8 Nov 2009

Dark Clouds Gathering Over Copenhagen

Phil Gasper keeps sending me useful things, much appreciated! This is on Copenhagen and the mounting calls for a Tobin Tax, they can save the banks but saving the planet is just too expensive for them, we need to be making some noise in the run up to what is likely to be a carbon circus that shovels more money into the open mouths of the bankers.


*CLIMATE CHANGE: Dark Clouds Gathering Over Copenhagen*

Analysis by Sanjay Suri

ST. ANDREWS, Nov 7 (IPS) - It has been a bad week for the climate change
summit in Copenhagen next month. During the week the last meeting in the
formal round of pre- Copenhagen talks collapsed in Barcelona. Then, meeting
here on the weekend, the G20 finance ministers put the seal on that failure
by failing to agree a financial package.

The G20 is clearly a platform, not a group. And inevitably, the developed
nations as they are labelled, and the emerging economies, stuck to their
positions, that have conflict and differences built into them.

It is in the nature of these summits that - after all this - everyone still
announces an agreement.

"We committed to take action to tackle the threat of climate change and work
towards an ambitious outcome in Copenhagen, within the objective, provisions
and principles of the United Nations Framework Convention on Climate Change
(UNFCCC)," the G20 ministers declared.

"We discussed climate change financing options and recognised the need to
increase significantly and urgently the scale and predictability of finance
to implement an ambitious international agreement.

"To deliver this financing, coordinated equitable, transparent and effective
institutional arrangements will be needed. Coordination of support for
country-led plans and reporting of this support should be ensured across all
financing channels, multilateral, regional and bilateral. We discussed a
range of options and, recognising that finance will play an important role
in the delivery of the outcome at Copenhagen, we commit to take forward
further work on climate change finance, to define financing options and
institutional arrangements," announced the ministers.

The bureaucracy attached to these things is clearly not new to the business
of producing language to defy facts.

The meeting in St. Andrews in fact "turned out to be a mostly irrelevant
sideshow on the way to the talks in Copenhagen," says Richard Dixon,
director of WWF Scotland. "This is a group that can throw money at
collapsing banks but cannot find adequate figures for the far worse
challenge to the global economy of a collapsing climate system."

The collapse came after British Prime Minister Gordon Brown stepped into the
meeting to make what many considered a bold, if carefully worded,

Brown spoke sharply against the culture of banks, saying, "it cannot be
acceptable that the benefits of success in this sector are reaped by the
few, but the costs of its failure are borne by all of us." He then mentioned
a financial transactions tax as a possibility, that would also tax banks.

"I believe we should discuss whether we need a better economic and social
contract to reflect the global responsibilities of financial institutions to
society. There have been proposals for an insurance fee to reflect systemic
risk, or a resolution fund, or contingent capital arrangements, or a global
financial transactions levy."

The fact that he mentioned the last of these is significant, arising as it
does from ideas of the Tobin tax. Proposed by economist James Tobin, this
would be a tax on all currency trade across borders. Brown spoke beyond that
of a "global financial transactions levy."

The yield could be massive. A tax of 0.05 percent on financial transactions
could produce 700 billion dollars a year, Oxfam estimates. This would be
enough to pay for climate change mitigation and adaptation actions, and a
good deal of development work besides.

It is as significant that the proposal came from Britain, which has long
wrapped that kind of suggestion in cold silence. Oxfam estimates that 60
percent of the kind of financial transactions Brown spoke of take place in
Britain, where the City of London - the financial district of the capital -
is a global centre for bank and currency transactions.

Brown’s proposal did not get anywhere during the meeting. "Talk of a
financial transaction tax has the potential to raise hundreds of billions in
new funding every year, but turned out to be a red herring without solid
political support," Dixon stressed.

Germany and France have supported such a tax. But, with financial powerhouse
Britain now indicating that it should be considered, this opens up a new
division between major European economies on one side, and the U.S.
principally on the other - the U.S. very clearly is not supportive of this
family of tax proposals.

This was not the only possibility raised, and dumped. At the London G20
summit in April the developed countries spoke of action against tax havens,
to enable developing nations to use money saved for development. The
communiqué from St. Andrews, ActionAid points out, speaks only of "the
possible use of a multilateral instrument" to that end.

The possibilities here are huge, Martin Hearson from ActionAid tells IPS.
"What is needed is for developed countries to set up a system and to force
tax havens to participate. At the moment information is available to
developed countries bilaterally, but developing countries often lack
information or the means to protect their money."

The implications for development, including action on climate change, can be
huge, Hearson says. "We believe that potentially 160 billion dollars a year
can be saved for developing countries through action on tax havens, and that
money can be used for development and for actions over climate change. It’s
a sum of money that dwarfs aid budgets."

Campaigners are now looking more for such collaborative actions, and for
actions on suggestions such as Gordon Brown’s, rather than hoping for
governments to dish out money directly.

Several campaigners believe these proposals will bear fruit later, even if
they did not find instant agreement during the course of a day. "Gordon
Brown today signalled that payback time for banks could be just round the
corner," says Max Lawson, Oxfam senior policy adviser. "A tax on banks would
be a major step towards clearing up the mess caused by their greed."

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