Climate Change links I liked: Adaptation – the Economist, the Guardian and some good news from Burkina Faso and Kenya; Indian environmentalism; extreme LDC weather; a tribunal in Bangladesh; and an Advisory Group that doesn’t advise,

A random round-up of climate change links to coincide with this week’s UN gabfest in Cancún

An excellent overview on climate change adaptation from The Economist. Favourite quote? ‘The best starting point for adaptation is to be rich’.

“The environmental issue in India has been seen to be largely an upper-middle class elitist issue. I believe that a larger number of Indians are actually concerned about the environment than we give credit.” Jairam Ramesh, India’s pugnacious environment minister talks to the Guardian en route to Cancun.

According to UNCTAD’s new Least Developed Countries Report 2010 (Climate Change section starts on page 125), ‘there has been an increase in the frequency and intensity of extreme weather events in lesser developed countries, with five times as many incidents occurring from 2000-2010 as during the 1970s’ (see graph).

And a Guardian adaptation podcast brings together the paper’s John Vidal, Davyth Stewart from Global Witness, and Saleemul Huq, (International Institute for Environment and Development)

Proud Dad slot. Son Finlay writing about the recent climate change tribunal in Bangladesh

Simon Maxwell is disappointed by the High Level Advisory Group on Climate Change Financing, which seems to have failed to offer much in the way of advice……

And finally, some good news on climate change – we’ll probably need it by the end of this week: farmers restoring soils, reforesting and improving water management in Burkina Faso and Kenya (but be warned, you have to get past the irritatingly patronizing voice-over, which sounds like a 1950s Pathe newsreel)

So where, in the eyes of the G20, is development really going?

Jasmine Burnley is Global Economic Crisis Adviser for Oxfam and has taken up the baton for this post in Duncan’s absence…

Six short months ago, pundits didn’t hold out significant hope that the G20 would seriously tackle development. But the Korean government – hosts of the G20’s most recent bash in Seoul earlier this month – worked hard to push the issue high up the agenda.

Did it work? The verdict is mixed – though the undercurrents are fascinating.

Sino-US currency wars dominated the news. But in the background officials had been quietly spending time building up a Seoul Development Consensus. This deal was, the G20 said, a way to narrow the development gap and ensure a rose-tinted future of global growth.

The initiative was positive. The G20 has acknowledged that some of its members have existing development responsibilities and committed them to reaffirm their respective aid pledges.

The G20 also took a step away from the G8 by inviting two African countries to officially sit at their table in future. This alone falls a long way short of “fair representation” but it was another sign at least that the G20 knows it can’t replicate the G8’s ‘business as usual’ approach.

So what of this Seoul Development Consensus? There does seem to be some sting behind it. Leaders recognized that there was “no single formula for development success” and that others must respect that a sovereign country owned its own domestic policies.

This is a fairly significant formulation of words, a diplomatically-explicit acknowledgement that past policies have been flawed – by implication, the “one size fits all” Washington Consensus has not delivered on its promise, notably for several of the countries now around the G20 table.

The G20’s commitment to its new development deal will be tested by whether it genuinely recognises that successful countries have used a diverse range of economic policies to reduce inequality and promote growth. The G20 might yet be tempted to cherry-pick only the ones it now sees fit to promote.

The best way to ensure that the benefits of growth reach the poorest people are by countries investing in small-scale agriculture, land reform, education, healthcare and social protection. This is what many of the G20’s newly developed members did themselves after all.

The G20’s stated desire to focus on building skills to bolster employment in developing countries is welcome – fine words, not yet backed up by anything more substantial. The G20 hasn’t given enough recognition to the need to invest in universal primary and secondary education. Skilled workers also need to be educated and healthy in order for a country to attract much investment. Primary education investment can yield a 19 per cent rate of return – a number that would make any Wall St banker sit up and take notice.

And it’s similar for healthcare. Malaria costs Africa $12 billion each year in lost revenue yet the G20 demonstrated precious little understanding that better-resourced healthcare systems are important for long-term growth.

The G20 should openly acknowledge that sustainable growth-with-equity requires investment in these essential areas. This would send a signal for private investors as well as give some real meaning and status to this new development consensus.

France will be the next chair of both the G20 and G8 next year and it will want successful summits that reflect well on it. President Sarkozy’s intention to tackle international financial regulation should keep the new Seoul development consensus alive.

The French have some concrete ideas up their sleeves to keep the agenda from drifting, as some fear it could. A financial sector tax for instance was not on the official agenda at Seoul, but it remained on the table and featured in the communiqué as a note to finance ministers to look at the recommendations of the UN High Level Advisory panel on climate change financing. This panel has identified such a tax as a viable option for finding new funds.

Sarkozy has been demonstrably vocal about putting a financial sector tax in front of the French G20 next year (see Max Lawson’s blog earlier this week). Other issues such as food price volatility and domestic resource mobilisation are also likely to get good airtime next year.

So to the verdict: the Seoul Development Consensus is a start and significantly more tangible than many pundits expected. But the proof, as they say, will be in next year’s Gallic dessert.

For more on this see Oxfam’s paper The Making of a Seoul Development Consensus

Moslem countries are doing best at reducing hunger – why? What would a ‘Mecca Consensus’ on human development look like?

A few weeks ago, Dani Rodrik pointed out that while East Asia has topped the charts in recent decades on growth and poverty reduction, many of the best performing countries on human development are majority moslem, scattered across the Middle East and North Africa. I’ve just been reading IFPRI’s Global Hunger Index 2010, and the same pattern emerges. Here’s the graph of best and worst performers in reducing hunger over the last 20 years (click on the chart):

Six of the top ten performers on hunger over the last two decades are majority moslem (and they’re not the same six as the top performers picked out by Rodrik, which were Oman, Indonesia, Saudi Arabia, Tunisia, Morocco, and Algeria): is the apparent connection just coincidence/ correlation or causal? At least three of them have loads of oil, but the natural resource ‘curse’ is hardly an inevitable blessing – look at Nigeria. Lefties would doubtless argue that it’s because they are least likely to take any notice of the Washington Consensus, and they may well have a point.

But what else is going on here? Is there a distinctive set of particularly successful social policies or broader societal attitudes at work (a ‘Mecca Consensus’)? According to Rodrik, moslem countries demonstrate ’determined policies to expand educational opportunities and access to health along with a willingness to depart from the conventional wisdom of the day and experiment with their own remedies.’ Is there a link with the high speed demographic transition to much lower fertility rates in countries like Iran?

There’s also a notable disparity between progress on nutrition and human development, and that on democracy and civil and political rights (it would be interesting to do a cross comparison of countries positions on human development v some of the league tables for rights and freedoms – anyone got the time to do it?). I would appreciate some thoughts and stuff to read on this, please.

Do we complain too much?

Rob Bailey is a senior Oxfam policy adviser on food issues.

Last week on his blog, Dani Rodrik took issue with Oxfam and the World Bank for not being balanced in communications about food prices. When they’re low, we complain. When they’re high (like they were in 2008, and may soon be again we complain. On the face of it, Dani (and Johan Swinnen, on whose article his post was based) looks to have a point. But I think our constant complaining is justified. Below is my reply.

Oxfam International and other organisations stand accused of focusing too heavily on the losers from food price movements, giving the impression that whatever food prices do, poverty gets worse. However this is more than an academic gripe about NGOs being unnuanced and simplistic. It is claimed that the myopic focus on losers results in myopic policymaking. I don’t accept for one moment that this is the case by the way, but let’s start with the question of nuance.

Charge number one: Oxfam, and other international organisations, failed to make sufficient mention of the benefits to consumers of low food prices during the pre-2007/08 era. Here’s a report from 2005 recognising that consumers do benefit from artificially lower prices (whilst poor producers lose out). The paper argues that a more efficient, transparent and far less messy way to provide support to consumers would be through social protection. This would also have the added benefit of not destroying poor farmers’ livelihoods.

Charge number two: Oxfam, and other international organisations, failed to discuss the benefits to producers of higher prices during the crisis of 2007/08. Not guilty. An Oxfam report from 2008 showed that some countries benefited from the price spike, but a greater number lost out. It found the winners had invested heavily in agriculture and social protection. Among the losers, both rural and urban populations suffered.

Why did rural populations lose out in so many countries?

First, most of the rural poor were net consumers. Decades of rich country dumping and underinvestment in developing country agriculture probably helps explain this.

Second, many were unable to respond to price rises, due to poor access to credit, inputs, extension services and land – again a legacy of underinvestment.

Third, the struggle to respond was compounded by the nature of the price rise. This was not a nice, steady reversal of the previous two decades of stagnation. It was an economic shock: prices doubled over two years.

So Oxfam definitely nuances its reports, just not its headlines. And this is the real complaint. But seriously, what is expected of a campaigning organisation? Oxfam’s role is to raise urgent issues up the agendas of policymakers, politicians and publics precisely to help the losers – whether they are losers from conflicts and disasters, drug pricing policies, or in this case food price movements. I’m afraid this usually means a myopic focus on losers in messaging, albeit perhaps to the detriment of our academic credibility. But it does not follow that the result is bad policy-making.

Why? Because whether Oxfam was drawing attention to the corrosive impact of dumping on food producers in 2005, or the calamitous effects of spiralling food prices on food consumers in 2008, its policy prescriptions remained the same:

- increase investment in developing country agriculture;

- dismantle trade distorting subsidies in the North;

- increase social protection to protect poor food consumers.

I welcome the accusation that Oxfam focuses only on losers in its messaging, irrespective of whether prices rise or fall. That’s our job. But I do not accept the implication that Oxfam policy (and by a flattering extension, public policymaking) yo-yos around as food prices rise and fall. It simply does not stand up.’

Update: Johan Swinnen responds to Rob’s post here

Accidental aid; Rodrik v Oxfam on food prices; Chinese obesity; disability and development; gender and the plough; British happiness and cartoon US-Chinese currency rap battles: links I liked

OK, I know I’m supposed to be taking a break, but I’m still reading stuff, so here’s this week’s round-up of links I liked, best wishes Duncan

The accidental invention of foreign aid 

Does Oxfam always complain about the downside, whether food prices are high or low and if so, is that a problem? Thought-provoking exchange between Dani Rodrik and Oxfam’s Rob Bailey (and kudos to Dani for enabling such a quick right to reply)

Updates on previous blogs: first obesity: China’s diabetes-related medical costs, estimated at 173.4 billion yuan ($26 billion) annually, will skyrocket in 10 to 20 years as 100 million sufferers seek treatment and care for related ailments such as kidney failure, stroke and blindness. [h/t Sophia Murphy]

And more on disability and development: a new overview paper from World Vision

Why do some cultures encourage women to work, while others prefer they stay secluded in the home? It depends on how they farm. Societies with a tradition of plough agriculture tend to believe that the natural place for women is inside the home. Interesting bit of technological determinism c/o Aid Watch

David Cameron plans to make happiness Britain’s new GDP. Right idea, not sure about his timing though

Animated US-China currency rap battle. Fantastic. [h/t Wronging Rights]

Twelve months to secure a Robin Hood Tax?

Max Lawson, Senior Policy Adviser at Oxfam, looks forward to an important year for taxing the financial sector.

With the French now in charge of the G20, all eyes are on President Sarkozy to see whether he will press for a Robin Hood Tax on the financial sector to fund development and tackling climate change. Meanwhile a series new of reports underline the possibility of such a tax and challenge some of the perennial arguments against it, not least who would end up paying.

Financial sector and the richest continue to bounce back whilst poor countries remain in trouble.

As third quarter results start to emerge, the financial sector continues to make significant profits. Bonuses in the US are set to break all records for the second year, at an estimated $144 billion according to the Wall Street Journal. In the UK bonuses in the City will top £7 billion. Recruitment in the City of London and Wall Street is up. Meanwhile the FT reports that the richest people in the world expanded their wealth by 22% in 2009.

Following Oxfam research that found a $65 billion dollar hole in the budgets of the poorest countries, further research by Unicef has made similar findings. Forty four percent of developing countries are expected to contract aggregate government spending in 2010-11.

Second IMF report clears up two key arguments against the FTT, IDS have a change of heart.

An IMF background working paper, which while not supportive (they prefer their idea of a Financial Activities Tax, or FAT tax), nevertheless tackles two of the main arguments against transaction taxes.

• Firstly they question the idea that an FTT would have to be global in order to work: ‘The fact that major financial centers such as the UK, Switzerland, Hong Kong, Singapore and South Africa (already) levy forms of STT indicates that such taxes do not automatically drive out financial activity to an unacceptable extent’.
• The IMF then explores the question of who would end up paying a transaction tax and concludes that an FTT ‘like any tax on capital income, the distribution of this effect would likely be highly progressive: High income individuals possess a disproportionate share of financial assets, and so would suffer from the initial fall in taxed securities prices’.

So there you have it: the tax will be passed on, but largely to the richest individuals and owners of capital (which does in fact include the banks themselves as they often trade with their own money).

Meanwhile the UN convened Advisory Group on Climate finance has also published its report where it identifies a FTT as one viable option for financing the fight against climate change.

Finally IDS has produced a report in support of an FTT to raise money for development. It concludes that a small tax on currency could raise over £7 billion annually in the UK alone. Laudably the author Neil McCulloch at his own admission has moved from initial scepticism to support, after thoroughly reviewing the evidence. Now that is not something you hear much in our business!

What happens next? All eyes on France

Now that Obama has lost the house, any movement on taxing the financial sector in the US looks very unlikely in the short term, although anger towards the banks still runs deep. Canada would also block full G20 agreement too. It is more likely that the EU move ahead with a tax on the financial sector in the first part of 2011 and then other willing countries join at the G8 and G20 summits in June and November. Whilst not as good as a global tax, this would set a major precedent and raise significant sums.

The EC issued a communication that recommended a further tax on the financial sector, and linked it to climate change and development. The key states (France, Germany, UK and Spain) are all supportive of a further tax in the EU in 2011. It is unclear whether this will be an FTT, or the FAT. It is also not clear whether a coalition of the willing will emerge within the EU rather than the EU as a whole given UK intransigence on the FTT, or whether France will push for a compromise which the UK can take part. Big risks remain: there might be no agreement or else a tax that directs nothing to development or climate change.

The campaign continues to grow and get significant coverage in the media.

Almost a quarter of a million people have now signed up to the Facebook site in the UK.

Successfully securing a Robin Hood Tax will need even more active campaigning across the world in the next 12 months to keep the pressure up – but the political door is ajar. This is a campaign waiting to be won. Following the Korea G20 President Sarkozy reiterated that achieving progress on an FTT to help finance development and climate change will be a pr

I’m taking a blog break, but some new talent is arriving….

The idea of stopping blogging fills me with a disturbing mix of reluctance, relief and alarm at the impending withdrawal symptoms, but I have no choice. It’s getting on for two and a half years since I started this blog, and I’m taking a break, probably til the end of the year.

The reason, as always, is workload – I’m writing a report for Oxfam International’s forthcoming campaign on ‘food justice in a resource-constrained world’ (don’t worry, that won’t be its final name), and as anyone knows who’s tried to write a report in a large international bureaucracy with lots of clever, different, passionate people, it’s both a time-consuming and gruelling process. See right for my current favourite visual metaphor – I am definitely the mouse, but I’m naming no names on who/what is the toad…… Actually my previous favourite works pretty well too.

So while I disappear into the toad, I thought we’d run an experiment and throw the blog open to some of Oxfam’s advocacy gurus, working on climate change, aid, the Robin Hood Tax, the G20, essential services etc etc. They’ll be strutting their stuff over the next few weeks. Make sure you give them a hard time or I might never be allowed back……

If I can’t stand the cold turkey, I might drop in the odd post. If not, see you all in 2011.

best wishes

Duncan

How can the global system manage scarcity?

Alex Evans is on a bit of a roll at the moment, with an excellent new paper on ‘Globalization and Scarcity: Multilateralism for a World with Limits’. It’s a great summary of the problems created by the threat of scarcity of food, land, water, energy, and ‘airspace’ (for greenhouse gas emissions). He confines his solutions to the implications for the multilateral system, rather than equally important responses from citizens, nation states or the private sector. Here’s a summary of the summary. First the problem:

“Globalization has improved the living standards of hundreds of millions of people – but growing resource scarcity means it risks becoming a victim of its own success.
 
On food, projections suggest that production will need to increase by 50% by 2030 (and 100% more by 2050), to meet forecast demand. Yet there are already signs that the productivity gains of the Green Revolution are running out of steam, even as significant amounts of crops are being diverted to biofuels. The 2008 food price spike provided a taste of what may be to come.

On land, competition between different land uses is increasing fast – both globally (between land uses including food, feed, fuel, forest conservation, carbon sequestration and growing cities), and in hotspots where land degradation, desertification, fast growing populations and weak systems of land tenure create the risk of political discord or violent conflict.

On water, demand will rise by around 25% by 2025, but even existing consumption levels are already beyond sustainable levels. Water scarcity will intensify over the next decade as groundwater depletion continues in many regions. Declining water availability is also projected to be probably the most significant impact of climate change over the next decade, with particular impacts on regions dependent on glacial meltwater and trans-boundary freshwater resources.

On energy, the International Energy Agency estimates that investment of $26 trillion is needed between now and 2030 to meet projected demand – a figure that rises to $36.5 trillion once the need to reduce greenhouse gas emissions is factored in too. However, current investment totals are nowhere near this level.

Climate change, finally, will intensify all of the above challenges, reducing food and water availability, driving massive shifts across energy and agricultural systems and causing a range of other shocks and stresses. A particular challenge facing policymakers is the fact that climate change impacts are likely to be highly unpredictable, non-linear, and hallmarked by sudden shifts as key thresholds are passed.

These scarcity challenges need to be understood as an integrated whole, not as separate issues. All of them present the greatest risk to poor people and countries, who have the least capacity to cope with shocks or adapt to new realities.

Scarcity issues could emerge as an important catalyst for collective international action to tackle global challenges – in the process helping to ensure that a globalization that is already efficient also becomes more sustainable, equitable and resilient. The paper focuses in on four key policy areas:

Development and Fragile States
Climate change and resource scarcity will hit poor people and countries hardest – not only for geographical reasons (e.g. that climate impacts will impact disproportionately on low latitudes), but also because of their high vulnerability. Environmental shocks are often part of the reason people become poor in the first place; poor people and countries spend high proportions of their incomes on food and fuel; the institutional and political weaknesses of fragile states can make them more susceptible to conflict risks arising from scarcity (although scarcity issues will usually be threat multipliers, rather than stand-alone conflict risk drivers).

Multilateral actors are already massively involved in issues of development, state fragility and conflict response, and this – together with the fact that poor people and countries are most vulnerable to scarcity – means that the multilateral system will have no choice but to take account of scarcity in its work in developing countries, whether in humanitarian assistance, conflict mediation, peacekeeping, long-term development partnership or support in international forums.

Finance and Investment
The key areas in which investment is needed as a result of climate change and resource scarcity are (a) energy systems, where the policy challenge is to deliver both energy security and climate stabilization at the lowest possible cost; (b) agriculture, where there is a need to finance increased crop production, again in a way that addresses climate stabilization, and with far lower input levels than today’s agriculture; and (c) the costs of financing improved resilience (for example, through social protection systems), especially in developing countries.
 
Three roles stand out for multilateralism. Collective action is needed, first, to correct market failures, such as environmental costs that are not reflected in prices; second, to provide ‘signals from the future’ that can improve long-term predictability for private sector investors; and third, to protect poor people and poor countries from the effects of scarcity by financing enhanced resilience.

International Trade
The food and fuel price spike demonstrated the risk of acute trade shocks such as price spikes, and how these can lead to knock-on social, economic and political consequences. At the same time, such impacts risk leading to countries losing confidence in open international trade, while the potential for unilateral use of ‘carbon tariffs’ risks leading to a slide towards tit-for-tat protectionism. Over the longer term, increasing energy scarcity or tight emissions controls could impede international supply chains and reduce the overall volume of international trade.

Effective multilateral cooperation can help to head off these risks by creating trust between countries that they can rely on the trade system to meet their needs.

Strategic Resource Competition
Finally, increasing scarcity will create new strategic resource competition between states – at worst, involving the risk of inter-state conflict.158 of the world’s 263 international river basins lack any kind of cooperative management framework, with projected glacial melting an especially important risk driver in the future. Already, both developed and emerging economies are engaged in a scramble for energy resources in numerous regions, and a similar dynamic may be emerging in the context of land and food access deals. Climate impacts, especially rising sea levels, will create new political disputes over newly available resources and sea lanes, whilst challenging existing legal infrastructure (for example, water sharing agreements).

Multilateral cooperation is needed not only to contain worst case scenarios, such as the risk of inter-state conflicts over resources, but also the risk of a generalized shift away from international cooperation, and towards zero sum competition.”

The paper provides specific short and medium term suggestions for how the multilateral system can better handle scarcity in each of these areas. As is often the way, the recommendations are not quite as powerful or original as the diagnosis, often reading like pretty standard development policy (increase aid and R&D spending, educate girls, build social protection systems), but the paper as a whole is incredibly useful.

World diets; moslem tigers; British aid policy; untranslatable words; good and bad biofuels; fractals and finance; shooting poverty: links I liked

How many people can the world support? Depends on their diet, says Lester Brown

Dani Rodrik discusses why, when it comes to human development, the top ten performers are not dominated by the East Asian tigers, but my majority moslem countries, and not all of them big oil exporters.

The Guardian’s Madeline Bunting thinks British aid policy makes no sense

Iktsuarpok (Inuit) – “To go outside to check if anyone is coming.” 20 wonderfully untranslatable words from around the world [h/t Chris Blattman]

The Economist reckons a new generation of biofuels may finally be on its way, but not the cellulosic ones everyone was expecting  – instead ‘drop in’ hydrocarbons made from sugar could replace ethanol.

More on biofuels: ‘Plans to make European motorists use more biofuels could take an area the size of Ireland out of food production by 2020 and accelerate climate change’

Alejandro Nadal celebrates Benoit Mandelbrot’s work on fractals in financial markets, and why it means they need to be regulated

Washington Consensus R.I.P part 237: Ilene Grabel celebrates the return of capital controls in developing countries

And a film competition linked to the international campaign for an arms trade treaty – here are the shortlisted contenders – vote for your favourite. Here’s the current front runner:

Bang For Your Buck from ShootingPoverty on Vimeo.

Global price chaos – is another food crisis on the way?

Today in the FT: “Sugar prices suffered their biggest one-day sell-off in 30 years on Thursday, tumbling by as much as 11 per cent after speculators pulled out from the market in the wake of dizzying gains. The sell-off, which came just hours after the sweetener hit a 30-year high, started after the European Commission granted further export licences for the commodity, a move widely expected among physical sugar traders.

But some hedge funds took Brussels’ decision as a bearish signal and began selling heavily, traders said. The selling quickly escalated into a rout as falling prices triggered a string of automatic sell orders on the way down, they said. “It is a total meltdown, totally unexpected. There is no explanation,” one bullish trader said.”

Yesterday: “As economists and central bankers fret about the risk of Japanese-style deflation in the west, commodity traders are warning of a very different phenomenon: “agflation”. Amid supply shortages and panic buying across the globe, prices for cotton, sugar and wheat have spiralled to multi-year highs this week, pushing up sharply the costs of materials for basic foodstuffs and clothes.”

A look at the FAO’s useful food price tracker (left) shows the picture. Food prices are heading upwards rapidly again, approaching the 2008 peak that saw food riots in some 30 countries, and an outburst of concern over food security that triggered a spate of ‘land grabs’ by rich countries in the developing world. It also drastically pushed up the numbers of the roughly one in seven of the world’s population who go to bed hungry every night, (see graph of numbers of hungry people worldwide). The line falls back a bit to 925 million in 2010, according to the FAO, but given the latest price shifts, is surely about to resume its upward march.

This kind of price chaos can mean big profits if you’re playing the market and guess right, but it’s hard to see an upside for either producers or consumers. Is this really the best way to run the global food system?

For more see the Financial Times’ excellent ‘global food crisis’ site.