga (local government) and also includes representative with specific skills, particularly from the South African scientific community.”

Modise rejects the assertion that the inclusion of a Sasol employee is an inherent conflict of interest.  “The member of the delegation referred to was nominated by organised business, Busa, based on that individual person’s particular skills and knowledge, and as such that person does not represent Sasol but rather the broad interests of the business sector as a whole,” he said. Sasol claims that their employee on the committee is subject to a strict secrecy agreement that prevents Sasol from learning the negotiation position taken by the South African delegation. Modise also notes that other committee members could also be accused of having a conflict of interest. “We would note that any Busa representative, be they from the mining, industrial or energy sector, could be accused of a conflict of interest, also representatives of local government or labour could be similarly accused,” he said.

Earthlife is however not easily swayed. They point out that both Eskom and Sasol have invested heavily “in a high carbon future”, and their perspective on the committee is skewed. “Eskom alone blows our chances of reducing our emissions,” Taylor says. Lauraine Lotter from Business Unity South Africa however rejects suspicion that Sasol sought to scupper the negotiations. “It would only be a conflict of interests if the interests of Sasol and the interests of the county were different,” she said. She credits the government for adopting a balanced approach to the negotiations.

With just weeks to go before Cop-17 kicks off in Durban, early prospects of striking a historic deal to dramatically lower global carbon emissions have been quashed. Negotiators are now said to be working on a deal that ensures the global system just survives. And as an aside, the Department of Environmental Affairs points out that Earthlife was itself a part of South Africa’s negotiation committee until 2008. Modise explains, “At that point, the head of Earthlife’s climate change programme formally withdrew their delegate, stating that the South African official delegation code of conduct and discipline prevented their member from participating in other advocacy type work at the COP.” Rather kindly, Modise notes that an invitation to Earthlife to rejoin the committee remains open, “on the condition that the nominee represents civil society NGO’s as a whole and not their particular organisation.”

The bickering, however, is set to continue, regardless. DM