Sergio Abranches

Moving from a high-carbon to a low-carbon economy entails replacing the global energy and industrial high-carbon infrastructure over the next decades. UN’s recent Economic and Social Survey 2011 – The Great Green Technological Transformation estimates replacement costs at $15-$20 trillion, or between one quarter and one third of global income.This is a herculean task. One that has been interpreted more as an insuperable obstacle than as a great opportunity. The cost and magnitude of the shift seems, at first glance, to be a formidable barrier. It takes diverting a large chunk of global savings and investment towards this task. If we do it as fast as science has been asking us to to, we’ll leave unexploited a wealth of high-carbon, relatively low cost resources. But look again. Using these resources represents an unaffordable climatic and environmental cost. The huge mobilization of monetary values to invest in new activities, new materials, new energy sources, new technologies could feed a long boom cycle of economic activity over several decades. Income and profit gains will more than compensate for the cost of replacement. We could start a long cycle of global growth that would add up to one of history’s longer-lasting periods of increasing prosperity.

Because climate change is a global phenomenon, the shift towards a low-carbon economy has to be a global one. It creates distributive risks and advantages. Leaders of several developing and underdeveloped nations argue that it represents a burden they cannot afford. They also say that since they’re not responsible for the GHG emissions that caused the problem, they have no obligation to act. This reasoning corresponds to the “insurmountable obstacle syndrome”. Seeing change as a hindrance impossible to overcome is self-defeating, especially when there is no viable alternative. Besides there is no opting out for anyone.

Obstacles should be viewed as motivations, not deterrents. Rich countries have the opportunity to create an investment dynamic that will by itself be a source of strong job and income creation. Developing and underdeveloped countries have what I call, after Alexander Gerschenkron, the advantages of backwardness. As the UN survey puts it, “developing countries may be able to leapfrog directly to renewable energy sources”. Instead of trying to catch up developed countries through the high-carbon path, they can shortcut to the low-carbon advanced economy.

Read full article here.

Military action imposing a no-fly zone over part of Libya, would only crystallize a divided Libya, without an aggressive political and diplomatic campaign. Such a campaign should aim at promoting the conditions for a peaceful and free regime change in Libya.

Sergio Abranches

Military action can only be a means to a clear political goal. It has to support, rather than lead or replace a political and diplomatic strategy. In the case of Libya, I can identify only one sensible political goal: to create the conditions for regime transition under the control of the Libyan people. Such a goal implies an effective political and diplomatic work, mainly conducted by legitimate Arab governmental and civil leadership. This diplomatic offensive should seek to both convince Gaddafi to stop bloodshed by stepping down, and to empower Libyan society to choose the path towards a transition that could express the free will of the majority. Libya has other leadership than Gaddafi. Some are already known and active in tribal life and in the opposition. Others have emerged from the rebellion itself, as has happened in Egypt. Social mobilization is a demiurge of  legitimate, spontaneous leadership.

If political rulers sympathetic to the Gaddafis do want to help, they should negotiate with them a true cease fire, and an exit solution. It is pretty clear that there is no good, durable, legitimate solution with the Gaddafis in power. Arab supporters of the no-fly zone should start immediately political talks with the rebels, to identify leaders and spokespersons to articulate a political alternative. Dissidents with good credentials could also have an important role in this process of simultaneous regime transition and nation building.

These rather spontaneous, mass upheavals happened in countries dominated by ruthless dictators for several decades. Organized civil society has been dismantled through repression; persecution, imprisonment, torture, and execution of opposition leaders; censorship, among other authoritarian methods. Indoctrination through massive propaganda, content-controlled education, and in some cases religious manipulation, have demobilized society and acquired “alienated support” to the regime. Disillusionment, discontent and rage against the brutal regime, and the dismal economic performance led the youth to rebel. Social media helped to spread the word, and accelerate mobilization. Contagion not only took the rebellion beyond the country’s borders, but also across generation boundaries.

In a crucial sense these are societies with strong states but without civil societies, especially organized civil societies. Amorphous societies they are to a certain extent. Civil society rises or reemerges from the rebellion itself. That’s the major demiurgical effect of revolutions and rebellions.

When some persons start to create voluntary community councils, to manage necessary services be it on occupied streets and squares, like in Egypt, be it in entire cities, like in Libya, there is a spontaneous process of organization of a reborn civil society. In this movement of emergence of a new, more active and conscious civil society, new leaders are also spontaneously identified, and legitimated. These are the forces upon which Arab and North African democracies could be built. But they need political and diplomatic support, not only military protection.

The no-fly zone divided Libya into two territories, the one centered on Tripoli, controlled by Gaddafi, and the other based on Benghazi, controlled by the rebels, and protected by UN forces under the no-fly zone. A situation reminiscent of Italian occupation, in the 1940’s, when Rome divided the country into Tripolitania and Cyrenaica. The rebels control the several cities of what once was Cyrenaica, as Benghazi, Ajdabiya, and Tobruk.

Such an outcome wouldn’t be either stable or acceptable. A new armed confrontation would be awaiting the lifting of the no-fly zone. The rebels would hardly be able to establish regular, well trained armed forces capable of opposing Gaddafi’s. A united Libya was one of the few durable outcomes of decolonization, under King Idris. The military coup that raised the young colonel Muammar Gaddafi to power maintained and strengthened unification. A divided Libya would only be acceptable and legitimate as a result of the free choice of the Libyan people, never as the outcome of military action.

The necessary political and diplomatic action required to maintain all choices open to the Libyan people to make in the process of regime transition is too timid so far, vis à vis military operations. I would say that political action is clearly lacking, while military intervention is already moving to phase two.

Sergio Abranches

Who can influence the most climate change policies? Top economic policy-makers or environmental authorities? In any country of the world, economic policy-makers have far more power to lead us to a low carbon economy, than environmental policy-makers, both public and private. Hence the silence of Finance ministers on climate change is far more meaningful than the eloquence of environment ministers.

And silence was as heavy as the thickest fog ever in Paris at the close of the G20 finance ministers meeting, on February 19. The final communiqué has not a single phrase regarding either climate change or the economic costs and job destruction associated with of land, air, and water pollution.

The Finance ministers of the larger and most powerful economies of the developed and emerging world have used the word ‘sustainable’ only once, on a catch phrase, and in the wrong context. When interpreted by its proximity to other terms receiving greater emphasis, it becomes clear they were not talking about ‘sustainable’ growth, but about ‘sustained’ growth. They did not take notice of UNEP’s report “Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication”, released to the public today, February 21, one day after the meeting closed in Paris, on Saturday. They have quoted a few ‘interim reports’, but have ignored OECD’s “Interim Report of the Green Growth Strategy: Implementing our Commitment for a Sustainable Future”. The workshop for the preparation of the final report was held in Paris just one week before the G20 meeting. The final report is to be presented to ministers at the OECD Ministerial Council Meeting in May 2011. Perhaps they’ll will be able convey the basic ideas to their cabinet mates and to their leaders at home this time. But there is less than a slim chance that the Finance ministers will, then, come to know a bit more about the synergy between economic recovery, job creation, poverty eradication and the transition to a low carbon, green economy.

The Paris Communiqué has nothing but the following paragraph to say regarding economic growth, and their priorities for economic policy.

“We reaffirm our commitment to coordinated policy action by all G20 members to achieve strong, sustainable and balanced growth. Our main priority actions include implementing medium term fiscal consolidation plans differentiated according to national circumstances in line with our Toronto commitment, pursuing appropriate monetary policy, enhancing exchange rate flexibility to better reflect underlying economic fundamentals and structural reforms, to sustain global demand, increase potential growth, foster job creation and contribute to global rebalancing.”

The communiqué expresses high concern about food price volatility, but sees this volatility as part of the larger movement of commodity prices. Within this broader framing it gives far more importance to price instability of oil, gas, and coal. It also takes a strictly financial viewpoint of food price volatility.

On commodity price volatility, the communiqué says that:

“We discussed concerns about consequences of potential excessive commodity price volatility and asked our deputies to work with international organizations and to report back to us on the underlying drivers and the challenges posed by these trends for both consumers and producers and consider possible actions. Keeping in mind the impact of this volatility on food security, we reiterated the need for long-term investment in the agricultural sector in developing countries.”

Reiteration is just a metaphoric way to admit either that ‘nobody listened when we said it before’, or ‘we never really meant that to happen anyway’. The fact that they are reiterating a position about something that is factual amounts to an implicit admission of failure. By readdressing the need for long-term investment in the agriculture of developing countries they are admitting that this investment has not occurred in spite of their previous recommendation. There is no mention whatsoever to the vulnerability of most of the developing countries’ agricultural activities to climate change as well as to land degradation and water scarcity. The Finance ministers have also failed to see the damage to Africa’s agriculture done by agricultural subsidies in developed countries, especially in the European Union.

There is no indication in the communiqué that the Finance ministers have been informed of the effect of  extreme weather on food prices. Extreme weather has hit major portions of the agricultural areas of North and South America, Africa, and Australia. It is quite hard not to have noticed it, even more so, when there is an explicit concern about ‘food security’.

The communiqué has also disregarded that rising prices of fossil fuels could be a strong incentive to investment in low carbon, clean energy. This investment is a better hedge against fuel price volatility, than any intervention in the oil, gas, and coal markets. This Monday, February 21, the price of Brent oil opened at US$ 104,26 a barrel due to events in Libya. It seems no Finance minister has ever read studies showing how clean investment and clean energy could help to effectively address the financial crisis. Or how high oil prices could help a greener economic recovery. Some say that  US$ 100,00 a barrel is the break-even point to the transition to a low carbon economy.

The G20 Paris communiqué mentions several organizations investigating the drivers of fuel price volatility. But the organizations  that are dedicated to understanding food price volatility are treated by the anonymous collective expression “relevant international organizations”. It seems that they are only worried about speculation with agricultural commodity derivatives. Perhaps as a result of pressure from the french presidency inaugurated on the Paris meeting.

“We welcomed the interim report by the IEF, IEA and OPEC to improve the quality, timeliness and reliability of the Joint Organization Data Initiative Oil (JODI oil) and call for further work on strategies to implement these recommendations to be detailed in their final report. Building on the Riyadh symposium held on January 24th, we encourage the IEF to provide concrete strategies to improve the producer-consumer dialogue at its next meeting on February 22nd 2011. Following our Leaders’ request, we call on the IMF and IEF, as well as IEA, GECF and OPEC, to develop by October 2011 concrete recommendations to extend the G20’s work on oil price volatility to gas and coal. We look forward to discussing at our next meeting the report of IEF, IEA, OPEC and IOSCO on price reporting agencies as well as the interim report on food security currently being undertaken by the relevant international organizations, and IOSCO’s recommendations, and the FSB’s consideration of next steps, on regulation and supervision of commodity derivatives markets notably to strengthen transparency and address market abuses.”

The absence of any concern about climate change, about the effects of economic activity on the environment, as well as about the impact of a damaged environment on economic activity at the center of economic policy design is an indicator of a ongoing conservative setback on global climate policy. It is very worrisome that Finance ministers feel comfortable to disregard  studies like those released by the OECD and UNEP on green economics and the costs and benefits of a transition to a low carbon economy. It is also disquieting that UNEP chose to release its new report on the green economy this Monday, one day after the G20 meeting closed in Paris. This report estimates the transition costs to a green economy at 2% of GDP per year. The ‘green economy’ is defined as “one which is low carbon, resource efficient and socially inclusive”. Far from the vague idea of sustainability adopted by the G20 communiqué.

This difference is even more striking regarding ‘food security’. It would be really great if the G20 leaders were to recommend their Finance ministers to read this:

“As regards to food security, we are seeing neither widespread understanding of the nature of the problem, nor globally collaborative solutions for how we shall feed a population of 9 billion by 2050. Freshwater scarcity is already a global problem, and forecasts suggest a growing gap by 2030 between annual freshwater demand and renewable supply. The outlook for improved sanitation still looks bleak for over 2.6 billion people; 884 million people still lack access to clean drinking water. Collectively, these crises are severely impacting our ability to sustain prosperity worldwide and to achieve the Millennium Development Goals (MDGs) for reducing extreme poverty. They are compounding persistent social problems from job losses, socio economic insecurity and poverty, and threatening social stability.

Although the causes of these crises vary, at a fundamental level they all share a common feature: the gross misallocation of capital. During the last two decades, much capital was poured into property, fossil fuels and structured financial assets with embedded derivatives, but relatively little in comparison was invested in renewable energy, energy efficiency, public transportation, sustainable agriculture, ecosystem and biodiversity protection, and land and water conservation.”

There is a deadly mismatch between what the political commanding heights of the global economy are saying about growth, and the evidence about the outcomes of the present path of global growth. While the major developed and emerging economies of the world insist on short-term, low quality global economic growth, societies are already facing the burden of the lack of sound and working economic strategies for development in the 21^st century.

Sergio Abranches

Today I saw a Retweet that reminded me of something I thought, and afterwards wrote about, many years ago. The RT by @paulegina (a.k.a Paule Wendelberger), a US citizen born in Haiti, living and working for more than 20 years in Germany (www.wendelberger.com), quoted a Tweet by @wsteffie (a.k.a Stefanie W) conveniently located in “Cyberspace”. Her bio is both a demand and a statement of belief: “human rights for all, and social democracy can work if we all act responsibly.” Her Tweet reads: “@TIME is just teaching us about American Democracy: Ask the people to vote & then screw them!”

The Tweet was about Time Magazine choosing Mark Zuckerberg rather than Julian Assange as Person of the Year. The Twittersphere reports that Assange, Wikileaks mentor and principal person, got 382,000 votes against 18,000 to Mark Zuckerberg, founder of  Facebook. Time magazine’s ranking based on the poll confirms.

But the recollection the RT brought to my mind has nothing to do with TIME’s choices. It was about the view of US democracy on Stefanie W’s Tweet, and the fact it gets an approving quote from another person from the USA living in an European social democracy.

Both Zuckerberg and Assange are controversial characters of their own. Zuckerberg’s nomination is not without merit. Facebook is an important addition to network life. And so is Wikileaks, to network life and journalism. However, Assange’s achievements and predicament this year clearly make him the winner, regarding both relevance and news content. The choice of Person of the Year by a news magazine would seem outright.

I know, the “democracy thing” was to be the lede and I have not spelled it so far. The “democracy thing” is a paradox: there seems to be a permanently high degree of dissatisfaction with how democracy works everywhere at any time; but no society has yet come up with an alternative regime. One that ensures at least as much freedom as a mature democracy does, and works better overall than existing democracies.

I met this paradox almost physically many years ago when I was at Notre Dame University for a brief tenure as senior visiting fellow of the Helen Kellogg Institute for International Studies. I was a young scholar, had gotten my PhD four years before. A group attending a Congress of the International Political Science Association decided to organize this conference on comparative democracy. We should compare democracies, or the “democratic problem”, in Latin America, the US and Europe. I wrote a critique of liberal democracies called “Neither citizens nor free persons: the political dilemma of liberal democracies”. It was a defense of social democracy. The essay was inspired by a paradoxical sequence of feelings I had when I arrived in Chicago, on my way to South Bend. Brazil was slowly moving out of a two-decade long period of military rule. Several friends of mine were still in exile. A few were killed by the ruthless authoritarian government. Being free to speak my mind, to openly discuss issues that were dangerous to bring to public debate in Brazil made me feel exhilarating. After a few hours discussing the shortcomings of US democracy and listening to US liberals’ (in the US sense) complaints about democracy under Ronald Reagan, I though: “well it is far better than a dictatorship, but it doesn’t seem to be enough.”

As I see it today, US Democracy has become far more progressive with Barack Obama than it was with George W. Bush. In the previous administration there were clear and dangerous setbacks for democracy, both domestically and globally. Obama has a tolerant and open-minded political personality. I’ve been to the US several times since 9/11, and the whole environment shows less stress and uneasiness now. I have friends in Germany that are convinced social democracy is not working there. I have heard from British people that democracy is utterly dysfunctional in the UK. The attitude of the Courts on Assange’s case does not bode well to British democracy. The French have always complained about French democracy, and continue to do so. French society is again “enragée” with its democracy and government. Talk to Italians about their democracy, especially after Berlusconi got the vote of confidence, and one’ll probably get a torrent of Italian imprecations as answer. Last year I’ve spent a few months in Toronto, and have been to Montréal. Canadians are not happy with their democracy. I will spare you opinions about Latin American democracies.

Are we dissatisfied with our democracies or with our governments? The right answer is both. But more with the governments, than with democracy in itself. The problems with governments we all know. They’re usually related to economic and territorial management, pressing current domestic issues, foreign affairs. The problems with democracy are more difficult to grasp, they are less tangible. Democracy nonetheless seems in disarray everywhere.

Part of the problem comes, very likely, from a permanent mismatch between desire, or, more properly, expectations and the performance of democracy. In other words, frustration with what democracy has managed to deliver is rampant. Democracy is a process and, as such, it can improve or decay. Usually it does have ups and downs. It seems fair to say that it is on a phase of decay. There is no final stage for the process of “democratic development”. It is a moving target. And it depends on the engagement of civil society to make any progress towards this target. Democracy decays when civil society is not engaged, is not aiming higher.

Democracy has not adapted yet to the new technological revolution – of which Facebook and Wikileaks are an offspring – to globalization, climate change, new waves of migration and a basketful of new issues and processes that will be the building blocks of this century’s history.

Adam Przeworski, born in Poland, a US Citizen, and very successful scholar, now teaching political science at NYU, was at the conference in Notre Dame. During the discussions, to my amazement, he reacted to my paper saying he couldn’t understand why I didn’t stress the role of the party as one of the major elements of the dilemma of liberal democracies. I did not understand, at the time, how someone could envisage democracy without political parties. At the time I believed that political parties were an essential element of democracies.

My first impression was that Adam invested against the party because it clearly was an instrument of oppression and privilege in communist regimes. This discussion took place seven years before their demise. It was also an instrument of oppression and privilege in authoritarian regimes. Like in Mexico, when the PRI was the only party. The party machinery and the state apparatus were intertwined. That much I was prepared to admit: party bureaucracies having promiscuous and non-competitive linkages to the state structure were a clear and present danger to democracy. I was also prepared to accept Peter Bachrach’s concept of “democratic elitism”, or E. E. Schattschneider’s idea of a semi-sovereign people. I have read their books in graduate school, and dealt with them in my essay. But I was not prepared to toss parties in the garbage can of political history.

It took me some time to understand that there was a deeper truth to Adam’s argument. The political party is an outdated technology of representative democracy. A necessary contraption, perhaps, before the advent of the network society. Today they do belong into the garbage can of political history. But, again, what will replace the parties? Will parliaments still make sense without parties? Is deliberation better than representation, even when we know how unequal is the distribution of knowledge, information, and education? Is legitimate and democratic deliberation possible in the absence of civic education, or in a situation it is declining? A civic culture, or social capital, or whatever one likes to call this “spirit of citizenship” is a sine qua non for truly democratic and participatory deliberations. This sentiment of belonging and togetherness, of collective responsibility is indispensable to what Machiavelli has called the “virtuous republic”. Today we would call it full-citizenship, or responsible citizenship, aware of both its rights and obligations, capable of a high degree of self-government.

Yes, back to Utopia to fight dystopias. We ought to fight democratic decay. That much is clear. We’ve got to bring to political life the new technologies and practices we use in our private and collective everyday life to our own benefit, our new forms of socializing, debating, exchanging ideas, seeking knowledge information and references.

So it has to do with Zuckerberg, Assange, Facebook and Wikileaks after all. We have, in several ways, a more democratic social exchange in the network society than in political society. We’ve got to bridge this gap moving towards more political democracy. But let’s not fool ourselves: we all live in a private and collective world of micro-tyrannies, prejudice, and exclusion. These social micro behaviors are also present in the Websphere. We won’t have more political democracy without democratizing private and collective life. We’ve got to take the network society to higher levels of openness and equal exchange. Nobody will do that for us. Certainly not the power-holders in both government and opposition. Political parties will not be a part of this (re)volution, they don’t belong into this future.

This process of permanently improving democracy, preventing its decay, and transforming it from the inside out, from top to bottom, to design a legitimate and functional regime for this century is a task for us all. It is a global endeavor. A collective challenge. A network mission. We have the technology and the dissatisfaction to begin with. But can we do it?

PS.

I know tons of theories have been written about this “democracy thing”, the network society, and everything else. But I am afraid we have been theorizing too much among ourselves, like a tribe of pundits, and have lost the praxis, as a collective body.

Sergio Abanches

COP16 closes today its technical segment with no concrete result. Even the draft document sketching the lines of a possible new global climate deal is a “non-paper”, a non-negotiating document.

The technical segment has been fully dedicated to informal consultations. Contact groups led by facilitators have produced summary texts, all “non-papers”, not negotiating drafts. The LCA “non-negotiating” draft prepared by its chair, Margaret Mukahanana-Sangarwe, has been discussed extensively, but delegates considered that it could not serve as the basis for formal negotiations. The document draws extensively on the Copenhagen Accord and “expands on the portions of that text”. It lacks, however, some definitions that are critical for a “balanced” package within and between each of the two trails of negotiation, the LCA and the Kyoto Protocol tracks.

Emphasizing informal consultations to the limit was clearly a Mexican strategy. The Mexican presidency has made all efforts to prevent deadlocks to emerge right at the beginning of the talks. It is also trying to create a positive ambience through informal encounters aiming at increasing the likelihood of a good result. This strategy has indeed helped to create a positive climate. But the side-effect was the lack of concrete results. The Mexican strategy has also triggered some criticism from delegations. Brazilian chief climate change negotiator ambassador Luiz Alberto Figueiredo told me he would prefer “direct negotiations with the Parties”, rather than talking informally with facilitators. During the Sunday informal stock-taking meeting with COP16 President Patricia Espinosa several delegates complained about the delay of direct government to government negotiations.

Christiana Figueres, Executive Secretary of the Climate Convention, inserted a veiled criticism of this excess of informality on her last press briefing: “We’re on Friday, almost the end of the first week. Governments should engage on the difficult task of deciding what they’re going to present to the high level segment. It’s time to switch gears.” She also said that “the challenge of Cancun is how to formalize proposals and pledges within the UNFCCC process on a balanced way.”

Balance is one of the three magic words that could provide the password for a deal at Cancun. It has been evoked repeatedly by all delegations in every press briefing and in every intervention at the stock-taking meetings.

U.S. Chief negotiator, Todd Stern, said that many countries look for a balanced result on both tracks, KP and LCA, here in Cancun. On the Kyoto Protocol, he added that “we are not a part of that negotiation, but I hope there is a way out of this debate without killing the possibilities of an effective result on the other track.”

EU top negotiator Arthur Runge-Metzger said: “The magic word is balance, there is no way to go without it. In the end, what’s important is that the commitments are comparable within the second period of commitment of the Kyoto Protocol and within the agreement that comes out of the development of the Copenhagen Accord. The sum of these commitments has to add up to meet the 2^oC target.” Peter Wittoeck, also from the European Union, considers balancing the two tracks the most “challenging question delegates have to solve in Cancun”. To him progress lies on the perspective of having a second period of commitment for the Kyoto Protocol and a comparable agreement on LCA. “That’s what Europe is offering as a middle ground a two-track balanced package”.

Balance is also key to the issue of transparency, the second magic word, that has actually to do with confidence among the Parties. A crisis of confidence marked the Copenhagen summit from the beginning because of rumors about a “secret paper” from the Danish Presidency. The paper did exist and was published by The Guardian. This hidden agenda led to a break of confidence that irremediably poisoned the negotiating environment. The Mexican Presidency is sparing no resource to create confidence. “No hidden agenda, no secret text” is a stock phrase repeated again and again by president Patricia Espinosa. Several delegates fear that the end of the Kyoto Protocol is at the core of a secret negotiation among a few governments. Thus the need for reassurance that all are committed to the two-track view as well as to a balanced final package deal.

Minister Espinosa said that much at the beginning of her statement Sunday morning: “all of us are fully aware of and respect the fact that this is a two-track process and will continue to maintain balance within and between each of them.”

Governments will have to compromise to reach a balanced agreement. Balance within each track means that adaptation and mitigation have to get a proportionate treatment on the texts. It also means that adaptation finance has to be solved and guaranteed. Balance between the Kyoto Protocol and the Post-Copenhagen Accord (LCA) tracks means that commitments under each of them are comparable, Runge-Metzger argued on his statement to the press last week.

Everybody is calling for compromise here in Cancun, the third magic word. Even Venezuela, usually holding intractable positions, called for compromise on Sunday. Venezuela’s chief climate change negotiator Claudia Salerno asked for a constructive dialogue, and for “those who disagree the most, to talk more to each other”, to move forward and strike a balanced and full deal in Cancun.

Executive-Secretary Christiana Figueres said that she is optimistic, because the governments have arrived in Cancun aware of the need for reaching an agreement for a concerted action on climate change. She asked all “to look beyond their national situations, although without sacrificing their true national interest”. At the end, she said, “nobody will be satisfied, but this is the very definition of a compromise: one from which nobody leaves totally satisfied or totally dissatisfied”. Later she said that delegates should look for a “solution that makes all equally uncomfortable with or comfortable with the final package”.

Paradoxically the best compromise deal should leave all equally dissatisfied, because that would mean everybody has relinquished some principled points that have been deadlocking climate change talks. A compromise that is fully satisfying to this heterogeneous assembly of parties to the Climate Convention, with so many contradictory interests among them, would be void of substance. A compromise without sacrificing some interests would not serve the objective of tackling climate change. We should hope for a solution that dissatisfies individual countries‘ interests and satisfies the target of enhancing the chance of the “best-case” scenarios for climate change.

Issues related to these conflicting interests permeate all aspects of what is under negotiation here in Cancun. They can only be solved politically. All the technical groundwork has been done. The options are all on the table. In an attempt to deal with these issues at the political level and try to strike compromises on them all, the Mexican Presidency has designed pairs of ministers representing the developed and the developing worlds, to act as facilitators on each of these issues.

“I have approached pairs of ministers, one from a developing country and one from a developed country, who I know would greatly benefit our effort by focusing on specific matters. I hope their agendas allow them to undertake this task. Sweden and Grenada could help on matters related to shared vision; Spain and Algeria on adaptation; Australia and Bangladesh on finance, technology and capacity building; New Zealand and Indonesia on mitigation, including MRV, and the United Kingdom and Brazil on items under the Kyoto Protocol. Other ministers, among them those from Ecuador, Singapore, Norway and Switzerland could support on other specific issues as they arise.” (Patricia Espinosa, President of COP16, on Sunday’s stock-taking informal meeting)

We will soon see whether this strategy of political management of the hot issues will work. There is some stress on the relationship between negotiators (“experts”) and the “politicos”. This stress was apparent at other COPs as well. To avoid the politicos to encroach on the “experts” legitimate right to be the actual negotiators within the UN process, president Espinosa has set strict ground rules for the “high-level segment”.

“Ministers will not be expected to draft compromise language, but to help identify where balance is to be found. Ministers will not convene informal sessions of any sort, but will instead approach every delegation they believe ought to be consulted at each specific moment and remain accessible to all. Ministers will not limit their contacts to other ministers, but will be open to dialogue with all and they will reach out to the representatives that each party has decided to appoint. Ministers will not relief the Chairs of their responsibilities in any way, but will support their efforts to resolve matters that have so far not advanced in a more formal setting.” (Patricia Espinosa, President of COP16, on Sunday’s stock-taking informal meeting).

The issues are well known. The ground rules are set. However there are no formal papers to negotiate. Before a “balanced package on the two tracks” can be agreed upon, a frantic day of drafting and text negotiation lies ahead of delegations. Let’s hope that at the end of the day they’ll have substantive drafts to be presented to the ministers and, more importantly, to be tabled at the respective decision-making bodies of the UN process so that the game can enter its decisive phase.

Sérgio Abranches

The election of Dilma Rousseff, Lula’s personal pick and former top aide, as next President of Brazil will trigger several important political shifts in the country.

The president-elect, once in office, will face challenges much harder than Lula has ever faced in the Presidency. For the first time someone without previous political experience and leadership will be seating legitimately on the presidential desk with full power.

The Brazilian system of governance is a presidential coalition government. Congress is strong, almost every policy the President plans to enforce requires a law authorizing or enabling the policy. The President has the power to initiate legislation, but the majority to approve presidential initiatives depends on a multiparty coalition in both Houses of Congress. President-elect Dilma Rousseff has said that her multiparty electoral alliance will become her governing coalition. This is not an automatic process, though. It requires a lot of political bargaining around ministerial posts, offices in the second and third tiers of government, as well as shares in the budget. The larger the representation of the pork barrel-seeking parties in the coalition, the harder it is to strike a deal. The major clientele-oriented party in her coalition, PMDB, is a federation of bosses of state party machines, very difficult to hold together and utterly ungovernable under stress. This process of coalition formation requires plenty of political savvy and bargaining skills. It will clearly be president-elect Rousseff’s first major test.

Looking to the bigger picture, the most important outcomes of this electoral process are the changes it trigers.

First of all, there will be a tremendous change of style. President Lula is a mobilization leader and he has relied almost 100% on the motivational dimension of the relationship between the Presidency and the people. He has never acted as a dedicated chief executive officer. He was more like a strategic leader. He spent more time on public events, such as inauguration of public projects and new plants of private corporations, celebrations, fairs and conventions, and on international travels, than at the office. He has a highly developed political instinct that balances his political shortcomings, and compensates for his lack of interest on the daily routines of the Presidency.

President-elect Dilma has so far proved to have no mobilization skills, and to be a poor motivational speaker. She is the kind of office-centered CEO. She likes to look into the details, and is unlikely to delegate as much as Lula did. One should not expect her Chief of Staff to be as powerful and independent a Chief of Staff as she was under president Lula. She has a more formal techno-bureaucratic attitude that will very soon contrast with Lula’s streetwise style of motivational presidency.

A second important difference is that Dilma is more ideological and less pragmatic than Lula has ever been. Lula was an AFL-CIO type of union leader, far different from the socialist and communist European union leaders of the 1960’s and 1970’s. Dilma still likes to think herself as belonging to what she calls “the camp of the left”. She has updated her views, as almost everybody in the left has done, but she is very likely less flexible than Lula.

Third, Lula was greater than PT and Dilma is smaller than the party. She owns her election far more to Lula’s popularity than to her political skills and capabilities to communicate with voters. She also has a temper and that may generate stress and friction as PT will try to impose party controls on her presidency.

PT, the Workers’ Party, is entering a whole new stage of its political life. For the first time  since 1989 it will not have Lula running a presidential campaign. Lula ran for the presidency in 1989, 1994, 1998, 2002, and 2006, being elected in the last two. From 1990 to 2002, Lula led the opposition. Over the last eight years he was the President of the Nation. Perhaps even Lula himself is uncertain about what he will be doing from January 2^nd, 2011 onwards.

The immediate challenge will be how to host a former president, known for his voluntarism and lack of personal discipline. Lula’s informality has led him to breach all democratic limits to the role an incumbent President could have on a presidential campaign to support his candidate. He disqualified the opposition, and used the government apparatus and state-owned companies to favor the official candidate. He always acts on impulse and instinct alone, and he seems to need public attention all the time. This phase of Lula being out of the Presidential office will be a testing one to Lula, the Party, and president Dilma Rousseff for quite some time. He may cast a giant shadow over the new government and the party as well.

Although Lula cannot be discarded as a presidential candidate in 2014, the Workers’ Party will have at some point to start looking for new leaders and to design feasible alternative courses for party life without Lula. “Lulism” will always remain a factor beyond the party’s reach as long as Lula stays on active political life. And the President is giving no signs that he will simply retire. The moment Lula recedes into the background the party will start facing stress and competition among its several internal factions.

At the same time, PT will also have to deal with the growth of competitors on the center-left side of the political spectrum. PSB, the Brazilian Socialist Party, has elected six state governors. PT elected 5. PSB’s parliamentary gains weren’t that significant, the party elected 34 representatives, and four senators. But it has more political leaders able to run a competitive presidential campaign than PT. Some were elected state governors. The critical aspect is that to put in place checks and balances on the power and influence of PMDB, the major clientele-oriented party on the new coalition, PT and Dilma will have to amplify PSB’s influence and power.

PT will not be alone on the road towards a new and yet unknown future. Its main adversary, the social democratic PSDB, is also on that road, even though heading to a different destination. With José Serra’s second failure on a presidential pledge – he ran against Lula in 2002 – the party’s founding fathers from the state of São Paulo will loose ground. The São Paulo section, once led by former president Fernando Henrique Cardoso, has been the hegemonic force within the party since its creation. Now it ran out of alternatives. Its other leader, Geraldo Alckmin, who ran against Lula in 2006, was elected governor of the state of São Paulo, defeating PT and Lula’s candidate, former senator Aloizio Mercadante. But the party does not look at Alckmin as its champion to run the 2014 presidential elections.

All eyes have already turned to former governor of the state of Minas Gerais, now elected senator, Aécio Neves. Two other politicians from the party’s second generation, i.e. the generation after the founding fathers, were elected governors of their states: Beto Richa, governor-elect of the southern state of Paraná, and Marconi Perillo, elected governor of the midwestern state of Goiás. Richa was the mayor of the capital city of Paraná, Curitiba. His father, José Richa, already deceased, was one of the party’s most influential founding fathers, celebrated for his political savvy. Marconi Perillo is a senator, he has been governor before, and now has defeated the powerful machine of PMDB in his state, running against the party’s boss Íris Resende. Resende was publicly and strongly supported by President Lula. The president deeply resented Perillo’s role in the Senate as a fierce opponent to himself and his government. He played a strong role accusing Lula of direct participation in the scandal of political corruption known as “mensalão”. The scandal negatively marked Lula’s first term. It involved monthly payments to parties in Congress to buy their allegiance to the government. It is under judicial review and there are 40 former members of Lula’s government and PT officials being prosecuted, among them the still influential, former party Secretary-General and Lula’s first Chief of Staff, José Dirceu.

Both PT and PSDB are on the verge of a power transition and will also experience a process of power diffusion. For PT, the transition and diffusion of power will take longer, because Lula will continue to hold most of the power and influence in the party and outside it. For PSDB, transition and diffusion will move faster. First there will be a transition of power from São Paulo’s leadership towards Aécio Neves. He will clearly attract the majority of the Party’s active forces, that see him as their best bet for 2014. Although Neves will likely be the major political attractor within the party, power will also be more decentralized, and we should expect Richa, Perillo, the new governor of Minas Gerais, Antonio Anastasia and other emerging social democrat leadership to become more influential and to have a stronger voice in the party’s decisions. Power will become more diffused within the party.

The first presidential election without Lula as a candidate will cause major waves of change. It wouldn’t be an exaggeration to put up an alert for a political tsunami. Large tectonic plates under the ground of Brazil’s two major parties are already shifting and moving. These undercurrents are likely to generate several waves that will deeply change the parties’ landscape and the political environment. The unlikely scenario will be one of continuity and stability. How strong and how deep change will be it remains to be seen. But a substantial amount of change should be expected. As one says: “shift happens”.

Increasing market awareness about climate change risk and costs has been driving a growing number of companies to adopt climate friendly corporate policies in the US.

Sergio Abranches

Now this movement towards sustainable corporate behavior is becoming political. It is spreading all over the US and has already reached Washington. One could only hope it got there on time to push a Senate vote on the Kerry-Boxer bill before December.

A realignment of business interests regarding climate change issues is provoking shifting alliances in Washington, the growth of pro-climate change lobbying, and defections of important corporations from traditional – and conservative – trade organizations. It is likely also to affect some of GOP’s traditional corporate ties.

Two good stories report these shifting alignments due to divergence over cutting GHG emissions. WSJ’s Political Alliances Shift in Fight Over Climate Bill, and NYT’s Divisions in U.S. Over Emissions. Both recommended reading.

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.

Sérgio Abranches

The country is approaching the first marks of the 2010 election calendar. October 3 is the last day for candidates to register with a party to become eligible for candidacy.

Sergio Abranches

Obama’s election was, after all, mostly like every other presidential race in the US. A business as usual election of a business as usual administration. So says Princeton’s political scientist Larry M. Bartels.