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The WTO on "Effort to Restart the Engine"
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Also compare:
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    Further down are the transcripts of
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    Finance for Trade: Effort to restart the engine

    Session 9:
    Sub-theme III:

    The impact of the global economic crisis on developing countries, in particular LDCs, and the role of trade financing.
    (WTO Programme)

    Mr Guy de Jonquières — Senior Fellow, European Centre for International Political Economy (ECIPE) [former trade editor of the Financial Times]

  • H.E. Mr Jong-Hoon Kim — Minister for Trade, Republic of Korea
  • Mr Jean Rozwadowski — Secretary General, International Chamber of Commerce (ICC)
  • Mr Steven Puig — Vice President for Private Sector and Non-Soverign Guaranteed Operation, Inter American Development Bank
  • Mr Raoul Ascari — Chief Operating Officer, SACE
  • Mr Pascal Lamy — WTO Director-General
  • Wachstum, Arbeitsplätze, Entmaterialisierung usw... - Gedankenaustausch mit einem bekannten Ökonomen in der Schweiz
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    ecoglobe for realistic answers

    Finance for Trade: Effort to restart the engine

    Part transcript from the forum Audio. [For the scientific comments (rejoinders) that the forum format (one question, one "answer") did not allow to be advanced: See our letter to Letter to Mr Pascal Lamy ]
      Our statement and question:

      "My name is Helmut Lubbers. I represent civil society, by means of a small NGO.
      Last year I had a question and then I got a reply.
      This time I have a statement and after the statement I want to ask a question.

      Last year I asked whether the people would understand that the earth is finite.
      This time... And I got the wrong answer and I wrote this to Mr. Lamy.

      This time I would like to make a statement by showing a picture.
      The picture is this one:
      And the picture says, the picture says that if we "restart the engine", which is the title of this session, we are continuing to grow the economy and to accelerate the depletion of non-renewable resources.

      And my question is still the same question as every time in every one of these single meetings: Why do you not understand that we cannot continue to grow?

      And I have another another book here. Normally I don't take books. It says "Overshoo...". Well, "Overshoo..." is lacking one letter or two letters. It says "overshoot". Which is a prediction of overshoot. Actually, we have overshot the Earth's carrying capacity.

      And this is not an ideology. This is an environmentally, scienfically proven fact. Scienfically, environmentally proven fact is also that economic growth is always material.

      And what Mr Lamy answered last year, by saying that we have to internalise the externalities: It does not work. It does not reduce the consumption of non-renewable resources."
    [ecoglobe: Actually internalisation of externalities by means of equivalent evaluation, could work to a certain extent if the values attributed are high enough to reduce consumption levels. But then it would reduce economic growth. Which is the opposite of what the BPE Compact, the comrades of Business, Politics and the discipline of Economics, strive for.
    The theoretical concept of internalisation has no practical value. How could one measure the value of a singing bird and then internalise this in the cost of cutting down a hedge between two fields?

      Mr Pascal Lamy's reaction:

      "Again the question we had last year about the exhausting [of] available resources. And I am afraid my answer this year will be very similar to last year's.

      We know we now have to operate under environmental constraints. Everybody agrees with that.

      The question is: How do we do that? And there are several ways of doing it.

      But in a market economy the normal avenue is to internalise environmental costs that are not factored in by market forces. Now you can do that through regulation. You can do that through taxation. You can do that through semi-market mechanisms like carbon trade for CO2. The toolbox is there.

      The question is: How much of that can be done individually and how much of that has to be done collectively?

      And the environment is an obvious place where doing things individually doesn't make much sense. Hence the necessity to step up at international level the sort of internalisation machinery. And we know that inevitably at international level things will be slower than at national level. But there is no other option than doing this. And we are well placed in the WTO to know that that's the right way to accept collective disciplines. But you have to negociate them.

      And you have a very good example of this in Copenhagen, where the problem of the burden sharing, of who does what, is on the table.

      And you know, unless and until people agree to accept and sort of internalise these constraints, things will not happen. I'm sorry. But at the end of the day this is something which is a political issue.

      Now, NGOs pushing, that's absolutely fine. Why do we have now a negotion in the WTO on disciplines on fisheries subsidies, which was not our sort of normal cup of tea? If you look at 60 years of GATT, we never stepped into fishing or fisheries activity. Now the reason why we now have a negotiation on this is because the problem of depletion of fish resources and a part of this has to do with subsidies. And then a discipline has to be put on subsidies, which of course creates a big negotiation on what's a big boat, a small boat, coastal fishing, high sea fishing, all this negotiating that needs to enter into international level. But I don't thinlk there is any other way out.

      And on the zero growth: I have exactly the same answer as my neighbour, which by the way happens to be the answer I gave last year. Which is that if I'm in Laos, if I'm in Benin, if I'm in Paraguay, if I'm in Yemen: Preaching zero growth attracts zero attention. For an obvious reason, which is that people are extremely poor and that they want to be a bit better off."

    Letter sent to Mr Pascal Lamy: []
    ecology discovery foundation - ecoglobe
    Helmut E. Lubbers
    BE MsocSc DipEcol
    14 Boulevard Carl-Vogt
    CH-1205 Genève / Genf
    Tel./tél. +41-22-3212320

    Genève/Genf, 6 October 2008

    ecoglobe, 14 bd. Carl-Vogt, CH-1205 Genève
    Mr Pascal Lamy, Director-General,
    World Trade Organisation
    rue de Lausanne
    1211 Geneva, Switzerland

    Environmental outlook and economic growth, your comments at the introductory forum, 24.9.2008
    Dear Mr. Lamy,

    Enclosed you find a transcript of your words regarding growth and the environment, completed with comments, where necessary.

    Your openness and careful words are appreciated indeed. Unfortunately the provisos that you advanced do not quite correspond with environmental possibilities.

    On the one hand we have hard scientific evidence which tells us that the earth is being depleted at an ever higher rate because of human economic and reproductive hyperactivity. Humanity has largely overshot the earth's carrying capacity and we are seriously out of balance. Actually, with the present developments, a total collapse must be expected before long, possibly as soon as within a few generations, i.e. by the middle of this century. This is a very dark, albeit scientific outlook.

    On the other hand we have widespread misconceptions about the nature of economic growth and solutions that technology and ingenuity could offer. Growth is always material, since it's measured in monetary units, that represent material, predominantly non-renewable, resources.

    "Internalization" is a theoretical concept that aims at putting a price on "externalities" such as the damage done to nature or the noise generated by human activity, by means of "hedonic pricing" and "contingent valuation". But it remains highly debatable, how one could attribute a value to a singing bird, for instance ( see enclosure.).

    Non-renewable resources, however, can never be internalized, because no amount of money can compensate for resources that are lost forever. Some economists believe nature can be replaced by capital. But human-made structures cannot replicate the functions of nature.

    Thus one can only conclude that we must contract, instead of further expanding our economies.

    As a last resort many discussants advance ingenuity, technology, or even optimism, in defense of economic growth. But these cannot recreate non-renewable resources or revive extinct species. We have collated a list of arguments on page (copy attached).

    We repeat that we have much appreciated your personal participation in the discussion and that the audience had a fair chance to voice ideas. Unfortunately such events do rarely allow for an in-depth discussion and search for scientifically correct positions.

    Hopefully you appreciate our comments. We are at your disposal if you have questions of comments regarding our arguments. Your reaction is most welcome.

    With kind regards,

        Helmut E Lubbers
    ecological psychologist