Wall Street’s Climate Finance Bonanza

Oldspeak: “Washington is at it again, hijacking the debate about how to support the global transition to a low-carbon, climate-resilient economy — and keeping the public, the press, and even developing countries out of the conversation. They’re repeating the same tired story that rich governments are broke and thus have to call in the private sector to finance climate change solutions… In this corporate-oriented approach, countries would provide generous loan guarantees and export subsidies that sweeten investments for private firms and give them the chance to net big profits while leaving governments (and the taxpayers they represent) to cover the losses if investors’ bets don’t pay off. In today’s economy, mobilizing private finance means going to the capital markets to raise money. But relying on financial markets for funding to support renewable, clean energy or to resettle climate refugees would subordinate climate action to the speculative whims of bankers.” -By Janet Redman and Antonio Tricarico. That last sentence is the key point of this piece. The biosphere IS NOT subordinate to financial markets or the speculative whims of bankers. This all-encompassing life support system has existed and renewed itself for millennia. These artificially created and virulent systems are destroying our planetary life support system.  Bankers, financial markets and their speculative whims don’t matter on a dead planet.  Any “market-based” solution to climate change is doomed to failure, simply because “the market” regards the climate and the biosphere as mere externalities. You’d be wise to be wary of anyone touting market based solutions to climate change (“Cap and Trade”, “Clean Development Mechanisms”, “Reducing Emissions from Deforestation and Degradation“). There is only one market that matters. Our planet. Wall Street has demonstrated time and time again that it does not care about our planet. Why would we leave any plans to sustain it to wall street?!

 By Janet Redman and Antonio Tricarico @ The Huffington Post:

Government officials from an elite group of developed countries meeting in Washington, D.C. at the invitation of U.S. climate envoy Todd Stern appear to be on the brink of instigating yet another corporate handout and big bank giveaway — this time in the name of fighting climate change.

If it follows a recently leaked agenda, the meeting will focus on using capital markets to raise money for climate finance. The goal is to fill the void left by the United States and other developed nations that have failed to meet their legal obligations to deliver funding to poorer countries for climate programs.

In this corporate-oriented approach, countries would provide generous loan guarantees and export subsidies that sweeten investments for private firms and give them the chance to net big profits while leaving governments (and the taxpayers they represent) to cover the losses if investors’ bets don’t pay off. Wealthy countries would then be able to claim that they had moved billions of dollars of new climate investments.

Unfortunately, the projects best placed to benefit from large-scale private investment and market mechanisms — like mega-infrastructure projects and fossil fuel-powered ventures that hide behind a “low-carbon” label — are likely to be those that have fewest sustainable development benefits. In many cases, the funding will channel windfall profits to corporations that would have invested profitably even without these new channels of support.

The sad fact is that this has happened before. Nations spent five years negotiating the Kyoto Protocol — the only multilateral treaty to regulate emissions of greenhouse gasses and spell out binding targets for reducing climate pollution. But before the treaty was finalized in 1997, the United States led a push to replace the enforcement mechanism — a fine for missing reduction targets paid into a clean development fund — with a market mechanism meant to lower the cost of compliance for polluting companies. The accompanying clean development mechanism (CDM) was born so that companies in the industrialized world could purchase ultra-cheap carbon pollution credits from developing nations to offset their continued pollution at home.

In the end the United States pulled out of the Kyoto treaty. But by shifting a global regulatory regime into a market-based regime centered on enticing private-sector investment with promises of profitability, Washington left its mark.

A decade and half later, carbon markets have collapsed, developing countries are awash with carbon credits for which there is no demand, and the planet keeps getting warmer.

Meanwhile, the clean development mechanism has led to private sector investment in spurious projects like mega-hydropower dams and coal-fired power plants that have delivered little in the way of sustainable development outcomes — and in some cases have further harmed the environment and human health.

Passing the Buck

And now Washington is at it again, hijacking the debate about how to support the global transition to a low-carbon, climate-resilient economy — and keeping the public, the press, and even developing countries out of the conversation. They’re repeating the same tired story that rich governments are broke and thus have to call in the private sector to finance climate change solutions.

In today’s economy, mobilizing private finance means going to the capital markets to raise money. But relying on financial markets for funding to support renewable, clean energy or to resettle climate refugees would subordinate climate action to the speculative whims of bankers.

Americans have visceral reminders of the consequences of leaving decisions about critical needs to the market — the more than 1.6 million families locked out of their homes and the $2.5 trillion in taxpayer dollars handed over to bail out Wall Street and U.S. car companies are just two. Europeans can point to the recent bailout after the carbon bubble burst. If a global climate finance bubble were to burst, we wouldn’t just lose our houses; we might have lost our chance at averting catastrophic global warming.

Governments in the developed world shouldn’t pass the buck to the private sector. They must act now. They can start by cutting subsidies for fossil fuels, including for natural gas “fracking” in the United States, and set binding regulation for reducing climate change pollution. Then governments can adopt innovative ways to raise public money, like taxing pollution from shipping or financial transactions. Indeed, even a very low financial transactions tax would generate substantial revenue and deleverage capital markets.

And of course, if there is any hope of creating a new paradigm of climate-sound development, there will have to be a role for the private sector. But the micro, small, and medium enterprises of the developing world would be preferable partners to the multinational firms that have been responsible for sucking wealth and resources out of countries for decades, leaving pollution and poverty in their wake.

At some point — and for the sake of the future generations who will bear the results of our decisions, we hope it’s sooner rather than later — the government officials who place their bets on private finance will have to learn that putting corporate profits over the needs of climate-impacted people is a risk the rest of us are not willing to take.

Antonio Tricarico is director of the New Public Finance program of the Italian organization Re:Common based in Rome and a former economic correspondent at the Italian newspaper Il Manifesto.

Janet Redman is the co-director of the Sustainable Energy and Economy Network at the Institute for Policy Studies in Washington, DC.

Editorial support by Peter Certo and Oscar Reyes of the Institute for Policy Studies.

Trans-Pacific Partnership: Obama To Sign Secret Treaty That Will Offshore U.S. Jobs To Slave-Wage Countries; Decimate Corporate Regulations

A group photo of leaders from the member countries of the Trans-Pacific Strategic Economic Partnership Agreement (TPP). (Photo: Gobierno de Chile)

Oldspeak:”While Obama is touring the country assailing Mitt Romney’s record on offshoring and yapping about creating jobs in America, and regulating banks, he’s working on a treaty that will do THE EXACT OPPOSITE. It will give companies incentives to move jobs out of the U.S. to slave-wage countries, severely limit government regulation of financial services, zoning and land use, product and food safety, energy and other essential services, tobacco, and more.  It will consolidate corporate control over public resources and services. It’s basically NAFTA on Andro. “The TPP negotiations have been going on for two years under extreme secrecy, no information has been made available to either the press or Congress about the US position. But on June 12, a document was leaked to the watchdog group, Public Citizen, revealing the current US position and the reason for the secrecy. The contents are surreal, shocking and prima facia evidence for how corporations have become the master puppeteers of our government.” -Dr Brian Moench No surprise, universal silence in corporate media on this.  Also no surprise that Mitt Romney has demanded that this treaty be signed months ago. Both of these men have consistently proven themselves to be wholehearted Transnational Corporate Network Shills. This Illusion of choice make me think of the words of Dr. Howard Zinn “If the gods had intended for people to vote, they would have given us candidates… If those in charge of our society – politicians, corporate executives, and owners of press and television – can dominate our ideas, they will be secure in their power. They will not need soldiers patrolling the streets. We will control ourselves.” Democracy’s gone, America is a one party Inverted Totalitarian Kleptocratic State. “Ignorance Is Strength” “Freedom Is Slavery”

Related Stories:

Trans-Pacific Partnership Trade Negotiations Seal Obama’s Pro-Corporate Approach to Foreign Policy

Growing Attention to Obama Trans-Pacific Trade Pact Threatens to Undermine Offshoring Attack on Romney as TPP Talks Wrap Up Today

Trans-Pacific Partnership: Under Cover of Darkness, a Corporate Coup Is Underway

By Dr. Brian Moench @ Truthout:

This may be one of the most important stories ever ignored by the so-called “lame-stream, liberal” media. It’s unlikely you’re losing sleep over US trade negotiations, but the unfolding business agreement among the US and eight Pacific nations -the Trans-Pacific Partnership (TPP) – should cause every US citizen, from the Sierra Club to the Tea Party to get their pitch forks and torches out of the closet and prepare to “storm the Bastille.”

The TPP negotiations have been going on for two years under extreme secrecy, no information has been made available to either the press or Congress about the US position. But on June 12, a document was leaked to the watchdog group, Public Citizen, revealing the current US position and the reason for the secrecy. The contents are surreal, shocking and prima facia evidence for how corporations have become the master puppeteers of our government.

The leaked document reveals that the trade agreement would give unprecedented political authority and legal protection to foreign corporations. Specifically, TPP would (1) severely limit regulation of foreign corporations operating within US boundaries, giving them greater rights than domestic firms; (2) extend incentives for US firms to move investments and jobs to lower-wage countries; and (3) establish an alternative legal system that gives foreign corporations and investors new rights to circumvent US courts and laws, allowing them to sue the US government before foreign tribunals and demand compensation for lost revenue due to US laws they claim undermine their TPP privileges or their investment “expectations.”

Despite the North American Free Trade Agreement’s (NAFTA) failures, corporations are arm-twisting the federal government to pursue trade agreements as inevitable and necessary for economic progress. But 26 of the 28 chapters of this agreement have nothing to do with trade. TPP was drafted with the oversight of 600 representatives of multinational corporations, who essentially gave themselves whatever they wanted; the environment, public health, worker safety, further domestic job losses be damned.

Residents of the West should be particularly alarmed. TPP would allow the plunder of our natural resources by foreign corporations allowed to bypass US law. Disputes over Western land contracts for mining and timber, for example, would be settled by international tribunals. Even if you are oblivious to environmental concerns, you should be outraged at the total circumvention of national sovereignty. Foreign investors could bypass our legal framework, take any dispute to an international tribunal and pursue compensation for being denied access to our resources at fire-sale prices – with much of the West on fire as we speak.

It gets worse. Those tribunals would be staffed by private-sector lawyers that rotate between acting as “judges” and as advocates for the corporations suing the governments. American taxpayers could be forced to pay those corporations virtually unlimited compensation for trying to protect our air, land and water from much looser standards than current US law allows.

This agreement could directly affect efforts in my home state of Utah to hold the international mining giant, Rio Tinto, accountable to the Clean Air Act. A consortium of public health and environmental groups including WildEarth Guardians, Utah Physicians for a Healthy Environment, Utah Moms for Clean Air and the Sierra Club have filed suit against Rio Tinto for mining more – and polluting more – than the amount allowed by the Environmental Protection Agency via provisions in the Clean Air Act. This agreement would allow disputes about their pollution to be settled by foreign “judges” who don’t live in Utah, aren’t personally affected by the outcome, aren’t even US citizens and could be attorneys for mining companies. Talk about putting the fox in charge of the chickens.

The original TPP nations were the US, Australia, Peru, Malaysia, Vietnam, New Zealand, Chile, Singapore and Brunei Darussalam. But Mexico, China, Japan and Canada are expected to be invited to join, so there is no comfort to be derived from the thought that only a few minor, foreign corporations will be given these extraordinary free passes to profit at our expense. Of course, American corporations will get the same opportunity to “invade” other countries, as if that makes this agreement any less grotesque.

TPP is much worse than NAFTA, which eviscerated middle-class jobs and wealth in the US. And this sellout to foreign corporations is not just a rogue brain cramp of President Obama. Mitt Romney demanded this agreement be signed months ago, and the notorious “climate change denying” US Chamber of Commerce can’t get it signed fast enough. Romney has called Obama’s the most hostile administration to business in recent history. If the TPP trade agreement is “hostile” to business, god help us if we have an administration, presumably Romney’s, “friendly” to business.

If you thought that with Citizens United we had hit rock bottom in surrendering our democracy to the power of money, this TPP “trade agreement” would throw our democracy into free fall. Foreign corporations will be allowed to feast like termites upon America’s natural resources, trash our environment and public health, violate our rights as American citizens and make us pay them if we try to protect ourselves.

AT&T Chief Says DOJ Blocked Merger With T-Mobile Will Cost Its Consumers More

Oldspeak: “Since that deal got killed, our data prices have gone up 30%,” he said. He also blamed the blocked T-Mobile USA deal, in part, for AT&T’s decision earlier this year to impose a limit on the amount of data available to a given customer. However, he said such a move probably would have been necessary regardless of the decision, and that he regretted not imposing the cap sooner.” Austerity measures, affect you in more ways than you think. How bout that. The merger doesn’t happen, so they jack up prices to increase their perceived lost potential profits. And the argument for corporate consolidation and less choice perfectly crystallizes some of the fundamental flaws with oligarchical capitalism.  In the minds of terminal ill Capitalists, More for me, less for you = More for me, more for you. Your basic 2+2-=5 logic. This insatiable lust for more, and the idea that it is good, unbridled greed;  it is unsustainable and certainly catastrophic for our planet, and our ‘civilization’. Every thing in nature grows, and then stops growing. We’ve created a civilization in which that basic physical rule does not apply and we are reaping the consequences: ever rapid resource depletion and contamination, mass extinctions, environmental destruction and contamination, drought, starvation, overcrowding, homelessness, poverty… All because a few hundred Oligarchs want ever ‘more’.  And have conditioned us to believe that we want ever ‘more’ even though the vast majority of us never will attain Oligarchical levels of it. That simple and insidious idea; ‘more’ has led us to the brink of collapse on multiple levels, yet we’re still being told that everything is ok. Why? We need Barefoot Economics. NOW.”

Related Story:

AT&T To Buy T-Mobile: Great For Them, Bad For You

What Does Proposed AT&T And T-Mobile Merger Mean?

By Ethan Smith @ The Wall Street Journal:

The government’s decision to block AT&T Inc.’s T -0.76% takeover of Deutsche Telekom AG’s DTEGY -0.18% T-Mobile USA unit will result in higher prices to consumers, AT&T Chairman and Chief Executive Randall Stephenson contended during a public interview Wednesday.

Speaking at the Milken Institute’s annual global conference, Mr. Stephenson said that the U.S. wireless-telecommunications market can’t sustain the current number of competitors because there isn’t enough wireless spectrum for all of them.

Based on current patterns, wireless data usage will increase 75% a year for at least five years, Mr. Stephenson said.

“We’re running out of the airwaves that this traffic rides on,” he added. “There is a shortage of this spectrum.”

With or without a deal like the one his company unsuccessfully pursued, he said, competitors will be forced to drop out if they can’t find enough wireless capacity to offer more modern data services to growing numbers of customers.

“The more competitors you have, the less efficient the allocation of spectrum will be,” he said. “It’s got to change. I don’t think the market’s going to accommodate the number of competitors there are in the landscape.”

Many countries in Asia, Europe and Latin America have many fewer companies offering wireless voice and data services, letting them allocate bandwidth more efficiently, Mr. Stephenson contended.

“Since that deal got killed, our data prices have gone up 30%,” he said. He also blamed the blocked T-Mobile USA deal, in part, for AT&T’s decision earlier this year to impose a limit on the amount of data available to a given customer. However, he said such a move probably would have been necessary regardless of the decision, and that he regretted not imposing the cap sooner.

“I wish we had moved quicker to change the pricing model to make sure the people who were using the bandwidth were paying for the bandwidth,” Mr. Stephenson said.