One of the most significant developments at Copenhagen was the emergence of the BASIC coalition – Brazil, South Africa, India and China – which negotiated the final details of the Copenhagen Accord with the United States.

My understanding is that BASIC was formed at China’s instigation. China agreed a Memorandum of Understanding with India in October 2009, committing the two countries to working closely together at Copenhagen. It then invited Brazil and South Africa to join the party, at a meeting in Beijing a week before Copenhagen started. Sudan was also invited to represent the G77.

According to Jairam Ramesh, India’s environment minister, the four countries decided that they’d walk out of Copenhagen together if necessary:

We will not exit in isolation. We will co-ordinate our exit if any of our non-negotiable terms is violated. Our entry and exit will be collective.

During Copenhagen, China worked extremely closely with India, with the two delegations meeting up to six times a day. It also engaged intensively with the other members of BASIC. In the final meeting with the Americans, China agreed to accept a limited international monitoring of its targets (India claims to have pushed China on this point).

The decision was also taken to drop language, setting a deadline for turning the Copenhagen Accord into a legally binding agreement. South Africa and Brazil both appear to have been unhappy with this decision.

Since Copenhagen, the BASIC countries have met once and have agreed to continue to get together on a regular basis. They want the Copenhagen Accord to set the stage for a ‘twin track’ agreement – with tough and binding targets for developed countries through Kyoto #2 and voluntary commitments for themselves under a new agreement.

No-one really knows how the US would fit into this picture. It is also increasingly clear that they and the US left Copenhagen with quite different impressions of what will happen next. The US believes that large emerging economies now have “very explicit activities and obligations”. I don’t think they believe they are committed to anything significant, beyond what they agreed at Bali or put on the table on a voluntary basis before Copenhagen started. (more…)

On climate, campaigners are unbelievably craven when it comes to the big emerging economies. China, in particular, gets treated with kid gloves. Within NGO circles, it is now more or less obligatory to kowtow to Beijing’s domestic track record on clean energy. Which is all very well – but I see absolutely no signs of Chinese leadership internationally (although its track record in the G20 shows how quickly it can pull out its finger when hard economic issues are at stake).

Weakness on China is especially egregious now that the country is above average global per capita emissions. Campaigners should be demanding that China ties itself to a date when its emissions will peak and then to commits to deep cuts by mid-century. (Armed with such a commitment, of course, China itself could then begin to turn the heat up on America – rather than allowing the US congress to bleat about US competitiveness.)

A failure to ask hard questions of China is bad for lower income countries. Not only will they suffer worst as the climate changes, they are going to wake up in ten years’ time to find that most of the global carbon budget for 2 degrees has been spent. Their interests are being sacrificed on the altar of G77 solidarity, with the global NGO community helping sharpen the knife.

The problem is similar, if less extreme, for the world’s other rising powers. Their per capita emissions may be lower than China’s and NGOs less terrified of offending them. But still, a country like India has 17% of the world’s population – which gives it quite a stake in our collective future. It is also massively vulnerable to a changing climate (especially as a lack of water disrupts food production).

But yet India is notoriously rubbish at international climate talks. So all the more credit to Malini Mehra, from the Center for Social Markets, for her persistent (and unusual) attempts to shine a light on India’s failings.

“In recent months, India has sought to challenge its image overseas, and in growing quarters at home, as recalcitrant and obstructionist on climate change,” she writes in her latest critique.

“[But] in a showdown this week with the old guard, the reformist environment minister, Jairam Ramesh, had to tone down his climate advice to India’s Prime Minister, Dr. Manmohan Singh. Political correctness won, but the loser was India’s climate security.”

Here’s the rest of her analysis: (more…)

- With the upcoming anniversary of the fall of the Berlin Wall, Timothy Garton Ash surveys the current debate about the causes behind those dramatic events twenty years ago. Commenting on the role of the superpowers, he suggests: “They made history by what they did not do… both giants stood back partly because they underestimated the significance of things being done by little people in little countries.” Adam Roberts, meanwhile, explores how civil resistance has fared around the world since 1989. When confronted with the reality of power politics, he suggests, choosing the right time for action from the bottom-up is critical.

- Looking to Copenhagen, Bruce Bueno de Mesquita propounds the predictive capacity of game theory and rational choice theory to explore what the climate negotiations might hold. Der Spiegel, meanwhile, has a report about the Danish island of Samso – at the forefront of the country’s green revolution.

- Elsewhere, Robert Skidelsky assesses the current debate raging between New Keynesian and New Classical economists over the financial crisis. Fully grasping the “implications of irreducible uncertainty for economic theory”, he suggests, would lead to a better understanding.

- Finally, Mihir Bose explores the contemporary state of Anglo-Indian relations, suggesting that fragility, rooted in history, is still very apparent. And with Indian and Chinese officials set to meet, Kapil Komireddi argues that rivalry between the two rising superpowers will come increasingly to define the 21st century.

- Writing in the New Yorker, Malcolm Gladwell explains how “the roots of Wall Street’s crisis were not structural or cognitive so much as they were psychological”. Overconfidence among bankers, he suggests, in addition to the more familiar arguments about poor regulation and simple incompetence, played a significant role in the financial crisis.

- The Prospect blog, meanwhile, discusses how “the Indian Ocean is emerging as a focus for Chinese logistical and naval expansion” – something being felt acutely in Washington and New Delhi. Staying with the US and India, WPR takes an interesting look at Hillary Clinton’s recent trip to South Asia.

- Elsewhere, the Channel 4 News blog has more details about the UK’s upcoming Iraq War Inquiry – suggesting that it is due to hear “mountains of evidence” and, given the expansive nature of its remit, is unlikely to have lawyers present.

- Finally, Adam Roberts has an interesting piece in The World Today assessing the current state of the Geneva Conventions. Sixty years later, he ponders, are the laws of war still relevant to the changing nature of conflict?

Indian writer Aravind Adiga yesterday offered the winner of India’s election a heads-up on four emergencies likely to test them early in their term of office. Two of them – terrorism, and India’s fiscal position – aren’t any great surprise.  The other two?

Three: In the past few weeks, the Naxals – Maoist guerrillas who operate in the desperately poor states of north and central India – have attacked a major aluminium mine, killed voters and policemen, and disrupted trains. The Naxal insurgency, which taps into the resentment of those left out or threatened by the economic boom, has grown steadily in the past five years. Yet most urban Indians still think of it as an obscure menace that is “out there” – far from the cities and towns.

This is likely to change. The emboldened guerillas look set to escalate their war against the Indian state in the months ahead. Attacks on industries, mines, police stations and trains are likely to rise; a spectacular strike that grabs national and international attention is on the cards. Understaffed local police and corrupt regional politicians will not be able to deal with the Naxals without significantly greater assistance from New Delhi.

Four: India’s population continues to grow and demand for water – for irrigation, industrial and personal consumption – keeps mounting; yet no government has given enough thought to husbanding the country’s water resources. Tensions over the use of water simmer across India. Sooner or later, they will explode. In the months after a bad monsoon, for example, there could be a flare-up between neighbouring regions over the use of a shared river; this could lead to strikes and protests that paralyse parts of the country.

Here’s the go-to site on Naxalites, btw.

Something odd is happening. Though the Tories are cruising for electoral success, many sympathisers are worried that the party has neither the policies nor personalities to make a success of government.

In the City, many bankers and businessmen are unimpressed by George Osborne. People in the defence establishment think Liam Fox is a lightweight. And foreign policy-watchers like William Hague, but worries that he is only working part-time.

When David Milliband offered a duff analysis of international terrorism in The Guardian and managed to insult the Indian government, there was hardly a peep from the Tory frontbench, through the strategic and electoral reasons to speak up are obvious.

This may not prevent the Tories from wining an election, but it could make their time in government look a lot like Labour’s 1997-2001 term – full of intentions and spin, but short on delivery.

It will take more than an “Implementation Unit” to change this. However, George W Bush, Barack Obama and Gordon Brown may have shown the way out of this predicament. They have all brought outsiders or retired officials back into government. Bush brought back General Pete Schoomaker as Army chief and, famously, made Roberts Gates Defence Secretary. Obama has appointed retired admiral Denis Blair as the U.S spy chief and made the Nobel Prize winner Steven Chu Energy Secretary. Brown, meanwhile, has packed the Lords with outsiders, Peter Mandelson just being the most famous (and powerful).

Forgetting for a moment the constitutional problems presented by having too many peers in government as well as the problems arising from having apolitical ministers (like Shriti “Green Shoots” Vadera) what would a line-up of Tory GOATS look like? Readers will have their own views, but to kick-start the discussion here is my list:

1. Arcadia’s Phillip Green as Business Secretary
2. Olympian Sebastian Coe as Sports and Culture Secretary
3. Environmentalist Zac Goldsmith to head the Climate & Energy Department
4. The Times Foreign Affairs Editor Bronwen Maddox as National Security Adviser
5. Former General Rupert Smith as Chief of Defence
6. Ex-AVIVA boss Richard Harvey as International Development Secretary
7. Joel I Klein as Education Secretary (why not a Yank?)
8. Para-Olympian Chris Holmes as Veteran Affairs Secretary

It may also be wise to appoint a number of junior ministers from outside Westminster (though I confess to believing each department ought to have only one “Deputy Secretary of State”, not scores of Ministers and Parliamentary Secretaries).  In the Ministry of Defence, for example, I’d make someone like NATO’s Jamie Shea a junior minister or Ronnie Flanagan a Deputy Home Secretary.

What do you think?

As David just noted, this morning’s Lex column in the FT is relatively upbeat about the dangers of protectionism, arguing that “the disaggregation of global supply chains, the source of the huge efficiencies that companies pass on to consumers, will not be easily undone.”

Whether or not that’s right (and like Willem Buiter, Martin Wolf is also a good deal more downcast than the Lex team), it’s interesting to compare today’s Lex column with what they had to say about capital flows to emerging markets just a couple of days ago.  Here’s the bit that made me sit up:

Take Brazil and India, the globe’s ninth and 12th biggest economies, according to the International Monetary Fund’s latest estimates. While the developed world is expected to shrink by 2 per cent this year, the IMF reckons Brazil will grow by 2 per cent, and India by 5 per cent. Why? One answer is that they have stable banks, relatively closed economies, and large internal markets. This has insulated them from much of the global turmoil.

The contrast with East Asia is stark. Singapore’s economy shrank at an annualised 17 per cent rate at the end of last year, South Korea by some 20 per cent. Yet this is not for lack of capital. Asian economies, after all, are global creditors. Their economies have shrunk instead because they are heavily oriented towards collapsing international trade. Meanwhile, their local markets are undeveloped and weak. Asia’s challenge is how to best deploy its accumulated surpluses to boost domestic demand.

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In an interview with the FT yesterday, Wen Jiabao sets out China’s negotiating position in the run up to the Copenhagen climate negotiation. Three main points:

• Green stimulus as part of the response to the financial meltdown.
• Domestic action to increase energy intensity by 4% a year (“We failed to meet the targets in the first two years of the five year period, and we succeeded in meeting the target in 2008.”)
• No quantified emissions targets for China – the country is still at an early stage of development and “in terms of per capita greenhouse gas emissions, we are certainly not the biggest one.”

How strong is China’s position? Not very, I think. China is obviously right to expect the rich world to do more, but if they accept tough targets and China refuses to, then there are two consequences. 450ppm stabilization becomes impossible – and it’s the rest of the G77 that will end up with a highly inequitable deal.

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Image Author: mike_is_scrumptious

Assume a robust global deal on climate and the world’s cities will have to transform their infrastructure, economies and societies in little more than a generation.

Assume uncontrolled emissions growth and they face growing impact from a less hospitable and more volatile climate.

Either way – big changes are on the way. Few cities’ leaders grasp the scale of the challenge, especially in developing countries, where towns and cities will have an additional 1.5bn residents to cope with by 2030.

This new think piece has been prepared as part of the British Council’s Climate and Cities programme. Download the pdf (which has full references) or read the full text below the jump.

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Courtesy Flickr user massdistraction

The IMF today predicted a grim economic outlook for 2009, with some green shoots in 2010.

The news is especially grim for the UK and Eurozone countries, with a 2.8% and 2% fall in output in 2009 and barely any growth in 2010. The US is predicted to do quite a lot better – a 1.6% fall this year, but 1.6% of growth next. That should cue a pleasant new wave of American triumphalism.

China floats through the crisis more or less unscathed. Growth slips to 6.7% in 2009, but bounces back to 8% in 2010. India does a little worse, Brazil suffers pretty badly, while the Mexican economy really tanks.

But I really don’t know why I even bothered to read the stats. Nine months ago at the Progressive Governance Summit, Dominique Strauss-Kahn told everyone that Europe and the US would experience a slowdown, but not a loss of growth (with the European economy expected to outperform the American one).

Even since it last ran its models in November (just three months ago!), the IMF has knocked 1.7 percentage points off world growth, and a staggering 6 points from its prediction for what were once known as the Asian tigers.

The IMF itself is forced to admit that “the uncertainty surrounding the outlook is unusually large.” Doesn’t that translate as “our models weren’t built for these crazy conditions, but we’ll run them anyway and PR them heavily to the 1000 or so media outlets that’ll reprint our speculation as fact”?

Or am I missing something here?

A few days ago, I did a post on the UK government’s current horizon scanning exercise – part of the process leading up to its second National Security Strategy – in which I suggested that “the really stand-out risk that barely got a mention in the events I attended was the possibility that serious erosion of states’ capacity and legitimacy [will undermine] their ability to respond to all the global trends that we were discussing”. 

As regular readers will know, that observation comes straight out of the writings of ‘fourth generation warfare’ theorists like William Lind, Martin van Creveld and John Robb.  But what may come as more of a surprise is the interesting revelation that Kaiser Wilhelm II made a similar point yesterday in his birthday conversation with Lind*:

“My generation of kings and emperors were fixated on the age-old contest between dynasties. Would the houses of Hapsburg and Hohenzollern defeat those of Romanoff and Savoy or the other way around? We could not see the paradigm shift welling up all around us, the onward rush of democracy and equality and socialism and all the rest of that garbage. What we needed was an alliance of all monarchies against democracy. Instead we wiped each other out, putting the levellers in charge everywhere, to the world’s ruin.”

“Does that hold any lessons for our time?”, I asked.

“From Olympus, the picture could not be more clear,” His Majesty replied. “As we were mesmerized by dynastic quarrels, so your politicians cannot see beyond the state. They think only of states in conflict. Will America be threatened by China? Should India go to war with Pakistan? Is Iran a danger to Israel? They cannot see that states are now all in the same, sinking boat, just as all the dynasties were in 1914.”

“What should states then do?”, I enquired.

“Form an alliance of all states against non-state forces, what you call the Fourth Generation,” the Kaiser answered. “The hour is late, and the state system itself has grown fragile. That is the lesson of America’s quixotic war in Iraq. You destroyed the state there, and now no one can recreate it. That is what will happen almost everywhere when states fight other states. But none of your leaders can see it, because they, too, are time-blinded. It is the human condition.”

* Since you ask: in addition to being one of the top experts around on counter-insurgency and fourth generation warfare, William Lind is also an ardent Prussian monarchist.  Consequently, he marks the birthday of Kaiser Wilhelm II (“my reporting senior and lawful sovereign”) with a column each year in which he records a conversation with that leader’s ghost.  Previous editions are highly recommended – e.g. here and here.

Nick Stern isn’t going to like this, but there’s a new Stern on the climate block: Todd Stern , who is set to be announced as the US’s new climate envoy.

(Todd) Stern has set out a fairly clear road map for US engagement in the climate process (nb. these are his personal pre-appointment views, not those of Obama or Clinton). He thinks the US should:

• Start with domestic policy - get the National Academcy of Sciences to recommend (and review on regular basis) a stablization target; legislate cap and trade, not a carbon tax; supplement with regulation on energy efficiency and tex incentives for R&D.
• Use domestic policy as a lever in the international arena – negotiating first with a core group of countries (the ‘E8′ – Brazil, China, EU, India, Japan, Russia, South Africa and the US); then building a post-Kyoto framework on the back of their agreement, with binding long-term targets for all developed and ‘as many advanced developing countries as possible,’ and a built-in mechanism to ratchet those targets up over time (and as scientific findings dictate).

Stern is fairly tough on China. The country needs to accept targets (calculated on what basis is a question he does not address), but he makes lots of positive noises. Joint action on a climate can form the basis of a new strategic partnership between the 800-pound gorillas, but only if it is elevated from “traditional place in the second tier of mutual concerns.”

Throughout, of course, he has an eye on the US Senate and ratification. Bottom up targets and sectoral agreements should be deployed if they can suck more countries into a climate deal, as this will shut up antsy Senators. Access to carbon markets should be used as another tool that creates an incentive for developing country participation.

But there needs to be a stick too, Stern believes – and that stick is trade. Unilateral tarrifs on carbon-intensive goods would be ‘profoundly alienating’ and ‘a prescription for mutual recrimination, not progress’, especially after the US has spent so many years in the climate wilderness. But:

Considered in a mutilateral context…the idea…is more interesting. Today, the carbon content of goods is not captured in their price…If the premise of a climate regime were that countries must capture those social costs by putting a price on carbon, whether by means of a cap-and-trade program, a carbon tax, or equivalent policies to cut emissions, tarrifs could then be imposed on the exported products of any country that lacked such policies.

The Europeans will welcome Stern’s appointment with open arms – the Brits in particular.  John Ashton, the UK’s climate envoy, gets name checked by his new US counterpart – and it wouldn’t surprise me to see the two working hand in hand…

David Cameron yesterday warned that the UK could be forced to go cap in hand to the IMF, as it did in 1976 under chancellor Denis Healey. (This, by the way, at the launch of a new programme at Demos about ‘progressive conservatism’. Et tu, Demos?)

The question is, would the IMF have the cash. Click on more to read a story I recently wrote for my mag, www.emeafinance.com, which looks at the risk of the IMF running out of money in the next 18 months, and asks what the chances are of it receiving more funds from cash-rich G20 governments (answer: slim).

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Last year, I wrote a couple of posts (here and here) warning of a rift between African countries and the West over how to administer peace and justice on the continent. That was coming out into the open over Darfur and Zimbabwe, forcing Western liberals to balance a commitment to “African ownership” with their desire to stay involved in African affairs. Now, a trenchant critique of “African solutions to African problems” rhetoric comes from Tsoeu Petlane, a South African scholar:

As we enter a New Year, we have to acknowledge that the “African solutions for African problems” approach has had some glaringly painful failures. The continuing crises in Somalia, in Zimbabwe, in Darfur and in the Democratic Republic of Congo and the surrounding Great Lakes region all demonstrate the weaknesses of the way “African solutions” have been implemented in 2008.  These weaknesses must be addressed in 2009. The year ahead should be one of rethinking how Africa deals with problems in a manner that is effective and restores the continent’s image and initiative.

Petlane anatomizes the problem thus:

There are three key reasons for failure: an almost unquestioning adherence to protecting state sovereignty, dependency on forces outside the continent and lack of leadership. Together, these stifle innovation, limit the effectiveness of proposed solutions and alienate potential allies.

First, the continent’s endorsement of the leaders of collapsed or collapsing states such as Zimbabwe, Somalia and the DRC, far from promoting sovereignty, negates it.

Sovereignty resides in the people, who only delegate it to leaders. In a situation in which the expression of this sovereignty is denied the people, such as in Zimbabwe; where those entrusted with it are unable to exercise it practically, such as in the DRC; or where the institutions supporting it are in question, such as in Somalia, protecting a government makes no sense – it allows a regime to maintain a veneer of statehood only on the basis of recognition by others. Thinking beyond this paradigm is urgently needed.

Second, while African leaders appear united in calling for indigenous solutions, few have demonstrated a conceptual or practical commitment to the notion. Their initiatives and solutions have depended on Africa’s “partnership” with the nebulous “international community”. A major component of this “community” comprises the very same former colonists who, we claim, have (i) “created” Africa’s problems by colonising them, (ii) “interfered” in Africa’s internal affairs, (iii) shaped the international system to serve their own interests (in trade, economy and international relations), (iv) dictated values of good governance and economic performance that are “foreign” to Africans, and (v) “abandoned/marginalised” Africa by withdrawing aid and political support after the Cold War.

This kind of dependency – developing solutions on the basis of actions of others, and blaming them when things don’t work – points to our lack of good leadership.

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I’ve been in Japan today, speaking at ‘Reforming International Institutions – Meeting the Challenges of the 21st Century’,  a seminar organized by the United Nations University and the British Embassy in Japan.

You can download my talk here (with pictures, references etc) – or the text only is available below the jump. There’s a webcast too.

Headlines:

• It’s going to be a tough year. The financial meltdown has a long way to go, and the downturn is risking turning into a global depression.
• Trade is a bell wether. Protectionist pressures are already on the rise. If they gain traction, take that as a warning of a wider loss of confidence in global institutions.
• The unravelling of global economic imbalances could prove corrosive to the international order. If countries start to devalue to protect exports, expect a tit-for-tat dynamic to kick in.
• Scarcity issues (energy, water, land, food, atmospheric space for emissions) remain the key medium term driver of global change. Commodity prices will spike again as soon as there’s recovery.
• The downturn has stemmed the uncontrolled growth of emissions, but also lessened the chance of a robust global deal on climate.
• Economic bad times could well drive increased conflict. A major new security threat might be the fabled black swan – hitting just when the global immune system is already overloaded.
• If we experience a long crisis (or a chain of interlinked crises), we are likely to see either a significant loss of trust in the system (globalization retreats), or a significant increase in trust (interdependence increases). 
• You need to stretch time horizons to get the latter – shared awareness (joint analysis of risks and challenges), as a basis for shared platforms (loose coalitions of leaders), which can lobby for a shared operating system (a new international institutional architecture).
• 2009 sets a challenging agenda for the G20 (financial reform and economic recovery – but framed by a broader vision on climate, resources, security etc.)…
• …the G8 (caucus of rich countries able to tee up Copenhagen and kick start development assistance if developing countries begin to teeter)…
• …the UN (especially Ban Ki-Moon’s proposed high level ‘friend’s group’ on climate, but also as a fora for getting to grips with scarcity issues)…
• and the Bretton Woods institutions and the WTO (first of all ensuring they keep their heads above water, then looking to ’save globalization from itself’).
• Oh and be ready for the backlash – people are angry and rightfully so, but that may well lead us down some populist blind alleys.

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