by Alex Evans | Jul 26, 2008 | Climate and resource scarcity, East Asia and Pacific, Economics and development, Global system
Herewith an attempt to marshal my thoughts about what’s happening on the oil price (which has fallen sharply over the last few weeks), what’s likely to happen next, and what policymakers need to do to move forward. Brief summary as follows:
– The oil price has fallen sharply over the last couple of weeks, from a peak of $147 to a 7 week low of $123 at close yesterday. So is this the start of a long decline, or just a brief pause to draw breath before a resumption of the relentless upward march of recent years?
– In a nutshell, probably more like the latter – but with the potential for a big drop in the near term for as long as the credit crunch lasts, as emerging economies slow down sharply in line with falling US demand for their exports.
– However, once we’re through the crunch, we may be back to a game of cat and mouse between oil supply and economic growth. Demand falls, oil price falls; demand picks up, oil price goes back up too – but never for long enough to give investors a clear signal to pump cash into new oil supply infrastructure.
– What we need is a game changing intervention that breaks us out of this stop-start cycle. Massive investment in new oil supply would provide it, but can’t be squared with what needs to happen on emissions reductions.
– It looks like the only way through is for policymakers to agree a global climate policy framework that’s both global in scope and sufficiently long term to provide investors with an unequivocal signal of where to put their cash: this is the only way of squaring energy security with climate change.
Full version after the jump.
(more…)
by Alex Evans | Jul 24, 2008 | Climate and resource scarcity, Conflict and security, Cooperation and coherence
As a general rule of thumb, my starting assumption is that we need new multilateral agencies like we need a hole in the head. But if there’s an exception to that rule, then energy has a pretty good claim to be it. As I argue in Multilateralism for an Age of Scarcity, there is no multilateral agency with a mandate to look at all aspects of the issue:
The International Energy Agency is supposed to represent major consumer countries, but its 27 members are all OECD countries – hence leaving out key emerging economies including China and India. Although the Organisation of the Petroleum Exporting Countries (OPEC) is generally thought of as the major body representing producer states, in fact well over half of the world’s oil is produced by non-OPEC countries. Yet the most fundamental incoherence on energy is the obvious one: that with consumer and producer states represented by two different institutions in two different cities, it is wholly unclear where any discussions about a comprehensive approach encompassing both producer and consumer interests would take place.
Now, IAEA head Mohamed ElBaradei has written a piece in the FT which starts from the same analysis, and goes on to argue that a new global energy organisation is indeed needed. What would it do?
“complement, not replace, bodies already active in the energy field … bring a vital inter-governmental perspective to bear on issues that cannot be left to market forces alone, such as the development of new energy technology, the role of nuclear power and renewables, and innovative solutions for reducing pollution and greenhouse gas emissions”;
“provide authoritative assessments of global energy demand and supply and bring under one roof energy data that are now dispersed and incomplete … speed the transfer of appropriate energy technology to poor countries and give them objective advice on an optimal energy mix that is safe, secure and environmentally sound”;
“develop a global mechanism to ensure energy supplies in crises and emergencies, and help countries run their energy services and even do it for them temporarily after a war or natural disaster … co-ordinate and fund research and development, especially for energy-poor countries whose needs are often overlooked by commercial R&D.”
He concludes, “the need for joint action to develop long-term solutions to the looming energy crisis is now undeniable. It is difficult to see how this can be done without an expert multinational body, underpinned perhaps by a global energy convention, with the authority to develop policies and practices to benefit rich and poor countries alike, equitably and fairly”.
So what to make of this call? A few thoughts.
First, I can’t see much in the first two paragraphs that isn’t already done by the IEA – with the possible exception of advising poor countries on their energy mix, which agencies including UNDP and the Bank already cover. True, most publicly available data on oil reserves is pretty suspect; but this new agency wouldn’t obviate that problem (which stems from internal machinations within OPEC).
The interesting element here is the idea of a global mechanism to ensure energy supplies in crises and emergencies (what could the head of the IAEA be thinking of?). When I was drafting Multilateralism for an Age of Scarcity, this seemed to me one of the real gaps in current multilateral capacities – both for dealing with short term spikes (attack on Iran leads to $200 oil) and long term stresses (peak oil). In those conditions, a regime for sharing access to what supplies there are will be essential for reducing the risk of competition and friction, and for providing (at least a degree of) predictability, to reduce wild market swings as much as can be.
What I think is missing from ElBaradei’s proposal is a proper account of where food fits in. There are plenty of major reasons why food prices and energy prices are ever more closely in synch: biofuels, input costs (especially fertiliser), and the fuel used to cultivate land, harvest crops, process, refrigerate, ship and distribute them. If energy costs keep going up over the long term (as looks likely, recent sharp falls notwithstanding), then food prices will do the same – making it more important than ever to effect a far more integrated international approach.
by Alex Evans | Jul 22, 2008 | Climate and resource scarcity, Economics and development
I’m currently immersed in writing the main pamphlet for my project on food prices with Chatham House (hence not much posting for the last few days) – but I have to take ten minutes out to sing the praises of the gorgeous piece of writing I’ve been immersed in for the past couple of hours.
The paper in question is Escaping Poverty Traps: the Chronic Poverty report 2008-09, from the Chronic Poverty Research Centre. The title, admittedly, makes it sound like any other international development report of the sort that fill cardboard boxfiles in great reams of unread worthiness in people’s offices around the world. But don’t be fooled. This is an edgy, push-the-envelope, fundamentally political piece of work.
What makes it so, above all, is its understanding of what poverty actually is. The report brushes aside the dry platitudes about the number of people living on less than a dollar a day, and brings the reader face to face with the nature of social exclusion. In particular, it explores five kinds of poverty trap:
– Insecurity, including conflict and violence, but also economic crises and natural hazards;
– Limited citizenship, where the report bluntly calls for us all to “move beyond the good governance agenda, and purely technocratic interventions around ‘getting institutions right’ or ‘strengthening civil society'”, and focusing instead on “individuals’ engagement in the political sphere”;
– Spatial disadvantage, through four overlapping dimensions, including remoteness, natural resource endowments, political disadvantage and weak integration;
– Social discrimination, including social relationships of power, patronage and competition that entrap people in exploitative relationships; and
– Poor work opportunities, caused by low or non-existent growth, or by growth happening only in enclaves.
As this kind of analysis makes clear, this is anything but a technical agenda. It also underscores commonalities across different kinds of countries: so while the report’s clear about the particular challenges of working in ‘chronically deprived countries’, it also stresses that these traps can and do afflict poor people in much higher income countries too.
So what should donors do about all this? One of the approaches that the report’s keenest on is social protection systems (which I’ve written about here before, and which will be the focus of one of the main parts of my food pamphlet). These can take many forms – food vouchers, pensions, payment for public works, conditional cash transfers, skills training and so on – but in all cases the key is that the assistance is targeted at society’s most vulnerable people, with a view to helping them manage, prevent and ultimately overcome their vulnerability.
As that objective implies, social protection’s an agenda that’s very much about promoting grassroots resilience (something we could do with more of here in Britain as well). But the authors of the Chronic Poverty report think it can help to produce something else as well: durable social compacts between states and their citizens, that in turn point directly towards effective, legitimate, responsive and accountable states.
This kind of approach to development is exciting. It’s practical, tangible, full of ideas you can see working in practice; but it’s also about real world politics, where there are vested interests, obstacles to change, coalitions that need to be built and sustained. As the consensus on international development that was put together in 2005 starts to come due for renewal, this is the direction in which the development agenda needs to head.
by David Steven | Jul 19, 2008 | Climate and resource scarcity, Global system, South Asia
There have been lots of suicide bombings in Pakistan lately, corruption is rife, and the education system is in a terrible state. But only 2% of Pakistanis believe that each of these problems is the most important issue facing Pakistan.
So what is? Inflation, of course, thought by over 70% to be the country’s biggest challenge. Running at 21% (and with food prices up by almost a third), it’s imposing a heavy burden on the middle class, a devastating one on the poor. Unemployment, picked by 13%, is the only other issue to get into double figures.
This from IRI’s quarterly survey of public opinion, which now has data stretching back to 2006 and which published new results this week.
In just a few years, Pakistan has seen a complete collapse in confidence about the future. 86% of people now believe the country is heading in the wrong direction, slightly more than before February’s election. 72% are worse off than they were a year ago. 1% feel richer.
Policymakers badly need to cut through the political froth and focus on these fundamental drivers of social unrest. I thought people were bleak when I was here a few months ago, but the mood has darkened once again.
If anyone out there has any doubts about the depth of Pakistan’s problems, they should spend some time with IRI’s figures. Read the whole thing here.
by Richard Gowan | Jul 17, 2008 | Climate and resource scarcity, Cooperation and coherence, Europe and Central Asia, Global system, Influence and networks, Off topic, UK
Having just returned home to the U.S. after a long trip to Britain, I am naturally consoling myself with frequent readings of the expat section of the Daily Telegraph website. This appears to be designed to lull far-off anglo-nostalgists into believing that the UK is still a green and pleasant land, give or (preferably) take the odd immigrant. But all is not well: classic British dishes are dying out.
Traditional British dinners are being replaced by ‘foreign quick fixes’ as they take too long to cook. Classic dishes such as toad in the hole, bubble and squeak and hot pots are dying out are diasppearing from the family dinner table, a survey shows.
Researchers found almost one in three people now opt for pizza or spaghetti bolognese at the majority of meal times. And more than a quarter of adults polled named Italian as their favourite type of food.
However, not all British classics are disappearing as the research found that roast dinners and jacket potatoes are still firm favourites.
Kathryn Race from The Potato Council, which carried out the poll, said:
“It’s a shame to see that some of our country’s best loved foods are no longer seen on UK dinner tables – they are our heritage and something we need to keep. We are travelling the world more than ever now, and it seems we are trying to recreate the dishes we sample abroad once we get back home. Foreign foods and the ingredients needed to make those dishes are readily available in supermarkets making it far easier to cook them back at home, although this is, it seems, at a price.”
