Africa

Rajeev Batra is partner and head of risk consulting at KPMG.

By Rajeev Batra, Special to Gulf News
ABU DHABI, Jan 29 2016 (IPS)

(WAM) - The discovery of hydrocarbon reserves brought tremendous prosperity for the UAE and made it a central player in the global energy market. With one of the highest gross domestic product per capita levels in the world, the UAE has generally used its wealth wisely to stimulate sustainable economic growth. However, volatility in oil markets, growing unrest across the region and the growing threat of climate change has concentrated minds on the need for immediate and decisive action.

Credit: Gulf News archive

The UAE has long recognised that environmental responsibility and economic diversification are essential for a better, more sustainable future. As the first country in the region to set renewable energy targets and as home to the International Renewable Energy Agency (Irena), Masdar City and the Mohammad Bin Rashid Al Maktoum Solar Park, the shift towards cleaner energy sources and reduced carbon emissions is evident.

Ahead of last month’s COP21 summit in Paris, the UAE government pledged to increase clean energy’s share of the national energy mix to 24 per cent by 2021. This is a pivotal step towards making the UAE a global centre of renewable energy innovation. With more than 300 days of abundant sunshine every year, increasing solar’s share of the UAE energy mix should be attainable. Hydrocarbons that are not burnt to generate electricity can be used for other, higher value-adding purposes, or sold to increase the gross national income. Clean energy could also reduce the long-term social costs the government will face as adverse environmental and health effects could be minimised — or even eradicated.

The UAE should be proud of its clean energy leadership role. Abu Dhabi’s renewable energy agency Masdar was a key sponsor of Solar Impulse, the flying laboratory full of clean technologies that represents 12 years of research and development. Solar Impulse generated tremendous global excitement when it attempted the first round-the-world solar flight to demonstrate how a pioneering spirit and clean technologies can change the world.

The Zayed Future Energy Prize — which represents the environmental stewardship vision of the late Shaikh Zayed Bin Sultan Al Nahyan — celebrates impactful, innovative and long-term achievements in renewable energy and sustainability. It reflects the UAE’s commitment to finding solutions that meet the challenges of climate change, energy security and the environment. The 2016 winners were announced on January 19 and ranged from SOS HG Shaikh Secondary School, a school for 300 students three hours from Somaliland’s capital, Hargeisa, to BYD, the largest rechargeable battery supplier and new energy vehicle manufacturer, based in Shenzhen. A lifetime achievement award to Dr Gro Harlem Brundtland recognised her many achievements and accomplishments, included being a guiding force behind the “Brundtland Report” on sustainability over 25 years ago.

The UAE, like many other developed and developing countries, faces a number of clean energy and carbon emission issues. In a reflection of its growing economy, there is an increasing number of vehicles on our roads, leading to increasing fuel usage and higher carbon dioxide, carbon monoxide and nitrous oxide levels. Electricity demand from individuals, industries and commercial buildings — which are major consumers of electricity — is high and the UAE has a significant carbon footprint. Competitively priced oil, gas and energy prices, while driving economic growth in some traditional industries, is undermining renewable energy and stifling growth in what could be a key sector of the country’s future economy.

The recent adoption of the Paris agreement was a historic moment. COP21 was an unprecedented international climate deal and presents both risks and opportunities for businesses who have an important role in terms of emissions reductions and investments to help governments achieve the goals.

As countries start reforming their economies based on their COP21 commitments, we should see the global economy evolving to a lower carbon model. Companies will be required to be more open and transparent about the financial, environmental and social risks and opportunities that they face from climate change.

Investment in clean technology should grow dramatically — governments are expected to double their clean-tech research and development budgets and the private sector is likely to increase its involvement and investment. The role of the private sector, in fact, is key to the sustainability agenda — because of its central role in the development of the global economy. The increase in the private sector’s rate of triple bottom-line reporting — which focuses on social and environmental as well as economic costs and benefits — will be a key marker of the likely success, or failure, of the COP21 programme.

(End)

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An industrial sugar and ethanol plant in Sertãozinho, in the southern Brazilian state of São Paulo. The sugar cane industry in Brazil has shrunk under the government of Dilma Rousseff, due to the gasoline subsidy, which dealt a blow to its competitor, ethanol. Credit: Mario Osava/IPS

By Mario Osava
RIO DE JANEIRO, Jan 28 2016 (IPS)

Brazil, which boasts that it has one of the cleanest energy mixes in the world, is now plagued by corruption, poor market conditions, and bad decisions – a near fatal combination.

Brazil’s energy mix is made up of 42 percent renewable sources, three times the global average.

But the country also hopes to become a major oil exporter, thanks to the 2006 discovery of the “pre-salt” wells – huge reserves of crude under a thick layer of salt far below the surface, 300 km from the coast.

Megaprojects involving the construction of refineries and petrochemical plants, dozens of shipyards that mushroomed up and down the coast, and the dream of turning the new oil wealth into a better future lost their charm in the face of the corruption scandal that broke out in 2014, revealing the embezzlement of billions of dollars from the state oil giant Petrobras.

Nearly 200 people are facing charges in the scandal for paying or receiving kickbacks for inflated contracts. Around 50 of them are politicians, most of them still active members of Congress.

The heads of the country’s biggest construction companies were arrested, which dealt a blow to the real estate market and major infrastructure works nationwide.

The investigations took on momentum when over 30 of those facing prosecution struck plea bargain deals, agreeing to cooperate in exchange for shorter sentences.

The scandal is one of the main elements in the economic and political crisis shaking the country, which saw an estimated drop in GDP of more than three percent in 2015, rising inflation, a dangerously high fiscal deficit, a threat of impeachment hanging over President Dilma Rousseff and chaos in parliament.

Besides the corruption scandal, Petrobras has been hit hard by the collapse of oil prices, which has threatened its investment in the pre-salt reserves, and by the losses it accumulated during years of government fuel-price controls.

The government took advantage of Petrobras’ monopoly on refining to curb inflation by means of price controls, mainly for gasoline.

But the oil company scandal, which broke out after the October 2014 elections in which Rousseff was reelected, fuelled the growth of inflation, to over 10 percent today.

With Petrobras in financial crisis and selling off assets to pay down its debt, none of the four planned refineries has been completed according to plan. The only one that was finished is operating at only half of the planned capacity.

Most of the shipyards, which were to supply the oil drilling rigs, offshore platforms and tankers involved in the production of pre-salt oil, have gone under, and the government’s plans to build a strong naval industry have floundered.

The priority put on oil production, to the detriment of the fight against climate change, along with subsidised gasoline prices dealt a major blow to ethanol, which was enjoying a new boom since the emergence in 2003 of the flexible fuel vehicle, specially designed to run on gasoline or ethanol or a blend of the two.

The innovative new technology revived consumer confidence in ethanol, which had been undermined in the previous decade due to supply shortages. With the flex-fuel cars, consumers no longer had to depend on one kind of fuel and could choose whichever was cheaper at any given time.

The use of ethanol, which is consumed in nearly the same quantities as gasoline in Brazil, broke the monopoly of fossil fuels, making a decisive contribution to the rise in the use of renewable energies.

But gasoline price subsidies drove many ethanol plants into bankruptcy and led to the sale of one-third of the sugarcane industry to foreign investors. Many local companies, facing financial disaster, sold their sugar mills and distilleries to transnational corporations like Bunge, Cargill, Louis Dreyfus and Tereos.

Brazil has practically given up on the idea of creating an international market for ethanol, after initially encouraging consumption and production of the biofuel made from sugarcane. Former president Luiz Inacio Lula da Silva (2003-2010) was very active in this campaign, unlike his successor Rousseff.

Part of what will be the Belo Monte hydroelectric plant’s turbine room in the northern Brazilian state of Pará – a mega-project which is 80 percent complete and is set to be finished in 2019. Credit: Mario Osava/IPS

Hydroelectricity

Another decisive factor in achieving a more renewables-heavy energy mix is the predominance of hydroelectricity in the generation of electric power. In recent years, wind power has grown fast, and the use of biomass from sugarcane bagasse has also expanded, although to a lesser extent.

But the construction of giant hydropower dams in the Amazon jungle, such as Belo Monte on the Xingú River, has drawn strong opposition from indigenous communities and environmentalists, which, along with legal action by the public prosecutor’s office, has brought work on Belo Monte to a halt dozens of times.

As a result, work on the dam has been delayed by over a year. One of the latest legal rulings suspended the plant’s operating permit, and could block the filling of the reservoirs, which was to start in March this year.

When the plant comes fully onstream in 2019, Belo Monte will have an installed capacity of 11,233 MW. But during the dry season, when water levels in the river are low, it will generate almost no electric power. The flow of water in the Xingú River varies drastically, and the reservoir will not store up enough water to fuel the turbines during the dry months.

The dam has come under harsh criticism, even from advocates of hydropower, such as physicist José Goldemberg, a world-renowned expert on energy.

The controversy surrounding Belo Monte threatens the government’s plans for the Tapajós River, to the west of the Xingú River – the new hydroelectric frontier in the Amazon. For the last two years, the Rousseff administration has been trying to find investors to build and operate the São Luiz del Tapajós dam, which would generate 8,040 MW of electricity.

The presence of the Munduruku indigenous community along that stretch of the river and in the area of the São Luiz dam has stood in the way of the environmental licensing process.

The diversity of sources in Brazil’s energy mix, lessons learned from earlier negative experiences, and the complexity of the integrated national grid make decisions on energy almost a game of chance in this country.

Hydroelectric dams built in the Amazon rainforest in the 1980s, like Tucuruí and Balbina, caused environmental and social disasters that tarnished the reputation of hydropower. Belo Monte later threw up new hurdles to the development of this source of energy.

Another alternative source, nuclear energy, also brought negative experiences. Completion of the country’s second nuclear plant, still under construction in Angra dos Reis, 170 km from Rio de Janeiro, has long been delayed.

It formed part of a series of eight nuclear power plants that the military decided to build, during the 1964-1985 dictatorship, signing an agreement in 1975 with Germany, which was to provide technology and equipment.

Economic crisis brought the programme to a halt in the 1980s. One of the plants was completed in 2000 and the other is still being built, because the equipment had already been imported over 30 years ago. The final cost overruns will be enormous.

For the government and the different sectors involved in policy-making in the energy industry, giving up hydropower is unthinkable.

But the advances made in wind power, new energy storage technologies, and especially the reduction of costs in the production of solar power increase the risk of making large hydropower dams, which are built to operate for over a hundred years, obsolete.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Roberto Savio, founder and president emeritus of the Inter Press Service (IPS) news agency and publisher of Other News

By Roberto Savio
ROME, Jan 27 2016 (IPS)

The rich and the powerful, who meet every year at the World Economic Forum (WEF), were in a gloomy mood this time. Not only because the day they met close to eight trillion dollars has been wiped off global equity markets by a “correction”. But because no leader could be in a buoyant mood.

Roberto Savio

German Chancellor Angela Merkel is losing ground because of the way she handled the refugee crisis. French President Francois Hollande is facing decline in the polls that are favoring Marine Le Pen. Spanish president Mariano Rajoy practically lost the elections. Italian President Matteo Renzi is facing a very serious crisis in the Italian banking system, which could shatter the third economy of Europe. And the leaders from China, Brazil, India, Nigeria and other economies from the emerging countries (as they are called in economic jargon), are all going through a serious economic slowdown, which is affecting also the economies of the North. The absence of the presidents of Brazil and China was a telling sign.

However the last Davos (20-23 January) will remain in the history of the WEF, as the best example of the growing disconnection between the elites and the citizens. The theme of the Forum was “how to master the fourth revolution,” a thesis that Klaus Schwab the founder and CEO of Davos exposed in a book published few weeks before. The theory is that we are now facing a fusion of all technologies, that will completely change the system of production and work.

The First Industrial Revolution was to replace, at beginning of the 19th century, human power with machines. Then at the end of that century came the Second Industrial Revolution, which was to combine science with industry, with a total change of the system of production. Then came the era of computers, at the middle of last century, making the Third Industrial Revolution, the digital one. And now, according Schwab, we are entering the fourth revolution, where workers will be substituted by robots and mechanization.

The Swiss Bank UBS released in the conference a study in which it reports that the Fourth Revolution will “benefit those holding more.” In other words, the rich will become richer…it is important for the uninitiated to know that the money that goes to the superrich, is not printed for them. In other words, it is money that is sucked from the pockets of people.

Davos created two notable reactions: the first came with the creation of the World Social Forum (WSF), in 1991, where 40,000 social activists convened to denounce as illegitimate the gathering of the rich and powerful in Davos. They said it gave the elite a platform for decision making, without anything being mandated by citizens, and directed mainly to interests of the rich.

The WSF declared that “another world is possible,” in opposition to the Washington Consensus, formulated by the International Monetary Fund (IMF), the World Bank, and the Treasury of the United States. The consensus declared that since capitalism triumphed over Communism, the path to follow was to dismantle the state as much as possible, privatize, slash social costs which are by definition unproductive, and eliminate any barrier to the free markets. The problem was that, to avoid political contagion, the WSF established rules which reduced the Forums to internal debating and sharing among the participants, without the ability to act on the political institutions. In 2001, Davos did consider Porto Alegre a dangerous alternative; soon it went out of its radar.

At the last Davos, the WSF was not any point of reference. But it was the other actor, the international aid organization Oxfam, which has been presenting at every WEF a report on Global Wealth.

Those reports have been documenting how fast the concentration of wealth at an obscene level is creating a world of inequality not known since the First Industrial Revolution. In 2010, 388 individuals owned the same wealth as 3.6 billion people, half of humankind. In 2014, just 80 people owned as much as 3.8 billion people. And in 2015, the number came down to 62 individuals. And the concentration of wealth is accelerating. In its report of 2015, Oxfam predicted that the wealth of the top 1 per cent would overtake the rest of the population by 2016: in fact, that was reached within ten months. Twenty years ago, the superrich 1 per cent had the equivalent of 62 per cent of the world population.

It would have been logical to expect that those who run the world, looking at the unprecedented phenomena of a fast growing inequality, would have connected Oxfam report with that of UBS, and consider the new and immense challenge that the present economic and political system is facing. Also because the Fourth Revolution foresees the phasing out of workers from whatever function can be taken by machines. According to Schwab, the use of robots in production will go from the present 12 per cent to 55 per cent in 2050. This will cause obviously a dramatic unemployment, in a society where the social safety net is already in a steep decline.

Instead, the WEF largely ignored the issue of inequality, echoing the present level of lack of interest in the political institutions. We are well ahead in the American presidential campaign, and if it were not for one candidate, Bernie Sanders, the issue would have been ignored or sidestepped by the other 14 candidates. There is no reference to inequality in the European political debate either, apart from ritual declarations: refugees are now a much more pressing issue. It is a sign of the times that the financial institutions, like IMF and the World Bank, are way ahead of political institutions, releasing a number of studies on how inequality is a drag on economic development, and how its social impact has a very negative impact on the central issue of democracy and participation. The United Nations has done of inequality a central issue. Alicia Barcena, the Executive secretary of CEPAL, the Regional Center for Latin America, has also published in time for Davos a very worrying report on the stagnation in which the region is entering, and indicating the issue of inequality as an urgent problem.

But beside inequality, also the very central issue of climate change was largely ignored. All this despite the participants in the Paris Conference on Climate, recognized that the engagements taken by all countries will bring down the temperature of no more than 3.7 degrees, when a safe target would be 1.5 degrees. In spite of this very dangerous failure, the leaders in Paris gave lot of hopeful declarations, stating that the solution will come from the technological development, driven by the markets. It would have been logical to think, that in a large gathering of technological titans, with political leaders, the issue of climate change would have been a clear priority.

So, let us agree on the lesson from Davos. The rich and powerful had all the necessary data for focusing on existential issues for the planet and its inhabitants. Yet they failed to do so. This is a powerful example of the disconnection between the concern of citizens and their elite. The political and financial system is more and more self reverent: but is also fast losing legitimacy in the eyes of many people. Alternative candidates like Donald Trump or Matteo Salvini in Italy, or governments like those of Hungary and Poland, would have never been possible without a massive discontent. What is increasingly at stage is democracy itself? Are we entering in a Weimar stage of the world?

(End)

Syrian mother and child near Ma'arat Al-Numan, rebel-held Syria. Credit: Shelly Kittleson/IPS

By Thalif Deen
UNITED NATIONS, Jan 27 2016 (IPS)

As the global refugee crises continues to worsen by the hour, UN Secretary-General Ban Ki-moon is quick to point out that when he took office in January 2007, the international appeal for funds for humanitarian emergencies was only about 4.0 billion dollars annually.

“Now, we need more than 20 billion dollars,” he said last week, underlining the tragic turn of events worldwide: over 60 million people either displaced internally or who have fled their home countries becoming refugees virtually overnight.

And there are about 40 countries – out of the 193 UN member states – which are engulfed in “high-level, medium-level and low-level crises and violence,” he added.

A new study by Oxfam International, titled “Righting the Wrong,” says tens of millions of people receive vital humanitarian aid every year, but millions more suffer without adequate help and protection, and their number is relentlessly rising.

“Far too often their suffering is because their governments cannot, or intentionally will not, ensure their citizens’ access to aid and protection.”

In addition, says the study released January 26, international aid has not kept pace with the rising tide of climate-related disasters and seemingly intractable conflicts, and promises to help affected people reduce their vulnerability to future disasters and lead their own humanitarian response have not yet been kept.

As a result of the growing crises, the United Nations and several of its agencies continue to put out appeals for funds with monotonous regularity, but the responses are few and far between.

Ban said some donors are cutting 30 to 40 percent of their funding. “This is an understandable situation. But it is not a zero-sum game”.

“Development aid and humanitarian aid, there must be an additional budget and money for those people. This is what I have been urging.”

The largest single funding appeal is for Syria – amounting to over $3.2 billion for 2016 – as it struggles with a five year old conflict where more than 220,000 have been killed, 7.6 million displaced and nearly 4.0 million described as refugees.

The UN children’s fund UNICEF has appealed for $2.8 billion to provide assistance to about 43 million refugee children worldwide; the World Health Organisation (WHO) is seeking $76 million to meet the health emergencies arising from El Nino which has triggered disease outbreaks and water shortages affecting about 60 million people in seven high-risk countries: Ethiopia, Lesotho, Kenya, Papua New Guinea, Somalia, Tanzania and Uganda.

At the same time, the World Food Programme (WFP) is appealing for $41 million to feed nearly 2.5 million people facing hunger in the Central African Republic.

Last week the UN launched an $885 million plan to meet the needs of 30,000 Yemenis fleeing their war-ravaged country into Somalia—with more expected in 2016.

And the Office of the UN High Commissioner for Refugees, the International Organization for Migration, along with 65 other non-governmental organizations (NGOs), last week appealed for $550 million for food, water, shelter and medical care for refugees making their way to Europe.

In Syria, both government and rebel forces have blocked humanitarian access to parts of the country depriving food and water to nearly 181,000 residents in besieged towns and villages, while 4.5 million Syrians live in”hard-to-reach” areas.

UN spokesperson Stephane Dujarric said using starvation as a tool of war is a clear violation of international humanitarian law and constitute war crimes.

The Oxfam study says the international humanitarian system—the vast UN-led network in which Oxfam and other international nongovernmental organizations (INGOs), the Red Cross/Red Crescent Movement, and others play key roles—is not saving as many lives as it could because of deep design flaws that perpetuate an unsustainable reliance by aid recipients on international donors.

Despite these flaws, much has been accomplished in the past 70 years.

“Courageous aid workers have saved thousands of lives and provided vital services such as health care, water, and protection to millions. “

“But today’s system is overstretched, and humanitarian assistance is often insufficient, late, and inappropriate for the local context,” warns Oxfam.

Addressing the World Economic Forum in Davos last week, US Secretary of State John Kerry said in order to create a stronger and more sustainable funding base for UN humanitarian appeals, “we are seeking commitments to regular contributions from at least 10 new nations.”

“In tandem with that effort, we will seek at least a 30 percent increase in financing for global humanitarian appeals, from $10 billion in 2015 to $13 billion this year,” he added.

Asked for a response, Oxfam America President Ray Offenheiser told IPS Kerry’s comments about the United States renewed focus on strengthening the international response to the global refugee crisis show critical leadership and Oxfam welcomes them.

The refugee crisis is being brought on by the seemingly intractable conflicts raging as well as increasing natural disasters and climate change, which is being further exacerbated by this year’s Super El Nino.

We must also work together to address the root causes of the refugee crisis and invest more in making sure communities are better able to respond when disaster strikes.

Oxfam has been calling for the international community to meet appeals, resettle refugees, and allow refugees to work and do more to support countries hosting refugees.

We need to look beyond the issue of resettlement, which is vitally important, to holistically address what we can do to improve the situation for refugees and their host communities.

In terms of employment, the international community needs to do more to work with countries to develop policies that allow refugees to support themselves financially and contribute to the economy of their host community. It is in everyone’s best interest for refugees to be able to find stable and legal employment – not only is it their right to work, it will lead to more successful and stable communities.

In its study, Oxfam asks: “How do we right this wrong?”

By shifting more power, resources, and responsibility from the international actors—UN agencies, wealthy donor countries, large INGOs, and the Red Cross/Red Crescent Movement—to local actors, including Red Cross/Red Crescent local chapters, national governments, national NGOs, local NGOs, community-based groups, and other civil society organizations.

It’s a huge task, admits Oxfam. But today, only a small fraction of funding is given directly to local actors.
More often, local humanitarian aid workers take direction from the international humanitarian community, which tends to relegate them to the role of subcontractors, rather than equal partners.

This role leaves the local actors in no better position to prevent or respond to the next crisis.

In addition, donors and national governments are investing too little in prevention and risk reduction efforts that could diminish the need for humanitarian response, Oxfam said.

The writer can be contacted at thalifdeen@aol.com

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