Sergio Abranches

After a few days of internal squabbling president Lula decided to drop a proposal from the Ministers of Finance and Science & Technology to launch a program to incentivize domestic production of electric cars.

The decision came after pressure from the Development Minister, responding to the auto industry and ethanol lobbies. He argued that incentives to electric cars would jeopardize the ethanol economy. Brazil is the leading producer of sugarcane ethanol, and according to the Development Minister, the Brazilian car fleet is progressively becoming mostly sustainable.

President Lula seems to have agreed. To justify his decision to drop the incentive plan he said that “almost 100% of the cars sold in Brazil have flex-fuel engines, and 60% of flex car owners prefer ethanol to gasoline.”

But this is not entirely true. Today, almost 100% of popular cars sold in the country are, in fact, flex-fuel cars. Flex-fuel engines can run on either ethanol or gasoline or any possible mix of the two. But fuel consumption increases significantly when engines run on ethanol. Because of the relevant consumption differential, what determines the choice of fuel is the price at the pump.

Over the last several months, ethanol prices have been higher, on average, and the difference between ethanol and gasoline at the pump has been reduced. Higher sugarcane prices and vigorous export sales have led to decreased production of ethanol for domestic consumption, resulting in raising ethanol prices at the pump.

I’ve been talking to flex car owners at gas stations and with cab drivers using flex-fuel engines instead of natural gas (mostly used in the cities of Rio de Janeiro and São Paulo). Everyone to whom I asked has told me that the fuel of their choice was presently “gasoline”. The reason: the price of ethanol is too high. A cab driver who travels almost daily between neighboring cities in the States of São Paulo and Minas Gerais told me he is now choosing ethanol when he is in São Paulo, and gasoline, when in Minas Gerais, because in São Paulo ethanol is cheaper than in Minas Gerais.

This means that Brazilian flex cars are not that sustainable. It will always depend on the price difference between ethanol and gasoline at the pump. Price variability is intrinsic to the ethanol economy because producers’ strategies will always be dictated by the commercial advantages of the relative balance between sugar and ethanol production. Unless the government subsidizes ethanol to maintain a ceiling to its price, totally distorting the economic equation of the industry, this variability will always mean cycles of greater use of gasoline alternating with cycles of greater consumption of ethanol.

The best policy solution would be to create incentives for the development of hybrids running on ethanol and of electric cars, leading to a diverse fleet with the aim of increasing overall sustainability and the lower emissions rate possible.

Policy, however, is not determined by intelligence or technical rationality. The main factor behind policy choices still is lobby power. And the ethanol lobby is among the most powerful in the country. When allied to traditional carmakers it becomes almost invincible.

Sergio Abranches

Extreme natural events may be a source of huge human and economic losses, although they are not, in themselves ‘disasters’. A disaster happens when an extreme natural event reaches a populated area.

Often the extent of human losses depends on the vulnerability of the population affected as well as on the degree of preparedness, and the quality of resources for disaster prevention. A poor country will suffer more. The poor wherever they are also will suffer more. Economic losses are greater where there is more property to be damaged, especially valuable economic assets such as industrial plants, commercial buildings, crops or large residential areas.

Munich Re’s NatCatService collects data on fatalities and economic losses caused by ‘natural disasters’ – a misnomer. It shows that, from 2004 to 2009, 543 thousand people have died from natural geophysical, and climatic/hydrological events. Economic losses amounted to US$ 753 billion, and insured losses to US$ 256 billion. Geophysical events are earthquakes and volcanic eruptions. Climatic and hydrological events are storms, floods, landslides, extreme temperatures, droughts, and wildfires.

Losses were caused by a total of 4,725 extreme events. Geophysical events represented, on average, 11% of the total over the last six years. But, they were, on average, the cause of  47% of human losses. There were three major deviations from this average. In 2004, that category of extreme events provoked 95% of total fatalities, because of the earthquake and tsunami in South Asia and East Africa, killing 220 thousand people. In 2004, it represented 90% of fatalities. An earthquake in Pakistan, India and Afghanistan killed 88 thousand people. In 2007, however, geophysical events accounted for only 5% of the fatalities. The deadliest events were cyclone Sidr, killing over 3,775 people in Bangladesh, and floods in China, killing almost 6,800 people.

Climatic and environmental events accounted for 89% of total extreme events registered. Storms were 41% of the total; floods and landslides averaged 31%; waves of extreme temperatures and wildfires, 17%. They were also the main source of economic losses, accounting, on average, in the period, for 81% of such losses. Storms were, by far, the costliest events, explaining around 58% of economic losses. (Click for larger image)

Both human and economic losses vary greatly year by year, depending on the incidence of extreme events in more populated areas. As the chart shows, the greatest fatalities have occurred in 2004, due to the earthquake, particularly the tsunami in South Asia and East Africa. The second deadliest year was 2008 because of the fatalities caused by the earthquake in China, killing more than 70 thousand people, and cyclone Nargis, in Myanmar, killing almost 85 thousand people. (Click for larger image)

Sergio Abranches

Heavy-weights of the computer and electronic industries have joined forces to rid their supply-chains from “blood minerals” coming from the Congo’s militarized mines.

They are supporting “Phase 2” of the initiative developed by the tin industry organization International Tin Research Institute – ITRI,  to address the problem of minerals, mainly tin and tantalum, coming from militarized mines in the Democratic Republic of Congo.

Militarized mining has meant massive use of forced labor, widespread violence against workers and the population in general, continued abuses of human rights, and unending war.

ITRI says that “Phase  1”, implemented in July 2009, was “a comprehensive due diligence plan for tin minerals exported from the Democratic Republic of Congo (DRC).” It has now announced “Phase 2” of its policy, called ITRI Tin Supply Chain Initiative, iTSCi.

iTSCi would represent

the first practical field trial designed to address concerns over ‘conflict minerals’ from that region and has required significant commitment and funding, around US$600k, to be put in place in order to go ahead.

As I reported earlier, Phase 2 doesn’t seem to be commensurate to the dimensions and seriousness of the problem. At the same time it has the support of an impressive roster of heavy-weight downstream users of tin and tantalum in the electronics sector, such as Apple, Dell, HP, IBM, Intel, Lenovo, Microsoft, Motorola, Nokia, Nokia Siemens Networks, Philips, RIM, Sony, Telefonica, Western Digital and Xerox.

I asked Kay Nimmo, ITRI’s Manager of Sustainability and Regulatory Affairs, what has effectively been achieved with Phase 1. She answered  that Phase I

ensures all correct export permits and payments have been made, and means that all available official documentation is collected on every batch of mineral.

I also asked her why only a pilot trial in Phase 2 to address concerns over ‘conflict minerals’ in the Congo, when the problem is already well-known, demands urgent and effective responses, and ITRI has the backing of the most relevant end-users.

Nimmo said that

Phase 2, tracking to widespread and remote mines, is not a simple task and the pilot project is designed to check that the system is effective and make any necessary improvements before it is put in place more widely. The ICGLR (conference of the great lakes) aims for a full certification process in several years time; our project will contribute to that development, together with other projects which are starting now, such as one on mine standards run by the german organisation BGR. You can see from the project supporters list that all parts of the supply chain are combined in their wish to ensure the project is as successful as possible for the benefit of those in the DRC.

I have also contacted Annie Dunnebacke at Global Witness, an NGO that investigates and campaigns to prevent natural resource-related conflict and corruption. I wanted to know what she had seen in the region, on her last field trip last February, and how that related to the industry’s initiatives.

She told me that GW’s team

gathered documentary evidence (…) that some comptoirs [trading houses] implementing the ITRI scheme are currently sourcing from militarised zones. Our recent investigation also highlighted that the national army (mostly brigades commanded by former CNDP [Congrès National pour la Défense du Peuple] rebels) have taken over the majority of the mining sites in eastern Congo (with the exception of gold, much of which remains under FDLR [Forces Démocratiques de Libération du Rwanda] control).

This means, according to her view, that Phase 1 was only about

ensuring that comptoirs have their paperwork in order – licences, taxes, things they should have been doing by law anyway. It is not an accomplishment, it does not address the conflict minerals problem in any way and is merely belated compliance with basic elements of Congo’s laws.

However, other situations in which illegally extracted natural resources enter the supply-chain of large global corporations showed that compliance with the law is a prerequisite to any successful attempt at banning such products from regular markets.

Annie Dunnebacke’s stronger point is that if

the ITRI scheme does not cover the army – so it does not address the heart of the problem.

She also argues that

companies that source minerals from eastern DRC have a responsibility to make sure their supply chains are free of all materials from militarised mines right now, not at some point in the future. The violence associated with militarised mineral trade is not a future prospect, it is immediate and is costing lives. Any scheme that does not include regular field investigations and independent audits by companies is meaningless.

Kay Nimmo won’t debate with GW through the media, but says if the NGO wishes to make direct contact to “positively engage” and “make useful suggestions of their own”, they are welcome. She also says that engagement would allow GW to become more fully informed of ITRI’s endeavors to tackle the problem.

Annie Dunnebacke told me they have already made concrete corporate policy recommendations to individual companies like Apple or Nokia, such as

Publish credible evidence that the tin, tantalum and tungsten in their products is conflict-free:

Publish the identity of their suppliers of tin, tantalum and tungsten.

Contractually require suppliers to disclose the mine of origin for all tin, tantalum and tungsten from DRC or neighbouring countries.

Contractually require suppliers that source from DRC or neighbouring countries to publish written evidence of the comprehensive due diligence they have carried out on their supply chain to ensure that the minerals have not passed through the hands of armed groups or military units, benefited them in other ways or otherwise involved human rights abuses.

Conduct spot checks of their suppliers and commission and publish regular independent audits of their supply chain

“Blood minerals” and militarized conflict in African regions, like the Congo, are what conflict analysts call “an intractable problem”. Stopping the flow of income that enables conflicting groups to arm themselves is a prerequisite to start making it more tractable. Only large end-users of these “blood minerals” can stop that flow and help to create alternative sources of income to the local population. This is a clear case of strong correlation between sustainable development and corporate sustainability.

One cannot rely on governments of “failed states” to effectively address the suffering of their people. Only corporate action in concert with social movements seem to have the means to create small paths that with time, coherent commitment, and corporate social responsibility may really lead to state rebuilding and conflict resolution.

High-tech is linked to war and brutality not only through the arms industry. Computers, cellphones, and other electronic equipment can be part of a shocking connection of highly advanced technology with human suffering, forced labor and unending war. Does it sound too preposterous?

Sergio Abranches

Well just take a look at the 2009 report “Faced with a gun, what can you do? War and the militarisation of mining in eastern Congo” by Global Witness. It tells us about the “conflict minerals” or “blood minerals” that are widely used by high-tech electronic industries. Raw-material in their supply-chain could have been sourced from many parts of the provinces of North and South Kivu, where armed groups and the Congolese national army control the trade in cassiterite (tin ore), gold, columbite-tantalite (coltan), wolframite (a source of tungsten) and other minerals. The report documents a billionaire tale of brutality, tyranny, and corruption. Not too dissimilar from the story most of us came to know from the movie “Blood Diamond”, directed by Edward Zwick, with Leonardo Di Caprio, Djimon Hounsou, and Jennifer Connely or from National Geographic’s documentary Blood Diamond (Diamond of War).

In their broader struggle to seize economic, political and military power, all the main warring parties have carried out the most horrific human rights abuses, including widespread killings of unarmed civilians, rape, torture and looting, recruitment of child soldiers to fight in their ranks, and forced displacement of hundreds of thousands of people. The lure of eastern Congo’s mineral riches is one of the factors spurring them on. By the time these minerals reach their ultimate destinations – the international markets in Europe, Asia, North America and elsewhere – their origin, and the suffering caused by this trade, has long been forgotten.

These minerals of war end up into advanced products of major global companies, reports Global Witness:

Several of the main comptoirs – trading houses based in Goma and Bukavu – buy, sell and export minerals produced by or benefiting the warring parties. They include Groupe Olive, Muyeye, MDM, Panju and others. The fact that these comptoirs are officially licensed and registered with the Congolese government acts as a cover for laundering minerals which are fuelling the conflict. These comptoirs’ customers include European and Asian companies, such as the Thailand Smelting and Refining Corporation (THA ISARCO), the world’s fifth-largest tin-producing company, owned by British metals giant Amalgamated Metal Corporation (AMC); British company Afrimex; and several Belgian companies such as Trademet and Traxys. These companies sell the minerals on to a range of processing and manufacturing companies, including firms in the electronics industry. Economic actors are turning a blind eye to the impact of their trade. They continue to plead ignorance as to the origin of their supplies and hide behind a multitude of other excuses for failing to implement practices which would exclude from their supply chain minerals which are fueling the armed conflict.

The report says that cassiterite (tin ore) is the most important blood mineral in terms of quantity and price. It has many uses as a component in the production of solders, tin plating and alloys. Downstream users are the electronics and tin can industries. Electronic solders alone accounted for over 44% of all refined tin in 2007. In 2007 and 2008 the so-called Democratic Republic of Congo accounted for about 5% of global tin ore production.

The trading houses – comptoirs – are, according to Global Witness, a critical part of this chain of supply and export of minerals, in a setting of violence, exploitation, environmental and human degradation.

“We all end up buying minerals which, in some way, have been produced illegally. You can’t just ask us to stop. We have no alternatives other than closing,” a representative of one to the comptoirs told Global Witness.

Global Witness has written to about 200 companies all over the world inquiring about their trade practices in the Democratic Republic of Congo.

Some of the companies which replied to Global Witness stated that they were committed to upholding and improving due diligence policies. However, the policies or internal codes of conduct they refer to are fairly general and do not include specific safeguards against the mineral trade fueling armed conflict.

Global Witness’s view at the time of the report is that the industry lacked a coherent plan to address the conflict dimension of the mineral trade.

The industry has adopted some actions to address the problem, coordinated by its trade association, the International Tin Research Institute – ITRI. The Institute claims that “Phase  1”, implemented in July 2009, was “a comprehensive due diligence plan for tin minerals exported from the Democratic Republic of Congo (DRC).” It is now announcing “Phase 2” of its policy called ITRI Tin Supply Chain Initiative, iTSCi.

ITRI says that iTSCi represents “the first practical field trial designed to address concerns over ‘conflict minerals’ from that region and has required significant commitment and funding, around US$600k, to be put in place in order to go ahead.”

Phase 2 consists of “a pilot trial which will begin to track minerals and provide verifiable provenance information from individual mine sites in eastern DRC; something that has not been possible up to now.”

This initiative has the support of an impressive number of well-know downstream users of tin and tantalum in the electronics sector, such as Apple, Dell, HP, IBM, Intel, Lenovo, Microsoft, Motorola, Nokia, Nokia Siemens Networks, Philips, RIM, Sony, Telefonica, Western Digital and Xerox.

Kay Nimmo, ITRI’s Manager of Sustainability and Regulatory Affairs says that the industry can now “move ahead with this next step in the iTSCi project” which “really demonstrates the commitment of the tin, and now also the tantalum sector, to find a solution to this difficult issue.”

It is a welcome move, but it still seems to be too weak a response to such a brutal problem. Global Witness acknowledges that many mining and electronic companies have clear policies regarding the sustainability of their supply-chain, but due diligence procedures fall short of adequately addressing the problem of the warring parties’ control of a major share of mineral supplies.

A Group of Experts nominated by the UN in 2004 to recommend actions regarding conflict minerals, issued a report in 2008, urging UN member states to “take appropriate measures to ensure that exporters and consumers of Congolese mineral products under their jurisdiction conduct due diligence on their suppliers and not accept verbal assurances from buyers regarding the origin of their product”.

ITRI’s plan to track minerals and provide verifiable provenance information could be an important instrument for origin certification in the supply-chain. Similar cases of illegal goods entering the production process of large, competitive companies show that only the giant corporate downstream users have the power to enforce rules aiming at cleaning the supply-chain.

The situation doesn’t seem to have improved much since Global Witness issued its report and ITRI implemented Phase 1 of its project. Annie Dunnebacke, just back from a month in eastern DRC, reports that:

For more than a decade now, the country’s mineral wealth has provided an incentive and a cash base for the conflict to continue. Unless the government and international donors implement a comprehensive strategy which tackles once and for all the economic drivers of this conflict, the local population will continue to suffer and the country’s future will continue to be blighted.

Emilie Serralta, also part of Global Witness’ team just back from the Congo, adds that the

capacity of the former rebels to siphon off revenue from the mines means they could afford to re-arm if they decide peace no longer suits them. This is particularly dangerous considering the ex-commanders’ history of reverting to rebellion when they don’t get what they want.

Global Witness said on a recent press release to have evidence that companies in eastern DRC and Rwanda are still buying goods directly from militarized mines.

Some in the industry have committed on paper to greater supply chain traceability and more responsible sourcing practices, but so far companies buying minerals from eastern Congo have failed to move beyond the rhetoric and put in place credible due diligence measures.

Annie Dunnebacke contends, on a Global Witness press release, that

It’s not enough for companies to rely on promises made or paperwork filled out by their suppliers. If companies want to avoid being complicit in the conflict and human rights abuses, they have to carry out investigations to find out exactly which mines the goods come from, and who has benefited from the trade. Information about who controls which mine site is common knowledge in the trading towns of eastern Congo. Companies buying minerals from militarised areas cannot claim ignorance.

Amid strong controversies among his ministers, president Lula has supposedly concluded a cabinet meeting, last Tuesday, by saying “we’ll move ahead, but first bring me a consensual policy with figures all of you agree with.”

Sergio Abranches

The decision was postponed to November 14. Meanwhile government officials will try to agree on a set of actions and figures that go beyond the commitment 80% reduction  of deforestation by 2020.

The new commitment would include the agricultural sector (land use change), by means of a program of quality and productivity gains to reduce greenhouse gases emissions. The program could include new production practices, increasing non-tillage farming, and direct seeding; changing use of fertilizers; fighting agricultural wildfire, especially on sugar cane plantations; and recovery of spoiled land to move the agricultural frontier without forcing deforestation.

Another action considered almost fully approved is to ban wood from deforestation in the production of charcoal for steel mills. Government officials are labeling it “green steel”. President Lula has recently criticized private giant iron ore mining company Vale, for not producing steel for export. He and his Chief of Staff (also his presidential candidate to be) Dilma Roussef are staunch supporters of steel production.

Some sources have told me there wasn’t too much conflict over goals or over the idea of an enlarged commitment to be taken to Copenhagen. Most of the divergence centered on figures and procedures. The meeting was adjourned so that the different ministries could get together and agree on both.

The major source of opposition to an extended commitment continues to come from the Foreign Ministry. They argue that the Kyoto Protocol does not impose such obligations on Brazil. President Lula’s political advisors, however, are reported to have said that there is great expectation in the Brazilian society about a new attitude in Copenhagen. The president was apparently sensitive to the argument, because he is very fond of his domestic popularity, and also because he is already looking at the 2010 presidential elections.

Brazil would present a new and more ambitious set of NAMAs – Nationally Appropriated Actions, that, although not considered technically as legally binding commitments, are “quantifiable, reportable and verifiable commitments.”

Although there are those who say the government has already decided to commit only with the 80% reduction of deforestation in the Amazon, I heard from more than one official source that the president wishes to go beyond that.

The expectation is that actions and corresponding quantitative figures, consensually supported by all ministers involved, should be finally evaluated with the president next November 14.

President Lula’s last words were “let’s move ahead, but bring me a consensual policy with figures all of you agree with.”

Only 37 days before COP15 in Copenhagen, pragmatic proposals for a new framework agreement leaving detailing to be negotiated ex-post are gaining force.

Sergio Abranches

On October, 27^th IPCC lead writer, economist Graciela Chichilnisky wrote on The Ecologist, that she reads “the smoke signals [about a Copenhagen deal] positively”.

“My prediction for Copenhagen is that nothing will happen until the 11½ hour. This is because the stakes are so high – involving the use of energy and the economic growth of nations – that no nation wants to move first. At the end, reaching a deal will focus everybody’s attention.”

On her view there will be “an agreement in principle – the details worked out over a year or so and a process agreed for this.”

Earlier, on May, Climate Policy, a blog project of the American Meteorological Society, published a post by economist Scott Barrett, of the  Johns Hopkins University International Policy Program, on “How to Prevent Climate Change Summit from Failure”, where he argues that:

“It is more realistic to aim to negotiate a skeleton agreement in time for Copenhagen, to save face, with the details being finished later—a Copenhagen bis agreement (bis is Latin for “a second time”). Though many people emphasize the need to act quickly, it is much more important that the US develop an institution that will work, a foundation for making incremental improvements over time.”

He contends that “there is a feedback between domestic negotiations in Washington, and the negotiations in Copenhagen and beyond.” Hence his focus on what the US negotiators should do to save the climate summit.

“My recommendation for the US would be to negotiate a skeleton agreement in time for Copenhagen, and follow up with supporting agreements focusing on individual gases, sectors, and R&D efforts. Success in Copenhagen should not be defined by setting goals that lack domestic support and that cannot be enforced but by laying a foundation for making incremental improvements over time.”

A recommendation that does not differ too much from Chichilnisky’s. But this coincidence of views is only partial, if not superficial. On her article, she also defends the maintenance of the Kyoto Protocol. She is co-author of the book Saving Kyoto. Her argument on why we should keep the Kyoto Protocol is a practical one:

“Why keep the Kyoto Protocol? We must bound global emissions and decrease carbon in the atmosphere – no matter what. Most people agree on this. But this is the first thing the Protocol does. So if we scrap the Kyoto Protocol we will have to start in the same place and do more of the same – so at the end we would have a Kyoto Protocol by another name. It took 13 years to negotiate the Kyoto Protocol. Why spend precious time reordering the chairs in the Titanic?”

I have written a piece defending the opposite position. That we should abandon the failed Protocol and work towards a new treaty. Graciela Chichilnisky doesn’t think Kyoto is a failed experience.

“The Kyoto treaty was faulted because greenhouse gas emissions rose under its auspices. But the rising emissions of the last 13 years came mostly from nations that never ratified the Protocol. The Protocol is not at fault for those who refused to obey its limits.”

She does, concede, however, that “Kyoto is only a start and requires improvements”. She also comments the difficulties, political, and geopolitical, the US faces to ratify Kyoto, she thinks could be overcome.

Scott Barrett holds a different view on Kyoto. He considers Kyoto be be both a failure and a risk.

“It is easier to define failure. Most climate watchers would define failure to mean lack of an agreement by states to “commit” to limiting their emissions dramatically. I would define failure to mean repeating the mistakes made in Kyoto in 1997. The worst outcome would be for the United States to “commit” to meet quantitative targets and timetables of emission reduction without being sure that these obligations will be approved by Congress.”

He doesn’t even think that targets and timetables are workable pieces of a viable treaty.

“Targets and timetables are also difficult to enforce. We know this because Kyoto established economy-wide targets and timetables and has been ineffective. This is the mistake we must not repeat.”

Scott Barrett prefers a mechanism more similar to the Montreal Protocol, that was far more effective in reducing CFC’s emissions.

“Montreal has several important features that are not shared by Kyoto. First, it not only limits production (like Kyoto); it also limits consumption (defined as production plus imports minus exports). Second, it not only requires industrialized countries to limit their emissions (like Kyoto), it requires developing countries to reduce their emissions, too. Third, while Kyoto’s limits apply for just five years, Montreal’s cuts are permanent. Fourth, under Montreal, industrialized countries finance compliance by developing countries.”

That’s why he prefers a series of ex-post supporting agreements focusing on individual gases, sectors, and R&D efforts.

“An alternative approach is to address these sectors at the global, rather than at the national, level. New technical standards should be negotiated, creating a new “level playing field.” These can then be implemented in the same way as the Montreal restrictions.”

Although disagreeing on what to do about Kyoto, and even on what did Kyoto really mean to the global endeavor towards and effective climate policy, they both point to a practical way to prevent failure in Copenhagen. To negotiate a political framework, leaving the operationalization and technical detailing for subsequent negotiations after Copenhagen. Some countries are already proposing a “Copenhagen 15.5”, an additional Copenhagen meeting in early 2010.

They may both be right about what appears to be possible to achieve in Copenhagen. Their very disagreement shows how far we are from solving what I called the Asimov Paradox. The Paradox tells us that to change a planet full of people either we get as broad a consensus as necessary, involving as many people, or if consensus fails, far more time for change must be allowed.

I’d like to see those who advocate piecemeal, incremental changes to be more explicit about the risks involved. I am not persuaded that we have the time necessary for policies gradual enough to elude the lack of consensus.

Yet, it doesn’t seem likely, even at the 11½ hour, that world leaders will be able to reach consensus on an ambitious, far-reaching new Protocol to replace Kyoto.

If a bold agreement becomes impossible, an even worse outcome would be to let Copenhagen fail outrightly as some are advocating. We can’t afford to begin again from the scratch. That would only consume time we don’t have. If it comes to a solution like Scott Barrett and Graciela Chichilnisky’s we should, at least, work towards two partial outcomes.

First, that the agreement includes some warranty that we’re not deciding only to muddle-through (Kyoto amounted to a muddling-through compromise). It should contain the terms necessary to achieve significant progress on the details on how to reduce GHG emissions and concentration on the atmosphere.

Second, that brainpower and money are invested in assessing the risks we are taking with an incremental solution, and how to best manage those risks.

Last weekend, central urban areas of Rio de Janeiro were once again a theater for war among drug gangs fighting to take each other’s control of drug fiefdoms. The police intervened and the battle became a tripartite one: gangs fighting each other and the police fighting both.

Sergio Abranches

There is nothing new in this brief report, only a new death-roll, and the hard fact that this tragedy has become a routine event of city life.

Some more facts. A police helicopter was downed, three of the six policemen in aircraft were killed by the explosion. The third one died today at the hospital. The helicopter was very likely hit by an anti-aircraft shot from one of the gangs.

The Brazilian military have the monopoly over the use of heavy military guns and assault weaponry, as well as the power to regulate third party use. They have denied permission for Rio’s police to mount a heavy machine gun on an armored helicopter to cover their people in action on the ground.

But they are totally silent and complacent about the fact that criminals do use such weaponry to kill innocent people and policemen. Weapon not rarely stolen or smuggled from military bases.

They are planning to spend an awful lot of money on air fighters to defend Brazil against unlikely external threats. At the same time, the frontier base up the Rio Negro, on the Amazon, next to Colombia, doesn’t have even a single powerful boat to prevent drug traffickers to come down the river from the border with their loads of cocaine paste. They simply see the traffickers to accelerate their powerful four motor boat and leave the military staring powerless at the river foaming behind it.

Over three days of street combat in Rio, 21 people were killed, (roughly half the number killed on the suicidal bombing in Iran this week) several injured. There was, again, controversy about police action. Some claim it may have caused the death of at least three innocent people. There are obvious difficulties in separating criminals from innocent bystanders in action. But there is also clear signs of faulty intelligence and neglect of early-warning signs that might have led to preventative measures, saving lives.

This violence (homicides) is killing three times more young people from 15 to 25 years old, of which 97% male, and 83% black males.

Cut to a slum or popular neighborhood.

Action: One looks at any slum or poor neighborhood of any Brazilian metropolitan cities and sees the signs of neglect, absence of public authority, basic services, aesthetic degradation, garbage spread all over.

No wonder they’re becoming the fiefdoms of drug-lords or paramilitary militias, often formed by active policemen, monopolistically providing paid illegal, services such as access to cable TV, the Internet, light, gas, and, obviously, security.

Cut to any street of Ipanema, Gávea or Leblon, upper middle class neighborhoods of Rio de Janeiro. All three are circled by growing slums.

Action: One doesn’t look close uphill, where they are. One should now look at the streets below. One then sees what bus drivers are doing: crossing red lights, driving dangerously, disobeying the most elementary transit laws. One looks again, and will likely see police around taking no action. One more look to see a bus parked irregularly, the driver pissing on the sidewalk, aloof to pedestrians, or admonitions.

Public transportation is a public concession, hence a service city government licenses private companies to explore. They should be severely punished for disobeying rules, and even more, for breaking the law. But they aren’t. City governments have more pressing issues to attend to.

One moves to the door of a private school where wealthy children are educated. Students are arriving or leaving school. One sees tens of SUVs, and expensive cars irregularly parked, most conducted by paid drivers, transforming the neighborhood transit into a chaotic series of transgressions. One looks again, to see the police giving protection to the elite’s drivers violating sociability rules, and organizing transgression, not enforcing the law.

Cut. Move to a busy street in Ipanema.

One asks how many people walking on the streets have been victims of petty robbery, armed robbery, car theft. Many will answer affirmatively. One asks how many went to a police precinct to register the occurrence. Only victims of  car theft will answer affirmatively, because it is a necessary step to get insurance money.

People who did complain about purse or wallet thefts, petty robbery incidents, only do it once. The regular answer the get from the police is “we have bigger problems to deal with, problems like yours happen at every minute”.

Sociability is gravely compromised in the neighborhoods of Rio de Janeiro. But it is almost impossible in the slums and poor communities. The innocent, working population in these areas is a victim of public neglect, and subject to what I once called tyrannical banditry. They use a well-known strategy of social control that combines in variable dosages actual violence (summary executions, demonstration killing, beating, torturing, and several forms of harassment); threat of violence; and private favors substituting for public service. They use the unattended needs of the population they are tyrannizing on their own benefit, the same way clientele politics does.

Cut to a few years back.

Action: B. a former assistant of mine, today an excellent police reporter for a local newspaper, drives her car uphill, crossing a slum, where a black friend of hers lives. They are both doing voluntary church work at the time. As they work after hours, she drives him home. That saves him about and hour and a half if he were to go by bus. To her it is a 30 minute detour. She drops him at the farthest point she can go with her car, and drives back downhill.

There comes a youth on his motorcycle carrying a bicycle across the hear rack, so that one wheel goes out to the left, and the other to the right. The way is too narrow. She couldn’t drive pass him without hitting the bike. There are no sideways, nor sidewalks. She stops. He goes on, accelerates, and breaks down the side mirror of her car.

She moves away. A few meters downwards she’s stopped by a large, shirtless black men, on his shorts, holding a 9mm automatic pistol. He asks her what happened. She said, “nothing important, just an accident”. He replied, it was no accident, but an aggression, and added that he knew she was a “straight girl”, doing “cool community work”, and that she deserved to be respected. She thanks him and says she’d like to leave. He says no. Tells her to leave the car blocking the narrow street and walk back uphill with him.

She has no way out, so up she goes. He takes her to a house, with an empty large room, like a meeting room without furniture. A solitary working table lies at the center, where the boss is seated, with two 9mm pistols each next to one of his hands. A brief dialogue ensues, with the first one telling him what happened. The boss asks who did it. “Johnny”, the other answers. “Summon him”, demands the boss.

Johnny comes light speed. He confirms his doing, and the boss says: “You know what to do.” The boy says “yes”. He apologizes. Apologies accepted. The boss says: “not enough”. “She has to fix her car,” and asks her how much would it cost to fix the car. She says it was an old car, no compensation required. The boss asks his assistant, how much, and he estimates R$ 80.00 (about 1/3 of the minimum wage at the time). He boss looks at the boy, the boy takes the amount from his pocket and gives it to her. The boss says: “next time, you know the punishment,” and to her, “you can come and go safely around here. You’re doing good to my community. We have zero tolerance for such disrespectful behavior here.” The boy leaves. The large black soldier takes her to her car, other assistants open the way so that she can drive unimpeded out of the slum.

Zero tolerance to small aggressions, with people breaking the rules of sociability, vandalizing others’ property, that’s what sociologist James Q. Wilson would say public authorities should do. Fighting only grand thefts, organized crime, massive violence, is useless, it public authorities let disorder, transgression and disrespect become part of daily life and city culture. It only leads to cycles, where waves of even greater violence alternate with brief moments of peace at the shadow of the guns of both criminals and the police. It is not peace, just a moment of silence following the trauma of death.

This sort of context of crime and violence is a complex one. It is systemic. But complexity does not mean that solutions have to be grandiose. They often imply a daily routine of combating tolerance, laxity with the rules, and compromising.

Many intellectuals and professionals who address the problems of crime and violence, and not only in Brazil, say that the “broken windows” diagnosis is just right-wing ideology, not a working, or proven theory. That’s the wrong way to look into it. Malcolm Gladwell’s chapter on New York, in his book “The Tipping Point”, makes a good counterpoint to this argument. There is evidence that it works, but most important of all, democracy is about legitimate order, monopoly of the use of force by entrusted public authorities, also accountable for their doings. Disorder, impunity and corruption are anti-democratic. The enforcement of law and rules legitimately made is of the essence of democratic rule. The enforcement of laws and rules, made by bandits, enforced with violence at their will, defines tyranny. Like in the case of my former assistant.

Street violence and the tyrannical social structure imposed by drug lords to the popular communities across metropolitan Brazil are symptoms of a broader process of urban decay. Cities are uglier, dirtier, more disorderly; traffic is more violent and undisciplined; people don’t trust each other; the wealthy are building self-sufficient bunkers to isolate themselves from the “city”, and from “those others”, mostly “black others”. The number of armored private cars increases every month.

People discuss all these signs of decay, fear, distrust, and failed governance at dinner, casually, as if they were normal traits of contemporary living. Like a new job offer, or buying fashionables. Complacency kills, but no one seems to realize it.

It obviously kills far less within the well-to-do, the upper middle classes, than among the poor and the lower middle classes, living in the decayed neighborhoods at the borders of slums, and among poor, working, and lower middle class people living in the slums. They are not violence breeders, nor potential criminals. Poverty does not generate crime and violence. Neglect and disorder do. The poor, mainly black males are their victims.

Another argument is that the “broken windows” theory would lead to prejudice. Where there are fears of prejudice is because prejudice is already a trait of that society’s culture. Besides, it can be applied to overt prejudice and the treatment of minority groups. Violence stems from failed institutions and lack of civic pride. Democratic order, “fixing broken windows”, could help to contain violence, reduce fear, and to create livable streets and neighborhoods while making them more enjoyable, good looking, and sustainable.

If we keep our windows broken, our hearts will also be broken and we will have to survive under the shadow of the guns.

When Cop 10 failed in Buenos Aires, December 2004, there were two culprits for the deadlock of climate change negotiations: the US and G77. Bangkok ended deadlocked last September. The main agents leading to the standoff were the US and G77. The US, however, had completely changed its attitude towards a global climate change deal.

Sergio Abranches

At the time, Italy’s Environment Minister, had proposed that the Kyoto Protocol be abandoned by 2012, if a new and broader agreement were not possible. It was an act of protest against US vetoes, and the announcement by the UK and Japan that they would not be able to meet the meager Kyoto emissions reduction goals.

Cut. Bangkok, October 2009. The last preparatory meeting before COP 15, in Copenhagen fails. Reason: conflict between the US and G 77, with China leading the confrontation for the “small states league”. The US was pushing  for a replacement to the Kyoto Protocol. The G77 defended its permanence. It wanted the maintenance of the Protocol’s outdated bipolarity: “Annex I countries”, with binding commitments, and “Non-Annex I countries”, with no obligations. US criticism of the Kyoto Protocol is fully correct and has the agreement of the European Union. Kyoto is outdated. It has never worked properly.

The G77 major countries know that this group of countries makes even less sense than the Kyoto Protocol. They argue that Kyoto would be replaced by a lax scheme, with no clear obligations and no guarantees. But that is what the Kyoto Protocol has become. What’s being proposed is quite different: an ambitious deal, with much higher targets for reducing emissions, including binding commitments for the emerging powers: China, India and Brazil, in particular. These big emitters are using a bad geopolitical fiction called G77 to evade their obligations.

COP 10 was held on a different world. The UK, then unable to meet the dismal Kyoto targets, is today ahead of most other European countries in its endeavors to mitigate GHG emissions. Japan’s new prime minister, Yukio Hatoyama, announced last September, at New York’s climate change summit, that his Administration will commit to a 25% reduction of 1990 emissions by 2020. In the COP 10 world, Japan was defaulting Kyoto. Barack Obama’s election has removed the US veto to an ambitious climate deal. For the first time there is a present and concrete chance that the US could have e federal climate change law.

Brazil had, in 2004, a per capita income of US$ 7,770.00 (by purchasing power parity criteria – ppp). Its Human Development Index was 0,775. Today, its per capita income is US$ 9,577.00, and its HDI, 0,813. At COP 10, in Buenos Aires, Brazil worked most of the time shifting positions as mouthpiece for G-77 with Tanzania (per capita income of US$ 580.00 -US$ 1208.00, in 2007- and HDI of 0,407 – 0,530, in 2009). That was signal enough there was something weird about this group of countries. Brazil and Tanzania have never had common interests regarding GHG emissions, or economic development issues. Their agenda was, and continues to be, totally different.

Brazil could only find itself at home among most of the G77 countries by sheer opportunism. The same is true for China. I’m talking about countries such as Tanzania, Burundi (per capita income: US$ 630.00, in 2004, and US$ 341.00, today; HDI: 0,339 e 0,394, respectively), Democratic Republic of Congo (per capita income: US$ 650.00 and US$ 298.00; HDI: 0,365 and 0,389), Ethiopia ( p/c income: US$ 780.00 and US$ 779.00; HDI: 0,359 and 0,414) or Haiti (p/c income: US$ 1610.00 and US$ 1155.00; HDI: 0,463 e 0,532).

The G-77 is one of those relics the United Nations preserves. It has actually much more than 77 states today. They are already 130. It might as well be called the G-130: a disjointed set of heterogenous countries created in 1964, in an even more distant world, of Cold War, communist countries, and latino military dictatorships.

Brazil was then a Third World dictatorship, with a modest and closed economy. China wasn’t even dreaming of a process of economic opening and modernization that would turn it into a powerhouse of the capitalist world.

Such a disparate group of nation-states has no capability to define a proactive agenda related to social and economic development, even less a climate change agenda. It is, by definition, a veto group.

Sociologically speaking this amorphous mix has countries with tiny populations like the Maldives’ 300 thousand people, and mega-populations like China’s 1.4 billion. It puts together urban and rural countries; industrialized and industrializing ones. Their per capita incomes vary from Zimbabwe’s US$ 261.00, to Brunei Darussalam’s U$ 30,000.00. What could those countries have in common?

When the G-77 was created, the Brazilian population was growing at 3% a year; the birth rate was on average 6 births per female; its urban population was only 50% of a 78.6 million population; infant mortality was 116:1000; adult literacy was 55%; and per capita income was US$ 1,400.00.

Today, Brazilian urban population is 85% of a total of 114 million people; annual population growth is 1.2% and the birth rate is under 2 children per female. Infant mortality has dropped to 23,6:1000, 80% less. Adult literacy is 90%. Per capita income has increased sixfold.

Changes in China have been even more impressive, although they don’t show as much because of the enormous absolute size of its population.

Brazil cannot keep hiding behind 120 poor countries to evade its responsibilities for global climate change. The same is true to China, and to India. They belong to a different league. One that the financial market has come to know as “BRIC countries”, the intermediate economic powers of today, the stardom of the emerging markets. These countries may become mega-economies, in less than three decades, and are already large GHG emitters.

In Goldman Sachs’s study, the economists who concocted the acronym “BRIC”, to refer to Brazil, Russia, India and China, estimated that in less than 40 years, their GDP would sum more that G-6’s GDP. Only the US and Japan would have economies as large as theirs. The US would be the second largest, after China, and Japan, the fourth, after India, but still ahead of Brazil, the fifth, and Russia, the sixth.

The BRIC league would grow from 15% of G-6’s present economic power to more than 50% by 2025. The growth rates necessary to achieve this status conform to a less than best case scenario. Brazil would need an annual average growth rate of 4%, over the next four decades, to get there. China would have to sustain an average annual growth of between 7% and 8%, over the first 10 years, reducing progressively to less than 5%, to end the period growing between 3% and 4%. India would have to grow by at least 5% every year during the next 40 years.

In spite of having around 15% of G6’s GDP today, they represent about 30% of global GHG emissions. Almost half of that emission comes from China. Even looking at per capita emissions, these three countries are much larger emitters that most of the G77’s 127 other nations.

We’ve got to separate the emerging powers from the smaller G77 countries. Those who belong to the G20, a geopolitical grouping that makes far more sense, and to MEF, the Major Economies Forum, created by President Obama, should leave the G77. The MEF will meet next November, in the UK, to try to solve the deadlock preventing an ambitious global climate change deal in Copenhagen’s COP15. It would be a good opportunity for China, Brazil and India stop behaving as small league players, and take obligations proportional to their actual size.

The Brazilian electoral law has set October 3 as the deadline for those who want to run in the 2010 general elections to decide on their party affiliation.

Sérgio Abranches

Over the last few days several important announcements came from government authorities, business and political leaderships either choosing a party, or changing party affiliation.

The Chairman of the Brazilian Central Bank, Henrique Meirelles has announced his affiliation to PMDB yesterday. PMDB is the clientele-politics, pork-barrel, catchall party that presently holds the larger share of seats in both the House and the Senate. The party has a pivotal role in President Lula’s coalition. President Lula has tried to convince him not to reenter electoral politics next year. He had been elected a House member in the 2002 elections, before being invited to head the Central Bank. He didn’t even take the oath of office as a Representative.

Lula asked his Central Banker to wait for the victory of his presidential candidate Dilma Roussef, promising Meirelles a very important role in the new government. It seems Meirelles has more confidence on his own electoral chances in his home state, than on the Ms. Roussef’s, who has been handpicked by Lula himself. Knowing that he was decided to get a party affiliation “to let the door open to a future candidacy”, President Lula asked him to join PMDB. Meirelles said he will annouce next March whether he will leave the Central Bank to run for office. He is expected to run for governor of this home-state, Goiás, or, alternatively, to seek a Senate seat.

Celso Amorim, Lula’s Minister for Foreign Affairs,  who masterminded the disastrous operation that led the Brazilian Embassy in Tegucigalpa, Honduras, to host ousted president Manuel Zelaya, has announced his affiliation to the Worker’s Party (PT). President Lula is one of the founding fathers of PT. Mr. Amorim was formerly affiliated to PMDB, but has never participated in elections.

PT, however, has lost more affiliates than it acquired. PMDB is also losing several important regional leaderships. Both parties are paying a high price for their protection to Senate’s Chairman, José Sarney (PMDB-AP), who has been charged of corruption and administrative wrongdoing during his tenure. Internal divisions regarding the party’s standing on the next presidential elections are also taking their toll from PMDB. Lula wants PMDB to support his candidate and offer the name for Vice-president on her ticket. But several party leaders are supporting São Paulo governor José Serra’s bid.

The most celebrated wave of affiliations involved the small Brazilian Green Party (PV). Former Environment Minister and Amazon Icon, Marina Silva, has joined the party last month, to run for the Presidency. Yesterday, several important business leaders, all well known for their support of sustainable business and social and environmental corporate responsibility, have also jointed the party. They are all adhering to Marina Silva’s presidential candidacy, rather than to PV’s former platform.

The party is going through a thorough internal power shift determined by Marina Silva’s arrival. This sudden emergence of PV to the frontline has been correctly attributed to the “Marina factor”. She attracted Guilherme Leal, co-chairman of the board of cosmetics firm Natura, to the party as a possible vice-presidential nominee. Also joined PV the executive-director of Klabin, a Brazilian paper and pulp giant, who acts as CEO of the NGO SOS Mata Atlântica (SOS Atlantic Rainforest); Ricardo Young, CEO of the Ethos Institute, dedicated to promote corporate social responsibility and ethical management among Brazilian firms; Fernando Simões, CEO of Latin America’s largest handcrafted art paper mill, among several other affiliations. The party is likely to account for the greater share of new affiliations due to the “Marina factor”. The presence of well-known business leaders on her campaign will also help to  respond to fears that Marina Silva would adopt an anti-capitalist, green socialist agenda as a presidential candidate.

PV’s new affiliates represent a clear change of the party’s ideological outlook and a move towards a new and sharper identity. As British political scientist Anthony Giddens contends in his new book, “The Politics of Climate Change”, green is no longer the other shade of red. Several green parties, the German being the most noticeable case, have been created by former communists and socialists disillusioned with communism and dissatisfied with the conservative policies of social democratic parties. But now, they all have developed their own ideas, and a far better focused green view. They are becoming far more differentiated from socialist and social democratic parties, and proposing a new, broader, more systemic view of economy and society, having the climate change challenge, and the transition to a low carbon economy at the core of their new outlook. Green is no longer anti-capitalist, although being highly antagonistic to consumerism. The idea is to change capitalism, rather than to replace it with old socialist models.

The Chairman of FIESP, the Federation of São Paulo State Industry, once the country’s most powerful trade association, Paulo Skaff, joined the Brazilian Socialist Party (PSB). He  will probably run for governor of São Paulo. The party is likely to have Rep. Ciro Gomes as a presidential candidate. The latest polls show Ciro Gomes ahead of Lula’s candidate, Dilma Roussef, but still behind São Paulo governor, the social democrat José Serra (PSDB), who has been the forerunner on all polls until now.

These party shifts and new affiliations are pointing towards a very competitive, hard fought election in 2010, at all levels. The presidential election will probably be the most competitive of the last 15 years. Elections for the House and the Senate may likely have the greater number of contested (open) seats of the last 4 elections. State elections are also posed to be highly competitive all over the country. Democracy thrives on uncertainty, so does the risk of inevitable surprises.

Sergio Abranches

The people of the forest know about our global predicament. But we seldom remember to ask them what they are experiencing.

We were preparing for a series of small presentations to the “people of the forest” – rubber-tappers, Indians, small tenants, fishers – on climate change, the Amazon rainforest and REDD (Reduction of Emissions from Deforestation and Degradation). The setting was the meeting “People of the Forest and REDD” organized by the Forum for a Sustainable Amazon in Rio Branco, capital city of Acre, the Amazon westernmost state. The core idea was that we should be simple, and make a strong case for the connection between an ambitious climate change policy, the protection of the tropical forest and the payment for environmental service and avoided deforestation.

They were about 100 odd, from several parts of the forest, mainly, but not only, within the State of Acre, the Westernmost Amazon state. All very interested on how greenhouse gases warm the Planet, and how warming causes climate change. They were also very concerned about the relationship between their forest and all that. They knew deforestation is bad for all, and fires are a plague that brings many casualties to wild animals, and, in many cases, is hazardous to their communities.

Photo: Sergio Abranches

When I mentioned the flying rivers, the immense amount of water vapor that hangs over the canopy of the trees, the scientists are studying, and how they had as much water, sometimes more, than the rivers themselves, their eyes were shinning and their heads balanced up and down in agreement. Rivers do fly out there. They knew it all.

When the floor was opened to questions and statements almost all of them had something to say.

An old fisher, Antonio, told us about drying rivers and igarapés (water channels formed by the main rivers). He talked about deforestation, degradation and erosion, and how they were reducing quality of life for the river.

Photo: Sergio Abranches

A rubber-tapper, Luiz, told us about lawlessness and the lack of citizenship rights, where there is no permanent governmental presence.

Photo: Sergio Abranches

Benki Piyãko, leader of the ashaninka people, said they, indigenous forest people, “know the emissions of greenhouse gases are not of their making, they are the result of other people’s action.” They are aware, he told me, it is a problem that affects them “in many ways.” On an interview to Brazilian journalist Altino Machado, during the meeting, he talked about afforestation and wild game breeding, as a means to feed their people, reduce emissions and displace cattle ranching.

Photo: Sergio Abranches

He said that “the great afforestation, with native species, for logging, and fruit.” He envisions “associating forest economic management, and breeding of wild game” as a countervailing power to cattle ranching. “We will survive and sustainably manage our natural resources, protecting and using ou lakes, rivers, breeding species now threatened of extinction. We can live out of what Nature has.”

We, on our turn, have a lot to learn from them. They have the cases, they know the ways of the forest, they know how climate changing is happening, what forest degradation does to their people and to the rest of the forest. A respectful connection of our two societies, can be good for both. They also have many things to learn, but brought to them respecting their culture. Some of them are no longer guardians of the forest. They should be convinced to go back to their original role.

I was particularly happy to see Indian chiefs proudly using their headdresses, and coming to discuss REDD, as a mechanism they understand and could use to protect the forest, their cultural ways, and fight global climate change. We will need leadeship from these citizens of two cultures to protect the Amazon.

Photo: Sergio Abranches