The Guardian headline was unequivocal: “The US will exempt China from binding greenhouse gas targets.”

Guardian environment correspondent, David Adam, had had a chat with Jonathan Pershing, who leads the American climate delegation, and Pershing had told him that only developed countries need take on binding targets to reduce emissions. ”We’re saying that the actions of developing countries should be binding, not the outcomes of those actions.”

Now, that’s a big deal. After all, back in 1997, the US Senate made it crystal clear that it had no intention of ratifying Kyoto unless the agreement included “new specific scheduled commitments to limit or reduce greenhouse gas emissions” for all developing countries, and China, Mexico, India, Brazil, and South Korea in particular.

Now, you can argue the toss about the merits of the US position (my personal view is that China should bind itself at Copenhagen to an agreed date by which its emissions will peak), but for Obama’s team to say at this stage – do a bit more on energy efficiency and renewables, and we’ll give you a free pass on targets – would be astounding.

Turns out Der Spiegel has a more detailed and much clearer interview with Pershing.

SPIEGEL: But the Chinese don’t want to accept legally binding reduction targets for CO2. Does the US still insist on such a commitment?

Pershing: Yes, definitely. We are still asking them to commit to legally binding CO2 reductions as part of a Copenhagen agreement.

SPIEGEL: With only five months left until the Copenhagen summit, do you think such a compromise will be possible?

Pershing: We are working very hard to achieve a good solution. The US remains focused on a legally binding agreement and on concluding that agreement in Copenhagen. We expect all developed nations to commit to comparable reduction targets and we want more countries to belong to the group of industrialized countries than today, for example Korea. Major economies with large total emissions like China should take additional steps, including a quantitative and quantifiable set of actions with a legal requirement to implement those actions.

So what gives? A fine line between ‘reductions’ and ‘targets’? Pershing going off script? Or sloppy reporting from the Guardian’s journalist?

(Via @tancopsey on Twitter – follow me @davidsteven.)

Update – And we have our answer – sloppy Guardian reporting. Its original story went up online at 14.53 BST, but was extensively revised and corrected at 18:31 (the old version simply disappeared, but there’s a copy below).

The new headline: “US says it will not demand binding carbon cuts from China.” So targets are still on the table; immediate absolute reductions are not (and they never were – the idea is utterly implausible).

(more…)

I’m at a Ditchley conference on aid effectiveness, where the most interesting thing I’ve learned so far is that Kiva now lends some $50 million a year.

Kiva, for those who don’t know it, is a web-based micro-credit platform.  When you log on, you can go straight to a list of entrepreneurs looking for capital to borrow: entrepreneurs like Nguyen thi Dieu, who’s looking to borrow $1,125 over 13 months to invest in her beauty salon in Kim Dong, Vietnam (since you ask, she’s raised $350 so far; if you want to help out with the remaining $775, click here).

Recognition of micro-credit’s potential isn’t new - it’s three years since Muhammad Yunus won the Nobel Peace Prize for his work with the Grameen Bank in Bangladesh.  But what is new is that Kiva’s rapidly growing size means that the individuals that finance it have aggregated themselves into being a major player in the micro-credit sector.

After all, the largest bilateral aid agency in this field is USAID, which spends about $100m a year on micro-loans: given that Kiva’s only been running for four years, it shouldn’t be long before it overtakes USAID if current growth rates are sustained.

What makes Kiva’s approach so fascinating is that it’s an example of many-to-many network topology: aid can go directly from a miniscule aid donor (like me) to a miniscule recipient (like Nguyen thi Dieu) without having to pass through the giant cogs of the international aid bureaucracy. Kiva runs with just 15 staff, who are funded through a ‘tip-jar’ plus some cash from foundations.

At a point when the challenges involved in sustaining public support for aid spending are proliferating rapidly, Kiva’s approach also has the great value of being able to show real results in real people’s lives – but without falling back into the bad old days of small aid ‘projects’ that effectively undermine state capacity.

If the big story in the aid world over the last 5 or 10 years has been the emergence of large new donors like private foundations (like Gates) or vertical issue-specific funds (like the Global Fund on Aids, TB and Malaria), it’s entirely possible that one of the big stories of the next 5 or 10 will be about the growing importance of many-to-many aid programmes like Kiva’s.  Aid 2.0 is already here…

Update (David): For those of you who are interested, the consultancy I work for has a thriving Kiva portfolio which you can view here (though many of our Kenyan loans went sour after last year’s political violence – something that gave a very direct insight into how conflict ruins lives). As an example, Gladys Ehichioya from Benin City, Nigeria borrowed $700 to buy more crayfish for her fish business. Her business seems to be doing well.

In the world of Bretton Woods watchers such as myself (and what a world that is), all eyes are on the US Congress, where lawmakers are deciding on the fate of President Obama’s commitment at the G20 to boost the US’s contribution to the IMF by $108 billion. There is no doubt that the Fund needs that money (as part of an overall increase of its resources to £750 billion) but things are not going smoothly on the Hill.

Unfortunately, US politics being what it is, the increased funding is part of another bill… an Iraq war financing bill. Of course, this means that Congressmen and women can’t vote for IMF funds without also voting for war funds and can’t vote against war funds without also voting against IMF funds. (And vice versa.) According to Mark Weisbrot:

from the beginning, the administration has faced tremendous obstacles to getting a majority members of the House of Representatives to vote for the money in an up-or-down vote. This is because many members of both parties are afraid that it would be seen as another taxpayer bailout for the financial industry – and foreign banks at that.

So we are left with a state of affairs in which some Democrats are rebelling against the Bill for war reasons, and others because they want moves on IMF reform (particularly in terms of its dangerously austere lending conditions) in exchange for the increasing funding proposed. Few would argue that this is a sensible and eminently just request. However, the US Treasury (which of course has an enormous degree of sway over IMF policy) has refused to commit to this as a condition of the increased funds. Republicans, meanwhile, ostensibly just want the IMF money put to a separate vote. But (Weisbrot again):

Interestingly, the Republicans are not trying very hard to get the IMF money removed. They are not saying anything on television or in the media. This indicates that they may want this money to pass with only Democratic votes, so that they can attack the Dems – especially those in conservative districts – when the money ends up bailing out the European banks in eastern Europe.

Of course, that’s a solid criticism and no doubt it’d play very well. But at the end of the day, this is exactly what the IMF is meant to do, it’s part of what it was set up for and it’s certainly part of the job of a hegemonic country that claims to be ‘ready to lead once more‘.

Granted “taking offense” has been turned into a competitive sport, but this takes the biscuit. Top story on Drudge – Barack Obama is said to have insulted Israel by chatting on the phone with Benjamin Netanyahu with his feet on the table.

Drudge links to CBS which frets that that Obama was sending a ‘subliminal message’ to Israel. Apparently, “‘some Israelis…saw the incident as somewhat akin to an incident last year, when the Iraqi reporter threw a shoe at President Bush in Baghdad.” Somewhat akin! Can’t get worse than that.

Of course, it’s not Jews who have a thing about soles of shoes, it’s Arabs, but CBS has an answer for that. Apparently, “Israel feels enough a part of the Middle East after 60 years to be insulted too.” You really couldn’t make it up.

Probably not safe for work, but here’s a picture of the offending act.

(*I made the ‘feets smell’ bit up.)

Update: Note that Obama has still not got his shoes mended – compare this tatty pair he wore during his campaign…

Royal Dutch Shell - Flickr User Lee Otis

After 13 years, Royal Dutch Shell has agreed to pay $15.5 million compensation to settle a court case over its alleged part in the execution of Ken Saro-Wiwa and other Ogoni leaders in the Niger Delta. Much of the backstory can be found here.

Now I’m no judge (not yet, anyway), but $15 million doesn’t seem a lot for a firm with 2008 revenues of $458 billion. Michael Goldhaber, who does know something about law, describes the sum as ‘nuisance value’ from Shell’s point of view.

Yet the fact that Shell settled the day before the trial was due to begin is indicative of the firm’s distaste for either the publicity that court proceedings would create, or the culpability that might be uncovered. (more…)

I love a gritty internet takedown. At Travels with Shiloh, Dean tears apart a Small Wars Journal article by John P Sullivan on ‘criminal insurgencies and gangs’…

“I don’t know how but Sullivan somehow manages to sucker me into reading his stuff every time and every time I’m disappointed.  The paper is a motherload of unexamined assumptions, outdated information and self promotion (17 of his 24 footnotes cite himself).  I don’t know Sullivan and I’m sure he’s a great guy but if this is the sort of thinking that’s driving policy…we’re in big trouble. Sullivan has been promoting essentially the same idea for over 10 years, that gangs are going to politicize and become the major threat to the nation state system as these modern day barbarians storm the gates and plunge us into a new dark age.”

This is an excellent post. Where I part company with Dean is the idea that urban counter-gang strategy should be modelled on counterinsurgency doctrine. In Dean’s words, “Restore order, establish you’re there for the long haul and rebuild infrastructure, opportunity and trust”.

In theory this sounds like a good plan. But in practice, how many American municipal authorities have the resources to do this justice? And how would they sustain progress for the long haul? Success ultimately depends on people having secure jobs in legit economies. That in turn relies on industry returning to inner cities. There are good reasons why industry left – like changing patterns of demand, new means of production, the lure of cheap offshore labour – and that will be impossible to reverse.

The Columbia Journalism Review surveys  local newspaper coverage of how the U.S. stimulus package is being spent:

The Billings Gazette takes a look at a smaller chunk of the recovery picture: three to five jobs. Flaxville, a tiny burg of just over 100 people (with a yearly budget of $36,000), in northern Montana, will get a stimulus check for $7,530 and will use it to “sand-blast and repaint the inside of the town’s 10,000-gallon water tank,” which, the mayor estimates, will create three to five jobs for the duration of three months.

Any day now, the State Energy Office in Arizona should be receiving the first installment of money to pay for the state’s weatherization plan, according to the Arizona Guardian. (Arizona was the first state to apply for the weatherization assistance grant on April 28, creating a sort of unofficial timeline of money requested and money received.) The house weatherization project—which will add insulation, seal leaks and modernize cooling equipment, among other things—will both create jobs and help consumers out with summer cooling bills. And the state likely has other allotments of money coming down the pipeline. But, in an example of bureaucratic delay, it’ll take another two or three months before the U.S. Department of Energy completes its review of one big portion of it: Arizona’s application for $55.4 million to expand the State Energy Program, which invests in renewable energy programs.

The Cleveland Plain Dealer runs the headline, “Ohio’s first stimulus construction project under way but benefits won’t be felt for years,” echoing concerns that the stimulus money isn’t making enough of an impact, quickly enough. The project involves “widening the Interstate 490 east ramp to Interstate 77 north to accommodate a second lane.” The report’s description of the news conference: “Even with no immediate benefits, the project was hailed Monday as a history-making investment.” Why the skepticism? With the money currently available, the ramp work could be finished by late October, but the public “won’t be able to use the roadway for a while because it feeds into a portion of I-77 north that needs to be upgraded.” How’s that for helpful money?

In February, I published a piece entitled “Europe Retreats” arguing that, as the financial crisis bites, European countries will cut back on military operations and  budgets – just as rising powers like China and India are extending their reach.  Today, SIPRI published its Yearbook, which tracks such things – the data makes Europe look pretty tough:

Top 10 Military Spenders, 2008

USA $607bn
China $84.9bn
France $65.74bn
UK $65.35bn
Russia $58.6bn
Germany $46.87bn
Japan $46.38bn
Italy $40.69bn
Saudi Arabia $38.2bn
India $30.0bn

But before we all boast about Europe’s mighty armies, it’s worth checking out a first-class analysis from Tomas Valasek of the Center on European Reform, which explains why European defense spending is about to drop:

Most European governments will have to increase taxes and cut spending in order to rebalance the books. Those cuts will hit defence harder than other parts of the budget. This is because many forms of government spending – like the cost of paying interest on public debt – cannot be reduced by decree. Some non-mandatory expenditures like healthcare tend to be politically explosive: no government wants to be seen to be taking risks with people’s health. So defence budgets are an obvious target for ax-wielding finance ministers. George Osborne, the UK shadow chancellor of the exchequer, warned recently that he would cut defence spending if the Conservatives won the election (which they are widely expected to do this year or next).

The looming military budget cuts will have many salutary effects. Defence establishments, with their resistance to civilian oversight and emphasis on continuity, tend to get bloated in times of relative plenty. It often takes a crisis to force meaningful reforms. France – which suffered a defence budget meltdown in 2007, even before the economic crisis unfolded in full – at last shut many of its African bases, a legacy of its colonial years. Slovakia recently cut the number of military commands from eight to three – a long overdue step that will reduce unnecessary overheads. Other European militaries, too, will come out of the crisis with more sensible structures and budgets.

But the economic crisis presents several serious risks to European defences. The easiest portion of the defence budget to cut is the part that pays for operations. Withdrawing soldiers from faraway places plays well at home (it removes young men and women from harm’s way) and is politically easier than restructuring the militaries (no one is laid off). But European governments should resist the urge to pull back their soldiers indiscriminately; this could cause conflicts to re-flare and leave vulnerable people at risk. Instead, they should stop sending overlapping missions to the same trouble spots. Because international institutions compete to fly their flag in missions abroad, it is not unusual for western governments to have multiple operations in the same place. For example, three different forces are currently fighting piracy off the coast of Somalia. That is a wasteful use of taxpayer money. The EU, NATO, and the US should roll their Somalia operations into one or two.

Tomas goes on to point out that the downturn will also cause governments to cut back on big weapons programs, and that their decisions on what to save and what to cut will probably be driven by domestic concerns rather than security calculations. I recommend you read the whole thing closely. I’d like to stay with operations briefly, though. It’s true that “international institutions compete to fly their flag in missions abroad”. But this is also a particularly European problem, with the EU and NATO jostling for attention. As I argue in another recent piece for the CER, economic and political factors require Europeans to stop being picky and work through other mechanisms like the UN.  As the downturn bites, we have to be more pragmatic about crisis management.

I received an unexpected invitation by e-mail this morning:

We are glad to inform You that Academy of Strategic Research, Information and High Tech, Saint-Petersburg State University of Waterways Communications, Baltic State Technical University “Voenmech” named by D.F. Ustinov, Academy of geopolitical sciences, Interregional Fund of Leningrad veterans of war and military service fellow soldiers, National Youth Congress, Thin Technologies (Co. Ltd) and other universities, institutes and organizations are holding the Third International Scientific-Practical Conference “GEOPOLITICS, GEOECONOMICS AND INTERNATIONAL RELATIONS PROBLEMS. NATO AND EU EXPANSION TO THE EAST SECURITY PROBLEMS IN RUSSIA, CIS STATES, EUROPE AND ASIA” on the 22-23 of June in 2009 in Saint-Petersburg.

Oh good. Anything involving the Saint-Petersburg State University of Waterways Communications is right up my street (or canal).  But wait, not only are the assembled waterways experts, war veterans and Thin Technologies hoping I may pop over, but they list roughly thirty topics I might wish to give a paper on.  Here’s a sample:

Geopolitics and geo-economics of oceans, seas, rivers and waterway communications;

All very sensible. But not really my speciality. What else is there?

Nazism, fascism, racism, genocide and dual standards of Western-European civilization. Genesis and morphology. Historical, geopolitical and juristic analysis;

Oh, now I get it…

Historical, juristic, philosophical and financial aspects, military, geopolitical and geo-economic consequences of one-sided abolishment of Warsaw Treaty when saving NATO. Contemporary history, interaction of events, genesis and morphology;

Influence of Warsaw Treaty abolishment and further USSR destruction on geopolitical and geo-economic situation in the world, safety and vulnerability of Russia, CIS, Europe and Asia;

Problems and prospect of USA and NATO occupation military bases in Europe and Asia liquidation. NATO liquidation as the only way of struggle with the consequences of the World War the 2-nd, occupation fascism, struggle for freedom and democracy of European and Asian countries;

Speed-up of CIS integration in conditions of NATO and EU expansion, outer threats increase, including drug invasion from Afghanistan and other world drug regions.

Maybe I’ll stick to the waterways angle after all…

A few days ago the House of Commons International Development Committee released its latest report (entitled Aid Under Pressure: Support for Development Assistance in an Economic Downturn) and there are a few points which might be of interest to Global Dashboard readers.

As its title would suggest, the report focuses on the impact of the financial crisis on international development efforts. It opens on a grim note with the news that DFID estimates that by the end of next year 90 million more people will be living in extreme poverty as a result of the crisis. Moreover, the WHO believes that up to 400,000 additional children could die as a result. The International Development Committee adds that progress towards the MDGs may have been set back by up to three years.

A major point made in testimony given to the Committee was that initial expectations that the developing world would be insulated from the impact of the crisis have proven false. Whilst the contagion effect of the crisis has only directly harmed western economies, the indirect knock-on effects have applied pressure to transnational business flows worldwide. The World Bank reports that of the 107 counties it categorises as ‘developing’, 40% are ‘highly exposed’ to the downturn.

Unsurprisingly-though quite rightly-the International Development Committee’s response to all this is to insist on the importance of maintaining ongoing aid commitments, as agreed at the G20 summit in July.

Aside from that, the issue of tax havens is highlighted and it would seem that the British government is increasingly committed to making progress in this respect. Gordon Brown in particular has been forthright on this issue, but his government seems somewhat hamstrung at present and we shall have to await developments.

In the wake of the London Summit, institutional reform is back on the agenda. The need to overhaul the IMF and World Bank, particularly in regard to apportionment of votes within those organisations needs to be a priority for the post-crisis politics of global governance. Indeed, reform has been presented as a condition for the boost to IMF funding that the G20 agreed upon earlier this year. Broader questions of operational versatility are also important. In these respects, the Committee’s report is strong on good ideas and analysis, but light on suggestions for how Britain can help bring about the desired changes. For that perhaps we need to wait for the DFID White Paper due later in the summer.

On a seemingly superficial note, the Committee proposes that DFID’s name be changed and puts forward ‘British Aid’ and ‘DFID UK’ as possibilities. The intention, it seems is to increase the ‘visibility’ of UK international development spending. Of course, DFID does a lot more than aid, so I think we can immediately dismiss the first suggestion. As a reserved Brit, the idea of being so brash as to use ‘UK’ on international development work is too reminiscent of the US tendency to splash the Stars and Stripes on aid parcels. It seems… immodest, somehow. But it might be a good idea all the same – US aid is part of its soft power and in the same way, the work of the Department for International Development has the potential to be a significant contributor to British attempts to win ‘hearts and minds’, particularly in countries like Afghanistan. After all, the Committee’s report points out that DFID is the largest donor to the World Bank’s International Development Association. Maybe blowing our national trumpet more boldly isn’t such a bad idea. Though one wonders if there isn’t a snappier name out there somewhere – suggestions welcome, of course.

Der Spiegel has a fascinating interview with Pakistan’s former dictator statesman Pervez Musharraf:

SPIEGEL: Are you disappointed by Obama?

Musharraf: No, he is aiming at the right things. He is showing intentions of improving the dialogue with the Muslim world, which is good. He is right when he says that more forces must be deployed in Afghanistan. There is an intention of increasing funding for Pakistan, which is also good. But he also has to understand the reality in Pakistan and I am not sure he does.

It turns out that “the reality” is all about Indian intelligence subversion. But for me the takeaway (literally) from the interview is this:

SPIEGEL: Mr. Musharraf, there’s a bon mot that states that ruling Pakistan is like riding a tiger. You were in power for nine years. Are you bored now?

Musharraf: I recently was in Saudi Arabia, China and London giving lectures. I have engaged the famous Walker Agency …

SPIEGEL: … which Bill Clinton, Tony Blair and Gerhard Schröder all work with …

Musharraf: … In Prague, I am giving a lecture on leadership in front of high-level managers at a company which owns Pizza Hut and KFC.

Um, er, ah… no actually, I am lost for words this time.

Yesterday’s Financial Times featured an interesting proposal from Martin Sandbu and Nicholas Shaxson, aimed at evading the so-called ‘Dutch disease‘, in which high rents from valuable natural resource extraction can seriously undermine domestic manufacturing and agricultural sectors, as well as encouraging corruption. The proposed solution is that governments in developing countries should divvy up any revenues between the citizenry. According to Sandbu and Shaxson, this should mean that:

instead of fighting each other for oil rents, political elites would have to bargain with the people for tax revenues. If the government did not tax everything back, direct distribution would dram­atically transfer wealth to the poor. This has nothing to do with privatisation: the government could still get funds for roads and schools – but with pressure to spend the money well.

Now, to me, that sounds like a pretty solid and progressive idea. But I’m not so great at spotting potential unintended consequences in the long-term. I’m (rather pessimistically) assuming there must be some. That being the case, perhaps this should be thrown open in the comments section – can any readers spot possible flaws with this plan?