Japan’s G8: a week to go

So, with a week to go until Japan’s G8 in Hokkaido, how are things looking?  If you want the comprehensive answer, you should head straight for Jenilee Geubert’s excellent dossier on the website of the University of Toronto’s G8 research group – but here are a few highlights.

First, climate change.  A draft communique seen by Dow Jones suggests there are four options on the table: a 50% emissions reduction by 2050 [from what year’s level isn’t specified]; an unspecified percentage cut by 2050; a 50% cut by 2051 or later; or a more than 50% cut by 2051 or later. 

If you’re wondering where the magical figure of 50% comes from, it’s from the IPCC estimate of what it’ll take to limit average temperature rises to between 2.0 and 2.4 Celsius – though note that (a) the IPCC says 50 to 85%, and (b) that this is before the [rapid] rate of sink failure is taken into account.  So 50% by 2050 is already too low. 

Fukuda has said that the G8 will not aim to set medium term targets.  Tony Blair’s big new report says it must.  So does Avaaz.  The US says a 25-40% cut by 2020 is “frankly not do-able“. The US is meanwhile extolling the benefits of its Major Economies Meeting, but last week’s MEM in South Korea didn’t go so great.

Next: energy.  Oil’s just flown past $143 on the back of geopolitical tensions, so all the signs are that the issue will be charged when leaders gather next week.  Fukuda wants to see more oil production, but after Saudi Arabia’s pledge of only 200,000 more barrels a day last week, it’s hard to see much sign of it – and even harder to detect any sign of join-up between Fukuda’s calls for OPEC to open the tap up a bit more, and Japan’s stated goal of something called a “Cool Earth“.

Meanwhile, biofuels might conceivably also come up, as Fukuda’s not a fan (“it is a fact that the production of bioethanol in some cases compete with food production”) – though Japan will want to avoid putting its American buddies on the spot.  For its part, the US will point to IEA data that shows that biofuels have become crucial for meeting marginal oil demand (want to know how much non-OPEC oil supply growth is from biofuels this year? 63 per cent.)

And then there’s food. Sir John Holmes’s UN task force will be presenting its final report at the Summit.  Leaders will probably pledge to do everything they can to increase food production and increase investment in agriculture – which is a good idea, though it does still leave the small fact that enough food is produced for everyone to eat today, but there are still 850-950 million undernourished people.  Increasing yields isn’t the whole story.

One thing the G8 leaders could do is issue a strong statement of intent on the Doha trade round – and perhaps, if they want to be really relevant, taking security of supply issues into account at the same time.  More generally, World Bank President Bob Zoellick’s ten point plan on food prices will doubtless be referred back to as a good and brief overview of the challenges – worth having another look at that ahead of the summit.

All in all, the three scarcity issues of climate, energy and food will dominate centre stage at Tokayo.  It’s welcome that the G8 is focusing on them, but unclear that G8 leaders know what kinds of deal they should be agreeing on them – or how to get there.  And G8 leaders also appear not to have figured out yet that scarcity issues are uniquely integrated, while the multilateral response to them is anything but.  More on that over the course of this week…

G8 leaders make ready to drop aid commitments

Someone’s leaked a copy of the draft G8 communique to the FT (or, more specifically, to their Berlin correspondent – presumably no prizes for guessing which government the leak came from, then).  According to Hugh Williamson, the draft

…shows leaders will commit to fulfilling “our commitments on [development aid] made at Gleneagles” – but fails to cite the target of $25bn annually by 2010. 

 He continues:

In a further retreat, the G8 is set to abandon its Gleneagles promise to provide universal access to Aids treatment and prevention by 2010. The pledge has been a benchmark around which health campaigners and others have been organising their work, especially in Africa. The draft says the G8 will continue “working towards the goal of universal access to HIV/Aids prevention, treatment care” but it does not mention the 2010 deadline.

Oh dear – although it’s been obvious for a while that the G8 was sliding way, way off track for universal treatment by 2010.  In the background, there’s the unpalatable fact that Africa’s still off track for all of the MDGs, in spite of all the talk of Calls to Action and so forth.

When fiction becomes fact

GD readers may be familiar with The Kingdom, a fictional film inspired by bombings at the Riyadh compound on May 12, 2003 and the Khobar housing complex on June 26, 1996 in Saudi Arabia.

From the plot:

… the Americans are allowed a hands on approach to the crime scene and discover that the second bomb was set off in an Ambulance, and the bombs used marbles as projectiles. This revelation leads them to discover that the brother of one of the terrorists had access to ambulances and State Police uniforms, and the Police raid the house, managing to kill a few heavily armed men.

It seems fiction has become fact with news that MI5 are concerned that emergency vehicles could be used by AQ in the UK. From the Sunday Times:

Terrorists linked to Al-Qaeda may be planning to buy former NHS ambulances and police cars to mount suicide bomb attacks in Britain, MI5 has warned. They may import a tactic already used in Iraq and Israel, according to a report by MI5’s Joint Terrorism Analysis Centre to chief constables. In a statement to The Sunday Times, the Association of Chief Police Officers also warned of the risk of such an attack. It said ministers must legislate to stop the sale of such vehicles.

According to the Sunday Times every year dozens of police cars, ambulances and fire engines are sold and Home Office officials have now written to eBay asking it to stop selling emergency service vehicles, equipment and uniforms. However, eBay has said it will only self-regulate if a new law is passed.

Farewell, suburbia?

First things first: bookmark this link.  It points to the Economics and Strategy page at CIBC World Markets, the Canadian investment bank whose research team brought us the superb brief I linked to a few weeks back, entitled Could Soaring Transport Costs Reverse Globalisation?  Having checked back a few times since then, it has become clear that (a) a lot of their research is focused on food and energy issues, and (b) all of it is excellent. 

Anyway, in their current weekly StrategEcon briefing note, Jeff Rubin has some thoughts about the oil price – which he now forecasts at $150 next year and $200 the year after that (“recent announcements from OPEC and China won’t be sufficient to hold oil prices in check. The additional 200,000 barrels per day pledged from Saudi Arabia is a pittance compared to the four million barrels per day that depletion will hive off world production this year”.)

What’s really interesting, though, is this little observation:

As gasoline prices climb inexorably, American driving habits are going to have to undergo a massive change, mimicking the driving habits long adopted by Europeans who have faced much higher gas prices. Average miles driven will likely fall by as much as 15%, while the market share of light trucks, SUVs and vans will be literally halved, reversing the trend of the last fifteen years. But the most fundamental, and unprecedented change will be in the number of vehicles on the road.

Over the next four years, we are likely to witness the greatest mass exodus of vehicles off America’s highways in history. By 2012, there should be some 10 million fewer vehicles on American roadways than there are today—a decline that dwarfs all previous adjustments including those during the two OPEC oil shocks. Many of those in the exit lane will be low income Americans from households earning less than $25,000 per year. Incredibly, over 10 million of those American households own more than one car.

Soon they won’t own any.

 And the New York Times last week gave some corroboration on the ground:

Suddenly, the economics of American suburban life are under assault as skyrocketing energy prices inflate the costs of reaching, heating and cooling homes on the distant edges of metropolitan areas.

Just off Singing Hills Road, in one of hundreds of two-story homes dotting a former cattle ranch beyond the southern fringes of Denver, Phil Boyle and his family openly wonder if they will have to move close to town to get some relief.

They still revel in the space and quiet that has drawn a steady exodus from American cities toward places like this for more than half a century. Their living room ceiling soars two stories high. A swing-set sways in the breeze in their backyard. Their wrap-around porch looks out over the flat scrub of the high plains to the snow-capped peaks of the Rocky Mountains.

But life on the edges of suburbia is beginning to feel untenable. Mr. Boyle and his wife must drive nearly an hour to their jobs in the high-tech corridor of southern Denver. With gasoline at more than $4 a gallon, Mr. Boyle recently paid $121 to fill his pickup truck with diesel fuel. In March, the last time he filled his propane tank to heat his spacious house, he paid $566, more than twice the price of 5 years ago.

Though Mr. Boyle finds city life unappealing, it is now up for reconsideration.

 Here’s James Howard Kunstler, prophet of suburbia’s demise, at TED last year:

[youtube:http://www.youtube.com/watch?v=Q1ZeXnmDZMQ]