Why Climate Policy Has Failed - William Nordhaus (Foreign Affairs)

 Foreign Affairs, Nova York – 12.10.2021

Why Climate Policy Has Failed

And How Governments Can Do Better

William Nordhaus

 

The world is witnessing an alarming outbreak of weather disasters—giant wildfires, deadly heat waves, powerful hurricanes, and 1,000-year floods. There can be little doubt that this is only the beginning of the grim toll that climate change will take in the years ahead. Today, the central question is whether our political systems can catch up with the geophysical realities that threaten our lives and livelihoods. As world leaders struggle to design and adopt policies that can slow the pace of warming and mitigate its consequences, the United Nations Climate Change Conference in Glasgow, Scotland, this November will be an important test.

How do we evaluate the success of past climate policies? The best indicator is carbon intensity, which is a measure of carbon dioxide emissions divided by global real GDP. Figure 1 displays the levels of carbon intensity between 1990 and 2019. There are small fluctuations in the annual changes, but the trend is basically a straight line showing a decline of 1.8 percent per year.

 

Figure 1. Trend in decarbonization, 1990–2019

 

Why is this important? The central goal of climate policies is to bend the emission curve downward. Yet even with all of the international agreements of the last three decades—the UN Framework Convention on Climate Change of 1992, the Kyoto Protocol of 1997, the Copenhagen accord of 2009, and the Paris climate accord of 2015, along with 25 conferences of the parties—over the same period the rate of decarbonization has remained unchanged.

Why has there been so little progress? To begin with, the price of carbon dioxide emissions across the world is essentially zero, so there is no real market incentive to decarbonize. Second, our economies suffer from inadequate investment in low-carbon technologies because of misaligned innovation incentives. Finally, the entire structure of international policy is hampered by the syndrome of free-riding. Countries rely on others to act, a tendency that undermines the strength of climate agreements. Given these three problems, it cannot be a surprise that the world has made so little headway in slowing climate change.

Climate policy today must address all of these failures. A successful strategy must include three mutually reinforcing components: universal carbon pricing, robust government support for low-carbon technologies, and a new architecture for international climate agreements. Every pillar is necessary if the world is to stand a chance of meeting its climate objectives.

 

THE PATH TO TWO DEGREES

 

The internationally agreed climate target is to limit the global temperature increase to two degrees Celsius. Looking forward, what is necessary to attain that objective?Consider three scenarios. The top line in Figure 2 assumes no change to climate policy. With the current (minimal) policies in place at both the national and international levels, emissions of carbon dioxide equivalent (carbon dioxide plus other gases that produce warming effects) are projected to increase roughly one percent per year over the next five decades—trending up, not down.

The next scenario, shown at the bottom of Figure 2, is one in which the world meets the two-degree target. To stay on this path, emissions must decline sharply and immediately. Whereas current policies will result in a rise in emissions of almost 25 percent between 2015 and 2030, the two-degree path requires a decline of 30 percent by 2030 and reaches zero emissions shortly after midcentury.  

Finally, consider the path of emissions under the Paris accord, shown in the middle line in Figure 2. Emission estimates through 2030 reflect actual national commitments, while those after 2030 are projections assuming countries continue to deepen their commitments at the same pace as during the period between 2015 and 2030. The emission trajectory under the Paris accord is virtually flat, rising three percent from 2015 to 2030 and then declining slightly after that. Of course, these projections assume that the Paris commitments are actually fulfilled.

 

Figure 2. Three emission scenarios

 

The main takeaway is that meeting the two-degree target cannot happen without an immediate and steep drop in emissions. Even if all countries meet their Paris objectives, that will reduce emissions only a fraction of the necessary amount.

We should recognize that some countries have moved beyond Paris in their domestic commitments. Many are aiming for zero net emissions by midcentury or shortly thereafter. These are soft commitments, however, lacking a binding international agreement and the actual policy mechanisms that will be necessary for implementation. The administration of U.S. President Joe Biden, for example, has promised deep emission reductions but has not put policies in place to meet those promises—no carbon pricing, no major increase in energy research, and no proposals to retool international agreements.

There is a vast chasm between aspirations and policies. Economic studies indicate that there are three steps countries can take to bridge the gap: price carbon emissions, promote low-carbon technologies, and improve the architecture of international climate accords.

 

THE IMPORTANCE OF CARBON PRICING

 

The single most important step to achieve climate objectives is to put a market price on the emissions of carbon dioxide and other greenhouse gases, such as methane. For succinctness, this is commonly referred to as a price on carbon. The fundamental economic logic is that raising the price of a good reduces consumption—whether that good is cigarettes, gasoline, alcohol, or emissions. A high carbon price is necessary if we are to change the behavior of thousands of local and national governments, millions of companies, and billions of consumers.

The power of carbon prices can be explained with the example of using coal for electricity generation. When burned, one ton of coal emits close to three tons of carbon dioxide. If the government levies $50 per ton of carbon dioxide emitted, this will add approximately $140 per ton to the price of coal. This will more than double the cost of coal-fired electricity. Producers would have a strong incentive to transition away from coal in favor of low-carbon fuels (such as natural gas) or renewable technologies (such as wind, solar, and nuclear power).

Other sectors will feel a smaller impact. A $50 carbon price would add $230 per year to the cost of driving a gasoline-powered car but only $1 to the average household’s annual cost of banking services. Across the economy, carbon prices tilt the playing field against emissions. The higher the price, the steeper the tilt.

A second point, which is less obvious, is that the carbon price needs to be equal across countries and sectors. It won’t do for some sectors, such as motor fuels, to have astronomical carbon prices while other sectors, such as electricity or aluminum production, have low ones. Harmonizing prices allows the world to attain its climate objectives at minimum cost. Calculations suggest that placing the burden of reductions on only half of all countries or half of all sectors will at least double that cost.

Meeting the two-degree target cannot happen without an immediate and steep drop in emissions.

How high a carbon price is necessary? Estimates of the “social cost of carbon”—which calculates global economic damage per ton of emissions—would suggest a price of around $50 per ton in 2021, rising to $85 per ton in 2050.

This price is unlikely to attain the two-degree objective or the target of zero net emissions by 2050, however. Doing either would require much higher prices. I estimate that these ambitious targets would require carbon prices of $300 to $500 per ton in 2030, rising as high as $1,000 per ton by 2050. But the estimates from different models vary widely because the technologies needed to reach zero emissions are still speculative.

In reality, carbon emission prices and the regimes under which they operate are completely inadequate. According to World Bank calculations, in 2019 the average global price was about $2 per ton of carbon dioxide. This is not even in the same universe as what is necessary. Low carbon prices are one reason why climate policies have been so ineffective.

There are dozens of carbon pricing plans in place in different regions of the world, each setting its own price and varying in terms of the share of the region’s emissions that are covered by the regime. The largest is the European Union Emissions Trading System (ETS), which operates as a multinational carbon trading scheme. Even the ETS, as impressive as it is, has two flaws. One problem is that the price is so volatile: it has varied from $4 to $75 per ton of carbon dioxide over the last decade. More important, the ETS covers only a fraction of the European Union’s economy—slightly less than half. Other regional carbon pricing regimes, such as the California cap and trade system, have a very high coverage rate but a very low tax. Still other systems, such as those of Sweden and Switzerland, have very high prices but very low coverage.

The policy necessary to meet international climate objectives looks very different from any regime currently in operation. It needs to have the price adopted by Sweden or Switzerland and the coverage rate of California—something like a price of $100 per ton of carbon dioxide and close to 100 percent coverage. High and harmonized carbon prices are key to climate change policy, but those that exist today tend to be low and fragmented.

 

GREEN R & D

 

Governments must also increase their support for low-carbon technologies. Just as countries used extraordinary incentives to develop COVID-19 vaccines in record time, we need to use all our ingenuity to accelerate the development of low-carbon technologies.

The reason for the urgency is that moving to a low- or zero-carbon global economy will require replacing large parts of our energy infrastructure and/or developing brand-new carbon-removal technologies. Fossil fuels accounted for 84 percent of the world’s primary energy consumption in 2019. By a rough estimate, it will take on the order of $100 trillion to $300 trillion in new capital to reach zero net emissions over the next four decades. And much of that new capital must come in the form of technologies that are largely unproven or immature today. Research and development is urgently needed to make this possible.

Why is government support necessary? From an economic point of view, R & D suffers from a severe externality in the same way that climate change does. The public returns on green innovation are much larger than the private returns. Indeed, there is a double externality for low-carbon R & D. Green inventors get only a small fraction of the returns on their innovations to begin with, and then the low prices of emissions exacerbate the problem.

Carbon capture and sequestration provides a good example of this double externality. Economic returns on the research and commercialization of CCS spill over to other firms and future consumers. But the captured carbon is worthless in most countries because carbon emissions are drastically underpriced, which makes investments in CCS commercially nonviable—and therefore out of the question in corporate boardrooms.

The same logic holds for advanced nuclear power, fusion power, and the burgeoning hydrogen economy: none of them have any advantage over fossil fuels as long as carbon prices remain low. Hydrogen will never be the energy carrier of the future when carbon prices are $2 per ton.

It should be emphasized that the primary requirement is support for research and development, not production. Developing new low-carbon technologies and energy sources is much more important than subsidizing the current generation of low-carbon equipment in cars, houses, and industry.

The U.S. government’s research budget today reveals misplaced national priorities. In 2019, federal R & D spending on military systems—such as aircraft, drones, artificial intelligence, robots, and nuclear weapons—totaled $60 billion. By contrast, advanced energy and renewables received only $2 billion in government R & D funding. While there may be political logic to this disparity, there is no societal logic to the imbalance given the climate threats the world faces in the coming years.

 

THE CLIMATE CLUB

 

Why have landmark international agreements such as the Kyoto Protocol and the Paris accord failed to make a dent in emission trends? The reason is free-riding—countries neglect to do their part, putting their national interests over global interests. A country displaying this syndrome might say not just “America first” but “America only.” Nationalist policies that maximize one state’s interests at the expense of others—beggar-thy-neighbor policies—are a poor way to resolve global problems. Noncooperative approaches to issues as diverse as tariffs, ocean fisheries, war, outer space, and climate change lead to outcomes that leave most or all nations worse off. The result of pervasive free-riding is that international climate policy has reached a dead end.

The fatal flaw in the 25 UN conferences leading up to Glasgow is that they are essentially voluntary. Countries may agree to take action, but there are no repercussions if they withdraw from the accords or fail to keep their commitments. When the United States dropped out of the Kyoto Protocol, there were no penalties. In every climate agreement to date, there have been no penalties for nonparticipation or for breaking promises. Voluntary climate change treaties produce very limited emission reductions—this is the lesson of both history and economic theory, and it is validated by the three-decade decarbonization trend shown in Figure 1.

 

Current carbon emission prices are completely inadequate.

 

One proposal to combat free-riding in climate treaties is what I have called a “climate club.” Scholars who study effective international agreements find they include sticks as well as carrots—that is, they set penalties for nonparticipants and rule breakers. Trade treaties and the World Trade Organization system epitomize such an approach. They require countries to make costly commitments that serve the collective interest, but they also penalize countries that do not keep their commitments.

This could be a template for an effective climate agreement. Take an example that we have modeled at Yale and that has been studied at other universities. Suppose a climate club agrees to establish a minimum target carbon price. Under club rules, countries would be required to impose a minimum domestic carbon price, say, $50 per ton of carbon dioxide, that rises over time. The implementation mechanism may vary by country—a government could decide to use a cap and trade or a carbon tax, for instance—and each country would keep its own revenues.

The new feature—and the key difference from existing climate agreements—is a penalty for nonparticipants and countries that fail to meet their obligations. In our analysis, this takes the form of a uniform tariff increase. Such a penalty is simple to administer and serves as a powerful incentive. Our modeling suggests that a carbon price of $50 per ton plus a uniform tariff penalty of three to five percent would be sufficient to induce strong participation in a climate club. Other projections have also found that the club can succeed in bringing most countries onboard if its initial members include key players, specifically China, the United States, and the European Union.

 

THE RIGHT POLICY MIX

 

The world has made little progress in slowing global warming. Even with all the policies implemented over the last three decades, the rate of global decarbonization is unchanged. If we hope to meet our climate objectives, we must enact a swift and sharp downturn in emissions.

An effective policy must introduce high carbon prices, harmonized across countries and across sectors. Actual carbon prices are virtually zero today; they should immediately increase to around $50 per ton of carbon dioxide and rise steeply after that. High emission prices will help remedy the problem of underinvestment in low-carbon technologies, but governments must provide additional support. Right now, countries severely neglect the fundamental energy research and development that will make possible a low- or zero-carbon economy. Finally, coordinating effective international policies will require some kind of club structure—an agreement that uses both carrots and sticks to induce countries to implement critical reforms.

High carbon prices combined with investment in low-carbon technologies and international participation in a climate club—this is the mix of policies we need to meet our ambitious objectives.

 

WILLIAM NORDHAUS is Sterling Professor of Economics at Yale University and a recipient of the 2018 Nobel Prize in Economics.

O fracasso das elites francesas (o Brasil segue o mesmo destino?) - Pascal-Emmanuel Gobry

Este artigo revela uma situação assustadora para a França: o completo fracasso de suas elites em diagnosticar corretamente os problemas do país e, a partir de um bom diagnóstico indicar ao povo os caminhos da recuperação.
Macron, que começou bem, desperdiçou seu capital de prestígio fazendo aquilo que todos os mandarins da República francesa (e do Ancien Régime também) sempre fizeram: reformar pelo alto, sem consulta à população.
Macron tentou "libertar" a França dos combustíveis fósseis, e de forma politicamente correta, mas totalmente incorreto quanto aos métodos, aumentou o imposto sobre esses combustíveis, ao mesmo tempo em que os preços do petróleo se elevavam, levando a gasolina a novos patamares.
Gerou protestos, assim como ocorreram protestos no Brasil contra os 20 centavos do preço dos transportes em 2013 (embora a história seja mais complicada do que isso, mas não vou contar agora o que deve ser contado, como a manipulação da esquerda sobre essas manifestações), o que sinalizou o início da crise para a queda do regime lulopetista em nosso país.
De toda forma, as elites brasileiras, como as francesas, não estão sabendo diagnosticar, em primeiro lugar, os problemas do país, para depois aplicar os remédios corretos.
Pode ser que dentro de mais algum tempo o Brasil também se descubra desamparado, e novos protestos comecem contra o governo.
Mas quem tem culpa são as elites, todas elas, em primeiro lugar as elites políticas, depois as econômicas, em seguida os mandarins do Estado (judiciário em primeiro lugar, mas outras categorias também), as elites sindicais (elas sempre foram muito burras e notoriamente corruptas), e todas as demais corporações que pretendem viver às custas do Estado, ou seja, de todo o povo trabalhador.
Não vai dar certo, e não vamos sair do lugar...
Paulo Roberto de Almeida
Brasília, 3 de março de 2019

The Failure of the French Elite

The yellow vest protests have revealed the profound divide between the privileged class embodied by Emmanuel Macron and the rest of France

Pascal-Emmanuel Gobry

The Wall Street Journal, February 22, 2019 10:58 a.m. ET

One of Emmanuel Macron’s most endearing qualities is his unshakable faith in his own power to convince anyone of the truth of his beliefs. Last November, the youngest-ever president of France tried to commemorate the 100th anniversary of the 1918 armistice by touring small French towns situated on the former front line to talk about world peace. It did not go well. The ordinary citizens he encountered were less interested in the history of the Great War than in voicing their anger at his economic policies—especially a recently announced increase in gas taxes—and seemed only to get angrier the more he assured them that things would improve. A week later, some 300,000 people, mobilized over the internet, donned yellow safety vests and began to set up barricades on thoroughfares across France. It was the first step in what has turned out to be a roiling, monthslong political crisis. 

Mr. Macron’s rise has been astonishing. Unknown to the general public until 2014 and never before elected to political office, he smashed his rivals to win the presidency in May 2017. His party, founded just a year earlier, swept the June 2017 legislative elections, granting him a solid majority and wrecking the center-left Socialists and center-right Republicans (the country’s two traditional governing parties).

Mr. Macron seemed to represent—to coin a phrase—hope and change: change from the generally mediocre political class that has governed France for 30 years, hope that France might embrace market-based reform and provide a model for combating the populist wave sweeping the West. 

Today, the hope is on life support, and the change has yet to be seen. France’s economy seems as stubbornly stuck in neutral as ever, with unemployment around 9% (and youth unemployment at 21%), government spending at 56% of GDP and debt rising. Mr. Macron has had the second-fastest drop in popularity of any French President. 

What happened? 

Mr. Macron is unpopular today because he has never really been popular. He saw a brief surge of support right before his narrow victory in the presidential election, mainly driven by the scandals of his center-right challenger. Since then, according to the polling firm IFOP, his approval ratings have trended inexorably downward, settling in the mid-40s after the honeymoon that all newly elected French presidents enjoy. More recently, they have ranged from the mid-20s to the mid-30s. 

‘Yellow Vest’ protesters in Tours, France hold a banner reading ‘Direct democracy, power to the people’ on February 2, 2019. Photo: GUILLAUME SOUVANT/Agence France-Presse/Getty Images

In other words, about a third of the French population is primed to like Mr. Macron; most of the rest tend to dislike him. Mr. Macron, it seems, is popular mostly among people like himself. As the political analyst Jérôme Fourquet has noted, while income correlates very well with support for Mr. Macron, the variable that correlates best is education.

Mr. Macron is neither right-wing nor left-wing, because what he represents is not an ideology but a caste. His base is France’s meritocratic elite, the people who have benefited from the same global trends that have left most of the country behind. When Gilles Le Gendre, a senior politician from Mr. Macron’s party, was recently asked what the government should have done differently, his baffling response seemed to encapsulate Macronism: “We were probably too intelligent, too subtle.” 

Mr. Macron—who has mused about the subconscious desire of the French for a king and has dismissed those who dislike him as “defiant Gauls”—represents a type: the brilliant technocrat, turned investment-banker multimillionaire, turned political appointee. It is a type that a great many French people detest and hold responsible for the country’s decline. As an adviser, speaking on background to French media, admitted in a striking moment of lucidity, “People viscerally reject who he is; the class-contempt stuff is not good.”

The rejection of Mr. Macron’s person and his policies are linked. The biggest misconception about his agenda, especially overseas, is that it is an ambitious program of pro-growth reforms, defying the status quo. But Mr. Macron’s earliest endorsements came from figures like the economists Jacques Attali and Jean Pisani-Ferry and the investment banker Alain Minc, who have advised virtually all center-right and center-left governments over the past 35 years. As Vincent Trémolet de Villers, an opinion editor at Le Figaro, pointed out, Mr. Minc is notorious for coining the phrase “the circle of reason” to describe supporters of his own orthodox centrism back in 1995. Those with the gall to challenge the views of this enlightened circle were not amused—and they still aren’t. 

Far from the revolution that his campaign promised, Mr. Macron’s agenda has consisted of doing what every president in recent memory has done. Consider the labor market. Contrary to conventional wisdom, it is no longer hard to fire employees in France. Since 2002, every government, left and right, has passed at least one labor-market reform bill. Each reform was mild, often watered down in the face of protests, but their cumulative effect means that the French labor market is now relatively flexible. Even though the infamous 35-hour workweek rule is still on the books, for example, so many exemptions have been added that it is almost impossible to find someone in the private sector on a work contract who works 35 hours a week. Mr. Macron’s own reform bill capped punitive damages linked to firings (whose unpredictability had deterred employment), but that’s about it.

Mr. Macron’s biggest-ticket item to fight unemployment—the number one concern of French voters—has been to plow billions of euros into worker retraining. It is an approach that French governments of both parties—indeed, governments all over the West—have tried in recent decades, with underwhelming results. Bill Clinton as a candidate in 1992 would easily recognize Mr. Macron’s employment agenda.

Meanwhile, Mr. Macron has shown no interest in challenging the eurozone’s austere monetary and budgetary policies, which most economists agree are a significant brake on growth. EU restrictions have curtailed France’s ability to borrow and to make the reforms necessary to cut its punishing payroll taxes, which are a much more serious drag on employment than labor-market regulation. 

The “gilets jaunes” or “yellow vests” started out protesting fuel hikes in France’s rural communities. But their demonstrations evolved into a national movement against President Emmanuel Macron and his government. Image: Getty

Given how much economic and policy thinking has changed since the global financial crisis and euro debt crisis of a decade ago, why does Mr. Macron’s agenda read like something from the 1990s? Why is the country’s governing elite still fighting the last war? 

The simplest answer is that they have become intellectually lazy. France’s École Nationale d’Administration, or ENA—the national school of public administration—produces the vast majority of the country’s top political and business leaders. Every nation has schools that groom an elite, but while Harvard enrolls some 1,600 undergrads every year and Oxford 3,200, ENA admits 40 to 60. There are fewer than 5,000 alumni in the world, total. They are commonly referred to as énarques, a word combining the school’s name with the suffix for a ruler, as in monarchy. 

Even this undersells just how narrow a group this is, given that only the top 10 or 15 ranked graduates gain admittance to the truly elite civil-service tracks that enable someone to become, say, a managing director of an investment bank before turning 30, as Emmanuel Macron did. The smaller the group, the higher the likelihood of groupthink. 

The building of the Ecole Nationale d'Administration (National School of Administration) in Strasbourg, France, 2013. Photo: PATRICK HERTZOG/Agence France-Presse/Getty Images

Every year, after reading candidates’ essays and conducting interviews, the ENA admissions committee puts out a report. The one for 2017 was typical of recent years: The general intellectual level of applicants is “good, even very good,” but the overwhelming majority have trouble thinking for themselves. They “recite talking points” and are unable to “offer true reflection or a personal point of view.” The committee said that it had to “hunt down originality as if it were a rare treat.”

In 2009, only 12% of students admitted to ENA came from a working- or middle-class background, according to the economic review Alternatives économiques. Early in his political career, Mr. Macron described himself as an up-by-his-bootstraps outsider to France’s ruling class because he grew up in the medium-size city of Amiens. In fact, his father is a neurology professor at the city’s teaching hospital and his mother a physician, and they sent him to the top local private school and then an elite school in Paris before he won admission to ENA. It is no mystery why so many French people think their elites are out of touch. 

France’s crisis is now eating at the very core of the social fabric, with predictable consequences for trust in institutions and rising levels of anger. 

Though the agenda of the énarques has failed to deliver benefits for the average French person, it has certainly delivered benefits to people like Mr. Macron. ENA used to be the golden ticket for a senior bureaucratic job and political office, but with the wave of privatization of government services in the 1980s, it also became a path to riches. Some of the schemes provided a necessary dose of market competition, but many more were solutions in search of a problem, and they created a lucrative revolving door between government and the corporate sector. 

For example, starting in the early 2000s, at the instigation of énarques in the French finance ministry, governments left and right privatized France’s world-class highways. The government’s independent auditor later found that the bidders may have underpaid by as much as 40%; tolls have since increased by 20% on average, with no corresponding increase in quality, according to the report. Most of the bidders were large French conglomerates whose business depends on government contracting and who routinely hire ex-civil servants. 

France does need market reform, but énarque-driven reform has tended to have little market competition and lots of cronyism. The cohort that came of age in that decade is often called la génération fric: “the cash-grab generation.”

French President Emmanuel Macron listens during a meeting with youths in Etang-sur-Arroux, France, February 7, 2019. Photo: Ludovic MARIN/Agence France-Presse/Getty Images

It is no wonder that yellow safety vests became the banner of Mr. Macron’s middle- and working-class opposition. All car owners must have such gear because of a much-grumbled-at 2008 government mandate meant to ensure the visibility of drivers in distress at roadside. For France’s exurban middle and working classes, who have been priced out of France’s glamorous city centers, having a car has become a necessity for getting by. They are what sociologist Christophe Guilluy, in a best-selling book, calls “peripheral France”—the rough equivalent of what some Americans call “flyover country.”

The yellow vest demonstrations have captured the country’s attention not because they are protests, with the requisite violent fringe—a regular feature of political Kabuki here—but because they consist overwhelmingly of those who never protest: middle and working-class people who go to work every day, are overtaxed and see their social and economic horizon darkening.

Another way in which France’s elite has benefited at the expense of ordinary citizens is immigration, which has lowered the wages of low-skilled workers even as it has provided cheap labor to the better-off. And the toll has been social and cultural too. In 2016, Institut Montaigne, a corporate-funded centrist think tank, trumpeted findings of a survey showing that “only” 28% of French Muslims have Islamist views dramatically at odds with France’s democratic values.

Given France’s sluggish economy, it is no surprise that many immigrants fail to integrate, becoming more likely to turn to crime or to embrace radical Islam. This dynamic has deepened tensions between many native French and second-generation immigrants, adding cultural and ethnic strife to the already volatile environment created by socioeconomic malaise. Gérard Collomb, then Mr. Macron’s interior minister, a reasonable center-left figure, was recently revealed to have said in private that France risked a civil war unless immigration, legal and illegal, was sharply curtailed within the next five years, an assessment that would turn Marine Le Pen’s cheeks pink. 

France’s less-privileged classes have also suffered socially from the dislocation and despair of recent years. When Florence Aubenas, a reporter for Le Monde, visited the makeshift roadside camps set up by the yellow vests, she encountered people who had finally found community. When one middle-aged woman invited fellow protesters she has gotten to know for dinner, she noted that it was the first time she or her husband has had nonfamily members over for dinner at their house. France’s crisis is now eating at the very core of the social fabric, with predictable consequences for trust in institutions and rising levels of anger. 

France’s identity has been shaped by the fact that, uniquely among Western nations, it is a state that built a nation and not a nation that eventually built a state. This means that its elites have an outsize impact on the country’s destiny. More often than not, elite failure has led not just to crisis but to collapse. The national collapses—1789, 1940—were always preceded by a generation of elite stupidity, cowardice and greed. Whatever their faults, the yellow vests have correctly identified France’s biggest problem.

Mr. Gobry, who lives in Paris, is a fellow of the Ethics and Public Policy Center in Washington, D.C.

A falencia da ajuda ao desenvolvimento africano

O que esse jornalista alemão (com experiência no terreno) diz sobre a ajuda ao desenvolvimento africano se aplica, mutatis mutandis, a toda e qualquer experiência de ajuda ao desenvolvimento, com muito poucas exceções. Ela nem ajuda, só vicia, nem conduz ao desenvolvimento, mas à assistência continuada, quando não ao aprofundamento da dependência, à corrupção, à deformação das regras do jogo econômico nesses países.
Pena que o Brasil está seguindo atualmente o mesmo caminho já empreendido 50 anos atrás por todos os países desenvolvidos, que se lançam com essa espécie de consciência de culpa na ajuda humanitária e na assistência ao desenvolvimento (no caso do Brasil uma totalmente equivocada alegação de "dívida histórica" com o continente africano, o que é um absurdo completo).
Teria muito mais a dizer, mas vou deixar vocês lerem o trabalho do desiludido alemão.
Paulo Roberto de Almeida

Time for a Rethink
A commentary by Kurt Gerhardt
Der Spiegel online, 08/16/2010

Part 1: Why Development Aid for Africa Has Failed

Development aid to Africa has been flowing for decades, but the results have been paltry. Instead, recipients have merely become dependent and initiative has been snuffed out. It is time to reform the system.

Development aid to Africa is a blessing for all those directly involved -- both on the giving end and on the receiving end. Functionaries on the donor side, at least those abroad, earn good money. Many of those on the receiving end, for their part, know how to organize things in such a way that their own personal interests don't get short shrift.

There is no reason for these two groups to be interested in changing the status quo. Yet even so, some within their ranks are starting to suggest the situation as it stands cannot continue. The development aid of the past 50 years, they say, is hardly justifiable given the disappointing results. Even individual donors, who know little about how development aid works in practice, increasingly sense that something might be amiss.

They're right. The aid has failed to a large extent.

We have taken on too much responsibility for solving African problems. We have essentially educated them to, when problems arise, call for foreign aid first rather than trying to find solutions themselves.

This attitude has become deeply rooted in Africa. This self-incapacitation is one of the most regrettable results of development cooperation thus far. Poorly designed development aid has made people dependent and accustomed them to a situation of perpetual assistance, preventing them from taking the initiative themselves. It is this situation which represents the greatest damage done, far worse than the enormous material losses engendered by failed aid projects. And there are many. Africa is strewn with idle tractors, ruined equipment and run-down buildings.

Deeply Rooted Misconceptions
On our side, the view has taken hold that we are primarily responsible for developing Africa. At the 2nd Bonn Conference on International Development Policy in August 2009, then-German President Horst Köhler, an experienced and dedicated African development activist, spoke about an energy partnership established between Germany and Nigeria two years previously. His conclusion:

"I cannot discern that the amount of electricity in Nigeria has increased since then. And I find it shameful for the industrialized countries, as well as for those responsible in Nigeria, that this large country, rich as it is in resources essentially, can't advance its socio-economic development because it hasn't yet managed to bring electricity to its rural areas. I find this shameful for the entire development cooperation that has existed for decades."

Here, the fact that Köhler mentions the industrialized countries before Nigeria when discussing responsibility for the failure is notable. More notable, however, is that he mentions the industrialized countries at all. Are we really the ones who should feel ashamed that one of the world's largest oil exporters isn't capable of providing its rural areas with electricity? Simply asking the question is enough to show how absurd the thought is -- and how deeply rooted the misconception.

This mothering mindset, widespread in industrialized countries for decades, is in direct violation of the subsidiarity principle. This principle states that providers of aid, whether private or governmental, should not assume any duties that could be carried out by the receiver country itself. Furthermore, it mandates that aid be given such that those providing it can cease giving as soon as possible.

Plenty of Lip Service
The subsidiarity principle should have been key to designing this cooperation from the beginning. In reality, it has played far too small a role.

The donor side is certainly not lacking in theories, clever strategies or concepts -- international development agencies have cabinets bursting with them. What's lacking is a basic understanding and clarity when applying principles. The realization that northern countries cannot develop the South -- that people and societies can only do so themselves -- is given plenty of lip service. In practice, however, the idea hardly plays a role at all.

Development experts sent to Africa come from societies that tend to value efficiency and speed to a greater degree than is generally found in Africa. Furthermore, foreign aid workers, as a rule, only spend a few years in a target country. Their desire to "achieve something" often leads them to do more than they should according to the subsidiarity principle. But by doing so, they inhibit Africa's own momentum and prevent it from growing stronger.

A further breach of the subsidiarity principle is found in the existence not only of the immense national and international development agencies, from the German Society for Technical Cooperation (GTZ) to the World Bank, but also of myriad private organizations both small and large that cover the continent with their network of charitable works.

Occupying Powers
These are the de facto occupying powers of the post-colonial period.

The second tenet of the subsidiarity principle holds that aid should become dispensable as quickly as possible. In Germany alone, the livelihoods of up to 100,000 people are dependent on the development aid industry. One can imagine the outrage that would result should someone seek to dismantle these agencies. But exactly that should ultimately be the raison d'etre of these agencies. After decades of providing aid, their continued existence is proof of their failure.

It is contrary to the logic of subsidiarity to give a person something that he or she could acquire or produce on their own. Yet in the hopes of doing good, we have done exactly that far too often in recent decades, whether it be a grain mill in a village or a council of GTZ experts for a government ministry. A considerable portion of Germany's bilateral aid, amounting to more than €1.5 billion ($2 billion) per year, is given as grants -- in other words, as a gift. Indeed, all of the least developed countries tend to receive foreign aid in the form of grants. Two thirds of the countries in sub-Saharan Africa belong to this category.

These perpetual gifts have made partners into beggars, ones who no longer value the things they have been given and consequently have not maintained them well. Apart from a few exceptions, emergency aid being one example, free aid was and remains fundamentally wrong.

Part 2: The Question of Money

Aid given with no strings attached robs the recipient of competence. The method has resulted in a divorce from reality in Africa, at all levels of society. It's time to accustom our partners to normalcy -- those who want to initiate a project but lack the necessary funds to do so, must take out a loan and pay it back. Indeed, this is where aid from abroad can make a significant contribution: by seeing to it that everyone committed to development has access to loans, and particularly by supporting microcredit programs.

The urge of foreign aid workers to quickly produce results promotes quantitative thinking and gives short shrift to efforts aimed at helping locals learn how to develop themselves. One example of this erroneous notion is the goal among donor companies, adopted 40 years ago, to donate 0.7 percent of GDP in the form of development aid.

It makes no sense to establish amounts before discussing the projects that should be funded with that money. The worst thing about this discussion is that it, once again, is purely quantitative. It feeds the disastrous attitude that more money necessarily means more development. In this way, lessons learned over the past decades are completely ignored.

Instead, people like Bono and Bob Geldof are allowed open access to our governments, where they propagate the "more money" idea -- and where they become stumbling blocks to African development.

Nothing to Do with Development Aid
It is easier to evaluate numbers than the qualitative effects of development aid. We cannot develop others. Only endogenous development -- what people and societies achieve themselves with the power of their own minds and hands -- deserves the name. No one can be developed from the outside.

Many would argue that when development aid brings water pipes and roads to Africa, it stimulates and strengthens local efforts. But perhaps the opposite is true, and the more we do, the more likely it is that our partners will sit back, because foreign aid is taking care of things to their satisfaction. Although the latter has proven to be true a thousand times over, development aid functionaries still overlook it with astonishing consistency.

Pouring further billions into funds for the climate, AIDS and other issues may, in fact, be necessary. But it has nothing to do with development aid. These payments will not cause political leaders in the Sahel countries, for example, to make more of an effort to combat soil erosion on their own. These countries could long ago have begun doing something on this issue -- they could even have used their masses of unemployed youth for the job. But so far, in cases where something has been done, it generally was the product of foreign initiative and not endogenous.

Our development aid has not lent enough support to the efforts of people in Africa themselves. Often it has even been an impediment, because our aid was focused too much on the object and too little on the subject. Too often the project or program, not the people, was the focus. The aid passed the people by.

The result has placed Africa in an undignified position -- and no amount of money from the enormous, globally organized network of aid organizations will free them. Only Africans themselves can accomplish that.

Kurt Gerhardt worked as a journalist for German public radio station WDR from 1968 to 2007. As a former country director for the German Development Service (DED) in Niger in West Africa, he has firsthand experience with the issues involved in providing aid to Africa. He is a co-founder of the political initiative "Primary Education in the Third World" and the Makaranta Association, both of which support primary education in Africa. He is also a co-initiator of the "Bonn Appeal" for alternative development policies.
Translated from the German by Ella Ornstein

1454) Impasses da Rodada Doha

O questionário que figura abaixo me foi submetido em julho de 2008, e se destinava a alimentar um Trabalho de Conclusão de Curso para estudante do CEABE-FGV-SP.
Verifico agora, que passados 15 meses das respostas fornecidas, pouca coisa mudou no cenário das negociações comerciais multilaterais. Resolvi, assim, tirar o inedetismo desse texto e publicá-lo neste meu blog, sem qualquer revisão ou mudança. Ele é divulgado tal como foi escrito, como sempre rapidamente, originalmente.

Impasses da Rodada de Doha
Paulo Roberto de Almeida
Brasília, 5 julho 2008
Respostas para elaboração de Trabalho de Conclusão de Curso para estudante do CEABE-FGV-SP

1. Em sua opinião, quais são os principais motivos para o impasse da Rodada de Doha?
PRA: De um lado, falta de capacidade dos países ricos em desmantelar seu arsenal de medidas protecionistas e seus mecanismos de subvenção na área agrícola, e, de outro, falta de vontade ou oposição política dos países em desenvolvimento em superar o protecionismo latente exercido em produtos industriais e em certas áreas de serviços. Adicionalmente, estes têm problemas em liberalizar amplamente os investimentos estrangeiros e aceitar normas mais intrusivas em propriedade intelectual e os países ricos ficam insistindo em criar novas regras de proteção a pretexto de defesa do meio ambiente ou como proteção a direitos trabalhistas e respeito a certas normas laborais. Nos dois casos, sentimentos protecionistas em ambos lados, submissão à ação de lobbies setoriais nacionais e desejo de continuar legislando em políticas setoriais, com práticas discriminatórias em várias áreas.

2. A atual crise econômica internacional pode emperrar ainda mais as negociações de Doha?
PRA: Pode, na medida em que reforça os elementos nacionais, discriminatórios, das políticas comerciais e industriais, com tentativas de defesa do emprego ou dos mercados nacionais. Por outro lado, como os preços dos alimentos encontram-se em patamares elevados, talvez isso diminua a necessidade de subvenções estatais, o que teoricamente poderia facilitar compromissos. Mas, agricultores chantagistas e políticos “espertos” alegam que, assim como os preços subiram, eles podem baixar, e portanto não têm a intenção de desmantelar o arsenal protecionista e subvencionista.

3. As nações desenvolvidas têm fortes políticas de subsídios à agricultura, pois alegam que alimentar sua nação é questão de segurança nacional e não de livre comércio. Porém , tais políticas desestimulam a produção de alimentos em países em desenvolvimento e distorcem os incentivos da produção e o consumo. Qual deveria ser a política da OMC em relação aos subsídios?
PRA: A OMC não tem uma política própria, pois não pode legislar por sua própria conta. Se pudesse, assim como outras entidades voltadas para a definição de políticas públicas em diversas áreas (como a OCDE, por exemplo), deveria simplesmente decretar a ilegalidade dos subsídios para fins comerciais, como ocorre na área industrial. Acontece, porém, que esses subsídios agrícolas foram legalizados na Rodada Uruguai, com a aprovação do acordo agrícola; agora fica mais difícil proibi-los. Em todo caso, a ministerial de Hong-Kong já acordou banir os subsídios à exportação de produtos agrícolas a partir de 2013, embora em condições e modalidades que não estão ainda de todo claras, pois algum “rebalancing” com tarifas diferenciadas e o recurso a medidas de exceção continuam à disposição dos países.
Essas políticas são claramente danosas aos países em desenvolvimento mais pobres, pois lhes retira qualquer possibilidade de se inserir na economia mundial com base em suas únicas vantagens comparativas possíveis no plano do comércio internacional, que seria a oferta de bens agrícolas em condições competitivas (ainda que isto não pudesse ser feito numa primeira fase).

4- Muitos analistas afirmam que o maior problema está entre o Brasil e os EUA, pois ambos não querem abrir mão de seus direitos nas negociações. Você considera que os dois países são realmente os pilares para o atraso de Doha?
PRA: Não; esses dois países foram responsáveis pelo desmantelamento das negociações da Alca, no plano hemisférico, mas os pecados que estão sendo cometidos em Doha envolvem um número bem maior de países. Praticamente todos são em grande parte responsáveis, embora as responsabilidades principais estejam, justamente, com os protecionistas agrícolas, de um lado (e aqui vale tanto para EUA e UE, como Japão, Coréia, Suíça, Noruega, China e India, além de vários outros em desenvolvimento), e de outro com os protecionistas industriais, Brasil e India em primeiro lugar, mas vários outros em desenvolvimento também. Registre-se que a posição da UE não é uniforme, pois alguns países querem a liberalização agrícola (Reino Unido), ao passo que outros lutam pelo mais amplo protecionismo (França).
Pecados devem ser uniformemente distribuídos entre os pecadores...

5. O single undertaking, um importante fato conquistado na Rodada do Uruguai poderá ser perdido, devido aos problemas de Doha?
PRA: O single undertaking não deve ser tomado como um princípio sagrado, inscrito nas tábuas da lei, como são, por exemplo, as regras do GATT. Trata-se de uma norma não escrita, ou seja, acordada entre os ministros para facilitar uma aceitação geral por todos. Teoricamente isso permite o exercício do direito de veto por qualquer país membro, por menos importante que seja. Na prática, sabemos que as coisas não se passam assim. Depois que os grandes parceiros comerciais conseguem chegar a um acordo entre eles, eles torcem o braço dos menores e os obrigam a aceitar os seus “compromissos”, ou seja, enfiam goela abaixo dos menos importantes regras que eles mesmos traçaram para eles. Como não há um processo decisório estritamente definido no GATT-OMC, não se sabe bem o que pode querer dizer esse entendimento único, pois ele é suscetível de diversas interpretações. Teoricamente, se deve chegar a uma situação em que todos devem se colocar de acordo sobre todos os pontos de negociação, num pacote uniforme e compacto que todos devem aceitar in totum, pois ele conterá benefícios mas também pílulas amargas. A realidade é que os acordos são construídos mediante certo consenso entre os grandes. Se algum pequeno tentar obstaculizar, pode atrasar certo tempo a conclusão do processo, mas será “convencido” a aderir.
Ou seja, não se trata de um “fato”, mas de um entendimento, que é suscetível de receber tratamentos variados segundo as linhas de força em jogo.

6. Dada as dificuldades, quais seriam as melhores soluções para que Doha seja finalizada? Deveria ser repensada a maneira de se fazer comércio internacional como mais acordos bilaterais e plurilaterais?
PRA: Nas áreas de acesso a mercados, fica difícil esse tipo de acordo, uma vez que vigem as regras de MFN e não discriminação. Pode-se pensar nesse tipo de acordo para setores específicos, como existe para a indústria aeronáutica civil, mas fica difícil para bens agrícolas e industriais.
Já existe a possibilidade de acordos regionais, administrados pelas regras do Artigo 24 do GATT ou pela Cláusula de Habilitação da Rodada Tóquio. Ver a este respeito, dentre outros trabalhos meus, um artigo sobre o minilateralismo disponível no site (link: http://www.pralmeida.org/05DocsPRA/1499Minilateralismo.pdf).
Não se concebe maneira de fazer acordos comerciais senão pela via multilateral e pela via regional, ou minilateral. O fato é que o sistema continua desagregado e fragmentado. Aparentemente vamos ter de conviver com esse regime menos do que satisfatório (second or third best).

Questões suplementares em 28.07.2008:
Complemento de respostas em 29.07.2008.

7) Se Doha não for concluída, você acredita que o sistema multilateral do comércio entraria em um colapso? O que isso significaria para o mundo?
PRA: Não entraria, mas passaria por uma fase muito difícil, com certo debilitamento dos mecanismos multilaterais de negociação e de solução de controvérsias e expansão das soluções “minilateralistas”, ou seja, acordos preferenciais ou de livre comércio entre parceiros seletivos, aumentando, portanto, o grau de discriminação comercial. Em termos globais, significa que a interdependência ativa, ou seja, o processo de globalização avançaria de forma mais lenta, e com muitas áreas submetidas a acordos restritos e parciais.

8) Para o Brasil quais seriam os benefícios de Doha?
PRA: Maior acesso a mercados para seus produtos competitivos, em especial agricultura, e maior pressão no mercado interno, com competição externa de produtos industriais, o que também é interessante, pois significa que a indústria nacional teria de fazer um esforço adicional, em termos de qualidade e preços, para se manter competitiva. No conjunto, reforço dos mecanismos dos esquemas multilaterais de acesso a mercados e de solução de controvérsias, em lugar de arbitrariedades praticadas de maneira unilateral, como ocorre em alguns setores atualmente. Os benefícios regulatórios talvez sejam ainda mais importantes do que a simples quantificação de ganhos de mercado.

9) Na sua opinião, compensa para o Brasil negociar apenas o setor agrícola e "esquecer" da indústria e do serviço? Quais poderiam ser os prejuizos e benefícios desta estratégia brasileira?
PRA: Mesmo que desejasse, hipoteticamente, não seria possível ao Brasil negociar apenas um pacote agrícola, pois os princípios (mesmo informais) que regem uma negociação desse tipo implicam que todos os países têm o direito de colocar seus interesses ofensivos (demandantes) na mesa e esperar compensação por vantagens concedidas a outros parceiros comerciais. No cômputo global, os países de pautam pela regra do “single undertaking”, ou seja, de que os resultados devem ser globalmente aceitáveis para todos, num pacote único e interrelacionado.

Paulo Roberto de Almeida
Brasília, 4 de julho de 2008
Complemento em 29.07.2008