Archive for December, 2009|Monthly archive page

Obama’s First Major Win

In Economics, Politics on December 27, 2009 at 18:33

It was the perfect Christmas gift for President Obama. On Thursday the 24th, the Senate passed the healthcare bill with 60-39 votes and marked the near-materialisation of Obama’s biggest domestic policy-challenge. The only thing that’s left is to merge the two bills of the House of Representatives and the Senate and receive similar approval.

The bill will apply from 2014 and will cost over $871 billion over the next decade, with Democrats claiming it will actually reduce the budget deficit by $130 billion during the same period. It includes the toughest measures that render medical insurance mandatory and forbids insurance-discimination at the expense of citizens with unfavourable medical record. The bills also aims at covering the 31 uninsured Americans and subsidise the low-income levels.

Although public option was deducted, Obama claims that the bill passed represents 95 percent of his initially planned one. Nevertheless, additional parts or amendments may take place in the future, does the bill prove to be popular.

Republicans may be politically-naturaly denouncing the bill but it is clearly to their detriment, as they try to reclaim their identity and regain public’s trust and favour. Obama exhibited persistence, commitment, passion , vision, and above all, the ability to deliver. He deserves full credit for such an epic achievement of unprecedented magnitude in the highly-sensitive sector of healthcare. May the plummets retreat..

by the Self-Seeker

Falling Short in Copenhagen

In Economics, Politics on December 20, 2009 at 12:27

World leaders failed to meet global expectations for a widely-accepted, legally-binding deal that would set a clear direction about effectively tackling climate change. It seems to me that President Obama pushed for this last minute deal mostly to preserve his reputation and maintain the political pretences. From his own words one deduces that the only element that gives meaning to this deal is that it’s better than no deal. Well, that’s certainly not that way to move ¬†forward, let alone when we need to move quickly.

The accord the leaders of USA, China, India, Brazil and South Africa agreed upon is not legally binding and enforces no penalties in case of not meeting its terms. In short, in the accord, leaders recognise the scientific view temperature increase should be held below 2 C. This, however, makes no implications about the C02 emissions levels, which has been left for countries to decide until February the 1st next year.

What is more, the deal promises $30 bn to developing countries until 2012, and rich countries pledge to provide poor nations with $100 bn a year by 2020 to help them compensate for the impact of climate change on their economies.

The last and most efficient part of the accord in my opinion is that all countries will become subject to regular scrutiny on the levels of their CO2 emissions, hence, increasing transparency and setting the foundations for a more honest and unambiguous dialogue between high polluter nations.

The deal fails to convince the global community about the decisiveness and willingness of the targeted nations to compromise. Throughout the talks, China demonstrated a rather selfish attitude with strong lack of environmental sensitivity. Unfortunately, the Copenhagen summit was a missed chance, and world leaders know that, irrespectively of what they might be saying.

by the Self-Seeker

‘Hopenhagen’: The Funding Issue

In Economics, Politics on December 12, 2009 at 14:03

There is so much fuss going on about the Copenhagen environmental summit these days which has inevitably raised expectations really high. There is a broad public and political consensus that seems to be converging to a climate change deal that would curb CO2 emissions but there are several hurdles that are yet to overcome.

The major issue that arose during this first week of talks was the funding for the developing nations. Tormented by the recent financial crisis, poor countries are unable to commit to large funds for the environment. It’s more an issue of inability rather than of unwillingness. Rich countries have been historically responsible for the climate menace we face these days and are hence expected to significantly contribute to developing nations.

On Friday, the EU 27 agreed on pledging $3.6 billion per year for the next three years to the poor countries, a figure labelled as puny by the G-77 (a coalition of developing nations), compared to the 2020 total target of $100 billion per year. What is more, the EU fails to commit to a long-run strategy which raises concerns about the sustainability of any deal. If there is one thing I can detect, that is signs of scepticism from EU’s part towards the climate battle.

The talks can highly reflect to a game theory. This week, the EU Commissioner Jose Manuel Barroso announced a ‘conditional’ plan of a 30 precent emissions cuts of 1990 levels by 2020. He demanded that other leading polluters make comparable commitments first, for EU’s plan to materialise. Now, what sort of politics is this..?

It’s really sad when politicians undermine the importance of such a sensitive issue like the environment, by bringing it down to micro-political level. Let’s just hope that EU’s funding proposal will just be the platform for a longer-run and more generous package towards the multi-suffering developing nations.

by the Self-Seeker

Copenhagen Summit: What to Expect?

In Economics, Misc on December 5, 2009 at 14:18

Environment ministers, government officials and other major players from more than 190 countries are gathering on Monday in Copenhagen for two weeks, in the framework of the United Nations Climate Change Conference for the highly-anticipated environmental summit, to address and agree on the measures that would curb climate change. The stakes this time are really high as major participants like the US and China have pledged to give in and finally seek for a deal.

Now, what is to realistically expect from the summit? We expect officials to agree on a new treaty that will succeed that of the Kyoto protocol and whose first phase will expire in 2012. Developed countries are expected to reduce their CO2 emissions while the newly-industrialised ones reduce its growth.

US, China and India have shown willingness to cooperate and strive for a sustainable agreement towards CO2 reductions. A major obstacle is that of funding. Although China overtook US in total CO2 production, it still is on 1/4 on a per capita basis of that of the US and has historically emitted much less than the States. In order for the NICs to engage in a CO2 growth reduction they would somehow have to be compensated for their economic slowdown.

Few days ago President Obama changed his scheduled appearance in the summit and announced he would be arriving at the final stage of the negotiations, boosting hopes for a strong deal.

There is a consensus that a positive outcome will come out. Nonetheless, limiting emissions by 80 percent on a 1990-basis by 2050 doesn’t look attainable to me. There is the problem of ‘burden-sharing’ of how much each country gets to emit. Moreover, according to Gordon Brown, leaders would have to pledge more than $100 bn a year by 2020, but the recession has made this sound as utopia. These are hurdles that have to be overcome.

There is a need to point to a direction and look long-run for once. When it comes to the environment, geopolitics ought to be neglected or at least downgraded to a second level. It’s the first time we’ve come that close to an agreement and who knows if we may have this opportunity again.

More posts throughout the summit.

by the Self-Seeker