1 Jul 2015

Can the IMF turn over a
new leaf and challenge the 1%?

...and will we follow Dutch court &
challenge Harper on climate change?

Two remarkable developments during the past week that could have a significant impact in many countries are worth a lot more attention in Canada and the United States.

First, a major research document published by five top economists at the International Monetary Fund (IMF) admitted that the strong pro-capitalist policies at the centre of its activities in developing countries for the past 30 years do not work.

One of the IMF’s main roles in recent years has been to bail out countries during financial crises. In return for loans, some 60 mostly poor countries have been forced to follow strict rules, such as privatizing government resources, deregulating controls to open markets to foreign investment, and restricting what they can spend in areas such as education and health care.

Now the paper, Causes and Consequences of Income Inequality: A Global Perspective, says there needs to be a shift and that greater income equality in both developing and developed countries should become a priority.

Dutch told to act on emissions

The other significant – but unrelated development – which received scant attention, concerns a ground-breaking decision judges in the Netherlands. They ordered the Netherlands government to slash greenhouse gas emissions by at least a remarkable 25 per cent by 2020.

The ruling came after almost 900 Dutch citizens, headed by the group Urgenda, took their government to court in April in a class action lawsuit to force a reduction of greenhouse gas emissions to tackle climate change. Netherlands has been lagging behind other European countries in tackling climate change.

Significantly, the challenge was based, not on environmental law, but on human rights principles. Urgenda asked the courts to “declare that global warming of more than two degrees Celsius will lead to a violation of human rights worldwide.” 

The court said, “The state should not hide behind the argument that the solution to the global climate problem does not depend solely on Dutch efforts ... Any reduction of emissions contributes to the prevention of dangerous climate change and as a developed country the Netherlands should take the lead in this.”

"A courageous judge. This is fantastic," said Sharona Ceha, a member of the climate change group Urgenda. "This is for my children and grandchildren."

The international community is attempting to set limit global warming to 2C over pre-industrial levels. Countries are to publish their own undertakings to reduce greenhouse gas emissions ahead of a hoped-for global deal to be agreed in Paris in December.

While the Dutch government can appeal the ruling to a higher court, lawsuits against governments and companies in Europe have increasingly been seen as a way to press for action against climate change.

The Amsterdam-based group said the case was the first in Europe in which citizens attempted to hold the state responsible for its potentially devastating inaction and the first in the world in which human rights are used as a legal basis to protect citizens against climate change.

The landmark case could very well set an important precedent for public interest groups in other countries. Cases are already being brought forward in Belgium, Norway and the Philippines.  

Perhaps this is a course Canadian environmental groups should consider. Diane Saxe thinks so. As the Toronto-based environmental lawyer told the CBC's The Current, "The more I read the Dutch court decision, the more I'm getting excited about it, because the arguments made by the three judges could be made in Canada . . . .I think it eventually will happen." 

IMF denounces ‘trickle-down’ economics

In the other story, the IMF report contradicted its long-held position of following hard-nosed capitalist guidelines. It said that the dreaded concept of ‘trickle-down’ economics – which it forced on developing countries and which is practiced by the Harper government – should be abandoned.

“To tackle inequality, financial inclusion is imperative in emerging and developing countries, while in advanced economies, policies should focus on raising human capital and skills and making tax systems more progressive,” concludes the report. Wages and living standards for the bottom 20 per cent should be raised, worker protections improved, and environmental standards implemented.

The practices and policies of the IMF have been controversial for many years.

The rich and powerful countries that control the IMF have used the body’s loans program to force their preferred economic policies on poor countries, even though rich countries themselves did not employ the same strict measures on themselves when they were developing.

The report’s critical analysis also applies to neo-liberal economic policies practiced by most Western governments, including the United States, Canada and several European countries.

The document was enthusiastically received by IMF critics, who have accused the world body of hindering – not helping – development in several poor countries over the years.

"Fighting inequality is not just an issue of fairness but an economic necessity," said Nicholas Mombrial of Oxfam International in response to the report. "And that’s not Oxfam speaking, but the International Monetary Fund."

“By releasing this report, the IMF has shown that 'trickle-down' economics is dead; you cannot rely on the spoils of the extremely wealthy to benefit the rest of us. Governments must urgently refocus their policies to close the gap between the richest and the rest if economies and societies are to grow," said Mombrial.

Austerity increases poverty

Critics strongly object to austerity measures that have been forced upon most of the 60 countries where the IMF has been providing loans.   

“Such belt-tightening measures increase poverty, reduce countries' ability to develop strong domestic economies and allow multinational corporations to exploit workers and the environment,” argues Global Exchange, an international human rights organization.

Global Exchange charges that the IMF contributes to poverty instead of alleviating it: “Nearly 80 percent of all malnourished children in the developing world live in countries where farmers have been forced to shift from food production for local consumption to the production of export crops destined for wealthy countries.”

It’s very likely that the IMF will change some of its policies concerning developing countries. However, change may be slow. The IMF is a huge and complex organization where the wheels grind slowly. Secondly, the Western countries that control the organization tend to be strongly influenced by powerful and wealthy people who benefit from “trickle down” economics.  

When the IMF finally makes significant policy changes, and if countries were to follow its lead in their own economic planning, many countries could experience a significant change in income distribution. Perhaps it will result in the one per cent no longer owning 48 per cent of the world’s wealth. 
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10 Jun 2015

G7 false commitments won't help us
tackle 7-million air pollution deaths

During the hour that it took the world’s elite G7 politicians discussing climate change to wander through an enchanting meadow of flowers in Germany’s Bavarian Alps earlier this week, at least 800 people died prematurely from the impact of air pollution, most of it caused by the burning of non-renewable fossil fuels.

Wanting to show the world – particularly voters at home – that they care about the seven-million people a year dying from various pollution and carbon related causes, the leaders of the world’s richest countries, including Canada, signed a joint declaration calling for a global phasing-out of fossil fuels 85 years from now.

It’s unlikely that, during their deliberations in the picturesque Schloss Elmau at the foot of Germany's highest mountain, anyone at the Summit reflected on the World Health Organization’s (WHO) report of a year ago that said in 2012 around seven million people died – one in eight of total global deaths – as a result of air pollution exposure.

Unfortunately, despite positive coverage in mainstream media in several countries, the section of the Summit dealing with climate change must be considered an over-blown failure.

German Chancellor Angela Merkel was disappointed that G7 members – largely because of opposition from Canada and Japan – wouldn’t agree to a commitment to a low-carbon economy by 2050. Instead, the G7 agreed to a full-blown, no-carbon economy, but not until 2100.

According to their declaration, the G7 countries say they intend to insist on greenhouse gas reduction at least in the upper 40 to 70 per cent range by 2050. There’s also a promise to cut emission by 17 per cent by 2020.

But, despite the tough talk, no nation-specific targets were set, and the G7Declaration is not binding.

Canada, living up to its long-held reputation as the world’s leading foot dragger on climate issues, balked at Merkel’s earlier proposal that G7 countries would eliminate carbon emissions by 2050.

Prime Minister Stephen Harper, who rejects scientific information on the threat of global warming, said Canada would reach the G7 targets through developing new technologies, not by reducing living standards.

Meanwhile, the G7 countries – in a farcical display of public relations – agreed on a binding two degree target for limiting global warming. Again, no timeframe was set, but the G7 group will take their declaration with them to Paris in December for the crucial UN Climate Summit.

Had they been more concerned about the hardship people around their world are experiencing – including people in some of their own countries – perhaps the Summit would have taken a more realistic, more dynamic approach to tackling the world’s most pressing problem.

Environmental groups were divided
in their opinions of the Summit. 

Christoph Bals from the NGO Germanwatch said “the summit sends a strong signal for a successful climate agreement at the end of the year in Paris.”

But the development organization Oxfam said the outcome was inadequate. “If the G7 really want to implement their decisions, they must take concrete measures – such as promptly initiating a phase-out of harmful coal,” said Oxfam climate protection analyst Jan Kowalzig.

“Coal is the biggest single cause of climate change”, says Oxfam, “yet the G7 countries are still burning huge amounts, despite efficient, affordable, renewable alternatives being available. G7 coal power stations emit twice as much fossil fuel CO2 as the whole of Africa, and their contribution to global warming will cost Africa alone more than $43-billion per year by the 2080s . . . .”

In addition, despite the bravado in Germany, G7 countries have pledged US$8-billion per year in subsidies to expand fossil fuel production. This runs totally contrary to their claimed emission commitment positions.

Despite U.S. President Obama’s action-oriented position in Germany, the globe’s second largest polluter is not committed to substantive action on climate change. Back home, 70 per cent of Republicans in the Senate and 53 percent of Republicans in the House deny the existence of human-caused global warming.

In view of such contradictions, holding global warming to two degrees appears to be a monumental challenge.

In fact, expectations for a successful outcome in Paris have been waning, and the lack of any concrete action by the G7 further decreases expectations.

If the planet is to avoid large increases in global warming, massive actions never before accomplished by humankind will be necessary.

No doubt some progress will be made but, according to the independent Climate Action Tracker, the world’s current policies would result in global warming of 3.6 to 4.2 degrees Celsius by 2100. Even the current pledges of the G7 countries, if converted into effective policies, probably would not be enough for the world to stay under the target of keeping warming to 2 degrees Celsius.

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25 May 2015

We must start 'shaming' those
who lie to us, destroy our climate

During a flight from Montreal to Halifax I missed a chance to carry out an act of defiance – “shaming” – against a person who has greatly abused his position of authority in Canada.

Given how powerless ordinary folk and public interest groups have become, I would like to see people embarrass the hell out of those who take advantage of the public by lying to us, cheating us, or destroying our priceless environment.

As I made my way down the aisle, I spotted the square jaw, the glasses and the prematurely-balding head. I was going to get my chance to walk right up to the Right Honorable Peter MacKay.

MacKay has lied to us enough times that cartoonists depict him with a Pinocchio nose. As Justice Minister, he lied that he didn’t know information ignored by the Department would mean a law the government passed violated the Constitution, and worst of all, in 2007, he misled the House of Commons over what he knew about the possible torture of prisoners handed over by Canadian troops to the Afghanistan government.