The Great Debate UK

Europe’s carbon trading system needs radical reform, not stop-gap measures

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–Laurens de Vries is an assistant professor, Joern Richstein is a doctoral candidate, Emile Chappin is an assistant professor, and Gerard Dijkema is an associate professor at Delft University of Technology, the Netherlands. The opinions expressed are their own.–

The European Parliament voted on December 10 to delay sales of around 900 million carbon permits for the EU greenhouse-gas Emission Trading System (EU-ETS). The deferral (or so-called back-loading) may help correct the substantial oversupply of permits which have caused the carbon price to fall below 5 euros, a sixth of the price in 2008.

While back-loading will be welcomed by many governments and by the European Commission, the episode underlines that in its current form, the EU-ETS system is simply not fit-for-purpose. Back-loading is a one-time, ad-hoc fix that does not solve the underlying problem of the unpredictability of carbon prices. If governments give away or sell too many carbon permits, the price falls too low – as now – and there is no incentive for companies to reduce emissions.  If too few carbon permits are sold, the price may become unacceptably high, causing economic hardship.

A solution would be to implement a minimum and maximum price for carbon permits.  Such a price collar would be a far more effective tool for limiting carbon emissions, and would be more beneficial for European companies and consumers too. Polluters would have more certainty about recovering investments in emission reduction while the economy would be insulated against excessive price rises.

from The Great Debate:

A ‘Marshall Plan’ for Africa’s employment challenge

To Africa’s many challenges, add one more: unemployment.

Unemployment, independent of any other factor, threatens to derail the economic promise that Africa deserves. It’s a time bomb with no geographical boundaries: Economists expect Africa to create 54 million new jobs by 2020, but 122 million Africans will enter the labor force during that time frame. Adding to this shortfall are tens of millions currently unemployed or underemployed, making the human and economic consequences nearly too large to imagine.

Thus, even with the strong economic growth we have seen over the past decade, job creation in Africa remains much too slow. Africa needs a comprehensive, coordinated approach akin to America’s “Marshall Plan” in Europe after World War Two. That effort focused on building infrastructure, modernizing the business sector, and improving trade. By the end of the four-year program, Europe surpassed its pre-war economic output.

from The Great Debate:

Putin’s (un)happy new year

Russian President Vladimir Putin has bid farewell to 2013 with his state of the nation address, followed closely by his annual 4-plus-hour marathon news conference. He even managed to appear magnanimous, notably in his decision to pardon the imprisoned oligarch Mikhail Khodorkovksy.

He is setting the stage for the main event: the Sochi Olympics.

But as Putin subtly warned in his final 2013 appearances -- and as the Volgograd bombings so graphically confirmed -- major changes must come in the new year. Putin virtually admitted in his December speeches that the current path is not sustainable, while the Volgograd bombings have increased the urgency to face up to Russia’s problems.

from The Great Debate:

International pressure works on Putin

Russian President Vladimir Putin had expected the grandest of guests for the opening ceremony of the Winter Olympics in Sochi -- presidents, billionaires, the global big players.

For years he had imagined the presidential box like this: Needling President Barack Obama that NASA now depends on Russian rockets to get American astronauts into orbit. Emphasizing to French President Francois Hollande that France would be better served in the business world if it dropped all references to human rights. Making deals with the German delegation over champagne, as the ice skaters pirouette below, around the Olympic flame.

from The Great Debate:

Turkey cashes in on the Iran talks

You may have thought the Geneva deal struck last month between Iran and the P5+1 nations (the five permanent members of the United Nations Security Council plus Germany) was a sweet one for Tehran -- getting billions in sanctions relief in exchange for mere promises to halt its nuclear program.

But Turkey may be an even bigger winner. It just needs to open its doors and wait for Iranian funds to pour in.

from The Great Debate:

Ukraine’s Protests: Not (yet) a revolution

In the three weeks since Ukraine formally suspended talks aimed at signing an Association Agreement with the European Union, two important facts have become clear.

First, it is now apparent that Ukraine's president, Viktor Yanukovich, had no effective strategy to resist intense pressure against the EU deal from Moscow. The Kremlin promised big cash loans, a gas discount and debt forgiveness, while explicitly threatening to block Ukraine's access to the Russian market and implicitly threatening to stoke separatism in regions of the country.

from The Great Debate:

Mandela and De Klerk: Essential partners

When Nelson Mandela and South African President F.W. De Klerk began their historic negotiations to end apartheid, each man professed respect for the other. Indeed their relationship appeared not only professional, but personal.

Yet as the negotiations dragged on through 1992 and 1993, tempers grew short, and South Africans grew increasingly frustrated with the slow progress toward the liberation that had seemed so promising just a few years ago. Most worrisome, violence was growing between the supporters of Mandela’s political party, the African National Congress, and Mangosuthu Buthelezi’s Inkhatha Freedom Party.

from The Great Debate:

On meeting Mandela

Journalists are not easily impressed. We pride ourselves on our skepticism. (Most advisable of us, may I add.)

But I confess to having been in awe of Nelson Mandela, and not just in theory. I met him, spent about an hour with him -- or, to put it more accurately, I spent about an hour in his presence.

from The Great Debate:

Mandela’s message of reconciliation

On the day that Nelson Mandela was elected as South Africa’s first black president, I drove across the fault lines of segregated suburbia to watch his fellow citizens vote him into office.

In the mixed-race “Malay Quarter” in central Cape Town -- named for the residents descended from the Malaysian and Indonesian slaves brought to the city in the 17th and 18th centuries -- joyous residents thronged the streets outside the polling stations.

Only paying teachers more will raise Britain to the top of the class

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–Vikas Pota is chief executive of the Varkey GEMS Foundation. The opinions expressed are his own.–

It was results day yesterday for education ministers around the world, and where they’ve come in the class will affect their prospects just as surely as a sixth-former opening their brown envelope. Nowhere around the world will the wait have been more nail-biting than in Michael Gove’s Department for Education.

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