Posts Tagged ‘climate change’

Climate Change in Bangladesh – BBC Photos

7 December, 2008

Bangladesh is one of the countries that will be worst affected by climate change. Rising sea and coastal water levels and more frequent storms threaten this low-lying country. Adapting Bangladesh to climate change is urgent – especially to prevent the reversal of recent progress in poverty reduction there.

An excellent set of pictures on the theme of climate change in Bangladesh can be seen at the BBC here.

BWPI will be undertaking with BRAC a new research programme on climate change and its implications for poverty in Bangladesh. Watch this space over the coming months. In the meantime check out the BWPI and CPRC working paper series for more on Bangladesh.

Nigel Lawson: No Fiscal Stimulus, Darling

24 November, 2008

You can rely on Nigel Lawson, Chancellor of the Exchequer 1983-89, to go against the conventional wisdom (see his views on climate change here and here, for example). He’s certainly not a member of the “we’re all Keynesians now” group. In today’s FT he argues that monetary policy is the key tool, not fiscal stimulus. Keynes was wrong:

“Britain … recovered faster than any other major nation from the 1930s slump. It did so largely on the basis of cheap money and a balanced budget. Between the slump’s deepest point, in 1932, and 1937 the UK economy grew at an unprecedented 4½ per cent a year. Nor was this due to rearmament spending, which did not start until 1936”.

I await the comments of economic historians on his reading of the 1930s. For the moment let me focus on his central message.

Lawson argues that recapitalizing the banks is the priority. Certainly, deleveraging by the banks has been huge. Nobody can deny that the economy can’t move again until the banks are sorted out. They are the achilles heel of the battered Anglo-Saxon model of capitalism. Today Citgroup got a $300 bn bailout.

But is this enough? It won’t be if deflation sets in. Then the real value of debt will rise, which will punish Britain’s already highly indebted households. Once deflationary expectations take hold, they are very difficult to shift as Japan in the 1990s demonstrated. Then monetary policy becomes next to useless: interest rates cannot be cut below zero.

Not using fiscal policy to stimulate consumer spending is therefore enormously risky. For sure, consumers might save rather than spend (see my previous post). And Britain will face a big tax bill (after the next election). The gilts market might take fright, but for now they are buying (few want equities).

Back to the lessons Lawson draws from the 1930s: if Britain was to revert to a balanced budget then it would have to cut public spending in a recession rather than raise it. This would have its own deflationary effect which, as economic activity fell, would reduce the tax base – thereby requiring a further expenditure cut to maintain a balanced budget. This is not a recipe for achieving economic recovery.

So, Nigel Lawson’s defiance of the Keynesian consensus is brave, but wrong. His recommendation is too risky. The same goes for doing nothing about climate change (on the latter: go here for a debate between Lawson and Oliver Letwin).

Tony Addison is Executive Director of the Brooks World Poverty Institute, University of Manchester.

Leading the Global Debate from the South

12 November, 2008

The debate on global policy, including such critical issues as climate change and globalization, is still dominated by the North. Northern universities and media are well resourced. But the majority of humanity lives in the South. Recent years have seen some exciting ideas emerging from southern scholars, research institutes, and think tanks. The media in the South is exceptionally vigorous – I was impressed by the quality of debate in Uganda’s newspapers during a visit to Kampala last month.

The South Centre has played a major role in expanding the debate – especially South-to-South – and has now initiated INSouth.org. INSouth (the Intellectual Network for the South) was launched by Benjamin Mkapa, President of Tanzania (1995-2005) recently. Tanzania under the late Julius Nyerere was a hotbed of ideas about development. Walter Rodney wrote his influential How Europe Underdeveloped Africa in Dar. Not all of the ideas worked out – for Tanzania was a young country and it was very much learning by doing – but there was a time in the 1970s when Dar es Salaam was the place to be.

We are now at a defining moment in the global economy. Many of the seemingly well-established principles of how to run the global economy lie in tatters. The international financial crisis is a shock that emanates from the North with a profound impact on the South – the collapse back in global commodity prices from their highs earlier in the year is leading many governments to revisit their assumptions about economic growth for 2008-2009. The IMF is warning of a synchronised global slowdown, with potentially deep recession in the economies most severely hit by the financial meltdown. Iceland not to mention Eastern Europe look badly exposed. China has initiated an expansionary programme to offset the impact of its rapidly slowing export growth.

Appropriately INSouth has initiated a debate on revamping the global financial architecture. Will we see a new system for regulating global capital markets to ensure that future blowups don’t hit world economic prosperity? Or will it just be another patch-up that ignores the interests of the poorer and weaker economies?

So How Grim is it Up North?

11 November, 2008

In yesterday’s post on ‘Parks for the Poor’ we cited the impact of proximity to greenery – parks, woodland – on life expectancy in the UK. Seems that you are less likely to suffer stress-related illness, irrespective of your income class if you can chill in some nice green space.

Now comes the news that Manchester is near the bottom of the league in environmental sustainability in the index constructed by Forum for the Future – and green space is part of the index. Manchester is down there at No.15 out of 20 – top place goes to Bristol and bottom goes to unloved Hull.

(Here is the list in descending order: Bristol; Brighton and Hove; Plymouth; Newcastle; Cardiff; Edinburgh; Sheffield; Leicester; Nottingham; London; Bradford; Coventry; Sunderland; Leeds; Manchester; Wolverhampton; Glasgow; Birmingham; Liverpool; Hull).

So while Manchester is aiming to achieve low-carbon city status by 2020, according to Forum for the Future,  it seems to have a long way to go. Ditto Liverpool, which starts from behind Manchester. Yesterday’s Daily Telegraph announced that “it’s still really grim up north”, with a north-south divide in the index. Yet that isn’t so evident: Newcastle and Sheffield are ahead of London (although the bottom of the index is decidedly northern). Daily Telegraph journalists might have difficulty finding Newcastle on a map.

However, Britain is far, far behind Europe – as a travel any Scandinavian city will demonstrate. Bristol is Britain’s lone entrant (in a field of 35) for the EU’s latest initiative – an annual European Green Capital. The green money is on Stockholm, Oslo, Copenhagen, Amsterdam, Hamburg, Freiburg and Münster.

So a suggestion to the leaders of Manchester, Liverpool (and Hull): set a target to become European Green Capital in the next decade. Now that the British government is intent on reflating the economy by expanding infrastructure investment, put together an ambitious plan to redevelop your cities with – sustainability at the core.

Check out the research of Simon Guy and others in the School of Environment and Development at Manchester, in particular the Building Sustainable Cities Initiative. Greening cities is the BIG urban agenda. And it’s a poverty issue too – for greenery improves life expectancy, regenerates blighted urban areas, and encourages inward investment (and hence jobs). Win-Win.

And to cheer yourself up go to KLF (Jams) ‘its grim up north’ on YouTube – for some northern merriment in the ceaseless rain.

Human Development Report highlights the impact of climate change on poverty

29 November, 2007

The UNDP’s Human Development Report released on Tuesday highlights the impact climate change is likely to have on poverty and the attempts to achieve the Millennium Development Goals. It notes that ‘In today’s world it is the poor that are bearing the brunt of climate change’. Failure to tackle the issue ‘will consign the poorest 40 percent of the world’s population – some 2.6 billion people – to a future of diminished opportunity. It will undermine efforts to build a more inclusive pattern of globalisation, reinforcing the vast disparities between the ‘haves’ and the ‘have nots”.

The report draws an analogy with the ‘fight against the much higher inflation rates of the distant past’, in which institutions were found, such as more independent central banks, that allowed lower inflation to be achieved despite the short term economic difficulties encountered. Of course, the problem with that is that the efforts to tackle high inflation had the support broadly of the middle classes, whose interests were directly affected. As the HDR itself states, however, with climate change at present it is not the middle classes that are being particularly adversely affected, althought they will be in the long run.

The report can be found here.

In the Human Development Index this year, Iceland comes out top. The UK is in 16th place, just ahead of Belgium.