German government decided on bank levy

The German government decided today to introduce a bank levy. During a period of 10 years an amount of approximately €1.2bn shall be raised per year. All banks - i.e. also savings and cooperative banks - will have to pay the fee. However, the bulk of the amount (900bn) should come from the systemically relevant big banks. The revenues would go into a special fund. The fee should not be tax deductable. The government also decided rules which allow for breaking up banks which are "too big to fail" and new rules on the liability for managers.

The French minister of finance, Christine Lagarde, participated in the meeting of the German cabinet and said that France would introduce a similar levy. However, the revenues would not go into a special fund but into the current budget.

The civil society alliance for the Financial Transaction Tax came up with strong critique on the decision:
* The revenue is too small.
* It is only for future crises and not for paying for the burden of the present crisis.
* It has no regulatory effect.

Thus, the reasons for introducing the FTT continue to exist. Therefore the alliance will continue to pressure for the FTT. All three opposition parties in the Bundestag reject the decision.

UNCTAD presses for economic governance reform

Substantial reforms – more than mere "window dressing" – should be pursued nationally and internationally to prevent opaque financial instruments, speculation, and the build-up of large financial imbalances between countries from causing a repeat of the current global recession, UNCTAD's Secretary-General urged last weekend. Secretary-General Supachai Panitchpakdi told the 122nd Assembly of the Inter-Parliamentary Union (IPU) that "the crisis provides a rare opportunity to forge a more balanced and inclusive global economy through two channels: measured government intervention and strategic policy action at the national level, and better coordinated and more inclusive economic decision-making at the international level."

In a statement Supachai said UNCTAD is concerned that with the worst of the financial crisis apparently over, "talk of reforming the financial sector, particularly at the international level, has become a good deal more muted. UNCTAD strongly believes that the crisis could have been prevented if there had been stronger governance mechanisms to regulate financial innovation and the build-up of various imbalances at the national and international levels. Moving forward on this reform agenda to create a new pattern of balanced and sustainable growth will require bold thinking."

Well-defined rules, with a transparent and fair system for judging infractions, should be "orthodoxy" for the international financial system as they are for the international trading system, Supachai said. "[I]t is … imperative to provide for an institutional framework for better international coordination of financial regulation and supervision… Such an agreement would hopefully address the current potential for regulatory arbitrage," he added. "Equally important is to reshape international monetary arrangements that help avoid the build-up of large current-account imbalances and their counterpart – large unbalanced asset positions across countries."

Supachai said that continued global dependence on a single reserve currency is becoming a concern, reviving the idea that an equitable system of special drawing rights (SDRs) might eliminate the need for developing countries to hold vast reserves of dollars as protection against reverses in their capital flows. These reserves "now represent a considerable opportunity cost for development," the Secretary-General said. Countries also could tackle large build-ups of reserves through regional arrangements such as the Chiang Mai Initiative, whose multilateralized currency swap agreement came into effect on 24 March. He also called for reform at the IMF "so that it can focus most properly on what its founders intended: the avoidance of contractionary macroeconomic responses to financial shocks and instability."

Agribusiness and the right to food

“Agribusiness can play a key role in realizing the right to food. But States have to give more support to their small producers and push corporations to change their pricing and standards policies”, said the UN Special Rapporteur on Right to Food, Olivier De Schutter, as he presented his second annual report to the UN Human Rights Council on 5 March 2010. His report concludes that in an increasingly globalized food sector dominated by large transnational corporations, smallholders have a very limited number of buyers, and are in a deeply unequal bargaining position in respect of a fair price for their crops. In these circumstances, sourcing and pricing policies of commodity buyers have a huge and sometimes negative impact on the right to food. This situation partly explains why smallholders in developing countries are the single most important group of those suffering hunger in the world today.

To address this situation and the specific needs of smallholders, the Special Rapporteur makes a series of recommendations to the agribusiness corporations and the States. According to the report, States have a number of tools they could use to strengthen the position of smallholders and allow them to reap a larger proportion of the food dollar in their transactions with buyers. In particular, De Schutter said “States could support the establishment of farmers’ cooperatives through appropriate legal frameworks, capacity building programs or tax incentives, thus enhancing the capacity of small producers to obtain higher prices when they seek to sell their produce. These organizations present many advantages in terms of services and information, and help the producers to implement the increasingly complex norms and requirements of buyers and public authorities active on regional and global food markets.

The UN Special Rapporteur also called on States to act against unfair practices of corporations, excessive concentration in the food chain, or abuses of dominant position acquired by certain actors. National competition laws play a fundamental role here. “Competition law as it currently stands is not appropriately tailored to the circumstances that weaken the bargaining position of smallholders”, he explained. “States where suppliers are based should extend the reach of their competition laws to foreign buyers whose abuses affect national sellers, developing regional responses if they are concerned about being vulnerable as a small economy.”

Noting that the pressure to produce at low prices was increasing on suppliers, leading to repress wages of agricultural workers and to the casualization of this workforce, the Special Rapporteur also made a number of recommendations on this issue. States must establish a clear legal framework with robust enforcement mechanisms. But in addition employers have a responsibility to respect the right to food, even where laws are insufficiently protective of agricultural workers or where the existing labour legislation is inadequately monitored: agribusiness companies must not contribute, directly or indirectly, to human rights abuses through their relationship with suppliers.

Please find the full report >>> here.

EU Council : Lack of agreement on a Financial Transaction Tax

Brussels-based NGOs are deeply disappointed that European leaders have failed to agree on the introduction of an EU wide Financial Transaction Tax (FTT) at the EU Spring council on 25-26 March. The international alliance of Catholic development agencies CIDSE says a mini tax on short-term and high-risk transactions would stabilise the current financial system and generate millions of Euros badly needed to alleviate poverty and combat climate change. CIDSE campaigned for the inclusion of an EU wide adoption of a Financial Transaction Tax (FTT) on socially unproductive and speculative trading on financial markets in the run up to the Council.


Yesterday, while European leaders were arriving in Brussels to attend the Council, CIDSE, along with a coalition of development, environmental and health organizations, staged a ‘tug of war’. It saw bankers on the one side and Robin Hood, the symbol of a massive ongoing popular campaign demanding the adoption of a FTT, on the other, with EU leaders in the middle to decide if money should go to speculators or to people and the planet (see photo).

The European Parliament has asserted unequivocal support for robust and properly resourced EU action to tackle poverty and climate change and asked EU member states to agree on a financial transactions tax to help developing countries cope with the effects of the global financial and economic crisis. Despite broad public support and the backing of the European Parliament EU leaders have failed to come to terms on the FTT.

Europe must play its part in rescuing the MDGs

A group of powerful women from the front-line in the fight against poverty have appealed to European leaders to ensure health and education for all people by rescuing the Millennium Development Goals. Testifying at the European Parliament, the ‘W8’ – a group brought together by Oxfam from Mali, Georgia, Thailand, Nicaragua, The Philippines, Bangladesh, Malawi and India – backed Oxfam’s call for Europe to adopt a “rescue package” to get the MDGs back on track.



The MDGs, signed by world leaders in 2000, commit to halving the number of people living in extreme poverty by 2015. With development aid faltering, the ability of poor countries to meet poverty goals is increasingly at risk. In a report to the UN general assembly this month, UN Secretary-General Ban Ki-moon said progress on the MDGs was being stymied by unmet commitments, inadequate resources and a lack of focus and accountability.

This comes in the wake of a warning by the European Commission that Europe’s international credibility was being undermined by Member States’ failure to stick to aid commitments; now €13bn ($17.6bn) short of 2010 targets. Oxfam spokesperson Elise Ford said: “With the MDGs teetering on the edge of failure, Europe can play a key role in rescuing the goals and at the same time salvaging its own international reputation. Without a European rescue package which includes a new credible plan to meet aid commitments, citizens in the poorest countries won’t get the most basic education and health care, and European leaders will not be able to hold their head high on the global stage.”

Responding to the W8’s call for a MDGs rescue plan, former UN Secretary-General Kofi Annan said: “With only five years to go, the need for concerted action to achieve the MDGs is becoming increasingly urgent. Last year’s global economic crisis has further aggravated the situation for billions of poor people around the globe. It is both timely and necessary to remind leaders of the promises they have made and the crucial necessity of their continuing commitment.”

Leonor Magtolis Briones of Social Watch Philippines said: “We have traveled to Brussels to appeal to European leaders not to abandon their promises to support health and education in developing countries. We see the desperate human cost of lack of basic services first-hand. A dramatic focus of political will and ambition and concrete actions plans are needed. If Europe agrees a strategy to achieve the MDGs, and world leaders to back it at the UN MDGs Summit in New York in September, 2010 could go down in history as the turning point in the fight against poverty.”

ActionAid report on biofuel consumption in Europe

Up to 100 million more people could go hungry if Europe commits itself to a huge increase in biofuels consumption in order to meet new European Union legislation, ActionAid says in a new report titled Meals per gallon: the impact of industrial biofuels on people and global hunger. The legislation states that 10% of transport fuels must come from renewable sources by 2020. EU member states will fill almost all of their renewables targets by using industrial biofuels – fuels made on an industrial scale from agricultural crops, including important staple foods. The vast majority of industrial biofuels are made from maize, wheat, sugar cane and vegetable oils such as palm oil, soy and rapeseed.

In its report ActionAid calculates that by 2020 biofuel consumption in the EU will jump nearly four-fold and that two thirds will be imported, mainly from the developing world. As well as diverting food away from the people who need it most, this will push up prices. It is estimated that for every 1% rise in the price of food, 16 million more poor people become hungry. ActionAid also says that most industrial biofuels do not save greenhouse gas emissions when compared to the fossil fuels they are replacing. The increasing use of biofuels is resulting in massive land use change, often in carbon rich habitats such as tropical rainforests. Using extra fertiliser to grow biofuels releases nitrous oxide, one of the most powerful greenhouse gasses.

Report author Tim Rice said: “Miracles do not grow on trees, or from any other plants for that matter. Using crops to fuel cars increases hunger while failing to help stop climate change. The huge expansion in industrial biofuels use must be stopped. To meet the EU deadline, the UK government is now writing its national action plan which will set out its strategy for renewable energy for the next ten years. This plan must not commit the UK to any further increase in industrial biofuels.”

To meet the EU 10% target solely from biofuels, the total land area directly required to grow industrial biofuels in poor countries could reach 17.5m hectares, well over half the size of Italy. ActionAid has already found that increased biofuel use is having disastrous impacts on the developing world. Multinationals are acquiring land on a colossal scale. Across developing countries as a whole, EU companies have already acquired or are in negotiations for at least 5m hectares. This has led to displacement of people, lack of consultation and compensation, broken promises about wages and job opportunities, and food scarcity.

ActionAid is calling on EU member states to ensure they do not lock in industrial biofuels into their 2010 national action plans. The charity also says that transport and energy consumption must be reduced, targets and financial incentives for industrial biofuels ended and more support given to small-scale sustainable biofuels in the EU and elsewhere.

ITUC at UNCSW: Raising Voices for Working Women

More than 100 women representing trade unions from around the world will be demanding improved rights for working women at the 54th Session of the United Nations Commission on the Status of Women (UNCSW), which begins today in New York. The delegation includes members from the International Trade Union Confederation (ITUC), Public Services International (PSI), Education International, and UNI Global Union.

United Nations member states will be evaluating what progress has been made towards achieving gender equality—and identifying remaining challenges—15 years after the adoption of the Beijing Declaration and Platform for Action. “The Beijing+15 commemoration at this session of the commission is hardly a cause for celebration,” said Diana Holland, chair of the ITUC Women’s Committee. “Workers today are faced with the worst economic downturn since the Great Depression, with women particularly hard hit by unemployment, precarious work and increased burdens of unpaid family care.”

Trade unions will be presenting seven main recommendations. These include calling on governments to: adopt a strong political declaration reaffirming the Beijing Declaration and Platform for Action as the basic framework underpinning gender equality policies, and to apply the International Labour Organization's Global Jobs Pact and the ILO Resolution on Gender Equality at the Heart of Decent Work to all economic recovery strategies. The unions will hold a workshop on “Women in the Global Economy in a Time of Crisis” on 4 March. A second event will feature the release of trade union “Alternative Reports to Government National Reports”. These alternative reports from Canada, Turkey, Ghana, and Trinidad and Tobago will provide a reality check by highlighting the real situation of working women and their families on the ground.

For the joint trade union statement and more information, discussion and regular updates from the trade union delegation, visit the UNCSW blog at: http://unioncsw.world-psi.org

Dancing the Robin Hood Tax

Broken promises: Aid shortfall of $21bn

Aid to developing countries in 2010 will reach record levels in dollar terms after increasing by 35% since 2004. But it will still be less than the world’s major aid donors promised five years ago at the Gleneagles and Millennium+5 summits. Though a majority of countries will meet their commitments, the underperformance of several large donors means there will be a significant shortfall, according to a new OECD review. Africa, in particular, is likely to get only about $12bn of the $25bn increase envisaged at Gleneagles, due in large part to the underperformance of some European donors who give large shares of official development assistance (ODA) to Africa.

In 2005, the 15 countries that are members both of the European Union and of the OECD Development Assistance Committee (DAC) committed to reach a minimum ODA country target in 2010 of 0.51% of their Gross National Income (GNI). Some will surpass that goal: Sweden, with the world’s highest ODA as a percentage of its GNI at 1.03%, is followed by Luxembourg (1%), Denmark (0.83%), the Netherlands (0.8%), Belgium (0.7%), the United Kingdom (0.56%), Finland (0.55%), Ireland (0.52%) and Spain (0.51%) – all figures are in 2004 dollars and relate to net ODA. But others will fall short: France (0.46%), Germany (0.40%), Austria (0.37%), Portugal (0.34%), Greece (0.21%), and Italy (0.20%).

Other DAC countries made varying ODA commitments for 2010, and most, but not all, will fulfil them. The United States pledged to double its aid to sub-Saharan Africa between 2004 and 2010. Canada aimed to double its 2001 International Assistance Envelope level by 2010 in nominal terms. Australia aimed to reach $A4bn. New Zealand plans to achieve an ODA level of $NZ600m by 2012-13. All four countries appear on track to meet these objectives. Norway will maintain its ODA level of 1% of its GNI, and Switzerland will likely reach 0.47% of its GNI, exceeding its previous commitment of 0.41%. Japan’s Gleneagles promise was to give $10bn more over the period 2005 – 2009 than if they had stayed at their 2004 base-line. In 2008 it was still $4bn short of this undertaking. Japan’s ODA for 2010 is not yet known, and the OECD calculations are based on an assumption that it will maintain the same level as in 2008.

Overall, these figures result in additional aid of $27bn from 2004 to 2010, but a $21bn shortfall between what donors promised in 2005 and the OECD estimates for the 2010 outcome. Of this shortfall, $17bn is the result of lower-than-promised giving by the donors and $4bn is the result of lower-than-expected GNI because of the economic crisis. All these figures are estimates based on countries’ national 2010 aid budget plans where available and on early GNI estimates.

Barroso II should put development at the heart of its agenda, CIDSE says

Following last year’s approval of the Lisbon Treaty and the election of a new European Parliament, 2010 has begun with the appointment of President Barroso’s newly selected European Commission (EC) line-up. CIDSE, an international alliance of Catholic development agencies, while wishing the new Commission success, points to the need for ambitious and fair policies. In the next five years leading up to the 2015 deadline for the Millennium Development Goals (MDGs) these should benefit both citizens at home and people living in poverty in developing countries to ensure our common future.

“In light of the recent food, economic and climate crises, which have left poor countries struggling with dire consequences, which will be felt for many years to come, it is imperative that the new Commission reaffirms the EU’s leadership in development cooperation by placing poverty eradication at the heart of its agenda and, crucially, ensures the coherence of all EU policies with this goal,”. Recent studies show that the EC is not meeting this goal with only 44% of its aid money going to poor countries in comparison to the average 65% rate of EU member states.

One of the main priorities of the Commission, and Development Commissioner Piebalgs in particular, should be to not only push EU member states to stick to their aid commitments but also to promote innovative and predictable sources of development and climate finance. “After having firmly declared his support for financial transaction taxes during his EP hearing, we expect Commissioner Piebalgs to match words with deeds. The Commission should urge EU member states to promptly implement these taxes,” said Bernd Nilles, CIDSE Secretary General.

Furthermore, the EU must adopt a policy framework for food security that focuses on the potential of small scale farming for development, a framework which is supported rather than undermined by the EU's own trade and agricultural policies. According to Nilles “the appointment of a climate commissioner presents an important opportunity for the EU to rethink and reinvigorate its engagement in international climate negotiations. The Commission must work with its member states to reach out to its negotiating partners and ensure that 2010 secures the fair, effective and binding climate agreement that both science and justice demand.” Credible and coherent policies on domestic climate mitigation efforts and support to developing countries are crucial to protect the world’s most vulnerable people from the impacts of the climate crisis.

Economists launch blog on “Triple Crises” in finance, development, and environment

On February 1, new voices joined the policy debate on the global crises in finance, development, and the environment. The “TripleCrisisBlog,” with an initial roster of economic analysts from nine countries, was launched by the Global Development and Environment Institute (GDAE) at Tufts University (USA), India’s Economic Research Foundation (ERF), and the Washington office of the Heinrich Boell Foundation. The initiative is chaired by GDAE’s Kevin P. Gallagher and ERF’s Jayati Ghosh.

“Crises are not new to the world economy nor to developing countries,” Gallagher and Ghosh write in their introductory post. “Indeed, our current predicament is a convergence of at least three crises: in global finance, development, and environment. These areas are seemingly disparate but actually interact with each other in forceful ways to reflect major structural imbalances between finance and the real economy; between the higher income and developing economies; between the human economic system and the earth’s ecosystems. This blog seeks to contribute to a more open and global dialogue around these three crises: about how they interact, and how they can collectively be solved.”

The TripleCrisisBlog starts with a wide diversity of analysts from the global North and South. In addition to Gallagher and Ghosh, the roster includes: Jeff Madrick, Sanjay Reddy, Mehdi Shefaeddin, Charles Abugre, Martin Khor, Alejandro Nadal, Matias Vernengo, Adil Najam, CP Chandrasekhar, Jim Boyce, Ilene Graebel, Gerhard Schick, Timothy A. Wise, Lyuba Zarsky, and Frank Ackerman. Ghosh and Gallagher will co-chair the project, with Wise serving as "managing editor."

Visit the TripleCrisisBlog >>> here.

ActionAid welcomes Sarkozy’s stance on financial reform

ActionAid welcomed French President Nicolas Sarkozy’s announcement that France plans to use its presidency of the G20 next year to create a new international monetary system. In a new report, Fruits of the Crisis: Leveraging the Financial & Economic Crisis of 2008-2009 to Secure New Resources for Development and Reform the Global Reserve System, ActionAid and Third World Network note that the IMF’s Special Drawing Rights (SDRs) could be used as an innovative financing tool to meet developing countries’ urgent requirements for development, climate adaptation, and counter the impacts of the global financial crisis.

Creative use of SDRs could complement measures such as the proposed financial transaction tax and levies on bunker fuels and aviation to raise the sums urgently needed. With international co-operation, SDRs would mobilise more resources than existing proposals for innovative financing. The report includes recommendations to build on the G20’s innovative use of SDRs to address the global crisis. It calls for mobilising the resources represented by the idle SDRs allocated to rich governments, and for easing the conversion of and use of SDR proceeds by developing countries.

In line with Sarkozy's speech to business leaders at the World Economic Forum in Davos, the report concludes that SDRs could also be a key part of reform measures that would address the causes of the global financial and economic crisis. In a climate of financial reform, with increasing volatility in the US dollar’s value and level of trust, SDRs may be the best option as an international reserve currency.

The new report analyses proposals for reform to the global monetary system from the United Nations and a range of economists and has been authored by Soren Ambrose of ActionAid and Bhumika Muchhala of Third World Network and is available >>> here.

Aid agencies sound the alarm on the militarization of aid in Afghanistan

As Foreign Ministers gather in London for a major conference on Afghanistan, leading aid agencies warn that the international militaries' use of aid as a “non-lethal” weapon of war may even be putting Afghans at greater risk. A US army manual for commanders in Afghanistan and in Iraq defines aid as a non-lethal weapon designed “to win the hearts and minds of the indigenous population to facilitate defeating the insurgents”. The Afghan government estimates international forces have already spent $1.7bn on “aid” in Afghanistan. The US military alone has budgeted an additional $1bn for the coming year – more than Afghanistan’s state budget for agriculture, health and education combined.

In their new report, Quick Impact, Quick Collapse, the eight international agencies show their concern that the militarization of aid is putting ordinary people on the frontlines of the conflict. Afghans say that the military places them at greater risk when they build schools and clinics which then become targets of armed opposition groups. The agencies say that “quick impact” projects provide a quick fix rather than sustainable development. Military-led humanitarian and development activities are driven by donors’ political interests and short-term security objectives and are often ineffective, wasteful and potentially harmful to Afghans. International guidelines agreed by ISAF and the UN state that “the military is primarily responsible for providing security, and if necessary, basic infrastructure and urgent reconstruction assistance limited to gap-filling measures until civilian organizations are able to take over.”

The agencies call on the 70 countries participating in tomorrow’s London Conference to rethink the militarized approach to aid and shift their focus towards a long-term aid strategy based on meeting the real needs of Afghans. The agencies say that the distribution of aid is heavily biased in favor of areas where the troop presence is strongest rather than distributed according to need. The needs of people in more secure areas and vulnerable populations, particularly Afghans displaced by the conflict and other factors as well as returnees are being overlooked.

The agencies say that over the last eight years there have been many places where significant progress has been made in health, education and rural infrastructure, but these have been driven by Afghans’ needs, carefully planned by development experts and implemented in partnership with communities and local government. The excessive influence of short-term military goals over aid policy is part of a larger flaw in the US-led strategy. “Troop-contributing countries overemphasize military issues and sideline the critical challenge of promoting genuine development and good governance,” says Farhana Faruqi-Stocker, managing director of Afghanaid. “This imbalance matters, not only because of the resulting human cost, but also because poverty and weak, corrupt government are key drivers of conflict, and must be effectively addressed if there is to be sustainable peace and development.”

* The paper, Quick Impact, Quick Collapse, can be downloaded >>> here.

Obama bank reforms: Major step in the right direction, trade unions say

US President Barack Obama’s announcement of plans to restructure banks as a key component of comprehensive financial regulatory reform is a major step in the right direction, which other governments must rapidly commit to match through similar laws, according to the international trade union movement. Linking the banking sector’s “binge of irresponsibility” to the deepening unemployment crisis, Obama has proposed a series of urgently-needed reforms, including an end to the practice of banks using depositors’ money to engage in the kind of high-risk speculative operations, such as hedge funds and private equity, which helped plunge the world into recession.

“While tens of millions of people are losing their jobs, the very same bankers and financiers who poisoned the global economy with their greed and arrogance are once again playing their dangerous game of financial roulette. They show no interest in helping solve the crisis, only in lining their own pockets with even bigger bonuses than before. This has to stop, and other governments must also move to take them on quickly and with the same determination as President Obama is showing,” said ITUC General Secretary Guy Ryder. News of multi-billion dollar bonuses, even in banks which had to be rescued by taxpayers, is a particularly ugly feature of the financial economy and has caused widespread outrage. On top of this, the “leveraged buyout”, where corporate takeovers are financed through massive debt, and employees often lose their jobs as a result, remains a feature of the world economy.

The US proposals are aimed at tackling one of the key causes of the world recession, and need to be implemented quickly and as a central pillar of overall reform, including action on bonuses and measures to limit purely speculative practices across the finance sector. “We need a clear and globally coherent regulatory framework to make sure that banking practices serve the real economy. A financial transactions tax to reduce speculation and provide funds to help pay the costs of the crisis and generate sustainable and decent jobs and development must also be part of the package,” said John Evans, general secretary of the Trade Union Advisory Committee to the OECD.

ONE: Creative thinking urgently needed to tap alternative sources of climate finance

An agreement of $10bn a year in fast track financing for the next three years and $100bn a year by 2020 for poor countries to cope with climate change must come over and above existing aid promises, Africa advocacy group ONE said after the Copenhagen climate summit. Currently these sums will largely be subtracted from promised resources to help these same countries fight poverty. But climate change is putting additional stress on poor countries – which is why they need additional funds to cope with it – on top of existing and promised aid levels,” said Jamie Drummond, Executive Director of ONE UK.

“Promises of aid made by the G8 in Gleneagles in 2005 must not be lost in Copenhagen. Without a clear commitment that these climate funds are additional, the dollar amounts are next to meaningless. This debate over ‘additionality’ might seem arcane, but within the details lie billions of dollars - and very real impacts on millions of lives,” Drummond said. “Without this additionality, Copenhagen adds up to nothing. It is not clear how a cap on two degrees will be achieved, but it is very clear that much more can and must be done, including harnessing the potential of African and other developing countries to be renewable energy hubs and help capture carbon through growing trees."

ONE supports the African proposal for an interim target of $50bn by 2015 on top of existing and promised aid to help the poorest countries – many of them in Africa – with pressing adaptation needs. The Copenhagen Accord mentions a High Level Panel to assess how alternative sources of funding can contribute to raising genuinely additional funds. ONE says this urgent High Level Task Force should be convened immediately and with links to the highest political level to look into alternative sources of climate finance to complement additional public funding from rich countries. These sources could include: revenue from aviation and shipping, international auctioning of emissions allowances, a financial transactions tax and the proposal to use the IMF’s own currency, known as Special Drawing Rights. ONE also highlighted the need for accountability and transparency for these new funds.

Betrayal or breakthrough?

Copenhagen Accord: Triumph of spin over substance

The ‘climate deal’ presented in Copenhagen (>>> Copenhagen Accord) is a triumph of spin over substance says Oxfam International. The deal provides no confidence that catastrophic climate change will be averted or that poor countries will be given the money they need to adapt as temperatures rise. Leaders have also put off agreeing a legally binding deal until the end of 2010. Jeremy Hobbs, Executive Director of Oxfam International said: “This deal barely papers over the huge differences between countries which have plagued these talks for two years.

The document recognizes the need to keep warming below 2° but does not commit to do so. The deal promises $100bn a year in climate cash for poor countries by 2020. This is an aspirational goal not a commitment – poor countries will have no confidence that they will receive the money they need to reduce their emissions and adapt to a changing climate. $100bn is only half the money needed. The shortfall could mean that health workers in South Asia and Sub Saharan Africa will not get the $1.5bn they need each year to prevent climate induced deaths from malaria and diarrhoea. There are no assurances that the $100bn will be additional to existing aid commitments. This means aid for education and health care could be diverted to pay for flood defenses. The $100bn will not all be public money. Unless climate cash comes from public sources, there are no guarantees that it will reach the right people, in the right places, at the right time.

Global temperature rises will be kept below 2° C, the Accord says. In reality the absence of any emissions reductions targets means there is no guarantee warming will be kept below 2°. Climate science is clear on the need for deep emissions cuts by 2020. Specific targets are essential. Shorbanu Khatun, a climate migrant at the summit with Oxfam said: “I came all the way from a displaced persons camp on the flooded coast of Bangladesh to see justice done for the 45,000 people made homeless by cyclone Aila. How do I tell them their misery has fallen on deaf ears?”

Copenhagen Accord: The financial side

Guest commentary by Liane Schalatek

It is ironic, really.

The question about financial transfers from the industrialized to the developing countries – one of the most contentious issues throughout the two weeks’ negotiations in the Bella Center – might be one issue area, where a final Copenhagen declaration could show a clear way forward — albeit in an otherwise weak and watered down political statement by Head of States, a sad remnant of the earlier, grander vision of a comprehensive “Copenhagen Deal”.

Finally, concrete numbers — the most to be expected for a future “Copenhagen Climate Fund” — are on the table. And while they are not as grandios as hoped for, they will, if collected and tranferred speedily, go a long way to improve the lives and livelihoods of men and women in the devleoping world as well as the world’s climate. Over the next three years, industrialized countries commit to transfer some $30 billion in short-term financing to developing countries. Most of these funds over the next three years would probably be delivered through existing (climate) financing mechanisms, including at the multilateral development banks and the GEF. (A reminder: It took seven years from COP decision to the start of operations of the new Adapation Fund). By 2020, a “Copenhagen Climate Fund” under the direct authority of the UNFCCC would then collect some $100 billion per year by 2020.

This at least, is what a three-page outline document for a political declaration, the result of a “green room”-type meeting of 30 countries came up with after a long night of negotiations early Friday morning. But it seems also the outline of what is politically possible as a financing framework, with its baselines seemingly holding throughout the high-level segment of the negotiations and the statements by Obama, Merkel, Lula & Co.

While US President Obama disappointed all those who had expected he would pull a financial trump card out of his sleeve and top the announcement that US Secretary of State Hilary Clinton had made on Thursday, Brazil’s President Silva da Lula surprised pleasantly by indicating that as an emerging economy his country might contribute to providing financial transfers to the poorest and most climatically exposed countries. An interesting side note: in his comments, President Lula’s explicitly warned of putting new climate funding under the control of the World Bank….

As encouraging as these stated intentions sound, a lot of the details are still missing. For example, it remains unclear how much the United States would contribute to such a Fund in the long-term. And nowbody knows how much the US are willing to cough up for the most urgent adaptation and mitigation action in developing countries in next three years. In contrast, the EU and Japan had both put their financial cards already on the table, promising $10 billion (EU) and $15 billon respectively from 2010-2012.

On the sources of financing, there is likewise ambiguity — but that might be a blessing in disguise. While the G30 draft outcome document lists private (carbon-markets) and public bilateral and multilateral sources, it also leaves room for “alternative sources of financing. This opens the door for the development of innovative tax instruments (for air or maritime travel or financial transactions a la Tobin), which a suggested high level panel under the COP could explore. Using (global or regional) sin taxes would go a long way to secure the truly additional and predictable revenue source that the developing countries are holding out for.

(Originally published in: Klima der Gerechtigkeit)

Leaked UN report: What Copenhagen pledges mean for future temperatures

Catholic CIDSE network and Caritas Internationalis say that the leak late yesterday of a UN report that proved that there is a significant gap between developed country rhetoric and their emission reduction commitments to date. They fall far short of what is required to prevent climate catastrophe in the future setting an unparalleled challenge to rich countries on the last day of the climate talks.

The internal UN report, dated 15 December, was never meant to be circulated. However, it merely confirms what many voices, civil society and developing countries most prominently, have been stating for months; rich countries fail to walk the talk on emission reductions, as their concrete commitments do not match with their expressed political will to tackle climate change. The report asserts that current developed country pledges would result in a further warming of the earth’s average temperature of 3° C, whilst developed countries continue to claim to be committed to limiting this rise to 2°.

“1° may not sound like very much to someone on the street, but the difference between 2° and 3° for developing countries is counted in hundreds of thousands of lost lives. In fact the most vulnerable countries are calling for 1.5° to be the limit,” said Anika Schroeder of German CIDSE member Misereor. “Developed countries claim to be committed to avoiding dangerous climate change in the future; this report reaffirms that they can no longer deny the science, and must now match these claims with adequate binding commitments.”

Thousands in Copenhagen to demand system change

At the end of the first week of the climate talks at Copenhagen, thousands of activists from the Climate Justice Action and Climate Justice Now! networks are joining the climate march under the banner of “System Change Not Climate Change” to denounce the climate negotiations as a predictable failure. The protesters are demanding radical changes in economic and political systems in order to address the climate crisis. The coming together of the Climate Justice Action and Climate Justice Now! is an unprecedented coalition of social movements, NGOs and grassroots climate activists from around the world to demand alternatives to the failed market solutions being pushed by governments and big business.

The ‘System Change’ contingent has been tipped as the largest and loudest section in the march and includes people from 50 different countries. It will include a flat bed truck broadcasting music and speeches from prominent activists from the global south.

Josie Riffaud from La Via Campesina a global coalition of peasant movements, said: “We’ve seen this week in Copenhagen that governments are turning the climate chaos into commodities. Farmers – men and women - are taking to the streets today because we are so outraged by the ineffective targets and false solutions such as agrofuels being peddled by business lobbyists and governments that listen to them.” Lidy Nacpil from the Jubilee South Coalition said: “All week we have heard a string of excuses from northern countries to make adequate reparations for the ecological crisis that they have caused. We are taking to the streets to demand that the ecological debt is repaid to the people of the South.”

Lars Fredikssen, an activist from Climate Justice Action said: “At the root of the climate crisis is an economic and political system that puts profit above people and the long term sustainability of this planet. Unless we address these root causes, climate change will devastate people around the world. These talks are a predictable failure and that’s why we will be taking action next week to create a People’s Assembly. We want the voices of ordinary people who are already being affected by climate change to be heard and listened to.”

Both networks will continue to work together on 16 December, where they are planning to bring the energy from the streets into the Centre where the talks are being held. A massive People’s Assembly will take place when thousands are expected to march to the Bella Centre to expose the false solutions and to propose positive alternatives and at the same time, hundreds of people inside the talks are expected to walk-out and join.