Tag: Energy

United We Stand to Achieve Sustainable Development — Global Issues

  • Opinion by Siddharth Chatterjee, Deepali Khanna (bangkok / beijing)
  • Inter Press Service

BANGKOK / BEIJING, Sep 12 (IPS) – The world today faces a future that is in peril. Our challenges have become more complex and interconnected, as we see the impacts of the COVID-19 pandemic, an uneven economic recovery, a climate emergency, growing inequalities, and an increase in conflicts globally. This year also marks a grim milestone, with over 100 million people forcibly displaced.

These events accompany increasing division in the community of nations which threatens to push the achievement of the Sustainable Development Goals (SDGs) further out of reach for the Global South.

Adding to these crises, rising food and energy prices driven by the conflict in Ukraine, could push 71 million people into poverty, according to UNDP. The Global South, typically comprised of countries in South America, Africa, Asia, and Oceania, was already grappling with economic issues now exacerbated by the triple planetary crisis.

With limited resources, high vulnerability, and low resilience, people in the Global South will bear the brunt of our inaction, on climate and elsewhere. Solely depending on external aid from the Global North or G7 countries cannot be the panacea. Here, countries of the Global South can empower themselves and combine efforts to achieve sustainable development.

Cooperating to catalyse change

In the face of global threats, international cooperation remains vital, as highlighted by the International Day for South-South Cooperation. South-South cooperation seeks to complement traditional development models by throwing light on the transformations needed to deliver on priorities, including the SDGs. It offers possible solutions from Global South to Global South.

Countries of the Global South have contributed to more than half of global economic growth in recent times. Intra-South trade is higher than ever, accounting for over a quarter of world trade. It is time to further leverage these partnerships in the development space.

We already saw this while many countries were trying to obtain COVID-19 vaccines. Citizens of low and middle-income countries faced systemic discrimination in the global COVID-19 response, leaving millions without access to vaccines, tests, and treatments. India sent over 254.4 million vaccine supplies to nations across the world, under Vaccine Maitri – a vaccine export initiative.

Likewise, China has supplied over 200 million doses of vaccines to the COVAX Facility, in addition to providing millions of dollars in medical supplies to countries in the Global South, including in Africa, throughout the pandemic.

Informing partnership models with Africa & China

To advance development priorities, partnerships need to be rooted in shared interests that can lead to shared gains, as seen in traditional development models and assistance from the Global North. This dynamic needs to be at the core of the China-Africa relationship as well.

China, an economic powerhouse, has the potential to advance development in the Global South, especially in Africa, by bringing its experience, expertise, and resources to bear, and its assistance must advance both its interests and those of the countries where it operates.

Investments in shared goals are reflected in efforts by China to improve public health in Africa, including in the construction of the Africa Centers for Disease Control and Prevention in Ethiopia, and in clean energy, through projects such as the Kafue Lower Gorge Power Station in Zambia.

China promises to invest US$60 billion cumulatively in Africa by 2035, directed at agriculture, manufacturing, infrastructure, environmental protection, and the digital economy. This is most welcome, and those planned investments must answer the needs of the local economies and societies.

What works in one country may not work elsewhere, but true collaboration allows for learning from mistakes and sharing successes. This is where the UN’s expertise can ensure cooperation is demand-driven, in line with local expectations and needs, national development priorities, and relevant international norms and standards.

Platforms like the Forum on China-Africa Cooperation (FOCAC) can work to improve that essential partnership. This mechanism has identified shared priorities like climate change, agriculture/food systems, global health, and energy security, among others, between China and Africa.

For the first time in FOCAC’s history and with support from The Rockefeller Foundation, the UN in China is engaged as a strategic partner in this bilateral mechanism between China and Africa. The UN in China is continuing similar efforts in close consultation with relevant counterparts, including the China International Development Cooperation Agency.

For The Rockefeller Foundation, it is a nod to its legacy in China dating back to 1914, rooted in redesigning medical education to improve healthcare and its current priorities to advance Global South collaboration, especially in public health, food, and clean energy access—all global public goods.

Beyond the Global South: Action Together

With less than eight years to achieve the SDGs, truly international cooperation is our only hope. Emerging trends in technology and innovation can get us there, along with enhanced South-South cooperation efforts. But doing so requires us to “flip the orthodoxy”, as UN Deputy Secretary-General Amina J. Mohammed advised.

The Ebola crisis is an example of where global cooperation, including South-South cooperation, enabled Sierra Leone to defeat the disease’s spread, notably through a brigade of 461 health workers sent to Sierra Leone to support their overburdened system. Later, other countries made similar efforts to support Sierra Leone and nearby countries, such as Guinea and Liberia. This example shows the potential of South-South cooperation, but also triangular cooperation and North-South partnerships. Public-Private Partnerships (PPPs) are another mechanism for financing and capacity building.

This can be seen in Kenya, where the Government and the UN System convened an SDG Partnership Platform with companies such as Philips, Huawei, Safaricom, GSK, and Merck. The outcomes include a downward trend of maternal and child mortality in some of the country’s most remote regions. Similar PPPs can hold promise in unlocking global progress on the SDGs.

Today, while we face a more volatile world, the spirit of South-South cooperation shows a core value that we need: solidarity. As UN Secretary-General António Guterres said, “The last two years have demonstrated a simple but brutal truth – if we leave anyone behind, we leave everyone behind”.

Deepali Khanna is Vice-President of the Asia Region Office at The Rockefeller Foundation. Siddharth Chatterjee is the United Nations Resident Coordinator in China.

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1980s Redux? New context, Old Threats — Global Issues

  • Opinion by Jomo Kwame Sundaram, Anis Chowdhury (sydney and kuala lumpur)
  • Inter Press Service

SYDNEY and KUALA LUMPUR, Sep 06 (IPS) – As rich countries raise interest rates in double-edged efforts to address inflation, developing countries are struggling to cope with slowdowns, inflation, higher interest rates and other costs, plus growing debt distress.

Rich countries’ interest rate hikes have triggered capital outflows, currency depreciations and higher debt servicing costs. Developing country woes have been worsened by commodity price volatility, trade disruptions and less foreign exchange earnings.

Anis ChowdhuryRising debt risks Almost 60% of the poorest countries were already in, or at high risk of debt distress, even before the Ukraine crisis. Debt service burdens in middle-income countries have reached 30-year highs, as interest rates rise with food, fertilizer and fuel prices.

Developing countries’ external debt has risen since the 2008-09 global financial crisis (GFC) – from $2 trillion (tn) in 2000 to $3.4tn in 2007 and $9.6tn in 2019! External debt’s share of GDP fell from 33.1% in 2000 to 22.8% in 2008. But with sluggish growth since the GFC, it rose to 30% in 2019, before the pandemic.

The pandemic pushed up developing countries’ external debt to $10.6tn, or 33% of GDP in 2020, the highest level on record. The external debt/GDP ratio of developing countries other than China was 44% in 2020.

Borrowing from international capital markets accelerated after the GFC as interest rates fell. But commercial debt is generally of shorter duration, typically less than ten years. Private lenders also rarely offer restructuring or refinancing options.

Lenders in international capital markets charge developing countries much higher interest rates, ostensibly for greater risk. But changes in public-private debt composition and associated costs have made such debt riskier.

Private short-term debt’s share rose from 16% of total external debt in 2000 to 26% in 2020. Meanwhile, international capital markets’ share of public external debt rose from 43% to 62%. Also, much corporate debt, especially of state-owned enterprises, is government-guaranteed.

Meanwhile, unguaranteed private debt now exceeds public debt. Although private debt may not be government-guaranteed, states often have to take them on in case of default. Hence, such debt needs to be seen as potential contingent government liabilities.

Jomo Kwame SundaramSri Lankan international capital market borrowings grew from 2.5% of foreign debt in 2004 to 56.8% in 2019! Its dollar denominated debt share rose from 36% in 2012 to 65% in 2019, while China accounted for 10% of its external borrowings.

Private borrowings for less than ten years were 60% of Lankan debt in April 2021. The average interest rate on commercial loans in January 2022 was 6.6% – more than double the Chinese rate. In 2021, Lankan interest payments alone came to 95.4% of its declining government revenue!

Commercial debt – mostly Eurobonds – made up 30% of all African external borrowings with debt to China at 17%. Zambian commercial debt rose from 1.6% of foreign borrowings in 2010 to 30% in 2018; 57% of Ghana’s foreign debt payments went to private lenders, with Eurobonds getting 60% of Nigeria’s and over 40% of Kenya’s.

More commercial borrowing
Thus, external debt increasingly involved more speculative risk. Public bond finance, foreign debt’s most volatile component, rose relative to commercial bank loans and other private credit. Meanwhile, more stable and less onerous official credit has declined in significance.

Various factors have made things worse. First, most rich countries have failed to make their promised annual aid disbursements of 0.7% of their gross national income, made more than half a century ago.

Worse, actual disbursements have actually declined from 0.54% in 1961 to 0.33% in recent years. Only five nations have consistently met their 0.7% promise. In the five decades since promising, rich economies have failed to deliver $5.7tn in aid!

Second, the World Bank and donors have promoted private finance, urging ‘public-private partnerships’ and ‘blended finance’ in “From billions to trillions: converting billions of official assistance to trillions in total financing”.

Sustainable development outcomes of such private financing – especially in promoting poverty reduction, equity and health – have been mixed at best. But private finance has nonetheless imposed heavy burdens on government budgets.

Third, since the GFC, developed economies have resorted to unconventional monetary policies – ‘quantitative easing’, with very low or even negative real interest rates. With access to cheap funds, managers seeking higher returns invested lucratively in emerging markets before the recent turnaround.

Large investment funds and their collaborators, e.g., credit rating agencies, have profitably created new means to get developing countries to float more bonds to raise funds in international capital markets.

Making things worse
Policy advice from donors and multilateral development banks (MDBs), rating agencies’ biases and the lack of an orderly and fair sovereign debt restructuring mechanism have shaped commercial lending practices.

Favouring private market solutions, donors, MDBs and the IMF have discouraged pro-active development initiatives for over four decades. Hence, many developing countries remain primary producers with narrow export bases and volatile earnings.

They have urged debilitating reforms, e.g., arguing tax cuts are necessary to attract foreign direct investment (FDI). Meanwhile, corporate tax evasion and avoidance have worsened developing countries’ revenue losses. Thus, net revenue has fallen as such reforms fail to generate enough growth and revenue.

Credit rating agencies often assess developing countries unfavourably, raising their borrowing costs. Quick to downgrade emerging markets, they make it costlier to get financing, even if economic fundamentals are sound.

The absence of orderly and fair debt restructuring mechanisms has not helped. Commercial lenders charge higher interest rates, ostensibly for default risks. But then, they refuse to refinance, restructure or provide relief, regardless of the cause of default.

When will we learn?
Following the 1970s’ oil price hikes, western, especially US banks were swimming in liquidity as oil exporters’ dollar reserves swelled. These banks pushed debt, getting developing country governments to borrow at low real interest rates.

After the US Fed began raising interest rates from 1977 to fight inflation, other major central banks followed, raising countries’ debt service burdens. Ensuing economic slowdowns cut commodity exporters’ earnings.

In the past, the IMF and World Bank imposed ‘one-size-fits-all’ ‘stabilization’ and ‘structural adjustment’ measures, impairing development. Developing countries had to implement severe austerity measures, liberalization and privatization. As real incomes declined, progress was set back.

With the pandemic, developing countries have seen massive capital outflows, more than in 2008. Meanwhile, surging food, fertilizer and fuel prices are draining developing countries’ foreign exchange earnings and reserves.

As the US Fed raises interest rates, capital flight to Wall Street is depreciating other currencies, raising import costs and debt burdens. Thus, many countries need financial help.

Debt-distressed countries once again seek support from the Washington-based lenders of last resort. But without enough debt relief, a temporary liquidity crisis threatens to become a debt sustainability, and hence, a solvency crisis, as in the 1980s.

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Biomethane, the Energy that Cleans Garbage in Brazil — Global Issues

Thales Motta, director of GNR Fortaleza, stands in front of the biomethane plant located in northeastern Brazil, the development of which required overcoming prejudices, mistrust and misinformation to open up the market for gas generated from garbage. Now biomethane is expanding, making use of landfills and agricultural biomass. CREDIT: Mario Osava/IPS
  • by Mario Osava (fortaleza, brazil)
  • Inter Press Service

FORTALEZA, Brazil, Sep 05 (IPS) – The increasing productivity with which humankind generates waste has gained at least one sustainable counterpart: the extraction of biogas from landfills, a growing activity in Brazil.

Two small plateaus stand out in the landscape on the outskirts of Caucaia, one of the 19 municipalities that make up the metropolitan region of Fortaleza, capital of the state of Ceará in the Northeast of the country.

Although they look similar, one of the hills receives about 5,000 tons per day of solid waste collected in the metropolitan region of 4.2 million inhabitants. The other, the old sanitary landfill which began to operate in 1991, is already closed, but it is the one that generates more gas.

“We are pioneers in the production of biomethane from garbage,” said Thales Motta, director of Fortaleza Renewable Natural Gas (GNR), a partnership between the private companies Ecometano, of the MDC renewable energy and natural gas group, and Marquise Ambiental, of Fortaleza, which manages the Caucaia landfills.

Biomethane is the by-product of biogas refining that removes other gases, such as carbon dioxide and hydrogen sulfide.

GNR Fortaleza produces about 100,000 cubic meters per day of this gas, which is sold to the state-owned Ceará Gas Company (Cegás), which mixes it with natural gas in its pipelines.

“We supply 15 percent of the gas distributed by Cegás, which trusted the quality of our biomethane,” Motta said during IPS’s visit to the GNR plant, inaugurated in December 2017.

This labyrinth of pipes collect biogas from the landfill and refine it to produce biomethane with 95 percent purity. The renewable gas is mixed with natural gas for industrial use, in vehicles and thermoelectric plants, as well as in homes and businesses in the metropolitan region of Fortaleza, in northeastern Brazil. CREDIT: Mario Osava/IPS

Initial difficulties

Ecometano’s pioneering activity is due to another plant, Dos Arcos, established in 2014 in São Pedro da Aldeia, a coastal city of 108,000 inhabitants, 140 kilometers from Rio de Janeiro. Its capacity is limited to 14,000 cubic meters per day.

“There was no regulation for biomethane then and the National Agency of Petroleum, Natural Gas and Biofuels denied us authorization to sell it,” said Motta, an electrical engineer. There were losses; the sales were made directly to a limited number of customers, such as supermarkets.

But the company persevered and the regulation came out in 2017, shortly before the start of GNR Fortaleza’s operations.

“There was a great deal of prejudice even among engineers, skepticism in the gas companies. We had to present analyses and quality tests that were more rigorous than the ones required for fossil fuel gas,” said the plant manager.

“But we broke down the barrier of discredit and opened a new market, proving that it is a safe, stable gas with predictable prices,” he added.

A view of the new Caucaia landfill, near Fortaleza, capital of the state of Ceará in northeastern Brazil, which receives about 5,000 tons of garbage a day. It already produces biogas, but will do so on a larger scale in a few years. CREDIT: Mario Osava/IPS

Advantageous costs

At the beginning, biomethane cost 30 percent more, but today it is 30 percent cheaper than natural gas, in view of the rise in fossil fuels, he pointed out. Its price depends on internal factors, such as inflation, and is not subject to unpredictable oil prices on the international market or exchange rate fluctuations, he stressed.

“Biomethane competes with fossil gas on an advantageous footing today. But even if oil becomes cheaper, the market is predisposed to betting on biomethane” because of environmental issues, he said.

“Cegás decided to distribute biomethane because it considers it strategic to diversify its mix with a cleaner, renewable and sustainable gas, thus contributing to reducing pollution and improving the environment,” the company’s president, Hugo de Figueiredo Junior, told IPS.

“It is also an opportunity to expand suppliers, competition and conditions to offer better prices to the end consumer,” he added.

Cegás, in which the state of Ceará is a majority shareholder, was a pioneer within Brazil in the injection of biomethane into its network, starting in May 2018.

The nearly 15 percent proportion of biomethane in the total volume constitutes “one of the highest percentages of renewable gas injected into the grid by a distributor in the world,” Figueiredo said.

That proportion may expand in the future, but biomethane faces several challenges, he added.

There is a need to disseminate existing technological solutions and facilitate access to them, expand knowledge about potential uses of green gases, and improve regulation and processes for the collection and disposal of solid waste and wastewater, he said.

The old landfill, now covered, still generates biogas that is converted to biomethane by refining, in Caucaia in northeastern Brazil. The dark lake is leachate, a highly polluting waste liquid that is treated before being discarded by sprinkling it on the soil. CREDIT: Mario Osava/IPS

Expansion

In terms of production, GNR Fortaleza is now the second largest biomethane plant in Brazil. It is surpassed by Gas Verde, from Seropédica, a town near Rio de Janeiro, which has been producing 120,000 cubic meters per day since 2019.

Many interested parties visit GNR, which has become a reference point for gas generated from waste because it has developed process technologies that make it possible to integrate equipment from different national and international suppliers, “with its own codes that are open” to anyone, said Motta.

Currently, many companies that extract biogas from landfills for electricity generation are preparing to convert their plants to biomethane production, he said.

“We receive visits here from universities and groups of interested parties. We have to build an auditorium for lectures. There was no laboratory for biomethane analysis in the Northeast. Now we have one and research on this gas is mushrooming,” Motta said.

But it is necessary to take a broader view, he acknowledged. Landfills are limited. A minimum of 2,000 tons of waste per day is needed to make a biomethane plant viable, he estimated. Only large cities with at least one million inhabitants generate that much solid waste.

“We have to look for other kinds of biomass,” he said.

Hundreds of trucks travel the roads transporting garbage to the Caucaia landfill, some 20 kilometers from Fortaleza, the capital of the state of Ceará in Brazil’s Northeast region.About 5,000 tons of garbage are produced daily from the metropolitan region, which has 4.2 million inhabitants. CREDIT: Mario Osava/IPS

This process is already underway, especially in the South and Southeast regions of Brazil, where largescale agricultural production offers a large volume of waste. Sugarcane is the main source of biomass, as it is also planted to produce ethanol, whose consumption in vehicles is on par with that of gasoline.

Livestock manure, especially from pigs, drives the production of biogas for electricity generation, and a growing proportion goes towards conversion into biomethane, especially for use in vehicles.

“Biomethane is a suitable fuel for the energy transition, has more predictable prices (than fossil fuels) and can be produced in regions far from the existing natural gas network,” which in Brazil is concentrated along the eastern coast, Figueiredo, the president of Cegás, said from the company’s headquarters in Fortaleza.

But not having a pipeline nearby can frustrate large projects, Motta said. He gave the example of a sugar agribusiness company that could produce 30,000 cubic meters of methane a day. As this is double its own consumption and the nearest big city is 90 kilometers away, the project was unfeasible.

Harnessing gas from garbage, and from biomass in general, has become an urgent necessity in the face of the climate emergency. Methane contributes more intensely to the greenhouse effect than carbon dioxide, the most prevalent greenhouse gas, which is used to gauge threats to the climate.

Brazil and other countries pledged to reduce methane emissions by 30 percent by 2030, as a crucial step towards keeping global warming to a maximum of two degrees Celsius by 2050.

GNR Fortaleza, located in Caucaia, a city of some 370,000 inhabitants 15 kilometers from Fortaleza, plays an environmental role. But in terms of employment, it generates only 32 direct jobs and an uncertain number of indirect jobs, including outsourced services, temporary consultants and suppliers of certain equipment.

Cegás serves only 24,000 gas consumers in Greater Fortaleza. According to its data, industry accounts for 46.26 percent of consumption, thermoelectric plants for 30 percent and motor vehicles for 22.71 percent. There is little left – just 0.73 percent for households and 1.22 percent for commerce.

© Inter Press Service (2022) — All Rights ReservedOriginal source: Inter Press Service

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Africa Should Trade its Carbon Credits to Fund Renewable Energy

Africa needs to transit away from fossil fuels to renewables to boost energy security. Pictured here is a coal production plant in Hwange, Zimbabwe. Credit: Busani Bafana/IPS
  • by Busani Bafana (bulawayo)
  • Inter Press Service

Bulawayo, Aug 31 (IPS) – Africa needs to trade in carbon credits to reduce greenhouse gas emissions, finance the transition to renewable energy, and boost economic development, the United Nations Economic Commission for Africa (UNECA) says.

Carbon credits present an opportunity for African countries – many dependent on fossil fuels for energy – to protect themselves against climate change while raising much-needed finance for the transition to renewable energy transition, said Jean-Paul Adam, Director for Technology, Climate Change and Natural Resources Management Division at UNECA.

Jean-Paul Adam, Director for Technology, Climate Change and Natural Resources Management Division at UNECA.

Carbon credits are globally traded commodities or permits that allow the emission of one tonne of CO2 or one tonne of carbon dioxide equivalent gases to be traded on national or international carbon markets. These credits, which can be used to boost economic growth and attract financing for various projects, are traded on the carbon offset markets.

By selling carbon credits, African countries can also tackle climate change by protecting their forests which absorb and store a measured amount of carbon. Besides, the carbon credits can also be sold as ‘offsets’ to companies unable to cut pollution to reduce emissions elsewhere.

Lack of finance and capacity to trade on the global carbon markets are hurdles for African countries have to overcome in the growing global carbon markets, where the carbon pricing revenue increased by almost 60 percent last year to about $84 billion, according to the World Bank.

Cashing in on carbon credits

Africa suffers energy insecurity, as seen in chronic power load shedding and blackouts that have a huge cost on people’s livelihoods and economic growth.

Fossil fuels dominate Africa’s energy mix, which comprises crude oil, coal, natural gas, hydropower, wind, and solar power. Africa is an untapped market for carbon trading. About two percent of global investments in renewable energy in the last two decades were made in Africa,  according to the International Renewable Energy Agency (IRENA) report.

But letting go of fossil fuels is a catch-22 situation for African countries. Many could lose essential revenue and risk stranded natural resources as the world demand for fossil fuels declines in favour of renewable energy.

According to the African Development Bank, more than 600 million people in Africa have no access to energy, and the continent has some of the world’s lowest electricity access rates for African countries at just over 40 percent.

The UNECA is supporting African countries to raise their resources reliably and transparently through carbon trading, said Adam, noting the need for an appropriate supervisory body for transparent carbon credit trading.

He said that African countries are the guardians of some of the world’s important carbon removing assets. Large-scale natural and land-based assets can enable African countries to meet  30 percent of the world’s sequestration needs by 2050.

“We know that the rate of deforestation in Africa is the highest in all regions of the world, and therefore a well-structured carbon credit system can allow African countries to protect at-risk resources and generate income from the protection of those resources,” said Adam.

UNECA projects that through nature-based carbon removal, Africa can generate between $15 and $82 billion annually, depending on the price of carbon. For example, at  $50 per tonne, the revenue potential from natural carbon sequestration removal would be $15 billion. Adam said the average price for carbon credit in Africa was currently about $10 per tonne, which could be raised with the creation of high-integrity registries.

Africa’s carbon market was not as well developed as many countries did not have a registry to measure carbon emissions and trade them.

Adam argued that a predictive carbon market would benefit African countries with long-term access to affordable energy.

Africa accounts for only three percent of cumulative global CO2 emissions and less than five percent of the world’s annual CO2 emissions. The United Nations Framework Convention on Climate Change (UNFCCC) highlights that Africa has made the smallest historical contribution to the greenhouse gases causing global warming but bears the brunt of the negative impacts of climate change.

“African countries on average are spending nine percent of their budgets, that means for every $100 that governments are spending, $9 is being removed right at the onset just for paying for climate change,” Adam told IPS. “Essentially, climate change is putting a tax on African countries that is higher relative to incomes in other countries.”

Adam says Africa has crafted an energy transition plan to boost energy security using natural gas as a transition fuel, given that many countries did not have access to geothermal and hydropower that could also be used for baseload generation.

African countries, through the African Union, have adopted a common position for energy transition recognising natural gas as a temporary energy need with oil and coal being phased out and allowing for more investment in renewable energy, particularly solar, wind and geothermal.

No to gas

The African Common Position on Energy Access and Transition proposed for adoption by African Heads of State and to be launched at COP27 in Egypt this year comes on the back of the European Union’s recent vote in favour of a new rule that will consider fossil gas and nuclear projects as “green”.

The African Group of Negotiators (AGN) and the African civil society have opposed the plan. They worry it would detract from Africa’s energy access and transition goals while locking the continent into fossil fuels for decades.

“Africa is blessed with abundant wind, solar, and other clean, renewable energies. African leaders should be maximising this potential and harnessing the abundant wind and sun, which will help boost energy access and tackle climate change,” said Mohamed Adow, Director of Power Shift Africa.

Lorraine Chiponda, Africa Coal Network Coordinator, said the acceleration of gas projects in Africa was another colonial and modern ‘Scramble and Partition of Africa’ among energy corporations and rich countries.

While Omar Elmawi, coordinator of #StopEACOP, commented, “Africa needs to wake up and stop behaving like (it’s) Europe’s petrol station and always looking at resolving their (developed nation’s) energy problems. It is time to think collectively about what’s best for the continent and its people. This is a continent ripe with renewable energy potential.”

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A Tale of the Spanish Neckties and Other Made-in-Europe Things — Global Issues

“Wildfires – well known for their disastrous consequences in southern Europe – are now occurring as far north as Scandinavia”. Credit: Unsplash/Fabian Jones.
  • by Baher Kamal (madrid)
  • Inter Press Service

MADRID, Aug 30 (IPS) – Shortly before the 25 August approval by the Spanish Parliament of the government’s plan to save energy, the country’s right and far-right opposition parties revived their debate about an earlier suggestion of not wearing neckties in the Spanish Congress and Senate and other official institutions.

The suggestion was made by Pedro Sanchez, President of the Spanish government, as a way to help save energy.

The idea was that neckties increase the feeling of warmth, now that the country has to face two great problems: energy shortage and unprecedented heatwaves that increase the consumption of electricity.

The Spanish-approved plan includes limiting the air condition temperature to 27 degrees C, and the winter heating devices to a maximum of 18 degrees, among many other measures.

The European Commission hailed the Spanish plan to reduce around 7% of its energy consumption. Other European Union member countries allocated different percentages. And one of the most dependent European powers on Russian oil and gas–Germany, plans to reduce its energy consumption by 15-20%.

As expected, the Spanish right and far-right parties voted against the plan, alleging that it falls short, that it demonstrates the failure of the government, that it increases the citizens’ suffering, that promoting public transportation and providing financial assistance to the most hit sectors, are not the solution.

They say that the way out is to reduce taxes. No wonder, now they are focused on the next regional and municipal elections that they hope will lead them to the central government

No wonder, they now focused on the next regional and municipal elections that may hitch them up to the government.

The argument

Likewise other European countries, Spanish politicians and the media continue to tirelessly blame the Russian Federation’s President Vladimir Putin for their harsh energy crisis, much too often attributing it to what they call the ‘Russian blackmailing.’

The point is that this crisis has emerged as a consequence of the United States-led severe sanctions on Moscow following the beginning on 24 February 2022 of the ongoing proxy war in Ukraine.

The sanctions include, above all, the prohibition of importing Russian oil, gas and other products like grains and fertilisers; the withdrawal and blockage of Western business activities, and a very long etcetera.

The sanctions were immediately implemented by the chorus of well-mannered US allies in Europe and elsewhere.

Then came the 30 June Summit in Madrid of the Western “defensive” military alliance – The North Atlantic Treaty Organization (NATO), which decided to double Europe’s military spending on weapons as a way to face the “Russian threat.”

All this happened before the Ukrainian war

While the United States continue to rank top oil and weapons producers, the world’s citizens are, once more, to pay the price: skyrocketing energy and food prices, unprecedented inflation rates, economic slowdown and the risk of a great recession, just to mention some.

The Ukrainian war is absolutely condemnable as are all wars. Once more, diplomacy has failed or even unwanted to be seriously tried. Meanwhile, Western powers continue to update the former US president George W. Bush and his allies list the “Axis of Evil.” Vladimir Putin now tops it.

Anyway, the Made-in-Europe current crisis –both Russia and Ukraine are European countries– just adds to earlier disasters. Indeed, likewise everywhere else, Europe now faces unprecedented heatwaves. And devastating fires.

These emergencies: war, energy, heat and fires are not new. They are just some of the symptoms of a much bigger, untreated disease: climate change.

Such a disease is much more dangerous that any other pandemic. Indeed the whole world population, in particular the poor, has been severely infected.

The ‘POP’ and the ‘POS’

Being ‘part of the problem,’ Europe is not ‘part of the solution.’ Even if European politicians continue to show shameful indifference toward the unspeakable suffering -and death- of other regions’ human beings, they don’t pay attention even to those of their own citizens.

See what the World Health Organization (WHO)’s Regional Director for Europe stated on 22 July 2022.

“Unprecedented. Frightening. Apocalyptic. These are just some of the adjectives used in news reports as vast swathes of the WHO European Region suffer from ferocious wildfires and record-breaking high temperatures amid an ongoing, protracted heatwave,” said Dr Hans Henri P. Kluge.

Heat kills, he said, and reminded that over the past decades, hundreds of thousands of people have died as a result of extreme heat during extended heatwaves, often with simultaneous wildfires.

“Wildfires – well known for their disastrous consequences in southern Europe – are now occurring as far north as Scandinavia, and this week fires in London have destroyed 41 homes. This scorching summer season is barely halfway done,” the WHO representative went on.

Extreme heat exposure often exacerbates pre-existing health conditions. Heatstroke and other serious forms of hyperthermia – an abnormally high body temperature – cause suffering and premature death. Individuals at either end of life’s spectrum – infants and children, and older people – are at particular risk, warned Dr Hans Henri P. Kluge.

And the consequences are…

A simple equation would say that more heat and more fires cause greater land degradation, droughts, desertification, loss of fertile soils and water resources, fewer crops, less food supplies, growing demand, more market speculation, higher prices, rising inflation, among others, all of them harshly impacting the already hard lives of the lay citizens.

Talking about water in Europe. As reported in a previous IPS article: Not Enough Clean Water in Europe? Who Cares…, two specialised bodies –the UN Economic Commission for Europe (UNECE), and the European branch of the World Health Organization (WHO)– have warned that plans to make water access possible in the face of climate pressures “are absent” in the pan-European region.

And “in most cases” throughout the region there has also been a lack of coordination on drinking water, sanitation and health during the Thirteenth meeting of the Working Group on Water and Health held on 19-20 May 2022 in Geneva.

The poor?… What is that?

This short story has addressed the case of the highly industrialised, rich Europe.

What about the rarely severe impacts of all that on the so-called low-income countries?. No mention of them in European political speech, let alone the mainstream media.

No matter if the number of hungry humans now amounts to one billion? No matter if the world’s billions of poor have by no means caused the current catastrophe, while bearing the burden of its severest consequences?

They don’t have silk neckties to wear.

© Inter Press Service (2022) — All Rights ReservedOriginal source: Inter Press Service

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How France Underdevelops Africa — Global Issues

  • Opinion by Jomo Kwame Sundaram, Anis Chowdhury (sydney and kuala lumpur)
  • Inter Press Service

SYDNEY and KUALA LUMPUR, Aug 30 (IPS) – Most sub-Saharan African French colonies got formal independence in the 1960s. But their economies have progressed little, leaving most people in poverty, and generally worse off than in other post-colonial African economies.

Decolonization?

Pre-Second World War colonial monetary arrangements were consolidated into the Colonies Françaises d’Afrique (CFA) franc zone set up on 26 December 1945. Decolonization became inevitable after France’s defeat at Dien Bien Phu in 1954 and withdrawal from Algeria less than a decade later.

Anis Chowdhury

France insisted decolonization must involve ‘interdependence’ – presumably asymmetric, instead of between equals – not true ‘sovereignty’. For colonies to get ‘independence’, France required membership of Communauté Française d’Afrique (still CFA) – created in 1958, replacing Colonies with Communauté.

CFA countries are now in two currency unions. Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo belong to UEMOA, the French acronym for the West African Economic and Monetary Union.

Its counterpart CEMAC is the Economic and Monetary Community of Central Africa, comprising Cameroon, the Central African Republic, the Republic of the Congo, Gabon, Equatorial Guinea and Chad.

Both UEMOA and CEMAC use the CFA franc (FCFA). Ex-Spanish colony, Equatorial Guinea, joined in 1985, one of two non-French colonies. In 1997, former Portuguese colony, Guinea-Bissau was the last to join.

Such requirements have ensured France’s continued exploitation. Eleven of the 14 former French West and Central African colonies remain least developed countries (LDCs), at the bottom of UNDP’s Human Development Index (HDI).

French African colonies

Guinea was the first to leave the CFA in 1960. Before fellow Guineans, President Sékou Touré told President Charles de Gaulle, “We prefer poverty in freedom to wealth in slavery”.

Guinea soon faced French destabilization efforts. Counterfeit banknotes were printed and circulated for use in Guinea – with predictable consequences. This massive fraud brought down the Guinean economy.

Jomo Kwame Sundaram

France withdrew more than 4,000 civil servants, judges, teachers, doctors and technicians, telling them to sabotage everything left behind: “un divorce sans pension alimentaire” – a divorce without alimony.

Ex-French espionage documentation service (SDECE) head Maurice Robert later acknowledged, “France launched a series of armed operations using local mercenaries, with the aim of developing a climate of insecurity and, if possible, overthrow Sékou Touré”.

In 1962, French Prime Minister Georges Pompidou warned African colonies considering leaving the franc zone: “Let us allow the experience of Sékou Touré to unfold. Many Africans are beginning to feel that Guinean politics are suicidal and contrary to the interests of the whole of Africa”.

Togo independence leader, President Sylvanus Olympio was assassinated in front of the US embassy on 13 January 1963. This happened a month after he established a central bank, issuing the Togolese franc as legal tender. Of course, Togo remained in the CFA.

Mali left the CFA in 1962, replacing the FCFA with the Malian franc. But a 1968 coup removed its first president, radical independence leader Modibo Keita. Unsurprisingly, Mali later re-joined the CFA in 1984.

Resource-rich

The eight UEMOA economies are all oil importers, exporting agricultural commodities, such as cotton and cocoa, besides gold. By contrast, the six CEMAC economies, except the Central African Republic, rely heavily on oil exports.

CFA apologists claim pegging the FCFA to the French franc, and later, the euro, has kept inflation low. But lower inflation has also meant “slower per capita growth and diminished poverty reduction” than in other African countries.

The CFA has “traded decreased inflation for fiscal restraint and limited macroeconomic options”. Unsurprisingly, CFA members’ growth rates have been lower, on average, than in non-CFA countries.

With one of Africa’s highest incomes, petroleum producer Equatorial Guinea is the only CFA country to have ‘graduated’ out of LDC status, in 2017, after only meeting the income ‘graduation’ criterion.

Its oil boom ensured growth averaging 23.4% annually during 2000–08. But growth has fallen sharply since, contracting by -5% yearly during 2013–21! Its 2019 HDI of 0.592 ranked 145 of 189 countries, below the 0.631 mean for middle-ranking countries.

Poor people

With over 70% of its population poor, and over 40% in ‘extreme poverty’, inequality is extremely high in Equatorial Guinea. The top 1% got over 17% of pre-tax national income in 2021, while the bottom half got 11.5%!

Four of ten 6–12 year old children in Equatorial Guinea were not in school in 2012, many more than in much poorer African countries. Half the children starting primary school did not finish, while less than a quarter went on to middle school.

CFA member Gabon, the fifth largest African oil producer, is an upper middle-income country. With petroleum making up 80% of exports, 45% of GDP, and 60% of fiscal revenue, Gabon is very vulnerable to oil price volatility.

One in three Gabonese lived in poverty, while one in ten were in extreme poverty in 2017. More than half its rural residents were poor, with poverty three times more there than in urban areas.

Côte d’Ivoire, a non-LDC CFA member, enjoyed high growth, peaking at 10.8% in 2013. With lower cocoa prices and Covid-19, growth fell to 2% in 2020. About 46% of Ivorians lived on less than 750 FCFA (about $1.30) daily, with its HDI ranked 162 of 189 in 2019.

CFA’s neo-colonial role

Clearly, the CFA “promotes inertia and underdevelopment among its member states”. Worse, it also limits credit available for fiscal policy initiatives, including promoting industrialization.

Credit-GDP ratios in CFA countries have been low at 10–25% – against over 60% in other Sub-Saharan African countries! Low credit-GDP ratios also suggest poor finance and banking facilities, not effectively funding investments.

By surrendering exchange rate and monetary policy, CFA members have less policy flexibility and space for development initiatives. They also cannot cope well with commodity price and other challenges.

The CFA’s institutional requirements – especially keeping 70% of their foreign exchange with the French Treasury – limit members’ ability to use their forex earnings for development.

More recent fiscal rules limiting government deficits and debt – for UEMOA from 2000 and CEMAC in 2002 – have also constrained policy space, particularly for public investment.

The CFA has also not promoted trade among members. After six decades, trade among CEMAC and UEMOA members averaged 4.7% and 12% of their total commerce respectively. Worse, pegged exchange rates have exacerbated balance of payments volatility.

Unrestricted transfers to France have enabled capital flight. The FCFA’s unlimited euro convertibility is supposed to reduce foreign investment risk in the CFA. However, foreign investment is lower than in other developing countries.

Total net capital outflows from CFA countries during 1970–2010 came to $83.5 billion – 117% of combined GDP! Capital flight from CFA economies was much more than from other African countries during 1970–2015.

IPS UN Bureau


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Argentina Seeks Elusive Investments to Fully Exploit Shale Gas — Global Issues

A view of two towers in Vaca Muerta, the field whose discovery gave Argentina huge potential in shale gas and oil. Since 2011, governments have dreamed of fully exploiting it, but have been unable to do so, so the country spends billions of dollars annually on imports of gas. CREDIT: Energy Secretariat
  • by Daniel Gutman (buenos aires)
  • Inter Press Service

BUENOS AIRES, Aug 29 (IPS) – Argentina, which has one of the largest unconventional hydrocarbon deposits in the world, has been forced to import gas for 6.6 billion dollars so far this year.

The main reason for this paradox -which aggravated the instability of the economy of this South American country- is the lack of transportation infrastructure.

In a public ceremony on Aug. 10, President Alberto Fernández signed the delayed contracts for the construction, for more than two billion dollars to be financed by the State, of a modern gas pipeline aimed at bridging that gap.

The objective is to bring a large part of the natural gas produced in Vaca Muerta to the capital, Buenos Aires, home to nearly a third of the 47 million inhabitants of this Southern Cone country.

Vaca Muerta is a geological formation with an abundance of shale gas and oil, located in the southern region of Patagonia, more than 1,000 kilometers from Buenos Aires.

The name Vaca Muerta has been on the lips of recent Argentine presidents as a symbol of the better future that awaits a country whose economy suffers from a chronic lack of foreign exchange and a weakened local currency, resulting in a poverty rate of around 40 percent of the population.

This has been the case since 2011, when the U.S. Energy Information Administration (EIA) reported that Vaca Muerta makes Argentina the country with the second largest shale gas reserves, behind China, and the fourth largest oil reserves.

Vaca Muerta has reserves of 308 trillion cubic feet of gas and 16.2 billion barrels of oil, according to EIA data, confirmed by Argentina’s state-owned oil company YPF.

“With Vaca Muerta, Argentina has the potential not only to achieve energy self-sufficiency but also to export. We are missing a huge opportunity,” said Salvador Gil, director of the Energy Engineering program at the public National University of San Martín, on the outskirts of Buenos Aires.

Gil told IPS that Argentina could play an important role, given the crisis of rising energy prices driven up by the war in Ukraine, which threatens to drag on.

But to do so, it must solve not only its transportation problems, but also the imbalances in the economy, which for years have hindered the influx of large investments in the country.

“Today, what the world needs is energy security and Argentina has gas, which has been identified as the main fuel needed for the transition period towards clean energies, in the context of the fight against climate change,” the expert said.

Argentine President Alberto Fernández, flanked by Economy Minister Sergio Massa (left), and the governor of the province of Buenos Aires, Axel Kicillof, signed a contract for the construction of the gas pipeline that will expand the capacity to transport natural gas produced in the Vaca Muerta field to the capital. It is considered a key project for the Argentine economy. CREDIT: Casa Rosada

More foreign dependence

However, since 2011, when the EIA made public its first data on Vaca Muerta’s potential, which led politicians and experts to start dreaming that Argentina would in a few years become a kind of Saudi Arabia of South America, the country is in fact more and more dependent from the energy point of view.

A study of the period 2011-2021 released this year by a private think tank states that “the decade was characterized by an increase in Argentina’s external dependence on hydrocarbons: gas imports increased by 33.6 percent over the decade while diesel imports grew by 46 percent and gasoline expanded 996 percent.”

The document, published by the General Mosconi Energy Institute, points out that Argentina, which until the end of the 20th century enjoyed self-sufficiency in gas and oil, began to experience a considerable decrease in production in 2004.

Two years later, gas began to be imported by pipeline from Bolivia and in 2008 liquefied natural gas (LNG), brought by ship mainly from the United States and Qatar, started to be imported.

“Since then, the proportion of imported gas out of the total consumed in the country has grown. In 2009 it represented only six percent, rising to 22 percent in 2014. In 2021 it represented 17 percent of the total,” the report states.

Still far below its real potential, Vaca Muerta’s production has been growing. In June it contributed 56 percent of the 139 million cubic meters per day of natural gas produced in Argentina, according to official data.

Gas is the main fuel in the country’s energy mix, accounting for about 55 percent of the total.

With regard to oil, Vaca Muerta contributed 239,000 of the 583,000 barrels per day of national production in June.

Today, gas from Patagonia in the south is transported to Buenos Aires and other large towns and cities through three gas pipelines built in the 1980s, which do not live up to demand.

For this reason, the gas pipeline whose contract was signed this month has been described by both the political leadership and the academic world as the most urgently needed piece of infrastructure in Argentina at the moment.

Its cost was set at 1.49 billion dollars at the end of 2021, but it will probably exceed two billion dollars, due to the devaluation and inflation that are crippling the Argentine economy.

According to the government, the pipeline will be operational by June next year, at the beginning of the next southern hemisphere winter.

View of the Costanera thermal power plant, which produces electricity in Buenos Aires with natural gas. Thermal generation predominates in Argentina’s electricity mix, making up almost 60 percent of the total in 2021. The gas shortage recorded this southern hemisphere winter made it necessary to use more liquid fuels to supply the power plants. CREDIt: Enel

In search of investment

“Of course the pipeline is important, but it will not solve all of Argentina’s energy problems,” said Daniel Bouille, a researcher with a PhD in energy economics.

The expert reminded IPS that an important factor is that shale oil and gas is extracted using the hydraulic fracturing technique or fracking, which “is more costly than conventional techniques.”

“To develop Vaca Muerta´s great potential, investments of between 60 and 70 billion dollars are needed,” he explained.

Bouille said that today the conditions do not exist for these investments to take place, in a country whose economy has not been growing since 2010 and where there are exchange controls and limits on the export of foreign exchange, none of which foments confidence among international capital.

In order to combat this situation, Economy Minister Sergio Massa announced that on Sept. 9 he will visit oil giants such as Chevron, Exxon, Shell and Total at their headquarters in the U.S. city of Houston, Texas to interest them in the possibility of investing in Vaca Muerta.

Argentina does not seem to be coming up with alternatives. “For 20 years the country’s conventional oil and gas production has been steadily decreasing, because all the basins have been depleted,” said Nicolás Gadano, an economist specializing in energy at the private Di Tella University.

“It is precisely the shale hydrocarbons from Vaca Muerta that in the last five years have offset the situation to slow the fall in total production,” he added in an interview with IPS.

Gadano believes that further development of Vaca Muerta’s potential will be positive for Argentina even from an environmental point of view.

“This year in Argentina a lot of oil was used for electricity production due to the lack of gas. But when the pipeline begins to operate, liquid fuels will be replaced by gas, which is a cleaner fuel,” he said.

There are also less visible but critical voices regarding the focus on Vaca Muerta as the path that Argentina should follow in terms of energy.

“Fracking, in addition to its negative environmental and social impacts, is very expensive,” said Martín Alvarez, a researcher at Observatorio Petrolero Sur, a non-governmental organization that focuses on the environmental and social aspects of energy issues.

He noted that “Vaca Muerta hydrocarbons had no possibilities of being exported until the current global energy crisis. It wasn’t until this year’s international price increase that a market for them emerged.”

“Argentina has forgotten about renewable energies and is committed to fossil fuels, which is a step backwards and goes against international climate agreements. Seeking the development of Vaca Muerta has been the only energy policy of this country in the last 10 years,” he complained.

© Inter Press Service (2022) — All Rights ReservedOriginal source: Inter Press Service

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Theres no Stopping Renewable Power in Chile, but Community Energy Is Not Taking Off — Global Issues

The Nueva Zelandia school is leading a pioneering experience of community electricity generation with solar panels that will reduce the cost of consumption for the school and 20 local families taking part in the project in the poor municipality of Independencia to the north of Santiago. To this initiative, the school will add another one to recycle gray water to irrigate the gardens. CREDIT: Orlando Milesi/IPS
  • by Orlando Milesi (santiago)
  • Inter Press Service

SANTIAGO, Aug 25 (IPS) – Renewable energies, especially solar and wind power, are growing inexorably in Chile, driven by large companies. But community generation of alternative energy is not taking off, despite a law promoting it.

This long, narrow country of 19.5 million people, rich in solar energy due to the northern Atacama Desert as well as wind thanks to its location between the Pacific Ocean and the Andes Mountains, can accelerate the transition to carbon neutrality, thanks to non-conventional renewable energies (NCRE), which also include hydroelectricity.

On Jul. 28 at 15:00 hours, NCRE broke the record for hourly participation in electricity generation in the country, accounting for 62.3 percent of the total. In 2021, renewable generation accounted for 44.8 percent of all electricity generated, equivalent to 35,892 gigawatt hours (GWh). The total generated that year was 80,116 GWh.

Ana Lía Rojas, executive director of the Chilean Association of Renewable Energies and Storage (Acera), which brings together companies in the field, said that all sectors are making progress in NCRE, especially energy and mining.

Acera estimated that 2022 could end with 13,000 to 14,000 megawatts (MW) of NCRE installed, and in fact there were already more than 12,370 MW in May.

“It’s been a long while since we represented 10 percent, we surpassed 20 percent five years before the date set by law and NCRE are currently above 35 percent of the total. This is a worldwide milestone,” said Rojas.

The target is now 50 percent in the next few years and 70 percent by 2030.

Andrés Díaz, director of the Center for Sustainable Energy and Development at the private Diego Portales University, said “the increase in the share of NCRE in the energy mix, as well as the promotion of storage systems, is fundamental as part of the energy transition we are facing.

“When it comes to meeting the greenhouse gas emission reduction targets resulting from the retirement of coal-fired plants, NCRE must be able to ensure stability in the electric power system,” he told IPS.

Díaz added that this implies providing the capacity to act in the event of possible failures in the transmission systems.

“There is a pedagogical aspect, the solar panels teach children how elements of nature can contribute technologically to making available a resource essential for human life that does not harm the environment,” says Rita Méndez, principal of the Nueva Zelandia school, in the municipality of Independencia on the northern outskirts of Santiago, Chile. CREDIT: Orlando Milesi/IPS

Community generation lacks momentum

These enormous advances in NCRE have not gone hand in hand with the meager development of community generation projects, the distributed or decentralized generation modality focused on self-consumption, mostly solar and collectively owned.

Nicolás O’Ryan, an electrical civil engineer and founding partner of Red Genera, promoted a community NCRE project at the Nueva Zelandia school in the low-income municipality of Independencia, on the northern outskirts of Santiago, by installing solar panels on the roof of the gymnasium.

The initiative is one of the very few promoted using Law 21118, which has been in force for two years, to encourage community electricity generation, also known as citizen generation.

The government’s Energy Sustainability Agency financed 50 percent of the 21,000-dollar investment. A further 3,158 dollars were contributed by Red Genera and the remaining 7,368 dollars were raised by five individuals and a campaign of donations from individuals and companies.

The panels will provide 26,703 kilowatt hours (kWh) per year. Of that total, 29.67 percent will go to the school and 3.52 percent to each of the beneficiaries and investors.

The connection process with Enel Chile, the subsidiary of the Italian transnational electricity group Enel, “is well advanced and only the last step remains – notifying the connection,” O’Ryan told IPS.

The energy will serve the school’s consumption and that of 20 neighboring families. The rest will be managed through a process known locally as Net Billing, the simultaneous measurement of consumption and injection of energy into the grid, which enables any user to self-generate electricity and inject the surplus into the grid, receiving a payment for it.

“By the end of the year I hope we will be ready…we need institutional support to channel the process and resolve difficulties such as the change of administration of the school, that will be transferred to the Local Education Service,” he said.

The school’s principal, Rita Méndez, told IPS that the plant contributes to the education of the 393 children (more than 50 percent of them sons and daughters of immigrants, mostly Venezuelans) who are in the 10 grades in the school in this underprivileged neighborhood, starting in kindergarten.

“The plant helps us to train new citizens in environmental awareness, who help care for the environment and think about how to use clean energy to contribute to the development of life,” she said in an interview at the center.

Part of the 33,600 solar panels installed in August 2020 in the vicinity of Til Til, in northern Santiago, with an investment of 15 million dollars and a useful life of about 30 years. In this municipality, one of the poorest in Chile, the project covers 23 hectares and will generate nine megawatts of electric power. CREDIT: Orlando Milesi/IPS

Pioneer project, five years on

Environmental lawyer Cristian Mires, co-founder of the non-governmental Energía Colectiva, presides over Buin Solar, the first initiative in Chile aimed at generating electricity on a community basis, founded in 2017.

At the time 100 people contributed upwards of 52 dollars each to finance a 10 KW solar panel plant installed at the energy laboratory of the Environment Institute (Idma) in Buin, a town 47 kilometers south of Santiago.

The energy is consumed by the Institute and any surplus is injected into the grid. After 10 years of operation, the plant will be transferred to Idma.

Idma pays about 215 dollars a month for the energy, but without panels the cost would have been twice as much. And it consumes clean energy, an important aspect for an Institute that trains professionals to combat climate change.

“Buin Solar was a pioneer collective project to build the first community plant. It is a successful project that has been a great learning experience and has highlighted the importance of working in associative projects,” said Mires.

He added that “community energy is an urgent solution to address the climate crisis. Buin Solar has social, environmental and economic benefits.”

However, the environmentalist regrets the slow progress made in community generation despite the existence of a legal framework that promotes its development.

“The promotion of community energy is very weak, the democratization of energy is very low,” he argued.

According to Mires, trust must be built to work collectively, but incentives are also needed to overcome the financing barrier and the lack of technical capabilities.

“It would be very important to have instruments for promotion. There is a commitment in the government program of President Gabriel Boric (in power since March), which mentions community generation. We are committed to greater development of this kind of energy generation. Up to now, most of them are individual projects,” he said.

The Los Cururos wind farm, inaugurated in 2014, is located in the middle of the desert of the Coquimbo region, facing the Pacific Ocean. The plant contributes 109.6 megawatts of power to Chile’s Central Interconnected System. It belongs to the private EPM Group and has 57 wind turbines of 1.8 and 2.0 megawatts. CREDIT: Orlando Milesi/IPS

Distributed generation – a minimal contribution to the energy mix

Distributed generation is characterized by small power plants that do not exceed 300 kilowatts (kW), as opposed to centralized generation, with large plants that inject all their production into the transmission grid. And while it has grown in terms of the number of individual actors, their contribution to the system is very small.

Felipe Gallardo, a research engineer at Acera, told IPS that as of June there were 12,365 distributed or decentralized NCRE generation facilities in private hands, totaling 125 MW, equivalent to 0.4 percent of the country’s installed capacity.

“Of the Net Billing installations, over 98 percent involve solar photovoltaic technology,” he said. The largest number are in the central regions of Chile.

Diaz, meanwhile, stressed the importance of increasing the number of individuals who generate energy for their own consumption and contribute their surpluses to the grid.

“Energy self-management allows customers not only to receive income for the energy injected into the grid, but also to avoid contingencies in the national electricity system,” he said.

A view of the sunrise amid the steam from the geysers of El Tatio, in the Antofagasta region, where geothermal energy, a non-conventional, clean, infinite source of energy from the earth’s internal heat that abounds in northern Chile, has begun to be harnessed. CREDIT: Marianela Jarroud/IPS

Obstacles to NCRE

A worrying figure is the explosive growth in the dumping of non-conventional renewable energy, due to difficulties in transporting it because of the lack of transmission lines to large consumption centers.

This year 290 GWh of wind and solar energy could not be used.

“Future development depends on storage systems to ensure the stability of NCRE while we move forward in fulfilling the agreements for the retirement of coal-fired plants,” said Diaz.

Gallardo regretted the impact of dumping energy at the country level “because as long as there are these types of limitations, thermal power plants are necessary, which have a higher variable cost and generate polluting emissions.”

“As renewables expand and, on the other hand, coal-fired plants are retired, it will be necessary to adopt additional measures to increase the levels of maximum NCRE participation,” he said.

The Acera advisor believes that in the medium term, storage systems should be implemented to avoid NCRE dumping.

He also says it will be necessary to continue improving the regulatory framework for storage systems.

© Inter Press Service (2022) — All Rights ReservedOriginal source: Inter Press Service

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How NOT to Win Friends and Influence People — Global Issues

  • Opinion by Jomo Kwame Sundaram, Anis Chowdhury (sydney and kuala lumpur)
  • Inter Press Service

SYDNEY and KUALA LUMPUR, Aug 23 (IPS) – After four years of Trump’s ‘America first’ isolationism, US President Joe Biden announced “America is back”. His White House has since tried to find allies against China and Russia.

But it has not found many, especially in the Global South. His summit with Southeast Asian leaders was well attended, but promised little. Worse, his Summit of the Americas revealed fading US influence in its long-time backyard.

Anis ChowdhuryAfrica not aligned
The latest U.S. Strategy Towards Sub-Saharan Africa (SSA) was expected to do better on the continent of Trump’s “shithole countries”. But it delivered little more than rhetoric. As with its Indo-Pacific Economic Framework for Prosperity, it is seen as “a hamburger without the beef”.

Biden’s strategy explicitly seeks to “counter harmful activities” by China and Russia, and “to expose and highlight the risks of negative PRC and Russian activities in Africa”. But it offers no evidence of such threats.

It asserts China “sees the region as an important arena to challenge the rules-based international order, advance its own narrow commercial and geopolitical interests, undermine transparency and openness”.

Similarly, it insists “Russia views the region as a permissive environment for parastatals and private military companies, often fomenting instability for strategic and financial benefit.”

Presenting Biden’s SSA strategy in South Africa (SA), US Secretary of State Anthony Blinken claimed, “Our commitment to a stronger partnership with Africa is not about trying to outdo anyone else”. He emphasized, “our purpose is not to say you have to choose”.

While “glad” the US was not forcing Africa to choose, SA foreign minister Naledi Pandor reminded the Blinken mission no African country can be “bullied” or threatened thus: “either you choose this or else.” The host also reminded her guests of the plight of the Palestinian people and life under apartheid.

Jomo Kwame SundaramVisiting Rwanda just before Blinken’s announcement, US Ambassador to the United Nations Linda Thomas-Greenfield had threatened, “Africa could face consequences if they trade in U.S.-sanctioned commodities”.

Pandor described the US Congressional bill, ‘Countering Malign Russian Activities in Africa Act’ as “offensive legislation”. The bill, the 2021 Strategic Competition Act and the US Innovation and Competition Act have all been criticized by Africans, including governments, as “Cold War-esque”.

Calling for diplomacy, not war, Pandor urged, “African countries that wish to relate to China, let them do so, whatever the particular form of relationships would be.”

US credibility in doubt
Biden’s SSA strategy has four explicit objectives – foster openness and open societies, deliver democratic and security dividends, advance pandemic recovery and economic opportunity, and support conservation, climate adaptation, and a just energy transition.

The US strategy paper refers to the 2022 G7 Partnership for Global Infrastructure and Investment (PGII) promising $600bn. Confident the PGII will “advance U.S. national security”, the White House has pledged $200bn “to deliver game-changing projects to strengthen economies”.

After all, the 2005 G7 Gleneagles Summit promise – to double aid by 2010, with $50bn yearly for Africa – remains unfulfilled. Actual aid has been woefully short, with no transparent reporting or accountability.

Over half a century ago, rich nations promised 0.7% of their national income in development aid. The US has long ranked lowest among the G7, spending only 0.18% in 2021. Worse, US aid effectiveness is worst among the world’s 27 wealthiest nations.

Meanwhile, rich countries have fallen far short of their 2009 pledges to provide $100bn in climate finance annually until 2020 to help developing countries adapt to and mitigate global warming.

After his stillborn Build Back Better World initiative, many doubt how much Congress will approve, and what will be for SSA. Likewise, before mid-2021, the Biden administration promised support for pandemic containment.

But it did not support developing countries’ request to the World Trade Organization (WTO) for a temporary waiver of related patents. The June 2022 WTO compromise was nothing less than “shameful”.

Supplies of Covid pandemic needs from China and Russia have been decried as “vaccine diplomacy”. Sanctions against Russia have disrupted contracted delivery of 110 million doses of its vaccine. This jeopardizes UNICEF efforts to vaccinate many countries, including Zambia, Uganda, Somalia and Nigeria.

With 43.87 vaccine doses per 100 people – less than a third of the 157.71 world average, or under a quarter of the US mean of 183 doses per 100 people – Africa had the lowest Covid-19 vaccination rate, by far, in mid-August 2022.

The SSA strategy paper highlights US-Africa HIV-AIDS partnerships. But it is silent about Big Pharma getting a US sanctions threat against SA for producing generic HIV-AIDS drugs. The US only backed down after a worldwide backlash as Nelson Mandela stood firm.

West still exploiting Africa
Biden’s SSA strategy promises to “engage with African partners to expose and highlight the risks of negative PRC and Russian activities in Africa” in line with the US 2022 National Defense Strategy.

But it ignores why Africa remains underdeveloped and poor. After all, Africa has around 30% of the world’s known mineral reserves, and 60% of its arable land. Yet, 33 of its 54 nations are deemed least developed countries.

The New Colonialism report showed British companies control Africa’s key mineral resources, with 101 mostly UK companies listed on the London Stock Exchange having mining operations in 37 SSA countries.

Together, they controlled over a trillion dollars’ worth, while $192 billion is drained yearly from Africa via profit transfers and tax dodging by foreign companies.

France retains control of its former colonies’ monetary systems, requiring them to deposit foreign exchange reserves with the French Treasury. It has never hesitated to topple ‘unfriendly’ governments through coups and its military.

Recently, the US promised to continue providing intelligence, surveillance and reconnaissance support on Africa to France, using its advanced drone and satellite technology.

As ex-colonial powers continue to control and exploit SSA, policies imposed by donors, the International Monetary Fund and multilateral development banks have ensured its continuing underdevelopment and impoverishment.

Once a net food exporter, Africa has become a net food importer. With more pronounced Washington Consensus policies since the 1980s, food insecurity has worsened. SSA has also deindustrialized, making it more resource dependent and vulnerable to international commodity price volatility.

Forget the past?
Many Africans have suffered much due to colonialism, racism, apartheid and other oppressions. Pan-Africanism contributed much to the non-aligned movement during the old Cold War. Julius Nyerere famously declared in 1965, “We will not allow our friends to choose our enemies”.

Half a century later, Mandela reminded the West not to presume its “enemies should be our enemies”. Older Africans still remember the former Soviet Union and China for their support through past struggles, when most of the West remained on the wrong side of history.

Africans are correctly wary of the new “Greeks bearing gifts” and promises. While most do not want a new Cold War, many see China and Russia offering more tangible benefits. Unsurprisingly, 25 of Africa’s 54 states did not support the March 2022 UN General Assembly resolution condemning Russia’s invasion of Ukraine.

IPS UN Bureau


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© Inter Press Service (2022) — All Rights ReservedOriginal source: Inter Press Service



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From Tragedy to Farce — Global Issues

  • Opinion by Jomo Kwame Sundaram, Anis Chowdhury (sydney and kuala lumpur)
  • Inter Press Service

SYDNEY and KUALA LUMPUR, Aug 16 (IPS) – Half a century after the 1970s’ stagflation, economies are slowing, even contracting, as prices rise again. Thus, the World Bank warns, “Surging energy and food prices heighten the risk of a prolonged period of global stagflation reminiscent of the 1970s.”

In March, Reuters reported, “With surging oil prices, concerns about the hawkishness of the Federal Reserve and fears of Russian aggression in Eastern Europe, the mood on Wall Street feels like a return to the 1970s”.

Anis ChowdhuryStagflation in the 1970s
Worse, it seems few lessons have been learnt from the last stagflation episode. There is no agreed formal definition of stagflation, which refers to a combination of economic stagnation with high inflation, e.g., when unemployment and prices both rise.

When growth is weak and many are jobless, prices rarely rise, keeping inflation low. The converse is true when growth is strong. This inverse relationship between economic activity and inflation broke down with supply shocks, particularly oil and other primary commodity price surges during 1972-75.

Non-oil primary commodity prices on The Economist index more than doubled between mid-1972 and mid-1974. Prices of some commodities, e.g., sugar and urea fertilizer, rose more than five-fold!

As costlier energy pushed up production expenses, businesses raised prices and cut jobs. With higher food, fuel and other prices, rising costs, coupled with income losses, reduced aggregate demand, further slowing the economy.

Fed chokes economy to cut inflation
Years before becoming US Fed chair in 2006, a Ben Bernanke co-authored paper noted, “Looking more specifically at individual recessionary episodes associated with oil price shocks, we find that … oil shocks, per se, were not a major cause of these downturns”.

Jomo Kwame SundaramThey concluded, “an important part of the effect of oil price shocks on the economy results not from the change in oil prices, per se, but from the resulting tightening of monetary policy”. Their findings corroborated others, e.g., by James Tobin.

Following Milton Friedman and Anna Schwartz, other economists also found “in the postwar era there have been a series of episodes in which the Federal Reserve has in effect deliberately attempted to induce a recession to decrease inflation”.

The US Fed began raising interest rates from 1977, inducing an American economic recession in 1980. The economy briefly turned around when the Fed stopped raising interest rates. But this nascent recovery soon ended as Fed chair Paul Volcker raised interest rates even more sharply.

The federal funds target rate rose from around 10% to nearly 20%, triggering an “extraordinarily painful recession”. Unemployment rose to nearly 11% nationwide – the highest in the post-war era – and as high as 17% in some states, e.g., Michigan, leaving long-term scars.

Interest rate hikes reduced needed investments. Outside the US economy, these sharp and rapid interest rate hikes triggered debt crises in Poland, Latin America, sub-Saharan Africa, South Korea and elsewhere.

Earlier open economic policies meant “the increase in world interest rates, the increased debt burden of developing countries, the growth slowdown in the industrial world…contributed to the developing countries’ stagnation”.

Countries seeking International Monetary Fund (IMF) financial support had to agree to severe fiscal austerity, liberalization, deregulation and privatization policy conditionalities. With per capita incomes falling and poverty rising, Latin America and Africa “lost two decades”.

Stagflation reprise
The IMF chief economist recently reiterated, “Inflation is a major concern”. The Bank of International Settlements has warned, “We may be reaching a tipping point, beyond which an inflationary psychology spreads and becomes entrenched.”

Central bankers’ anti-inflationary efforts mainly involve raising interest rates. This approach slows economies, accelerating recessions, often triggering debt crises without quelling rising prices due to supply shocks.

Economic recoveries from the 2008-09 global financial crisis (GFC) remained tepid for a decade after initially bold fiscal responses were quickly abandoned. Meanwhile, ‘quantitative easing’, other unconventional monetary policies and the Covid-19 pandemic raised debt to unprecedented levels.

GFC trade protectionist responses, US and Japanese ‘reshoring’ of foreign investment in China, the pandemic, the Ukraine war and sanctions against Russia and its allies have reversed earlier trade liberalization.

Higher interest rates in the rich North have triggered capital flight, causing developing country currencies to depreciate, especially against the US dollar. The slowing world economy has reduced demand for many developing country exports, while most migrant worker remittances decline.

Interest rate hikes have worsened debt crises, particularly in the global South. The poorest countries have seen an $11bn surge in debt payments due while grappling with looming food crises. Thus, developing country vulnerabilities have been worsened by international trends over which they have little control.

Lessons not learned
Supply-side cost-push inflation is very different from the demand-pull variety. Without evidence, inflation ‘hawks’ insist that not acting urgently will be costlier later.

This may happen if surging demand is the main cause of inflation, especially if higher costs are easily passed on to consumers. However, episodes of dangerously accelerating inflation are very rare.

Acting too quickly against supply-shock inflation can be unwise. The 1970s’ energy crises sparked greater interest in energy efficiency. But higher interest rates in the 1980s deterred needed investments, even to reverse declining or stagnating productivity growth.

Raising interest rates also accelerated recessions. But similar commodity price rises before the 1970s’ and imminent stagflation episodes – involving energy and food respectively – obscure major differences.

For instance, ‘wage indexing’ – linking wage increases to price rises – enhanced the 1970s’ inflation spiral. But labour market deregulation since the 1980s has largely ended such indexation.

The IMF acknowledges globalization, ‘offshoring’ and labour-saving technical change have weakened unionization and workers’ bargaining power. With both elements of the 1970s’ wage-price spirals now insignificant, inflation is more likely to decline once supply bottlenecks ease.

But the wage-price spiral has also been replaced by a profit-price swirl. Reforms since the 1980s have also enhanced large corporations’ market power. Greater corporate discretion and reduced employees’ strength have thus increased profit shares, even during the pandemic.

In November 2021, Bloomberg observed the “fattest profits since 1950 debunks wage-inflation story of CEOs”. Meanwhile, the Guardian found “Companies’ profit growth has far outpaced workers’ wages”.

Corporations are taking advantage of the situation, passing on costs to customers. The net profits of the top 100 US corporations were “up by a median of 49%, and in one case by as much as 111,000%”!

Meanwhile, many more consumers struggle to meet their basic needs. Interest rate hikes have also hurt wage-earners, as falling labour shares of national income have been exacerbated by real wage stagnation, even contraction.

Hence, policymakers should ease supply bottlenecks and address imbalances to accelerate progress, not raise interest rates causing the converse. Thus, they should rein in corporate power, improve competition and protect the vulnerable.

Allowing international price rises to pass through, while protecting the vulnerable, can accelerate the transition to more sustainable consumption and production, including cleaner renewable energy.

IPS UN Bureau


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© Inter Press Service (2022) — All Rights ReservedOriginal source: Inter Press Service



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