[PEN-L:29859] new subsidies guesstimates

["Ian Murray" <seamus2001@xxxxxxxxx>]

Published on Monday, August 26, 2002 by the Guardian of London
Ecological Decline 'Far Worse' Than Official Estimates
Leaked paper - OECD's grim warning on climate change

by John Vidal in Johannesburg

The real level of world inequality and environmental degradation may be far worse than
official estimates, according to a leaked document prepared for the world's richest
countries and seen by the Guardian.

It includes new estimates that the world lost almost 10% of its forests in the past 10
years; that carbon dioxide emissions leading to global warming are expected to rise by 33%
in rich countries and 100% in the rest of the world in the next 18 years; and that more
than 30% more fresh water will be needed by 2020.

The background paper for last month's Organization for Economic Co-operation and
Development pre-Johannesburg meeting on sustainable development draws on many previously
unseen UN, World Bank, World Trade Organization, and academic papers.

Although the governments of the world's 22 richest nations who make up the OECD have seen
the document, many of the calculations are new and considerably different from their own.

It calculates that less than 0.1% of of the average income of the 22 members of the OECD
actually finds its way to the world's low income countries and just 0.05% went to the
least developed countries. Recent US and EU initiatives, it says, "will not meet targets
at any time soon".

Donor assistance for environmental protection and basic social services has declined to
less than 15% of all aid compared with 35% at the time of the last earth summit in 1992.

The OECD paper calculates that rich countries now subsidize their industries by up to
$1,000m a year, including more than $300bn in agriculture. This, it says, is having
increasing effects on the development of poor countries. and on environmental degradation.
If unrestricted market access were given to just the four richest economies in the world,
it would increase per capita incomes of more than 2 billion people in the world's most
populated countries by 4% a year.

Meanwhile, the paper finds that foreign assistance from western European countries,
including private funding and direct investment encouraged through national policies, was
more globally oriented in 1900 than it is today.

It says that if the EU, Canada, Japan and the US allowed migrants to make up 4% of their
workforce, the returns to poor countries could be $160bn to 200bn a year - far more than
any debt relief could provide.

The paper's calculations of environmental degradation suggest the many conventions,
treaties and intergovernmental agreements signed in the past decade have had little or no
effect on stopping the rush for timber and mineral resources in the developing world and
that extinction of species is now reaching 11% of birds, 18%-24% of mammals, 5% of fish,
and 8% of plants.

Over the next 18 years, says the report, global energy use is expected to expand by more
than 50%, and by more than 100% in China, east Asia and the former Soviet Union. Transport
is by then expected to account for more than half of global oil demand.

"The non-renewable fossil fuel resource base is expected to be sufficient to meet demand
to 2020 though problems beyond that point are foreseen for natural gas and possibly oil,"
the report says.

It adds that OECD countries subsidize the emission of global warming gases by $57bn -
almost exactly what the report estimates it would cost to meet international targets. The
paper suggests that investing the money in reducing climate change emissions would have
next to no effect on the global economy. "Through the provision of subsidies on fossil
fuels governments are effectively subsidizing pollution and global warming as more than
60% of all subsidies flow to oil, coal and gas."

Environment and development groups yesterday reacted to the report with horror.

"The rich world knows this is happening," said the chair of Friends of the Earth
International, Ricardo Navarrez. "We in poor countries have always known the climate is
changing, aid does not come, and the poor are getting poorer. The richest countries are
here in Johannesburg to keep the system going."

Depleted resources: Key facts from OECD report

Fisheries

· Nearly 50% of all fish stocks are fully exploited, 20% are overexploited

· Only 2% of global fisheries is recovering from overfishing

Forests

· On current trends by 2025 15% of all forest species will be extinct

Development

· 60% of the world's population lives in ecologically vulnerable areas

· 3 million people die each year due to air pollution and 5 million due to unsafe water

Foreign investment

· 80% of global finance flows went to rich countries in 2000, with the entire African
continent receiving less than 1% of direct foreign investment

· In 1914 40% of western European investment went to Africa, Latin America and Asia. In
1990 less than 20% went to those regions

Water

· Global water withdrawals are expected to rise 31% by 2020

· Most groundwater resources are being replenished at a rate of between 0.1% and 0.5%