Last (Climate) Tango In Paris
This article explores how climate change was kicked into the long grass by the rising tide of neoliberal expansion and goes behind the history of the 2015 Paris Agreement.
The postponed COP26 in Glasgow would be happening right now (November 2020) were it not for Covid-19. To mark the moment I'm posting this updated article I put out after I returned from COP21 in Paris in 2015.
In 2015, the Paris Climate Agreement was reached. But how effective was it? In a process that has now been running for nearly 30 years, this article explores how climate change was kicked into the long grass by the rising tide of neoliberal expansion.
The Bruntland Report
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n 1983 the World Commission on Environment and Development (WCED) was established. It was chaired by the Prime Minister of Norway, Gro Harlem Brundtland. The objective of the WCED was to create a united international community with shared sustainability goals by identifying sustainability problems worldwide, raising awareness of them, and suggesting the implementation of solutions. The result was Our Common Future, published in 1987 also known as the Bruntland Report. It led to the Summit for Sustainable Development at Rio de Janeiro (Earth Summit) in 1992.
The timing of this process was important and needs to be taken within a historical context.
The Post War Boom And Globalisation
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fter World War 2, major changes took place that would shape the economic, political and social dynamics of the 20th Century and beyond. It began with the establishment of the so called Bretton Woods organisations.
The Bretton Woods conference took place in July 1944. This led to the establishment of the International Bank for Reconstruction and Development (IBRD — the forerunner of the World Bank) and the International Monetary Fund (IMF).
There was also a proposal for an International Trade Organisation. But it wasn’t until 1947 when, under the auspices of the UN, the General Agreement on Tariffs and Trade (GATT) was established. This was superseded by the World Trade Organisation (WTO) in 1995.
The ultimate aim of the Bretton Woods agreement was to create open markets and encourage trade and to engage in the free movement of capital — perfectly reasonable proposals in an environment of post war reconstruction. And with the financial and economic chaos created during the inter war years, which ultimately created the conditions that led to the outbreak of world war 2, there was no desire to repeat the same mistakes again.
The so called Bretton Woods era, which ran from the cessation of hostilities to 1971 was a period of considerable growth and recovery. Part of this process was attributed to the Marshall Plan, which took effect in 1947. It allowed the US to funnel funds into boosting ailing post war economies. Essentially the Bretton Woods era was a model of how a successful well regulated economic process could work.
The post war success story was linked to the strength of the US Dollar, which was pinned to the gold standard. But that all began to change in the ‘70’s. What happened next would lead to the emergence of the neoliberal economic model and financial globalisation.
During this period, two opposing forces would find themselves at loggerheads with each other, namely the rise of corporate power and the environmental and anti-globalisation movement.
Part of the reconstruction program was the development of intensive industrial agriculture that relied heavily on synthetic agrochemicals. Underpinning intensive agriculture is the use of nitrogen fertilisers. As this article from Mother Jones points out ‘Today’s industrial-scale farms would not be possible without it.’
The US led the way:
By the end of World War II, the United States had built 10 large-scale nitrate factories to make bombs. With Europe’s and Japan’s production facilities in ruins, the US entered the postwar period as the undisputed global champion of nitrogen production. The industry quickly shifted from munitions to fertilizer and domestic consumption began to skyrocket, driven, …by the rise of new hybrid strains of corn, “the first kind of high-yielding grain cultivar dependent on higher fertilizer applications.”’
However, fertiliser use brings with it a host of environmental problems:
Industrial agriculture’s reliance on plentiful synthetic nitrogen brings with it a whole bevy of environmental liabilities: excess nitrogen that seeps into streams and eventually into the Mississippi River, feeding a massive annual algae bloom that blots out sea life; emissions of nitrous oxide, a greenhouse gas 300 times more potent than carbon; and the destruction of organic matter in soil.
Another important component in industrial agriculture is the use of biocides for pest and weed control. It was the increased use of these chemicals that first drew attention to the fact that humanity was beginning to have an impact on the environment:
‘As crude a weapon as the cave man’s club, the chemical barrage has been hurled against the fabric of life — a fabric on the one hand delicate and destructible, on the other miraculously tough and resilient, and capable of striking back in unexpected ways. These extraordinary capacities of life have been ignored by the practitioners of chemical control who have brought to their task no “high-minded orientation,” no humility before the vast forces with which they tamper’.
These words were spoken by Rachel Carson over 50 years ago in her ground breaking book Silent Spring. Yet the text of that remarkable book could be rewritten today as though it was fresh and would be just as applicable to the mindless crusade against nature that continues to prevail.
Throughout history — since the first use of synthetic agrochemicals began in earnest during the post war years — it has been a constant battle of wits between humanity and nature. It was widely recognised as far back as the 1930’s that there were effective biological methods of dealing with pests and other agricultural ‘intrusions’. Yet these were completely ignored in the wake of the chemical revolution. It was therefore only a matter of time before the dangers of DDT and other chemicals would be fully exposed. These dangers and the folly that brought them to bear are fully explored in Carson’s book.
Many attribute Carson as being the first person to bring the concept of ‘ecology’ into the mainstream. Indeed in many ways the book was the spark that brought initial awareness to environmental issues. Yet as we will see, commercial interests would trump over the environment. But it wasn’t just agrochemicals that was causing problems. Pollution was also becoming a major issue.
One of the most destructive forms of pollution to surface in the 20th century was acid rain. It effects had been known about for some time. But during the 60’s into the ‘70’s, its effects became severe and widespread. Effects ranged from widespread forest damage to high mortality rates of organisms in rivers and lakes. There was also an impact on agricultural production as levels of acidity in the soil increased.
There was absolutely no doubt left an anyone’s mind that human activities was causing widespread ecological damage. And there was one phenomenon that began to surface in the ‘80’s that could hypothetically leave the planet uninhabitable:
In 1984 British Antarctic Survey scientists, Joesph Farman, Brian Gardiner, and Jonathan Shanklin, discovered a recurring springtime Antarctic ozone hole. Their paper was published in Nature, May 1985, the study summarized data that had been collected by the British Antarctic Survey showing that ozone levels had dropped to 10% below normal January levels for Antarctica.
Man-made chlorines, primarily chloroflourobcarbons (CFCs), contribute to the thinning of the ozone layer and allow larger quantities of harmful ultraviolet rays to reach the earth.
After a series of rigorous meetings and negotiations, the Montreal Protocol on Substances that Deplete the Ozone Layer was finally agreed upon on 16 September 1987 at the Headquarters of the International Civil Aviation Organization in Montreal.
The Montreal Protocol stipulates that the production and consumption of compounds that deplete ozone in the stratosphere — chlorofluorocarbons (CFCs), halons, carbon tetrachloride, and methyl chloroform are to be phased out by 2000 (2005 for methyl chloroform). Scientific theory and evidence suggest that, once emitted to the atmosphere, these compounds could significantly deplete the stratospheric ozone layer that shields the planet from damaging UV-B radiation.
The Montreal Protocol is regarded as one of the most successful collective action international legal instruments ever concluded. The evidence was clear. If the ozone layer goes, the Earth is effectively turned into a gigantic microwave oven. Unfiltered UV radiation would have a catastrophic effect on life on Earth.
By coincidence, 1987 was also the year Bruntland’s report came out. Clearly the world was ready to do something about the serious environmental problems emerging?
As it happened, this period was also when concerns over climate change began. The Intergovernmental Panel on Climate Change (IPCC), was established in 1988 by the World Meteorological Organization (WMO) and the United Nations Environment Programme (UNEP), and later endorsed by the United Nations General Assembly through Resolution 43/53. T
he concept of climate change first emerged in the late 19th century. Swedish chemist Svante Arrhenius published research he had been conducting, on CO2 levels in the atmosphere. He had estimated that rising CO2 levels could cause warming on the earth, although his estimates were a bit far off compared to modern research.
It wasn’t until the 1950’s when hard evidence emerged that scientists began to take the issue of climate change seriously.
The report A history of climate activities from the WMO traces the timeline of research on climate change.
At Mauna Loa in Hawaii, Charles Keeling began monitoring levels of CO2 in the atmosphere. He produced the famous Keeling curve. The following graph is the full record of CO2 rise since Keeling began his measurements in 1956.
As the WMO report notes, the first steps were taken in 1961 to understand the climate:
A 1961 United Nations General Assembly Resolution called on WMO and the non-governmental International Council for Science (ICSU) to collaborate in developing the new scientific and technological opportunities for monitoring, predicting and eventually controlling, weather and climate and triggered the twin birth of the WMO World Weather Watch and the WMO/ICSU Global Atmospheric Research Programme (GARP). The World Weather Watch was aimed at providing the basic global infrastructure for supporting operational weather forecasting and for describing and monitoring climate, while GARP was focused on the dual objectives of improved weather forecasting and a scientific basis for climate prediction.
In the 1970’s there was an alternative view that the earth was heading for an ice age. However in 1974:
WMO established an Executive Committee Panel of Experts on Climate Change which, in its final report, largely dismissed the speculation on global cooling and reaffirmed the general scientific expectation of greenhouse warming but stressed the importance of making better use of existing climate knowledge in learning to live with the large natural variability of climate. It inspired the early WMO planning for an inter-agency World Climate Programme and triggered the WMO decision to convene a World Climate Conference in 1979.
The 1979 conference was a watershed moment. Climate change had now become mainstream. From this stemmed a global endeavour to understand the implications of climate change and what steps could be taken to deal with the issue.
This was followed by the the Villach Conference in 1985, which considered the available scientific evidence at the time. The conference took an urgent view of climate change. This was tapped into by the Brundtland commission:
The Tenth World Meteorological Congress in May 1987 considered both the outcome of the Villach Conference and an advance briefing on the conclusions of the World Commission on Environment and Development (the Brundtland Commission) which had drawn heavily on the Villach findings in highlighting global warming as a major threat to sustainable development.
It was out of these considerations that the IPCC came into being. At the same time plans emerged for the creation of a framework treaty on climate change (UNFCCC).
The Second World Climate Conference (WCC-2) consolidated the plans:
The second purpose of the Conference, which emerged relatively late in the planning, was to undertake an initial international review of the First Assessment Report of the IPCC as a lead-in to the negotiations for a UN Framework Convention on Climate Change, which were scheduled to begin in Washington DC in February 1991 and to conclude in time for signature at the Rio Earth Summit in June 1992.
The first Conference of the Parties to the Convention (COP) was convened in 1995. Since then they have taken place on an annual basis, with COP21 taking place in Paris.
In 1997 at COP3 in Kyoto (Japan), the Kyoto Protocol was adopted and entered into force on 16 February 2005. The detailed rules for the implementation of the Protocol were adopted at COP7 in Marrakesh, Morocco, in 2001, and are referred to as the “Marrakesh Accords.” Its first commitment period started in 2008 and ended in 2012. A second commitment period was subsequently agreed, as stipulated on the UNFCCC website:
In Doha, Qatar, on 8 December 2012, the “Doha Amendment to the Kyoto Protocol” was adopted. The amendment includes:
New commitments for Annex I Parties to the Kyoto Protocol who agreed to take on commitments in a second commitment period from 1 January 2013 to 31 December 2020;
A revised list of greenhouse gases (GHG) to be reported on by Parties in the second commitment period; and
Amendments to several articles of the Kyoto Protocol which specifically referenced issues pertaining to the first commitment period and which needed to be updated for the second commitment period.
With respect to the current situation:
In Durban, the Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP) was established to develop a protocol, another legal instrument or an agreed outcome with legal force under the Convention, applicable to all Parties. The ADP is to complete its work as early as possible, but no later than 2015, in order to adopt this protocol, legal instrument or agreed outcome with legal force at the twenty-first session of the Conference of the Parties and for it to come into effect and be implemented from 2020.
The Paris agreement is therefore the outcome of this process and if this plan is followed, there should be another Protocol in place by 2020 at the latest. However due to the COVID-19 pandemic, COP26, due to take place in Glasgow, was postponed until 2021.
But the UNFCCC process has come under criticism in recent years. COP15 at Copenhagen became the focal point for civil society protest. By the time Kyoto was adopted, there had been two IPCC assessment reports. In 2007, the Forth assessment report was published. It was clear from this that the science had moved well beyond what was available at Kyoto. With the first commitment period ending in 2012, COP15 was targeted by civil society as means of influencing the UNFCCC process in order to convince of the scientific necessity of a stronger legal process following 2012.
Copenhagen was regarded a failure. But why was civil society ignored and indeed why was the science also rejected in favour of a second commitment period on Kyoto? To answer that question, the politico-economic shift that took place after the end of the Bretton Woods era needs to be considered.
Post Bretton Woods
This BBC article summarised the consequences of the breakdown of Bretton Woods:
The end of the Bretton Woods system unleashed two decades of financial globalisation, encouraged by the deregulation not just of currency markets, but also of rules about banking and investment.
This led to increased flows of private money to rich and poor countries alike, which helped boost growth but also created greater instability.
The rapid reversal of such private sector flows when currencies were threatened with devaluation was the central cause of the Asian financial crisis in 1997–98, which spread to Russia and eventually Argentina.
The resources of the IMF proved inadequate to compensate for the run on their currencies, and the adjustment proved painful, with sharp falls in GDP. Since then, many Asian countries, including China, have accumulated large currency reserves to insulate themselves against future crises, avoiding the need to call on the IMF.
The financial crash of 2008 was the ultimate consequence of this process. And in a sense, the market failure of 2008 parallels the failure of the UNFCCC to engage in any meaningful solution towards the problem of climate change.
With the emergence of neoliberal economics over the past three decades, Brundtland would end up being consigned to the archives.
Since the early 1970’s there has been a tug-of-war between sustainable development and neoliberalism. The global system that followed the breakdown of Bretton woods, has come to endorse the neoliberal philosophy. This has countered the realisation of sustainability. In order to understand why, I’ll trace how this parallel development of two apparently opposing concepts emerged.
The seeds were sown in the Chicago School of Economics by Milton Friedman, who’s economic theories became mainstream.
Friedman trained groups of students who became known as the ‘Chicago Boys’. Naomi Klein covers the story of the Chicago Boys and Friedman’s influence in detail in her book The Shock Doctrine.
Friedman was effectively the Godfather of unfettered ultra laissez-faire capitalism. He recognised disaster as an opportunity for ‘economic development’. This was the ideology that Friedman instilled in his students. As Klein put it in her book:
Like all fundamentalist faiths, Chicago School economics is, for its true believers, a closed loop. The starting premise is that the free market is a perfect scientific system, one in which individuals, acting on their own self-interested desires, create the maximum benefits for all. It follows ineluctably that if something is wrong within a free market economy — high inflation or soaring unemployment — it has to be because the market is not truly free. There must be some interference, some distortion in the system. The Chicago solution is always the same: a stricter more complete application of the fundamentals.
Prosperity grew during the post war period, but that prosperity was being shared. In other words those that were getting rich could be richer. Friedman’s goal was to open up the market. Everything should be privatised. That way the state would be exonerated from the cost of providing public services. It would effectively be the thin edge of the wedge for free market neoliberalism.
At the time the world was in the grip of the cold war. So anything that resembled socialism was regarded as negative.
With the creation of the CIA, the US began to engage in subversive US foreign policy. What couldn’t be achieved at home — yet — could be achieved abroad.
Friedman was presented with a golden opportunity to test his theories in Chile. The US developed a scheme where Chilean students would have their education sponsored and paid for by the US Government. Klein picks up the narrative:
By selecting Chicago to train Chileans — a school where professors agitated for the near-complete dismantling of Government with single-minded focus — the US state department was firing a shot across the bow in its war against developmentalism, effectively telling Chileans that the US Government had decided what ideas their elite students should and should not learn.
The ‘Chile project’ marked the beginning of blatant US interventionism on a grand scale. The infamous military Junta of Argentina followed the same pattern. The middle east had been and still was a target by virtue of its oil reserves.
But the experiment needed a push as many south American countries were predominately left wing. The newly elected president Richard Nixon was the man for the job. With billions at stake in US investments, Nixon gave the CIA the go ahead to bring down newly elected president Salvador Allende.
The CIA engineered the Chilean Coup through opponents of Allende, with the Chicago boys working furtively in the background. When General Augustus Pinochet came to power through the military, the regime agenda was already in place.
Pinochet was a brutal dictator. Thousands of people lost their lives during the Coup and in the purges that followed. A fascist dictatorship was the perfect home for unfettered capitalism.
But the experiment was a catastrophic failure. After a year, inflation went through the roof. Unemployment was rampant. The economy was facing imminent collapse. Finally in 1982, Chile crashed and Pinochet was forced to backtrack and shift into socialist mode.
Klein sums up the experiment:
Chile… was a country where a small elite leapt from wealthy to super-rich in extremely short order — a highly profitable formula bankrolled by debt and heavily subsidised (then bailed out) with public funds. When the hype and salesmanship behind the miracle are stripped away Chile under Pinochet and the Chicago boys was not a capitalist state featuring a liberated market but a corporatist one. …What Chile pioneered under Pinochet was an evolution of corporatism: a mutually supporting alliance between a police state and large corporations, joining forces to wage all-out war on the third power sector — the workers — thereby drastically increasing the alliance’s share of the national wealth.
The current economic situation is virtually a carbon copy. As far as Friedman and the faithful were concerned, the experiment wasn’t a failure, it was the fault of some external influence — the ultimate in group think. Or as Klein put it, the elitist in their cocoons — smothered by their wealth:
have been the crack cocaine of financial markets ever since. And that’s why the financial world did not respond to the obvious contradictions of the Chile experiment by reassessing the basic assumptions of Laissez-faire. Instead it reacted with the junkies logic: where is the next fix?
A similar fate befell other countries in South America. But the lurch towards neoliberalism was unstoppable. Although Friedman ended up in the wilderness after the South American disaster, unfettered capitalism was about to enter the stage in the West — courtesy of Margaret Thatcher and then Ronald Reagan. And it wouldn’t need a military coup to accommodate it.
Thatcher was a convert of Friedman’s theories. After all, he was one of her economic advisers. She also had a huge amount of respect for Pinochet. But not so much his methods. When it was suggested to her that she implement in the UK what happened in Chile, she refused. In other words, Chicago style economics wasn’t possible in democratic UK.
But a great irony was about to transpire. By 1982, Thatcher had become the most unpopular prime minister in history. She and her Government was heading for oblivion in the next election.
In April 2, 1982, the Chicago inspired Junta of Argentina invaded the Falkland Islands. There’s nothing like a good war to bolster one’s public image. And that precisely was what happened. Both sides had the same objective. The experiment was failing in Argentina, so lets invade the Malvina’s.
But it backfired on Argentina as the British task force sent to the South Atlantic ejected the Argentinians. It also led to the collapse of the junta, whilst at the same time giving Thatcher the green light to launch a different version of the experiment at home.
After a landslide victory in the next election, buoyed by the Falkland’s adventure, Thatcher began a widespread process of privatisation. This sparked possibly the most bitter rivalry in history between the Thatcher Government and the Unions, with the miners strike of 1984 taking centre ground.
But Thatcher won this battle as well. As a result, the UK economy was allowed to transform. Ominously the plan to retake the Falkland’s was called ‘Operation Corporate’.
Meanwhile in the US, Chicago influenced ‘Reaganomics’ was taking shape. He charted a course that put conservatism into the ascendancy. But he was nothing more than a political puppet, bouncing around at the whims of his advisor’s, an ‘amiable dunce’. The former B movie actor effectively acted out his presidency.
Today’s political climate in the US can be attributed to Reagan, with increased militarisation, surveillance and republican domination of congress. And — ultimately — the recent financial collapse. Reagan effectively put the ‘neo’ into Conservative, with a little help from his friends:
Accompanying the Reagan era was the rise of a well-oiled corporate-funded conservative propaganda machine — including think tanks and lobby groups, endowed professorships at universities, legal advocacy organizations, magazines, and college student internships to train the next generation — designed to demonize activist government and glorify unregulated markets. Years before Rush Limbaugh began his radio ministry to his conservative congregation of ditto-heads, Reagan and this right-wing echo chamber were on the job.
By the end of the 1980’s, the neoliberal gospel was being adopted by the Bretton Woods institutions. This would ensure subsequent globalisation in the 1990’s. Pivotal to this process was the establishment of the World Trade Organisation (WTO), which superseded the original GATT on 1 January 1995.
The mechanism that brought the WTO into existence was the Uruguay Round. The paper The Unbalanced Uruguay Round Outcome: The New Areas In Future WTO Negotiations explains the key differences between the original GATT and the WTO. Ultimately the driver of the new agreement was the US. The key elements were:
an umbrella agreement (the Agreement Establishing the WTO);
goods and investment (the Multilateral Agreements on Trade in Goods including the GATT 1994 and the Trade Related Investment Measures (TRIMS));
services (General Agreement on Trade in Services (GATS));
intellectual property (Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS));
dispute settlement (DSU);
reviews of governments’ trade policies (TPRM)
A central criticism here is that the creation of the WTO would benefit developed countries at the expense of developing countries. The paper noted above sums up the key points:
1. The developing countries’ lack of experience in WTO negotiations, particularly their (and everyone else’s) lack of knowledge of how the developing economies would be affected by what the industrial countries wanted in the WTO new areas.
2. An intensified mercantilist (our export interests first) attitude of the GATT/WTO’s major power, the US.
3. Creating the WTO put small countries over a barrel. It made ineffective the GATT tradition of decision by consensus. “No” by one country would not preserve the status quo; it meant that the country was out, stripped of the protection that the old agreement provided.
The argument over the WTO’s treatment of developing countries is further explored in an Oxfam report, particularly within the context of agriculture:
Agricultural dumping has a devastating effect on poor countries. The Uruguay Round at the WTO was supposed to cut the subsidies that lead to dumping, but it failed to do so — as did reforms of Europe’s Common Agricultural Policy and US agricultural policy.
The figures are telling:
The Uruguay round was designed to reduce export subsidies substantially. However, because of the restrictive way in which export subsidies were defined, the European Union and the United States were able to use hidden export subsidies while still abiding by the letter of the agreement. Oxfam has calculated that the EU and USA are massively understating the real levels of export subsidisation. The USA is providing 200 times more support in hidden export support than it declares, equivalent to $6.6bn (€5.2bn) a year. The EU pays out the equivalent of €4.1bn ($5.2bn) in hidden export support — four times what it reports to the WTO.
The price at which crops sell tells this story clearly. Thanks to an array of different support mechanisms, the USA is able to export its cotton and wheat at 35 and 47 per cent respectively of their cost of production. The EU exports sugar and beef at 44 and 47 per cent respectively of their internal cost of production.
This would certainly fit in with the neoliberal agenda of US focused trade in the global north. It also reveals something of a paradox of the WTO. It’s willingness to promote free trade whilst trying to harmonise global trade. Basically the WTO has submitted to the neoliberal agenda, but only so far. This has created contradictions. As Oxfam puts it:
All this directly contradicts one of the core purposes of the WTO, and the agricultural talks in particular: to cut market-distorting support. But the EU and the USA continue to attempt to force poor countries to give up their trade protection and agricultural support measures, while keeping their own in place.
Another area of contention is environmental issues. Through the Marrakesh Agreement (that created the WTO), it is possible for the WTO to take a position on environment issues. But some critics think it does not go far enough. The processes are laid out on the WTO website.
GATT Article XX set the initial parameters:
Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement [the GATT] shall be construed to prevent the adoption or enforcement by any contracting party of measures: …
(b) necessary to protect human, animal or plant life or health;…
(g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption. …
In 2001, a new round of negotiations began — the Doha round. The initial aims were to resolve some of the difficulties raised above. But negotiations were highly contentious.
What appears to be emerging is an organisation in crisis. Doha has failed to address many issues relating to the global economy. As a result, a new regime is appearing on the horizon that could be seen as the final frontier for neoliberal expansion. Namely the creation of two major trading blocs.
This article from YaleGlobal offers a useful analysis:
First, TTIP is the result of the WTO’s troubles, not the cause of it. The latest round of multilateral trade talks, the Doha round, dragged on for 12 years, before member countries agreed on at least some of the issues under discussion in December 2013. But the Bali agreement fell short of original ambitions, and the WTO is still playing catch-up. Today, international trade is at least as much about rules and regulations as it is about tariffs. The WTO has not significantly updated its rulebook since 1994. But business has moved on. The idea from the US and the EU to work together to overcome global gridlock is legitimate.
Second, in many areas, regulations and processes on both sides of the Atlantic have been drifting apart for years, and even more so since the start of the financial crisis in 2007. The two sides owe it to their business communities and consumers to try and narrow the regulatory gap. Bilateral talks are probably better suited for this than involving the other 130 WTO members.
A transatlantic trade agreement has been in the pipeline since the Creation of the WTO. But the failure of any agreements from the Doha round sparked discussions. Finally in 2011, the process towards the Trans Atlantic Trade and Investment Partnership (TTIP) started and a negotiating framework was introduced in February 2013.
Meanwhile on the other side of the world, progress has already been made on the Trans Pacific Partnership (TPP). A version of the text of the treaty “Subject to Legal Review” was made public on 5 November 2015.
Clearly both treaties when ratified are meant to compliment each other. But there has been considerable opposition from civil society — an opposition that initially exploded back in 1999. The YaleGlobal article highlights the issues:
In parallel to TTIP, the US and the EU should support an ambitious reform of the WTO itself. Such reforms could include extending the WTO’s mandate to deal with 21st century issues and abolishing the overly rigid rule that all 159 WTO members need to agree on each and every trade deal. The partial Bali deal has shown that, in practice, this rule already plays a diminished role.
What the US and the EU should not do is pass up the opportunity to free up trade between the world’s two largest trade partners because the WTO is slow-moving and out of date. A well-functioning global trade body should be everyone’s first choice. But the WTO’s problems run deep; they have to do with new technology that is changing the nature of international commerce and with the rise of new economic powers. The WTO is by no means the only multilateral body that is in trouble: Consider the United Nations Security Council, the G20 or global climate talks. But TTIP could be a giant wakeup call for a trade organization that has been drifting towards irrelevance.
Following the creation of the WTO in 1995, the views of civil society regarding the new deal were similar to the current concerns regarding TPP and TTIP.
Although ‘anti globalisation’ movements had been emerging for some time as part of the wider awareness of environmental and neoliberal concerns, it was after the Multilateral Agreement on Investment (MAI) was leaked that civil society began to mobilise.
At the same time, the internet had emerged. The build up to the protests that took place in Seattle in 1999 was regarded as the first internet based mass mobilisation. This enabled the protests to take on a global perspective:
For the first time, one is seeing the emergence of a global civil society represented by NGOs which are often based in several states and communicate beyond their frontiers. This evolution is doubtless irreversible. On one hand, organisations representing civil society have become aware of the consequences of international economic negotiations. They are determined to leave their mark on them.
Furthermore, the development of the internet has shaken up the environment of the negotiations. It allows the instant diffusion of the texts under discussion, whose confidentiality becomes more and more theoretical. It permits, beyond national boundaries, the sharing of knowledge and expertise. On a subject which is highly technical, the representatives of civil society seemed to us perfectly well informed, and their criticisms well argued on a legal level.
At the WTO ministerial conference in Seattle in November 1999, an attempt was made to include the MEI into a new “Millennium Round” of trade liberalisation talks. As a result, the ‘Battle of Seattle’ broke out. This was the culmination of all the campaigning that had taken place before the conference and was effectively the first major demonstration by civil society against the ‘system’. The demonstrations had caused widespread disruption within the city and the Mayor of Seattle declared a state of emergency. As far as activists were concerned, the protests were a success. MEI bit the dust:
People stayed in the streets all week until Dec. 3, when the WTO talks collapsed as representatives from poor countries, bolstered by public rebellion in the streets and pressure from movements in their home countries, refused to buckle under.
Clearly the neoliberal juggernaut had just came up against an unexpected barrier. Civil society had spoken loud and clear and had demonstrated that it could mobilise effectively in a new age of electronic communications. Although mass protests had taken place before, Seattle represented a new phase in global awareness that also connected to the environmental movement.
T
he other Bretton Woods organisations — the World Bank and the IMF — are closely related to the WTO, with both having observer status.
The World Bank had a poor record on climate change:
Friends of the Earth International (FoEI) released the report World Bank: catalysing catastrophic climate change. The report examines the Banks investment in high carbon infrastructure and the knock-on effects of its policies in developing countries.
Overall the World Banks’ contribution to GHG emissions is estimated to be around 7%. Much of the investment made by the World Bank — via the IFC (International Finance Corporation) — is targeted towards coal based projects, mainly in developing and emerging economies, such as India — locking these economies into fossil fuel dependence when they could be better served by a solar power based infrastructure.
The World Bank has also been heavily criticised for its ‘Structural Adjustment Programs’. In the 1980’s, the bank began lending money to developing countries along with prescribed policy changes. The results were highly contentious, as this article from Global Issues discusses:
Many developing nations are in debt and poverty partly due to the policies of international institutions such as the International Monetary Fund (IMF) and the World Bank.
Their programs have been heavily criticized for many years for resulting in poverty. In addition, for developing or third world countries, there has been an increased dependency on the richer nations. This is despite the IMF and World Bank’s claim that they will reduce poverty.
Following an ideology known as neoliberalism, and spearheaded by these and other institutions known as the “Washington Consensus” (for being based in Washington D.C.), Structural Adjustment Policies (SAPs) have been imposed to ensure debt repayment and economic restructuring. But the way it has happened has required poor countries to reduce spending on things like health, education and development, while debt repayment and other economic policies have been made the priority. In effect, the IMF and World Bank have demanded that poor nations lower the standard of living of their people.
Another point worth noting is the fact that the people in charge of running the world bank have in the past been all American. This article from Al Jazeera gives an overall outline of the Banks activities and policies:
…structural adjustment programmes were not designed to reduce poverty (in fact, they specifically preclude poor countries from using the basic strategies that Western countries used to develop their own economies). Rather, they were designed to pull wealth from third world governments into first world banks, allowing the US to transfer the crisis of capitalism abroad for a while without having to solve its contradictions at home. It’s no accident that all of the Bank’s past presidents have been US military bosses and Wall Street executives (see the full line-up here); they’ve been put there to underwrite this strategy.
…the World Bank is so valued by the US government and Wall Street: because it is instrumental to expanding the sphere of Western capitalism, a role not dissimilar to that which colonialism once played for Europe.
The bank also enjoys ‘“sovereign immunity” status, which presently allows it to avoid responsibility for the perverse outcomes of its policies.’
The initial role of the IMF was to monitor exchange rates and provide short term funding to countries during the post war recovery, ultimately attaining monetary stability.
However, the role of the IMF (in keeping with the other Bretton Woods institutions) in the 1970’s began to alter:
The countries that joined the IMF between 1945 and 1971 agreed to keep their exchange rates (the value of their currencies in terms of the U.S. dollar and, in the case of the United States, the value of the dollar in terms of gold) pegged at rates that could be adjusted only to correct a “fundamental disequilibrium” in the balance of payments, and only with the IMF’s agreement. This par value system — also known as the Bretton Woods system — prevailed until 1971, when the U.S. government suspended the convertibility of the dollar (and dollar reserves held by other governments) into gold.
The IMF is mandated to oversee the international monetary and financial system and monitor the economic and financial policies of its 188 member countries and facilitates international cooperation:
This activity is known as surveillance. As part of this process, which takes place both at the global level and in individual countries, the IMF highlights possible risks to stability and advises on needed policy adjustments. In this way, it helps the international monetary system serve its essential purpose of facilitating the exchange of goods, services, and capital among countries, thereby sustaining sound economic growth.
Each member country is assigned a quota, based on relative economic size. This means that the US — the largest global economy — effectively wields more power within the IMF. This has led to criticisms of undue influence over the workings of the IMF. As such, the US has blocked recent calls for reform at the IMF.
Just as the World Bank has been led by an American, the IMF has a European at the helm. Just to balance things out? On the surface perhaps. But there’s little doubt the IMF has played its role in neoliberal globalisation, with US interests predominating.
This article — a review of the book Globalization and Its Discontents — takes a critical look at the IMF and its policies.
The underlying argument is that many policies of the IMF is flawed, with too much preoccupation on ideology and discredited economic theories:
…the IMF’s policies stem not from economic analysis and observation but from ideology — specifically, an ideological commitment to free markets and a concomitant antipathy to government. Again and again he accuses IMF officials of deliberately ignoring the “facts on the ground” in the countries to which they were offering recommendations. In part his complaint is that they did not understand, or at least did not take into account, his and other economists’ theoretical work showing that unfettered markets do not necessarily deliver positive results when information or market structures or institutional infrastructure are incomplete.
More specifically, he argues that the IMF ignores the need for proper “sequencing.” Liberalizing a country’s trade makes sense when its industries have matured sufficiently to reach a competitive level, but not before. Privatizing government-owned firms makes sense when adequate regulatory systems and corporate governance laws are in place, but not before. The IMF, he argues, deliberately ignores such factors, instead adopting a “cookie cutter” approach in which one set of policies is right for all countries regardless of their individual circumstances. But importantly, in his eyes, the underlying motivation is ideological: a belief in the superiority of free markets that he sees as, in effect, a form of religion, impervious to either counterarguments or counterevidence.
Other criticisms levied at the IMF include funding for oppressive regimes, impacts on food availability (as noted by Oxfam above) and public health. This article from the Lancet offers an interesting reflection on the IMF’s role regarding health issues. In essence, the Journal lays the blame for the recent Ebola outbreaks in Africa on IMF programs, despite ‘coming to the rescue’ as the crisis worsened.
Environmental impacts have also been laid at the door of the IMF. However following COP15 at Copenhagen, the IMF announced it would set up a Green Fund. The IMF lays out its stall here. To date, the Green Fund has not been formally implemented.
Pulling it all together
In this article, I’ve considered how neoliberalism and the environmental movement have emerged almost in tandem, resulting in a stand-off between the two. But the greatest assault was yet to come.
Just as the Falklands war triggered an era of change in the UK and elsewhere, so the terror attacks on the World Trade Centre on 9/11/2001 would serve as a trigger for unleashing the neoliberal ‘beast’ big time.
The first shots were fired — literally and figuratively — when a US led coalition illegally invaded Iraq. This was despite huge public opposition to the war. It was the largest civil society mobilisation in history and it was completely ignored.
As this article from Greenpeace shows, it was Big Oil that was calling all the shots:
Iraq has the second largest proven reserves of oil in the world, but its production has been severely reduced since the Gulf War, due to effects of economic sanctions and the destruction of infrastructure. Rebuilding that infrastructure and increasing production will take years. Oil executives hungrily eyeing those reserves are enthusiastic to take on that work.
And they’ve never had such close ties to the White House. For Vice President Dick Cheney, this may well be round two for his post-war dealings with Iraq. Cheney is a former head of Halliburton, the world’s largest oil service contractor. In August 2000 Cheney publicly stated that, as the head of Halliburton, “I had a firm policy that I wouldn’t do anything in Iraq, even arrangements that were supposedly legal.” And yet, as the Financial Times eventually proved, Cheney oversaw $23.8 million in sales to Iraq in 1998 and 1999.
…Though it’s no secret that the White House cozies up to oil executives, declaring war on Iraq required a bit of a cover story. The “War on Terror” launched in the wake of September 11th was the perfect vehicle. With the world reeling from the threat of more chaos and destruction, Iraq was quietly slipped into key speeches. Bush quickly diverted attention from Osama Bin Laden to Saddam Hussein and now the hunt is on for his weapons of mass destruction.
Iraq wasn’t the only war Bush intended to wage. Under his administration, a major climate denial machine was set in motion. Scientist’s were gagged. Information relating to climate change was suppressed. This excellent article from Rolling Stone outlines the climate policies of the Bush administration. Leading the charge was Cheney. Rolling Stone summed up the new regime:
An examination of thousands of pages of internal documents that the White House has been forced to relinquish under the Freedom of Information Act — as well as interviews with more than a dozen current and former administration scientists and climate-policy officials — confirms that the White House has implemented an industry-formulated disinformation campaign designed to actively mislead the American public on global warming and to forestall limits on climate polluters.
The IPCC was also targeted. This revealing paper from the Meridian Program outlines how the Bush administration influenced the final text of the Summary for policy Makers of the IPCC’s Fourth Assessment Report in 2007:
From its inception the IPCC has been subject to the tension between these two incompatible drives. Its conflicted primary task involves both the mobilisation of best possible scientific engagement with the global “problematique”, and also the containment and control of the scientific endeavour on behalf of those vested interests most threatened by its findings. After the publication of the Third Assessment Report in 2001 the fossil-fuel industry recognised that the scientific information presented by the IPCC posed a massive threat to its future profitability and steps were taken to gain control of its process and agenda. The leader of the Senate in the Washington administration went on record at this time to castigate climate change as “The greatest hoax ever perpetrated on the American people”, a sentiment later echoed by the President himself.
The paper notes in conclusion:
The outcome is a document which lays a necessary but far from sufficient basis for the formulation of strategic policy. Despite the best efforts of the global scientific community, pursuit of goals based upon this Report may contribute to the sustained profitability of the hydro-carbon-based industries, but they do not get to first base in the task of preventing catastrophic climate change.
The Copenhagen Failure
Now back to Copenhagen. There was little doubt that considerable momentum was building up to COP15. Leaders who had met at the Major Economies Forum on Energy and Climate on July 9, 2009, declared:
Climate change is one of the greatest challenges of our time. As leaders of the world’s major economies, both developed and developing, we intend to respond vigorously to this challenge, being convinced that climate change poses a clear danger requiring an extraordinary global response, that the response should respect the priority of economic and social development of developing countries, that moving to a low-carbon economy is an opportunity to promote continued economic growth and sustainable development, that the need for and deployment of transformational clean energy technologies at lowest possible cost are urgent, and that the response must involve balanced attention to mitigation and adaptation.
We reaffirm the objective, provisions and principles of the UN Framework Convention on Climate Change. Recalling the Major Economies Declaration adopted in Toyako, Japan, in July 2008, and taking full account of decisions taken in Bali, Indonesia, in December 2007, we resolve to spare no effort to reach agreement in Copenhagen, with each other and with the other Parties, to further implementation of the Convention.
A series of commitments followed. But as noted above, COP15 failed. Why? The answer is revealed in this Ecologist article. Based on revelations from whistleblower Edward Snowden, ‘we now know that the US National Security Agency (NSA) gathered intelligence from key countries involved in the Copenhagen talks.’ The article notes:
The NSA documents show that the US monitored communications between countries before the summit, and planned to spy on the negotiations during the conference.
China — a key player at the conference — was prepared to negotiate. But:
In the event the US worked assiduously at the conference to engineer a split in the developing country bloc of countries — a highly effective means to counter a Chinese proposal before it was even made.
This appears to have been part of a deliberate strategy to make China ‘lose face’ as its negotiating tactics were pre-emptively undermined. And it worked. China emerged from the talks universally condemned as the ‘climate baddie’ — as eloquently expressed by the journalist Mark Lynas.
The article concludes with this thought:
Now, faced with the brutal reality of how the US scuppered Copenhagen, we must ask ourselves — how can dark powers such as these be overcome in the future, so that the world can secure the global climate agreement that we so desperately need?
And that is effectively the question that needs to be posed. Which brings us round full circle to Paris. Has UNFCCC had its day and did Paris really matter?
Paris in essence was neither a failure or a success. It did what it was supposed to do. And although civil society has had its say, it could be argued that its influence is limited.
The dark powers here are the neoliberal fundamentalists. This is what civil society needs to challenge. As for the UNFCCC process. That has with little doubt already been targeted by the ‘dark powers’.
This article from the Guardian sums up the challenge ahead:
Regardless of commitments made in Paris, any steps to halt runaway climate change will be wholly undermined by the secretly negotiated EU-US trade deal, the Transatlantic Trade and Investment Partnership (TTIP).
Notes:
TTIP is now obsolete. TTP was replaced by another trade agreement.
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