The Minister of Environment and Sustainable Development of Argentina, Rabbi Sergio Bergman, speaks during the opening of the Group of 20 (G20) Sustainability Working Group in Buenos Aires. Argentina, which chairs the Group this year, has the difficult task of seeking consensus on this thorny issue. Credit: Ministry of Environment of Argentina

By Daniel Gutman
BUENOS AIRES, Apr 20 2018 (IPS)

As president this year of the Group of 20 (G20) developed and emerging nations, Argentina has now formally begun the task of trying to rebuild a consensus around climate change. It will be an uphill climb, since the position taken by the United States in 2017 led to a noisy failure in the group with regard to the issue.

The G20 Sustainability Working Group (CSWG) held its first meeting of the year on Apr. 17-18 in Buenos Aires, in the middle of a balancing act.

Argentine officials hope a full consensus will be reached, in order to avoid a repeat of what happened in 2017 in Germany, when the final document crudely exposed the differences between the U.S. standpoint and the views of the other 19 members, with respect to climate change.

“Since the United States does not recognise the Climate Action Plan agreed in Hamburg (where the last G20 summit was held), we did not formally table it. But what we are doing is addressing the contents of that plan,” Carlos Gentile, chair of the G20 Sustainability Working Group, told IPS.

“Today the United States is participating and we are confident that this time a consensus will be reached for the G20 document by the end of this year,” added Gentile, who is Argentina’s secretary of climate change and sustainable development.

The official stressed, as a step forward for the countries of Latin America and other emerging economies, the fact that the main theme of the Working Group this year is adaptation to climate change and extreme climate events, with a focus on development of resilient infrastructure and job creation.

“We know that mitigation is more important for the developed countries, which is why it is a victory that they accepted our focus on adaptation,” said Gentile.

The Working Group commissioned four documents that will be discussed at the end of August at the second and last meeting of the year, which will be held in Puerto Iguazú, on the triple border between Argentina, Brazil and Paraguay.

Two of the papers will be on adaptation to climate change and will be produced by the Organisation for Economic Cooperation and Development (OECD) and UN Environment.

The other two will be about long-term strategies, prepared by the World Resources Institute, an international research organisation, and how to align funding with the national contributions established in the Paris Agreement on climate change, by the International Labour Organisation (ILO).

One of the highlights of the two days in Buenos Aires was that the countries that have already finalised documents on their long-term strategies (LTS) shared their experiences. Among these countries are Germany, Canada, the United States, Great Britain, Mexico and France.

The LTS are voluntary plans that nations have been invited to present, by the Conference of the Parties (COP) to the United Nations Convention on Climate Change, about their vision of how it is possible to transform their productive and energy mix by 2050 and beyond.

While the national contributions included in the Paris Agreement, established at COP 21 in December 2015, are included in the 2030 Agenda for Sustainable Development and are to be reviewed every five years, the LTS look much further.

“Each of the countries designed their LTS in their own way. Some countries said they used it as a way to send a signal to the private sector about what kinds of technologies are foreseen for the climate transition and others spoke about job creation,” said Lucas Black, climate change specialist for the United Nations Development Programme (UNDP).

The UNDP collaborates with the Global Resources Institute in its document on the LTS and it also plays a role in the agenda of issues related to the development of the G20, as an external guest.

What does not seem clear is where such ambitious transformation plans towards 2050 will find the resources needed to turn them into reality.

In this respect, Black acknowledged to a small group of journalists that for emerging economies it is particularly difficult to find the funds necessary for carrying out in-depth changes.

“The private sector, particularly in infrastructure, really needs long-term certainty. That is a crucial part of its decision to invest,” said the international official, who arrived from New York for the meeting.

For her part, María Eugenia Di Paola, coordinator of the UNDP Environment Programme in Argentina, said the financing for the transition must come from “a public-private partnership” and that “the incorporation of adaptation to climate change in the G20 agenda is mainly of interest to developing countries.”

This year’s G20 Leaders’ Summit will take place Nov. 30-Dec. 1 in Buenos Aires and will bring together the world’s most powerful heads of state and government for the first time in South America.

By that time, which will mark the end of the presidency of Argentina, this country hopes to reach a consensus on climate change, an issue that was first addressed in the official G20 declaration in 2008.

Black believes it is possible.

“Obviously, the G20 countries have different views. During the German presidency there was no consensus on all points. But all G20 members have a strong interest in the issues discussed this week: adaptation to climate change and infrastructure, long-term strategies and the need to align financing with national contributions,” he said.

The Working Group meeting in Buenos Aires was opened by two ministers of the government of President Mauricio Macri: Environment Minister Sergio Bergman and Energy and Mining Minister Juan José Aranguren.

Before joining the government, Aranguren was for years CEO of the Anglo-Dutch oil giant Shell in Argentina.

Argentina launched a programme to build sources of generation of renewable energy, which is almost non-existent in the country’s electricity mix but drives the most important projects in other areas of the energy sector.

Thus, for example, it was announced that in May Aranguren will travel to Houston, the capital of the U.S. oil industry, in search of investors to boost the development of Vaca Muerta, a gigantic reservoir of unconventional fossil fuels in the south of the country.

The minister has also been questioned by environmental sectors for his support for the construction of a gigantic dam in Patagonia and the installation of two new nuclear power plants.

“Latin America has a series of opportunities to build a more sustainable energy system, to improve infrastructure and to provide safe access to energy for the entire population,” Aranguren said in his opening speech at the Working Group meeting.

Bergman, meanwhile, said that “we have all the resources to address the challenge of climate change to transform reality and open the door to a secure and stable future for all.”

New analysis suggests that developing countries are losing a trillion dollars or more each year to tax evasion and corruption facilitated by lax laws in Western countries, raising pressure on global leaders to agree to broad new reforms at an international summit later this year.

These massive losses could be leading to as many as 3.6 million deaths a year, according to the ONE Campaign, an advocacy group that focuses on poverty alleviation in Africa. Recovering just part of this money in Sub-Saharan Africa, the organisation says, could allow for the education of 10 million more children“Whenever corruption is allowed to thrive, it inhibits private investment, reduces economic growth, increases the cost of doing business, and can lead to political instability. But in developing countries, corruption is a killer” – ONE Campaign
 a year, or provide some 165 million additional vaccines.

“Whenever corruption is allowed to thrive, it inhibits private investment, reduces economic growth, increases the cost of doing business, and can lead to political instability. But in developing countries, corruption is a killer,” a report on the findings, released Wednesday, states.

“When governments are deprived of their own resources to invest in health care, food security or essential infrastructure, it costs lives, and the biggest toll is on children.”

The new analysis focuses on a spectrum of money laundering, bribery and tax evasion by criminals as well as government officials. The lost money is not development aid but rather undeclared or siphoned-off business earnings – immense tax avoidance resulting in a decreased base from which governments can fund essential services.

International trade offers a key point of manipulation, the report says, with the extractive industries particularly vulnerable. In Africa alone, exports of natural resources grew by a factor of five in the decade leading up to 2012, offering clear prospects for growth alongside lucrative opportunities for corruption on a mass scale.

“Between 2002 and 2011 we saw an exponential increase in illicit financial flows across the globe,” Joseph Kraus, a transparency expert at the ONE Campaign, told IPS.

“Yet while we’re all familiar with corruption in developing countries, it takes two to tango – that money often ends up in the financial centres of the Global North. Those banks, lawyers and accountants are all essentially facilitators of that corruption, so in order to get at the root of this issue we need to go after the problems there.”

Real opportunity

Advocates including the ONE Campaign are currently stepping up pressure on industrialised countries to institute a series of across-the-board transparency measures. Some are aimed at corruption in developing countries, such as strengthening disclosure laws impacting on the extractives industry and bolstering “open data” standards to allow citizens increased oversight over their governments’ dealings.

Several other reforms would need to be carried out by developed countries, particularly those housing major financial centres such as the United States and United Kingdom. These would include new standards requiring governments to automatically exchange tax information, to mandate the publication of full information on corporate ownership, and to force multinational corporations to report on their earnings on a country-by-country basis.

In certain circles, such demands have been percolating for years. But current circumstances could offer unusual opportunity for such changes.

“In the last two years we’ve seen an acceleration of this agenda,” Kraus says. “Eighteen months ago, no one was talking about phantom firms or anonymous shell companies. But these issues have gained a lot of momentum in a short period of time, and there is real opportunity coming up.”

This new energy has been motivated particularly by concerns in advanced economies over shrinking government budgets in the aftermath of the global economic downturn. Yet developing countries arguably stand to benefit the most from substantive reforms, provided they’re structured accordingly.

Advocates of such changes are now looking ahead to a summit, on Nov 15 and 16 in Australia, of the members of the Group of 20 (G20) world’s largest advanced and emerging economies as well as two major meetings of finance ministers in the run-up to that event.

The G20 represent about two-thirds of the world’s population, 85 percent of global gross domestic product and over 75 percent of global trade.

The members of the G20 are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union.

The G20 has taken on a primary role in issues of global financial stability and, more recently, in pushing the automatic exchange of tax information between governments. A new global standard on such exchange could be approved by the G20 ministers in November, among other actions.

“For too long, G20 countries have turned a blind eye to massive financial outflows from developing countries which are channelled through offshore bank accounts and secret companies,” according to John Githongo, an anti-corruption campaigner in Kenya.

“Introducing smart policies could help end this trillion dollar scandal and reap massive benefits for our people at virtually no cost. The G20 should make those changes now.”

Coordinated response

In fact, many G20 countries have instituted some of these reforms on their own. The U.K. government, for instance, has taken unilateral action on publicising information on corporate ownership, while the United States was the first to pass strong transparency requirements for multinational extractives companies.

While such piecemeal national legislation can spur other countries to action, many feel only a comprehensive approach would have a chance at having a substantial impact. Further, many governments have pledged to act on these issues, but have yet to actually follow through.

“Illicit financial flows are a perfect example of a transnational problem, in that you have two legal regimes in which loopholes are being exploited,” Josh Simmons, a policy counsel at Global Financial Integrity, a Washington watchdog group that supplied data for the new ONE Campaign report, told IPS.

“So when an international cooperative body is able to identify these loopholes, they can get member countries to move in sync to address the situation. But if only one country tries to do so, businesses would probably just move elsewhere.”

Others are looking even more broadly than the G20. A paper released last month by researchers with the Center for Global Development, a think tank here, calls for the inclusion of anti-tax-evasion aims in the new global development goals currently being negotiated under the United Nations.

Indeed, even while there could be real movement at the G20 on several of these issues this year, the work on the other end of this equation – in developing countries – remains onerous.

“We need to get developing countries’ tax systems up to speed, strengthen their financial intelligence units and get their anti-laundering laws up to code. And that is proceeding, but much more under the radar given its complexity,” Simmons says.

“Still, that’s where people are actually bearing the brunt of this problem. Tax avoidance in the United States contributes to the national debt, but in developing countries it’s literally causing people to go hungry.”

Edited by Ronald Joshua