Wednesday, 26 September 2012

EU reducing biofuel target?

The Commission announced a proposal last week to reduce biofuel mandates to 5% by 2020, revising the controversial target of 10% of fuel transport to come from renewable sources by 2020. The 10% target was primarily envisaged as being met from biofuels. While recognising this was a step forward, aid agency Oxfam is calling on EU leaders to completely scrape the target. “The EU must recognise the devastating impact its biofuel policies are having on the poorest people through surging food prices, worsening hunger and contributing to climate change”, said Barbara Stocking, Oxfam’s chief executive.

Introduced in 2009 in an attempt to fight climate change, biofuel targets have increasingly become controversial as this resulted land being used to produce biofuel in place of food, impacting on supplies of food and contributing to increasing food prices. International Land Coalition estimates that around two-thirds of all large-scale land deals around the world in the past 10 years have been acquisitions in order to grow biofuel. Many such deals have displaced local communities with claims on the land or have involved laying claim to water rights. “Europe has helped spark a global rush for biofuels that is forcing poor families from their homes, while big business piles up the profits. Biofuels were meant to make transport greener, but European governments are pouring consumers' money down the drain, whilst depriving millions of people of food, land and water,” said Natalia Alonso, Head of Oxfam’s EU Office. According to Oxfam, in 2008 €3bn was spent in the EU on incentives for biofuel production, levels comparable to the cuts agreed in the Greek bailout mechanism earlier this year.
Oxfam’s alarm bell comes in the context of an informal energy ministers’ meeting in Cyprus last week where European Energy Commissioner Oettinger recognised the fact that the current EU policy had lead to “unfavourable developments such as the tearing down of rainforest to produce biofuel”. The ministers agree that anything over the 5% cap should be achieved without using food crops, but Oxfam calls the 5% cap itself ridiculous. “At this moment the biofuel use in the EU is only at 4.5%. So the new cap of 5% is actually an increase of what we’re using at the moment”, says Ruth Kelly, Oxfam’s economic policy advisor. The land used for growing the crops for biofuels in 2008, could have fed 127 million people according to Oxfam calculations revealed in its last week report, The Hunger Grains.

Thursday, 6 September 2012

Norway: First creditor ever to carry out a debt audit

On 15 August 2012 the Norwegian Minister of Development Heikki Holmås announced that Norway will make an assessment of the legitimacy of developing countries’ debt to Norway. This means that the Norwegian government will be the first to ever carry out a creditor’s debt audit. Since being elected in 2009, the Norwegian government has promised to carry out a debt audit, as well as working to establish binding guidelines for responsible lending. Now Holmås promised that the audit will now be launched, to be followed up with new and stronger guidelines for responsible lending.

The Norwegian government has previously admitted their responsibility as a creditor for dirty debts attached to a particular set of loans for developing countries to buy Norwegian ships. In 2006 the government announced that they would cancel debts for seven countries because the original loans had been a “development policy failure”. The Norwegian Coalition for Debt Cancellation (SLUG) has done its own investigation of debts owed to Norway. The research reveals that a part of Indonesia’s current debt to Norway is clearly illegitimate. SLUG shows that the people of Indonesia is still paying for a wave power plant that was never built, and failed technology for sea monitoring systems.

Norwegian initiatives have led to the establishment of international principles for responsible lending and borrowing in the UN Conference on Trade and Development (UNCTAD). The principles will be applied in the Norwegian debt audit. In April, the UK government unsuccessfully tried to stop UNCTAD working on responsible lending and borrowing principles. Jostein Hole Kobbeltvedt, Eurodad representative at the UNCTAD expert group on responsible sovereign borrowing and lending, said: “To apply the UNCTAD Principles in the Norwegian debt audit is a solid way of showing that the Norwegian government takes the Principles seriously and that they take their responsibility as a creditor seriously.” Development Minister Holmås announced that the plan is for the audit to be concluded within a year.

* For more information >>> here