Policy responses to the Amazon fires – a longer read for the weekend

President Macron, the UN Secretary General, London mayor Sadiq Khan and even Cristiano Renaldo have all chipped in over the last 24 hours with concern about the situation where 1/5th of the Earth’s oxygen source is located and Sao Paulo is covered in a blanket of smoke and across half of Brazil. How big is the problem, what are the implications and how do we incentivise and assist Brazil?

The figure above, from the BBC website, shows the increasing trend which feeds into the wider global concern about global warming and the resultant thawing of the Arctic, melting of glaciers such as that in the Hindu Khush that feeds 1 in 3 of the global population and the extreme weather events from heavy rains that cause flooding (from England to the current woes affecting the Indian sub-continent) and intense summer heat and often more intense winters. And witness the spate of Artic fires this year from Alaska to the Russian far north.

The immediate impact of climate change is evident across much of the world – even if not accepted by naysayers – and most pressingly by the developing world, countries without either the budgetary resources or the institutional structures in place to put together cohesive long-term stabilisation strategies in place to deal with the immediate emergency and humanitarian crises following fires and floods.

Water security – and linked to it the concept of food security, will continue to become a key issue for many nations in the next few decades and is already a concern from South Africa to California. Large swathes of the developing world have significant populations tied to Agriculture for food, employment and meagre incomes and we see regular 1-in-3 or 4 year “climate events” to use the jargon that have massive economic impact –through droughts, floods or in the case of Small States such as those in the Caribbean, hurricanes that are calculated to account for up to 20% of GDP.

Back to Brazil.

President Bolsonaro has been flippant about the issue is a climate change denier more keen on supporting the reduction of the Amazonian rainforest to support the expansion of commercial and cattle farming. His immediate response that French or possible G7 statements represent external intervention in domestic affairs and is pseudo colonialist may have some resonance among some supporters but only for so long as Brazil and neighbouring countries experience the smoke and resultant impacts on populations.

We in the developed world also need to acknowledge that the industrialisation in the West may be a cause of the climate change and that aspirational emerging economies cannot be denied the same living standards. Thus the need for effective co-ordination backed by incentive-based options for the likes of Brazil but more broadly the guzzlers in Asia and likely in the emerging sub-Sahara Africa during this century.

Policy Responses?

Brazil and other global sinks of oxygen needs to be incentivised to protect and nurture the Rain Forests because they represent a “global public good”. The Carbon Trading model that has been kicking around for almost 20 years and the EU’s Emission Trading System (EU ESTS) is the largest carbon market but there are others. I have personally seen the success of the system to help compensate for say guzzling factories in Germany or Norway but compensation through a net positive reduction of carbon through financing energy efficiency say in central America.

But clearly this is not enough.

Moral suasion and twittered “concerns” will not suffice. Nor, frankly will threats.

  1. Short term we should help with practical assistance because this is a natural disaster that requires international assistance
  2. Financial assistance is a short and longer-term option to provide countries in central and south America with more immediate resources for emergency but also to affect policy changes.
  3. This needs to be tied to a commonly agreed framework or conditionality for the likes of Brazil so that the funds are properly targeted, spent and accountable.
  4. The UK, through the EU and the G7 should take the lead to ensure that we can spear-head practical medium-to-longer term solutions using our knowledge of aid management, financial markets, financial engineering and recent innovations in Impact Financing that tie in with the broader aims of the 2015 Paris Agreement to deal with climate change. The issue will require international co-operation and resource transfers – even if it means fighting the Trumpian unilateralism afoot.
  5. The UK’s Aid budget is larger than often argued because it often excludes a large chunk of the aid spent through the EU. We should argue for a redirection of UK and EU aid through a mix of aid and scaling up of concessional lending through both development banks – and why not tapping the bond markets given negative yields.
  6. The EU, World Bank and say the regional development banks have decades of experience in sector based Budget Support operations and we saw the EU lead a massive immediate reaction to 30-odd Low Income Countries in 2008 following the financial crises – so there are mechanisms in place to already start the process.
  7. There is no easy answer to the legitimate demands of emerging states that they should not be straddled with the “negative externalities” of western-fuelled climate change and resultant higher cost of development for them. However, equally, many such as China have made impressive strides in alternative energies and broader energy efficiency measures. And the EU for instance has a good model whereby the likes of Poland for instance have been given ample time to comply with EU law on environmental standards but also given ample assistance to help a broader clean up.
  8. International co-operation and therefore international trade is one carrot-and-stick option that can effect change – and one that Mr Macron is right to emphasise to Mr Bolsonaro.

* With experience across academia, think tanks, central banking, EU Accession and reforms across 40 developing and transition countries, Dr Rupinder Singh works with multilateral organisations and governments as an independent adviser. He is an Executive member of Liberal International (British Group).

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6 Comments

  • William Fowler 24th Aug '19 - 3:05pm

    Global warming causes more forest fires, the loss of trees causes more global warming which causes more loss of trees, and ever onwards…

    On a personal note, can I commend the idea of not using hot water at all. I do this because of rip-off energy prices. Waking up to a cold shower every morning is most invigorating (and good for your hair) and you do actually feel quite warm afterwards due to rush of blood to the skin… if everyone in the country stopped using hot water then it would have a positive effect, albeit very minor, on global warming and is so easy to do!

  • nigel hunter 24th Aug '19 - 3:14pm

    ECOCIDE—– The policies are a start but this is a World wide concern . I hear that at one time a paragraph was written into ,I believe, (can be researched) the UN agreement on climate but it was taken out. It quoted as in the phrase genocide ECOCIDE.Presumably that no one thought we would destroy the ONLY home the human race has it was taken out, it must be replaced

  • Thank you for this thoughtful and well balanced piece. As a (past it) historian, it has seemed that the otherwise ghastly Bolsonaro has a point about old colonial powers pointing the finger. No one stopped the Romans despoiling much of Western Europe, nor the British, European, American and Asian ‘advances’ into industrialisation. No one interfered with our population growths and resulting crises either. No one now dares tell China to stop, but we feel able to stand up to Brazil. Hmmmn.

    There is one big difference though, and that is that Brazil does have most of the Amazon, which provides us with about 1/5 of our oxygen. We are happy to pay for the production of coal, meat, clean water, etc – am guessing what Brazil wants is for us to pay for stewardship of the Amazon and jobs too.

    Not that the U.K. has much influence any more thanks to crazy Brexit, we’ll have to do what our overlord Trump tells us to.

  • Peter Hirst 24th Aug '19 - 4:39pm

    The Amazon rainforest fires are a global emergency. The least we can do is recall parliament so that there can be a proper debate on what we can do with other countries. I would not exclude offering assistance to the Brazilian government to put them out.

  • And no mention of bio-fuels, which necessitate the tearing down of trees and wasteful use of water.

    And please, William Fowler, it is indeed wonderful, and no doubt invigorating, to enjoy a cold shower; a lot of us with chronic skin conditions are unable to do so.

  • Joseph Bourke 25th Aug '19 - 2:19pm

    The rainforest foundation https://rainforestfoundation.org/what-we-do/ fronted by Sting might be able to help with some short-term relief. Philanthropic funding was quickly forthcoming to restore Notre Dame after the devestating fire in Paris. Perhaps, a Live Aid concert to save the rainforests and highlight the issue with the current generation would not go amiss.

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