Glocal Economic Warfare?

by Will Alexander

Dear All,

These notes are addressed to international recipients in particular. I am trying to be helpful, not critical. I believe that a very serious international crisis could develop if the Western nations continue to undertake costly and fruitless emissions control measures and expect the developing nations of the rest of the world to follow suit. I do not expect a response.

Facts of life

We live in a competitive world. The nations of the world, nearly 200 of them, have different stages of development. They also have different degrees of reliance on other countries to boost their economies via imports and exports. Understandably they protect their internal key industries via import tariffs. There are also alliances between nations. This is all understandable and acceptable.

What is not acceptable is when a group of nations, the Western nations in this case, take deliberate action to suppress the growth and therefore competitiveness of the developing nations. It is even more reprehensible when they rely on manipulated science to justify their actions. The Stern Review is an excellent example. This was achieved by the deliberate exclusion of evidence that was contrary to the review’s objectives.

Unfortunately, this deliberate exclusion of contrarian evidence has become the norm practiced by many climate change scientists and their institutions. The recent Climategate exposures are an example. Their action can possibly be defended as being patriotic. It is altogether unacceptable when practiced by the United Nations bodies, the IPCC and the UNFCCC, in their reports and activities. Strangely enough, it was the misguided enthusiasm of these two UN bodies that precipitated their downfall.

While the affluent countries are well-organized – the G8 nations being an example – there is no corresponding organization that serves the interests of the developing nations. This is now changing.

The lead-up to the Copenhagen conference last December precipitated the grouping of the BASIC countries (Brazil, South Africa, India and China). Together with other developing countries they ensured that no economically damaging, binding agreements would be reached at Copenhagen.

While there is no likelihood of binding agreements being achieved in the foreseeable future, we are now witnessing the start of a possible international conflict between the Western nations and the developing nations. This is an unhealthy situation that could easily degenerate into low pitched global economic warfare.

Hoisted by their own petard

The Western nations are now suffering the consequences of their own gullibility. They cannot possibly believe that their actions are likely to persuade South Africa and other developing nations to change their priorities. These were clearly expressed by the BASIC countries at Copenhagen.

I can understand the reluctance of the Western nations to finance projects that will increase undesirable emissions. However, they should also understand the situation in South Africa and other developing countries. We have a large proportion of our population with a low standard of living. As a consequence, our per capita GDP is much lower than that of the fully developed countries. Obviously raising our GDP must be our national priority.

In order to increase our GDP, we have to increase employment opportunities. These in turn require increases in manufacturing and other industries with large power requirements. These activities will increase our economic competitiveness.

This situation must be obvious to the Western governments. So we are entitled to assume that their actions are a deliberate attempt to suppress our economic growth regardless of the consequences to the welfare of our people. This must damage relations between the developed and developing countries. It will also strengthen developing country alliances. This is already happening. Zimbabwe’s invitation to the president of Iran is one example. There are others.

Formidable alignments

We read that the cost of the emissions control measures may result in European manufacturers moving their activities eastwards. What does not seem to be appreciated is that the restrictions will also result in bilateral trade moving eastward.

On their return from the nuclear arms reduction discussions in Washington last week, the heads of state of the BRIC nations (Brazil, Russia, India and China) gathered in Brazil. South Africa’s president was also present. This is a formidable political alignment.

As another example last year China became South Africa’s largest export destination, advancing from our fifth largest export market in 2008 to first place last year.

These were South Africa’s exports last year in billions of Rand: China 47.7, US 37.9, Japan 34.5, Germany 31.5, and UK 26.3. As yet another indicator Richards Bay, which has one of the world’s largest coal export terminals, has just expanded its coal export facilities from 72 million tonnes per year to 91 million tonnes per year. There are no indications of worldwide decline in the use of coal. Why then should South Africa be penalized when the use of coal by other countries continues to rise?

In 1994 there was a change of government here in South Africa. The apartheid days of white supremacy were over. Black economic empowerment was the new political objective. But the newcomers had very little administrative, economic or professional experience. Our infrastructure has deteriorated alarmingly as a consequence. There is an increasing backlog in the provision of housing and services. There are riots and burning tires in the streets of our informal settlements as a consequence. We have a long and costly way to go to overcome these problems. We can do without interference from the West.

Then there are those vague promises of financial assistance. Earlier promises made in 2005 at the G8 conference in Glen Eagles remain unfulfilled. No country is going to change its policy based on promises of aid of any sort as there will inevitably be strings attached. Developing countries simply do not have the technological expertise to undertake these measures. I discussed this whole problem in my United Nations commissioned study Risk and society – an African perspective (Alexander 1999). The assumption that financial and technological assistance can solve Africa’s problems is altogether nonsensical. Africa’s requirements are simple. Africa requires trade not aid. Costly emissions control measures will obviously restrict our advancement in this direction. Is this deliberate?

Our world-leading research on nuclear pebble bed reactors has come to a standstill as a result of shortages of funds badly needed elsewhere. Despite assurances to the contrary, I foresee South Africa having to build more coal-fired power stations well into the future as there are no other economically viable alternatives on the required scale. Our coal reserves are sufficient for another 200 years.

Political pressures

On several occasions in the past the British High Commissioner made public statements advancing climate change. He also arranged visits by David King and Nicholas Stern. I believe that the UK has also sponsored minor education programs in this field.

Things have changed. South African audiences are no longer uninformed. The press has become more critical especially after Copenhagen. South Africa was due to produce a Green Paper on climate change policy in June for comment, followed by a final White Paper in December. This has been put on hold in the light of our policy to continue with the construction of large coal-fired power stations.

Our media are unlikely to remain silent if there are more visits sponsored by the High Commissioner propagating emissions control measures after abstaining from the World Bank loan application. I believe that this action has undone all the efforts of the High Commissioner to advance the climate change issue.

Stern review

In November 2005 I responded to the call for submissions by the Stern Review with a 92-page summary of my own studies An assessment of the likely consequences of global warming on the climate of South Africa (Alexander 2005). The report was based on three years of study of a comprehensive hydrometeorological database.

I demonstrated that there was no evidence to support the alarmist views. I feel sure that this was the most comprehensive submission to the review. There was no response. It became very clear that Nicholas Stern was acting under instructions to ignore all evidence to the contrary, and to persuade developing nations to adopt costly measures that would reduce their economic competitiveness. His theme was that although the emissions control measures would be costly, the consequences would be worse if no action was taken.

I deal with the Stern Review in my memos 09/10 and the forthcoming memo 11/10. Please take some time to study them.

Disintegration

Now everything is rapidly coming to a head. The UNFCCC and the IPCC have lost all credibility and influence. By now it must be obvious that developing nations will not adopt costly emissions control measures. There will be no successor to the Kyoto Protocol. This will leave the UK, EU and to a lesser extent the USA, out on a limb. How will they react? Even more importantly, how will their climate change scientists who are active in this field and their societies such as the Royal Society react? Is it not clear that if these scientists and their institutions continue to follow their present course, they will still not succeed in persuading the developing nations to impose these restrictive measures?

I have a great fear that this whole issue could seriously damage economic relations with a whole cascade of unpleasant consequences.

As you are aware, Hitler and Mussolini both rose to power in similar conditions of economic uncertainty and international political pressures. They received popular support without which they could not have survived.

We are starting to see similar events increasing in southern Africa. As an example, you may have seen the expulsion of a BBC reporter from a press conference. Similar action would be unthinkable in your society. We already have the example of a dictator ruling Zimbabwe.

This is one war that the UK cannot win. This time some of the Commonwealth countries are on the other side of the fence. Previous European colonies in Africa have little reason to respect their previous masters. There will be no calls for help such as those that my family and I responded to in both world wars. My father was wounded and received two medals for bravery during WWI. He was captured in Tobruk during WWII, sent to POW camps in Italy and Germany and later repatriated by hospital ship via Sweden. My contribution was limited to six service medals. My present loyalty to South Africa and its peoples is unequivocal.

The solution

This whole issue is getting out of control, nationally as well as internationally.

I am not a politician but as I see it the only route that the UK and other Western nations can follow is to set their own house in order and refrain from interfering in the affairs of the developing nations of Africa and elsewhere. This interference can only cause harm to their own economic interests without any benefits.

My elderly relations often referred to Great Britain as the mother country. Today nobody uses that expression. Regards, Will

Postscript

There were two independent meetings in Cape Town during the past weekend. One was by the ministers of the BASIC countries. They discussed their strategy ahead of the UNFCCC discussions in Mexico at the end of the year. They are unlikely to approve legally binding measures that will adversely affect their economies.

The second meeting was organized by the usual grouping of NGOs. They called on the government to commit itself to renewable energy sources and stop the construction of nuclear and coal-fired power stations. Economic and humanitarian concerns were obviously of no interest to them.

To be continued!

Will Alexander is a South African UN scientist.