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Forums, March 2002 Click on a link to see Past Forum notes: HOW WILL CLIMATE CHANGE CAN ETHICAL INVESTMENT GLOBAL ETHICS FOR THE ERA OF GLOBALISATION
This forum took place on: In the final debate in March 2002, the GLOBAL DEVELOPMENT FORUM discussed whether it is too late to halt climate change. The key point of contention was that, with all the uncertainties surrounding scientific forecasts, should we try to prevent it, or devote resources to ensure both rich and poor can adapt. Dr Richard North, formerly of the Institute of Economic Affairs, acknowledged the world is getting warmer, but highlighted the many uncertainties associated with climate change: we do not know whether warming will result in significant or minor change, and whether the effect will be uniformly bad. Whilst he accepted the likelihood that some communities will lose out, notably the very poor but also people living in low-lying areas all over the world, the uncertainties made preventive action both costly and potentially ineffective. In particular, he thought the 10% reduction in greenhouse gases emissions mandated in Kyoto would have little effect if climate change is severe, and would be unnecessary if the effects are more benign. Instead of seeking to prevent climate change, we should build our capacity to adapt to it. In particular, this means increasing the wealth and opportunities of poor countries through international trade and economic growth - which could be held back through unnecessary by efforts to reduce emissions. Professor David Simon of Royal Holloway College agreed that more radical commitments were watered down at Kyoto to reach a compromise reflecting the diverse interests of the 200 countries represented. The expected increase of between 2.5°-4°C over the next 100 years compares with 0.6°C in the last century, and would create massive and complex change. With so many of the world's most productive ecosystems in coastal regions, the problem went beyond issues of demography and relocation, with critical consequences for food supply. However the inevitable uncertainties were problematic, particularly given the short-term priorities of politicians, whose actions tended to be palliative rather than preventive. Charles Secrett, director of Friends of the Earth, also thought the Kyoto Agreement unsatisfactory, pointing to the scientific consensus that a 60% cut from 1990 levels was necessary by 2050. However it still represented a significant advance, putting emissions reduction onto a statutory basis for the first time. Highlighting the uncertainty of scientific forecasts, he suggested that the increase over the next 100 years could be as much as 5.8°C, twice that expected five years ago. The consequences for diverse ecosystems would be irreversible and need not be linear, with no apparent change and then a 'flip stage' in which change is very rapid. The need to develop low-carbon technologies offered significant investment opportunities that would create jobs and export markets, and increase innovation and competitiveness. This, he thought, would entice the US back into the fold. The panellists agreed that the poor were least well equipped to cope with climate change. Extreme global inequality, in both consumption and pollution, meant that the US, with only 4% of the world's population, accounted for 30% of oil use and 25% of emissions. However North highlighted the limited tolerance of wealthy nations to accept high energy costs, believing we should use the available resources to build the capacity of poor countries to adapt. However Secret refuted such trade-offs, arguing that any sustainable solutions needed to address economic, social and environmental priorities together. Both Secrett and Simon agreed that the erosion of national sovereignty meant that political action could be spurred on by both civil society and international bodies. The audience appeared convinced. Following scepticism in an initial vote, the final vote saw a significant majority believing that government will take the necessary action to halt global climate change.
This forum took place on: Can ethical investment restrain market forces? Following on from last week's discussion about the ability of consumers to influence corporate behaviour, the GLOBAL DEVELOPMENT FORUM's debate on ethical investment questioned whether it could be effective in restraining market forces. Rob Lake of Henderson Global Investors insisted that ethical investment is a market force, and one of the fastest growing segments of the investment market. The industry has responded to it by offering a wide range of ethical funds, catering to the diverse moral priorities of investors. Moreover it's influence is filtering through to the wider industry, with pension funds now required to declare their investment stance with regard to environmental, ethical and social standards. Companies also face much higher commercial risks if seen to act unethically. However, Lake insisted, ethical investment is not sufficient, and we also need tougher regulations making companies responsible for their supply chains and banning practices such as child labour. Deborah Doane of the New Economics Foundation argued that individual investors have too little information and fund managers are ill equipped to make ethical judgements. At only 2% of funds under management, ethical investment does not sufficiently reward good behaviour by lowering the cost of capital for businesses. Moreover, she questioned whether time horizons of businesses were too short to address the longer term global issues of social justice and environmental degradation, agreeing with Lake that governments are better placed to determine and enforce social objectives. Lord Andrew Philips, Liberal Democrat peer and President of the Citizenship Foundation, identified several areas in which charities and pressure groups worked successfully with businesses to move the focus away from profit maximisation to social objectives. However he too doubted whether ethical investment was sufficient, seeing businesses as essentially amoral and deploring the rise of stateless corporations. The demise of alternative ideologies such as communism and socialism, and the declining influence of religion, left the business ethos largely unchallenged. This had a coarsening effect on social values, although people had shown themselves highly resilient in upholding their own sense of right and decency. Lord Melchett, former director of Greenpeace, drew of his experience of three successful campaigns where market forces had been restrained, each requiring political rather than market action. Governments had allowed chemical companies to dictate the pace of action to protect the ozone layer, and it was only resolved when non-governmental organisations went to the market with effective alternatives to CFCs. Moreover he insisted that political action over Brent Spar led to a ban on the dumping of oil rigs in the sea, and doubted the impact of the Shell boycott. He was particularly heartened by the success of the campaign against genetically modified foods, where individuals acting as citizens rather than consumers led to a rethink. This was unique in his experience, as it did not require a major disaster to prompt a policy response. Contributions from the floor raised concerns about the close links between business and government, and the inability of individual investors to hold pension funds and insurance companies to account. Action by shareholders at AGMs was seen as another way to pressure companies, although Lord Melchett doubted its efficiency, citing the considerable effort needed to rally shareholder support to force BP to discuss a motion requiring it to increase research into alternative energy. Although Lord Philips feared that further laws risked absolving businesspeople from their obligations to act ethically, there was a broad consensus that, whilst positive, ethical investment needed to be complemented with a stronger legal framework, including further mandatory reporting of ethical standards. FREE TRADE v. FAIR TRADE This forum took place on: The speakers in the second of the GLOBAL DEVELOPMENT FORUM's debates, each Tuesday in March, were drawn from a wide spectrum of political and commercial interests. Yet all agreed that unfair trade, where wealthy countries protect their own markets while imposing liberalisation on poor producers, was unacceptable. The current hypocrisy goes beyond Bush's defence of free trade while protecting the US steel industry. The EU also imposes tariff barriers against commodity imports from poor countries, which increase if developing countries try to add value to their exports through milling, refining and other processes. Harriet Lamb, director of the Fairtrade Foundation, highlighted several foodstuffs, including coffee, bananas and chocolate, where fair trade has been successful in raising the living standards for producers. These are significant contributors to the £44 million of fair trade goods sold in Britain. Fair trade prices cover the cost of production and investment, giving dignity of small farmers. By putting social and environmental considerations first, Lamb argued that fair trade was affecting the wider debate, challenging profit maximisation and setting the gold standard for all forms of trade to be measured against. But as the retail analyst Bill Hamilton pointed out with regret, fair trade still only represents less than 1% of the market. Whilst he believed that fair trade would remain a niche
market, he suggested it should move beyond being an issue of conscience
to emulate the success of organic produce, where consumers were primarily
motivated by fear and quality due to concerns about industrialised food
production. Vincent Cable MP for the Liberal Democrats insisted that pitting free trade against social justice was a false dichotomy. He asserted that greater freedom of trade has increased international fairness and already contributed to a significant reduction in poverty. The negative effects of deteriorating terms of trade for commodities in recent decades reflected increased supply and static demand. This, he argued, should be countered by a reduction in protectionism, allowing poor countries to process their exports. He highlighted the triumph of free trade in the 19th century, which allowed Britain to import cheaper food for the working class, to the detriment of domestic landed interests. Yet if laissez-faire is a sufficient condition to alleviate
poverty, why do we insist on a welfare state to protect us from it?
Without political intervention, what progress would we have made against
Beveridge's five giants of want, squalor, idleness, ignorance and disease? John Hillary of Save the Children said that even the World Bank predicts that sub-Saharan Africa and the Indian subcontinent gain little benefit from the current trade round. He claimed that the 'level playing field' of free trade pitted the most powerful against the poorest, forcing the weak to the wall. As well as buying fair trade produce, he believes that
individuals must also hold multinationals to account for working conditions
right up the supply chain, and as citizens participate in movements
for trade justice. Comments from the floor showed widespread doubts about unfettered free trade. Trade can only be genuinely free if people have the choice to participate or not. Then free trade can empower workers by enhancing employment opportunities. However when poor people have no control over local resources such as land and water, landowners can increase profits by supplying foreign markets rather than local needs without raising wages above subsistence. Even if fair trade can grow beyond its niche, would it
be sufficient to provide genuine choice to the poor, or are more extensive
measures such as land reform required?
GLOBAL ETHICS FOR THE This forum took place on: Will antagonisms between competing religious and secular world views forever blight attempts to reach a common global understanding, and is this needed to meet the risks and opportunities offered by globalisation? The development of a global ethics - a universal ethical approach to the issues of unlimited capital movement, environment degradation, free markets, continental migration and global warfare - was the subject of a debate presented by the Global Development Forum. This was the first in a series in March* looking at the potential for fair trade to influence globalisation, the ability of the wealthy to shape it through ethical investment, and the implications of climate change on rich and poor countries. Extensive agreement between the two speakers, Dr Nigel Dower of Aberdeen University and Imran Madden of Islamic Relief, gave cause for optimism. Dower believes there already exist several competing global ethics, from neo-liberalism's emphasis on the ethics surrounding global trade, respect for contract and absolute property rights, to the internationalists' shared morality of the sovereignty of nation states and the principle of non-intervention, and the claims of religions such as Islam and Christianity to global communities of faith and ethics numbering over a billion adherents. His preference was clearly for the emerging global ethics developed by NGOs and what he claimed was a nascent global civil society based on responsibility and diversity. He highlighted core values around which a global ethics could grow, including subsistence, security and liberty, and the growing sense of global responsibility and solidarity built on a respect for diversity in cultural practices and beliefs. This approach forms the basis of the Earth Charter Initiative, to be presented at the UN's World Summit. Dower said that its calls for democratic societies that are just, participatory, sustainable and peaceful, and the need to secure Earth's bounty and beauty for future generations, had broad appeal, although not, perhaps, for extreme neo-liberals and religious fundamentalists. Indeed he argued that a global ethics need not, and could not, be compatible with all world views, or risked being the lowest common denominator. Madden suggested that the apparent competing world views of Islam and global capitalism were, in fact, highly compatible. The spread of Islam followed the trade routes through Asia, Africa and Europe, and its ascendancy was notable for its religious tolerance. Moreover the Islamic notion of ummah proclaims a global nationhood, a world community that includes non-muslims. Islam also emphasises khalifa or stewardship, in which we do not hold property out-right, and any possession is also a responsibility. He called for a change in western lifestyles to be compatible with the principles of sustainable development. In particular, Madden highlighted Islam's role in constraining capitalism whilst adhering to free trade. The zakah, one of the five pillars of Islam, requires Muslims to purify their wealth by giving away 2½% each year. The prohibition on charging interest similarly constrains capitalism's potential for exploitation. Yet there was little common ground about the source of a global ethics. Dower believed it could be derived from global governance in response to shared risks and increasing shared knowledge, awareness and consciousness. However he rejected universal religious and philosophical traditions that offered no means to resolve the inevitable conflicts. Beyond emphasising considerable areas of agreement, Madden gave little recognition that a global ethics requires a common language, which cannot belong to any single religion but must be secular if it is to have a genuinely global appeal. |