The global business community rejoiced when the Berlin wall came crashing down in November 1989. To them, it wasn’t about a divided nation coming together, it wasn’t about relatives and friends divided by a wall finally being able to meet, it wasn’t about people at all; they saw it as the homecoming of capitalism. Capital won, common people lost power. The push for globalisation of local economies gained momentum.
Two decades later, the world economy is on the verge of a major crash. The global financial system is nothing but organised chaos. The credibility of banks and other financial institutions seem dubious. Most of these maybe private entities, but they operate in the public domain – and have to be held responsible for their actions. A good analogy will be the driving of one’s car on a public road without the slightest care in the world for others on the road.
After the Worldcom and Enron disasters, we were assured by the governments that corporate governance is going to be very strict. The Sarbanes-Oxley act of 2002 is something big companies in the US or participating in the US markets can afford to ignore. Yet, wouldn’t it be an easy bet that we will hear of many more Enrons in the coming months? That’s the nature of the corporate beast, which is only bothered about capital gains and nothing else.
Amidst the financial shambles, the green economy suffered silently in the final quarter of 2008. There were reports of how the International Energy Agency is trying to underplay the significant gains made by the wind and other renewable energy sectors. The big boys know that there is money to be made by speculating on climate change. Wheels have been set in motion to create a favourable environment for their next big loot. Give that background, it comes as no surprise that much rhetoric on Global Warming and the Carbon Footprint is being dished out.
When we should be discussing the real dangers of rampant industrial pollution, nuclear proliferation, GM crops, Chinese CFLs without any mercury standards, dairy products contaminated with melamine and antibiotics… we are being made to feel guilty of the sin of CO2 emissions. CO2 is something we exhale; it’s as natural and green as it can get – without CO2 there won’t be any vegetation.
2008 has been a disaster for many big financial institutions – Banks, Insurance giants, Sovereign Wealth Funds, and even the bullet-proof Hedge Funds suffered massive losses. It is obvious that they need to go back to the super profit days – as quick as possible, even if it means jeopardising millions of human lives.
The UNFCCC (United Nations Framework Convention on Climate Change) is supposed to work in the best interests of us, the common people, in fighting global warming. It transpires that the Conference at Poznan had been working on the sly to help big financial institutions. A document from the Poznan conference says, “There was agreement that financial mechanisms, including insurance, can play an important role within a strengthened response to climate change, and that financial mechanisms for risk management in developing countries needed to be scaled up.”
On December 04th 2008, the Munich Climate Insurance Initiative (MCII) made a presentation to the ‘UNFCCC AWG-LCA workshop on risk management and insurance.’ It said, “At medium levels of risk – events such as a 1 in 50 year event – a Climate Insurance Assistance Facility will incentivise the private sector to engage in insurance and public-private solutions. This will facilitate safety nets, as well as new markets for insurance products including micro insurance. Regional centres can help build this market capacity.”
What the world really needs now is not more financial instruments. And clearly not schemes to incentivise insurance companies or build a new financial capital based on our fear of natural calamities. What we must ask our governments is to represent people’s interest and not special interests.
How on earth is a poor nation like Haiti, where people are forced to eat soil, going to pay a premium for a climate insurance cover – when hurricane after hurricane and wretched economic policies of the West have devastated that country? Clearly Haiti is a high-risk country and they would have no choice but to pay the high premium – maybe it will come out of the money set aside for food aid or housing!
It would be a big mistake to let UNFCCC finalise the Climate Insurance scheme in ‘Copenhagen 2009’ – a bigger fraud than Madoff’s ponzi scheme!
A capital mistake
