The Trojan Horse in the Transatlantic Trade and Investment Partnership (TTIP)

Is the EU Commission about to back down over clauses giving multinationals wide ranging powers to challenge democratic decisions?

Under pressure from Germany, and European citizens groups, the Investor State Dispute Settlement mechanism (ISDS) could be withdrawn from negotiations leading towards the proposed EU/US Transatlantic Trade and Investment Partnership (TTIP).

  

As details of the proposed treaty have been revealed, concern has grown among citizens, and some governments, especially about the ISDS clauses. Under other international trade agreements with similar provisions multinational companies have challenged governments for potential loss of profits, because a country in which they have invested, or intend to invest, has more constraining laws, regulations or standards than in their country of origin, and they claim these would have an adverse impact on their potential sales. 

These secret clauses are a neoliberal dream
The current version of the ISDS clauses is still secret, but in early drafts it was proposed that each case would be decided by three arbitrators chosen from a panel of international lawyers.  There could be no appeal. If it won the case, as well as obtaining very substantial financial compensation, a company could also demand that democratically agreed laws be changed. These clauses are similar to those included in the EU-Canada CETA trade treaty, which in turn were based on the World Trade Organisation’s model.

ISDS clauses in the North American Free Trade Agreement NAFTA, have led to many controversial judgements overwhelmingly in favour of US companies. During 20 years of the operation of the NAFTA agreement the government of Canada has had 30 cases brought against it by private US companies and it has lost 30 times. Mexico has had 5 cases against it by US firms and has lost 5 times resulting in compensation payments of $204 million. Canada and Mexico have brought 22 cases against the US and the US has won 22 times.   All together it’s an outstanding record for so-called independent arbitrators and a US neoliberal dream come true.

It's the potential for this kind of assault on European democratic institutions and their decisions which is at the centre of the opposition to these negotiations.

Jean-Claude Juncker

The appointment of Jean-Claude Juncker, the new President of the European Commission, and a group of new Commissioners opens up an opportunity for major changes in the treaty negotiations as the tide of opinion turns against the negotiations lead by the outgoing Trade Commissioner Karel De Gucht.

Timeline of recent developments

January 2014

In January 2014 the negotiation of the section of the treaty dealing with the ISDS mechanism was suspended by Trade Commissioner Karel De Gucht pending the results of a public consultation. This closed on 13^th July 2014, and nearly 150,000 responses were received, 99.62% coming from individuals. A report will be issued in November 2014.

March 2014

Germany announced in March 2014 that they would push for ISDS Clauses to be excluded from the treaty.

July 2014

On 11th July 2014 the new President of the EU Commission, Jean-Claude Juncker expressed his view to a meeting of the European Parliament green parties, that he could see no reason why national judiciary shouldn’t be able to judge arbitration cases brought by multi-national companies when they considered that their treatment in a particular national jurisdiction was unfair.

When asked by Yannick Jadot Green MEP about his stance on the controversial Investor-to-State Dispute Settlement process (ISDS) Juncker stated: 

“I don’t understand why great democracies would not have faith in the judiciary. We have courts which are able to deal with cases that are brought to them, and so I’m not really in favour of what one could call “private courts” or arbitration bodies which may sometimes reach good decisions but don’t always have to justify their decisions.”

He has subsequently been quoted in an article by the Dutch journalist Caroline de Gruyter, writing for NRC Handelsblad, on 15 October 2014 as saying that he now sees ISDS as a "lightning rod" issue for TTIP opponents. Politically, Juncker believes it cannot be won, as those in favour are “not fighting back.”

September 2014

Cecilia Malmström

In written replies leaked before the confirmation hearings of Cecilia Malmström, the proposed new EU Trade Commissioner, Ms Malmström appeared to refute the need for an ISDS procedure, saying:

"No limitation of the jurisdiction of courts in the EU member states will be accepted in this context; this clearly means that no investor-state dispute settlement mechanism will be part of that agreement."

She later retracted the statement, taking to social media to claim that:

"The sentence everybody is so excited about on ISDS / TTIP is not written by me in the final version of my answer to the EP [European Parliament]."

An EU official stated that the text released earlier had been in error and would be corrected when the final version of the replies was published.

October 2014

De Gucht warns no TTIP without ISDS

Karel De Gucht

The outgoing European Trade Commissioner Karel De Gucht has warned this month that there will be no free trade agreement between the EU and US without the controversial Investor-State Dispute Settlement (ISDS) clauses.

Speaking to Reuters in Rome, De Gucht – who is to leave his position shortly – said, in reference to the clause's biggest European objector, Germany:

"They should realise there will be no TTIP without an ISDS," adding that neither side would be able to insist on investor protection clauses in other agreements if they didn't include it in the Transatlantic Trade and Investor Partnership (TTIP)."

Is there any point to TTIP without ISDS?

For once he’s right.  The Investor-to-State Dispute Settlement mechanism is the principal means by which non-tariff barriers to trade would be steadily dismantled. The alternative is likely to be a series of never ending bilateral negotiations in which individual states will seek to protect their national interest and will have every opportunity to delay taking any action. Set against that are all the risks involved in handing over power to multi-nationals to challenge democratic decisions in all fields of trans-Atlantic trade.  Unless of course certain areas of trade in goods and services have been specifically excluded by the treaty!

But don’t forget that the EU Commission’s own study predicted, as a result of a treaty including ISDS clauses, an average increase in the growth of EU economies of only 0.5% by 2030. So, if the teeth in the TTIP treaty are to be withdrawn, the hoped for results in terms of economic growth would most likely be nullified and there would be no point in continuing with the negotiations. That is assuming that the US would still want to do so!

So that sounds like good news but what about the deal with Canada?

The Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada has gone ahead and been signed.  It now has to be ratified by national governments and the European Parliament. Despite Germany’s objections the Consolidated CETA Text  dated 26^th September 2014 still includes ISDS clauses. (Chapter X, Section 6 pages 134 – 185).

So if CETA is ratified what does this mean?

Any US multinational company with a subsidiary in Canada could, after certain conditions have been satisfied, challenge any EU government in just the same way as if ISDS clauses were included in a US – EU TTIP trade deal!

So the ISDS Trojan horse won’t go away?

And it doesn't matter whether TTIP includes ISDS clauses or not. A route still exists for multinationals to sue European governments. If they can prove to the satisfaction of a group of international lawyers, who are answerable to nobody, that a democratically validated law, regulation or standard is more onerous in the target country than in their own, and could affect their potential profits, they can still overturn it and get paid for doing so.

If you think I'm exaggerating Australia has been sued by Philip Morris Asia in Hong Kong, under a 1993 bilateral trade agreement, over its adoption of a law enforcing plain packaging for cigarettes.  Forty other WTO members have joined the dispute as third parties, a record number. The case is ongoing.

The only way to remove this threat is to halt the TTIP negotiations and not to ratify the CETA treaty!

Please sign the petition which proposes a European Citizens Initiative (ECI) to do this here. http://stop-ttip.org/sign/  they need at least a million signatures and at today’s date (25th November 2014) they have 936,000. They have also announced that they will take the EU Commission to court to challenge their decision that the ECI was not valid.

You can read more about it here. http://johnpreedy.blogspot.fr/2014/10/the-eu-commissions-own-goal.html

The Reasons why I Oppose Neoliberalism are explained here.

The EU Commission’s Own Goal

European Citizens Initiative to halt TTIP (TAFTA) and CETA Trade Deals Rejected

The European Commission has rejected the registration of a European Citizens Initiative (ECI) to stop the secretive negotiations concerning the Transatlantic Trade and Investment Partnership with the USA and also to stop the ratification of the Comprehensive Economic and Trade Agreement with Canada. 

An online petition to support the ECI has attracted more than 600,000 signatures so far and the European Commission’s rejection of the Initiative, with its attendant publicity, is surely  an own goal which will lead to even more public concern and also fuel support for Eurosceptic groups who are attracting more and more votes in many European countries.

The text of the ECI was as follows:

"We invite the European Commission to recommend to the Council to repeal the negotiating mandate for the Transatlantic Trade and Investment Partnership (TTIP) and not to conclude the Comprehensive Economic and Trade Agreement (CETA)"

The application was submitted under the rules established by the Lisbon Treaty in 2012 for a”European Citizens Initiative”.  It was rejected by the EU Commission on the grounds that, although negotiations for these wide ranging trade agreements are proceeding in line with mandates written by the EU Trade Commissioner and agreed by the member states, there was no “act” by the Commission which could be reversed. A second reason was that negative ECI’s are not valid. (See the EU's reasons for rejection here).

Michael Efler, contact person for the ECI, which currently represents almost 230 organizations from 21 EU countries, said:

 “Now the battle really begins. The rejection of the ECI only confirms the Commission’s strategy to exclude citizens and parliaments from the TTIP and CETA negotiations. Instead of paying attention to citizens, it is just lobbyists that are being listened to.”

“In its rejection of the ECI, the European Commission claims that the negotiating mandates on TTIP and CETA are not legal acts but internal preparatory acts between EU institutions and therefore not contestable via an ECI.

The Commission’s view that only acts with an effect on third parties are permissible for an ECI is obviously a legal error. The negotiating mandate of the Commission is a formal decision of the Council and therefore a legal act. If the Commission’s legal opinion had any substance, then in plain English this would mean that Europe’s population is excluded from participation in the development of any kind of international agreements – information that is as frightening as it is scandalous,” according to Efler.

What’s more, the Commission claims that it cannot make negative ratification proposals and therefore cannot comply with the ECI demand not to conclude the CETA and TTIP negotiations. “Contrariwise, this means that citizens can only applaud international negotiations carried out by the Commission, but not criticize them,” said Efler.

This means that the EU Commission, as well as conducting negotiations in secret, wishes to stifle any participation by citizens' groups in such trade negotiations.

“Apparently the Commission is afraid of this ECI, which has the potential to become the most successful citizens’ initiative so far,” said Efler. “If the Brussels bureaucracy thinks that this is how it can stop people’s protests against TTIP and CETA, then it is mistaken. We will not allow the Commission to tie our hands. ”

Prof. Dr. Bernhard Kempen, a German law professor from the University of Cologne, is very clear in his legal opinion on the EU Commission’s ruling, carried out at the request of the proposers of the ECI, and in his conclusions on page 22 his view is completely the opposite to that of the EU Commission.

The TTIP Wooden Horse

If it is not stopped the EU soon intends to sign these two far-reaching trade agreements. The negotiations were based on mandates written by the EU Commission and approved by the Council of Ministers.  

The official line is that this will create jobs and increase economic growth. But the study that was commissioned by the EU itself predicted an increase in economic growth, averaged over the whole of the EU of only 0.5% by 2030.

The real beneficiaries of these agreements, however,will not be citizens but big corporations, who will be given wide ranging rights to challenge democratically validated standards, laws and decisions:

• Investor-State-Dispute Settlement (ISDS): Canadian and US companies would have the right to sue the EU for damages if they believe that they have suffered losses because of government decisions (for instance new laws to protect the environment or consumer rights).
• Improving or even maintaining our standards for food, labour rights, environmental protection and consumer rights will become much harder.
• Liberalisation and privatisation would effectively become irreversible.
• The EU and its member states would come under pressure to allow risky technologies such as fracking or genetic modification.
• CETA and TTIP would increase the power of multinationals at the expense of democracy and the public

Read more about TTIP here.

Please sign the European Citizens Initiative here http://stop-ttip.org/sign/

The Reasons Why I Oppose Neoliberalism

Neoliberalism Ensnares Democracy

NeoLiberalism

Quoted from Wikipedia
"Nowadays the most common use of the term neoliberalism refers to economic reform policies such as "eliminating price controls, deregulating capital markets, lowering trade barriers", and reducing state influence on the economy especially by privatization and fiscal austerity. As an ideology the term is used to denote a conception of freedom as an overarching social value associated with reducing state functions to those of a minimal state.

American professor of political science and Democratic socialist Frances Fox Piven sees neoliberalism as essentially hyper-capitalism."

Rich and Poor
Speaking globally, there is an enormous and growing gap between the rich and the poor. In many countries, particularly in the third world, the ruling elite make sure that they become ever richer at the expense of their compatriots.  Corruption and weak government is the scourge of the under-developed countries of the world, but apart from withholding grants, it’s difficult to see what anyone in the West can do about this, even though I believe it’s the root cause of much of the world’s misery.  

Corrupt leaders are frequently less interested in investment, which leads to development opportunities for their own people, than in grandiose externally financed projects from which they can take their 10% oh sorry I meant 20%.  Furthermore political instability and perceived risk often causes a lack of inward investment.  All of this creates barriers to development and improvement in living standards for the general population of such countries. 

But even though corruption is endemic in many developing countries, during a recent trip to Kenya, somewhere that I hadn't visited since the 1980's,  I was pleasantly surprised by most of the changes that I saw. There is now a significant and growing middle class with money to spend on housing and goods or services. There are small businesses everywhere and a spirit that values work and enterprise.  If benign and effective government can be maintained, improvements for the standard of living of the rest of the population will follow.

The European Model
In Europe we are more fortunate that our political systems, whilst not perfect, are more transparent and less corrupt as a result of centuries of history.  We also fundamentally share a belief in social democratic principles; the protection of the most vulnerable, the provision of certain services by the state and an element of re-distribution of wealth.  In the UK even Thatcher did not really change any of that.

There is, in addition, a network of laws, regulations and standards built up during the 19th and 20^th centuries, which protects Europeans from the excesses of unrestrained capitalism.  Whilst we may not always be happy that enough is being done, at least we can express our views to our representatives and decide whether to vote for them or not every five years.

The Downfall of Left Wing Idealism
The communist system, which had at its core a set of idealistic Marxist beliefs in equality and the sharing of wealth, imploded after 72 years.  There were many reasons for this. There was a series of authoritarian leaders, intolerant of dissent, who undermined the movement’s principal ideals.  This was combined with the absence of incentives to work and innovate, which led to economic stagnation.  Finally the burden of the “Star Wars” arms race with the USA pushed the system over the edge.  It was a miracle that there was not a bloodbath as regime after regime collapsed.  During the same period Western democracies delivered better living standards, even after two devastating world wars.

Neoliberalism or Capitalism?
Concerning delocalisation and the rise of third world manufacturing, we all deplore the working conditions in countries like Bangladesh, Vietnam, Cambodia and China, but we still buy the goods that they produce because they are cheaper than we can achieve in Europe.  Is this a result of “unrestrained capitalism” or just human nature?  Europe in the 19^th century had similarly harsh conditions for employees, which slowly improved as a result of unionisation and enlightened legislation.  Do we expect other less developed countries to show more wisdom and compassion at a similar stage of development than we did?  And can’t de-localization of western industries also be seen as giving poorer countries the opportunity to improve their living standards? 

Would Neoliberals Stop Burning Fossil Fuels?
Of all the possible examples of the effects of capitalism and its attendant economic growth, for me the most worrying is climate change.  Without a concerted international response to reduce, or even to stabilize the concentration of atmospheric carbon dioxide, we will be leaving a very different planet to future generations, which will be uninhabitable in many places.  But I am, however, less pessimistic than some and I believe that technological solutions to this issue are possible which, as well as replacing the existing use of fossil fuels, could also accommodate the rapidly growing future energy needs of developing economies like China and India, without adding to atmospheric carbon dioxide.  

But whereas China can mobilise, and pay for, large research teams and resources to direct investment into carbon neutral energy sources, and is rapidly trying to move away from dependence on coal; in the West we are constrained to use slower carrot and stick methods, in the form of subsidies and regulations, to create change.  Because they are so heavily in debt, and suffer from short term political thinking driven by the electoral cycle, western governments are no longer able to carry out long term projects that require major government funding.  Consequently I am of the opinion that in the West we will continue to burn fossil fuels until cleaner methods of generating energy are proved to be cheaper by the Chinese.  These would then attract the necessary investment capital in developed countries to replace gas and above all coal, the most polluting and dangerous fossil fuel. 

The Neoliberal Trojan Horse

The latest neoliberal ploy 

Finally, coming back to Neoliberalism, without the likelihood of making a profit capital investments will not be made, but there still needs to be protection from the excesses of uncontrolled and unregulated private enterprise.  It is, however, precisely this protection that Neoliberals would like to dismantle under the guise of a Trojan horse of worldwide free trade agreements. 

After the financial crisis of 2008, which was a direct result of de-regulation and lack of banking controls, one can only think that Neoliberals must hold their beliefs as a result of irrational faith in “The Market” rather than any logical process.  

Unfortunately by over-stating the potential benefits of free trade agreements in terms of economic growth and employment, the Neoliberals have persuaded EU governments that it’s worth their while to risk giving up many of their powers as well as those things that define European values, like social protection and the precautionary principle.

I hope we can all agree that the Neoliberal agenda is not an acceptable way forward when so much is at stake and we must all do our best to block it at every opportunity.

Nuclear 2.0 by Mark Lynas - Why a green future needs nuclear power

An opinionated review

Since you are reading this you will almost certainly have your own views about the future role of nuclear power.  So did Mark Lynas!  In the Introduction to his book he says that he was a convinced anti-nuclear campaigner until, whilst attending a 2005 Oxford conference, he realised that nuclear power provided 15% of global electricity (2005 figures) and that this reduced CO2 emissions by 2 billion tonnes/year.  As a parent, concerned for his children’s future, he had overlooked the potential of nuclear power to ameliorate climate change. 

His short 100 page book seeks to justify his view that without replacing the energy generated from fossil fuels with nuclear power, as well as renewables, we have no chance of stopping the rapid increase of atmospheric CO2 before it’s too late to prevent runaway climate change.    In my opinion, he succeeds but then I’ve thought the same and written about it for some time, even if not so concisely and factually as Mark Lynas does.  In Chapter 7 he calls this strategy “All of the Above”. 

Now read on?

So if you are more concerned with the potential risk of an early death due to a nuclear power station accident than you are with reversing the rate of increase of discharges of CO2 from burning fossil fuels, you need read no further.  Equally those people, who like some of my acquaintances, prefer coal burning power stations with the certainty of the premature deaths that will result from cancer and respiratory diseases caused by particulate air pollution and are not concerned about their uncontrolled release of radiation into the environment  can stop here and write their comments.

Those who are less dogmatic and more pragmatic about where they stand on this highly emotional subject are recommended to read Mark Lynas’ fact packed book.  It’s well presented and well argued.  He supports many of his statements with references, a total of 95 references or explanatory notes for seven chapters, and if you read the ebook version the references are in the form of active links. 

Other reviewers and commentators

Other reviewers like Jonathon Porrit and Dr. Karl-Friedrich Lenz make no attempt to demolish his central argument or dispute his calculations in any quantitative way.  Jonathan Porritt offers a series of put downs without actually refuting any of the facts carefully referenced in the book.  He also advances the familiar qualititative arguments, based on faith, stating that we will see a reduction in the costs of renewable power sources and increases in efficiencies that will square the circle, and make everything come right.  He ignores the enormous areas of land that will need to be made available (see below) for any impact to be made on reducing the global rate of discharge of CO2 with renewables.  He also doesn’t believe that there is any problem of intermittency/energy storage.

Dr. Karl-Friedrich Lenz on the other hand, in a more tetchy review, concentrates on picking at this or that element in an attempt to discredit Mark Lynas, and support his own fixed views. Both are avoiding having to face the uncomfortable truths that Mark Lynas presents to those environmental activists, who like his earlier self, have campaigned against nuclear power all their lives. 

Some commentators have taken issue with Mark Lynas’s selective use of references concerning, for example, the health effects of radiation releases from Chernobyl and Fukushima.  Others disagree with his dismissal of the Linear No Threshold model for calculating expected early deaths from radiation exposure in chapter 4 pages 49-53.

In a short 100 page book it’s not possible to present fully balanced and detailed arguments for every subject area which it addresses and it’s inevitable that he would be accused of being selective.

All of these criticisms are peripheral to Mark Lynas’ main argument that to reduce discharges of CO2, and prevent runaway climate change, it’s necessary to retain nuclear power and also develop it, together with renewables.  I haven’t yet found a dissenting reviewer or commentator who argues against this fundamental assertion with realistic facts and figures.

In this short BBC video Mark Lynas introduces his ideas.

Energy conservation is not enough

In Chapter 2 pages 24–26 Mark Lynas deals briefly with the history of the environmental movement and discusses Amory Lovin’s and E.F. Schuhmacher’s 1970’s idealistic view that humans should use less energy.  As a result of their philosophy European and North American environmentalists often say that what will solve the climate change problem is more energy conservation and a change in people’s lifestyles. 

I agree that we all need to do more to save energy, but as Mark Lynas points out in chapter 2, even if we did it wouldn’t be enough to make a significant global impact.  It’s totally unrealistic to expect the populations of developed countries to adopt the lifestyle of their great great grandparents, to heat only one room in the house, to travel in horse drawn vehicles, to wash their clothes by hand and to harvest crops with scythes.  Even if everyone did so, it still wouldn’t address the energy needs of industry. 

Furthermore just saving energy in developed countries would not be enough to moderate global CO2 emissions because it takes absolutely no account of the energy expectations of the rapidly growing populations of developing countries who all want to improve their lives and have washing machines and fridges.  Western environmental campaigners will be hard pressed to persuade the inhabitants of such countries that they don’t have the right to enjoy the benefits of economic development and the energy consumption that goes with it.  Have a look at Hans Rosling’s “Washing Machine” TED talk on this subject because he’s so much more eloquent than me. I guarantee that it’s worth ten minutes of your life and it will change the way that you think about energy conservation!

The global growth of renewables

In spite of the recent massive global investment in renewable power in the form of wind and solar they still represent only a very small fraction of global energy consumption.  To paraphrase Mark Lynas in Chapter 2 pages 22 and 23,

“Solar’s meteoric 1200% growth over the last five years took it from producing 0.01% of global primary energy to 0.17%.  Wind, with its 200% growth went from providing 0.3% to 0.95% of global primary energy.”  Meanwhile, “between 2007 and 2012 coal added 7 times more to global primary energy than wind and 430 times more than solar.”

So the huge development of renewables in recent years, due to the encouragement given by subsidized buy-in tariffs for the energy generated, has failed to outpace the building of coal and more recently gas fired power stations.

The German experiment

In chapter 2 page 58 Mark Lynas refers to the German experiment. 

We tend to forget that more than 20,000 people died in the Japanese tsunami in 2011, because the world was gripped by the dramatic events and subsequent release of radiation from the Fukushima Daiichi nuclear plant.  As a direct result Germany decided on a policy of Energiewende (Energy Shift) to replace nuclear power with renewable energy.  Two years down the road, however, in spite of successfully installing major wind and solar power developments, these have not replaced all of the power generated by the nuclear plants that have been closed.  Germany has meanwhile opened two new 1,100MW  brown coal burning power plants at Neurath, and in 2012 they were importing more coal and gas than in 2011.  Furthermore they were forecast to add another 4GW of coal fired electricity to the grid in 2013.

This year (2014) Angela Merkel’s  Energy and Economics Minister (he has both portfolios) Sigmar Gabriel, has stated that the Energiewende  is on the verge of failure due to the ongoing cost of subsidised green electricity buy-in tariffs. 

So if you make replacing nuclear power with renewables your first priority, it’s just completely unrealistic to expect to lower the burning of fossil fuels at the same time.  But when you are capable of ignoring the figures and simply sticking to dogmatic orthodoxy, then anything can seem possible.

The real result of decades of anti-nuclear campaigning

In Chapter 3 Mark Lynas makes the case that, partly as a result of highly successful campaigning against new nuclear power stations by activists since the 1970’s, the burning of coal was guaranteed to grow in the decades that followed, as country after country cancelled their nuclear power programmes.

In Chapter 4 page 56, he quotes a 2013 paper in which “Hansen and Kharecha calculate that the use of nuclear power between 1971 and 2009 avoided the premature deaths of 1.84 million people thanks to its air pollution benefits”.  The extra air pollution over the same period from coal fired plants, built as a result of cancelled nuclear power station projects, could have been avoided and many more lives saved.

In addition environmental activists’ opposition to new nuclear power station research, development and construction means that we are now extending the operating licences on fundamentally unsafe 50 year old nuclear power stations instead of replacing them with much safer designs like those proposed by the Generation IV International Forum.

Furthermore an increasingly onerous regulatory environment has been developed which risks stifling new nuclear developments.  For example in the US, to gain licence approvals to build and operate a new nuclear facility the proposer of the design has to pay $800/day for each man-day of work done by the Nuclear Regulatory Commission and the proposer has no control over the amount of time spent by them.  As Bill Fox, chief executive of Generation mPower LLC recently said to the UK Parliamentary Committee on small nuclear reactors, it typically takes several years to prepare an application and then three or four years for the NRC to review it.

Inherently safe nuclear power plants

Some of the Generation IV designs are inherently safe and can’t explode, can’t meltdown, reduce their power output if they overheat and shut down safely when there is no power supply.  Mark Lynas  in Chapter 5 page 62, quotes the example of Argonne National Laboratory’s Experimental Breeder Reactor-II (EBR-II) in which, two weeks before the fire at Chernobyl, operators shut down the safety systems and turned off the coolant flow to the reactor in front of a group of international experts to prove that their design was safe.  The reactor shut itself down without operator intervention and the passive cooling system allowed residual heat to decay without any risk of a meltdown.

The EBR-II was part of Argonne’s Integral Fast Reactor Programme which was terminated by John Kerry of Clinton’s Administration in 1994.

Fourth generation nuclear power plant designs also burn their fuel more completely and thus reduce the quantity of waste generated.  Some reactors operating in the fast spectrum like the EBRII can use nuclear waste as a fuel.  

Much of this technology is still at the conceptual stage, although like the EBR II, a demonstration molten salt reactor was operating successfully at Oak Ridge National Laboratory ORNL as far back as the 1960’s. Not wishing to staff the project over the weekends the operators used to switch off the power and it would shut itself down, it was walk away safe. 

Wind farms twice the area of Spain

In Chapter 6 pages 78-81, Mark Lynas critically examines the Greenpeace and Global Wind Energy Council’s report published in November 2012 and takes a critical look at its scenario for 2030, which projects wind power generating 22 per cent of global electricity and solar 17 per cent. He calculates that this would require an area of land to be covered in wind farms which would be twice the size of Spain (or alternatively the combined areas of Pennsylvania, Ohio, Virginia, Tennessee, Kentucky, Indiana, Maine, South Carolina, West Virginia, Maryland, Hawaii, Massachusetts, Vermont, New Hampshire, New Jersey, Connecticut, Delaware and Rhode Island).  Solar plants would cover another 50,000 square km.  Even if such a massive scale up of renewables was technically, financially and politically possible, whereas this could displace 6.5 billion tonnes of CO2 generated by fossil fuel burning by 2030, under the Greenpeace scenario this falls to only 1.9 billion tonnes of CO2 if all nuclear power plants are all shut down, because wind and solar replace nuclear power rather than fossil fuels.  Furthermore this would still lead to an increase of CO2 emissions of 22 per cent by 2030 compared with a 2011 baseline as a result of the global increase in demand for energy.  It would be the German experiment on a global scale.

All of the Above

But Mark Lynas wants to finish his book on a positive note and at the same time set an ambitious target to limit climate change, so he accepts that such a scale up of renewables is feasible in order to create his vision for 2030.

In Chapter 7 Lynas recounts his involvement with a joint 2012 press release by Renewable UK, the Carbon Capture and Storage Association CCSA and the Nuclear Industry Association in which they call for a zero carbon target for the UK electricity system by 2030 to be included in the Energy Bill.  The Bill was passed with an overwhelming majority on 5 June 2013.

Lynas considers that this represents a clear “All of the Above” strategy, which allows for long term contracts to give renewables, nuclear and CCS the chance to compete against conventional fossil fuel power stations.

He goes on to rerun the Greenpeace and GWEC highly ambitious 2030 global scenario for renewables deployment but this time including a major scale up of nuclear to achieve 1000 nuclear plants as against 420 today.  This investment would generate 12,000 Terawatt-hours from solar and wind whilst nuclear would contribute 8,000TWh.

If all of this was possible, and dogma and old enmities could be put aside, then there is a 50% chance that global temperature rise could be limited to 2deg C.

Mark Lynas on Hard Talk

Nuclear Investment

So where are we with investment in nuclear power. Partly as a result of Fukushima Daiichi and the resulting public pressure to close nuclear power stations, attracting private investment funding for research and development in the developed world is difficult but Western governments in the US, France and the UK are, nevertheless, still committed to nuclear power and are funding research and development of various options.  These include small modular reactors, which should deliver significant cost reductions and timescale benefits.  By fabricating smaller reactors in a factory environment there are benefits of economies of scale and efficiency.  Time on site is reduced and the regulatory burden is also lessened.  Several countries and companies are promoting this promising approach.

China has enormous and growing energy needs.  At present China is coal and coal is China!  It’s choking itself on coal fired air pollution and is continuing to open 60 coal fired power stations per year.

But China is also highly committed to nuclear research and development and by 2015 it will have over 750 researchers working on new nuclear technologies, including molten salt reactors, with the target of having commercial plants available within 15 years.  At the same time it’s installing both renewable power and new nuclear power stations using current generation 3+ technologies.

It currently has 21 nuclear power reactors in operation and 28 more under construction.  By 2020 it plans an additional 58GWe of nuclear power generation, all of this development will still only raise nuclear’s share of power generation to 6% by 2020, but it also plans to build an additional 100GWe of nuclear power station capacity between 2020 and 2030.

So the scale-up of nuclear power at the rate proposed by Mark Lynas is possible when you have the political will and the money to do so.

Conclusion
It’s both a challenge and an opportunity for environmental groups to recognize the real priorities in this debate.  I congratulate Mark Lynas for writing this book and simplifying this complex issue so that it can be more easily understood.  What is at stake is your children’s future.

http://www.marklynas.org/

A Full Frontal Assault on Democracy - The Transatlantic Trade and Investment Partnership (TTIP)

Karel De Gucht

No not by terrorists but as a result of a more sinister threat from within!

Under a secret EU mandate written by the EU trade commissioner Karel De Gucht and dated 17 June 2013, an agreement is currently being negotiated between the USA and the EU to remove both tariff and non-tariff barriers to transatlantic trade. 

Why is the EU Mandate Secret?

The EU Mandate has only ever been released in English and the document is marked “EU Restricted”.  Previous trade negotiations have failed when the terms of a potential agreement were leaked.  Releasing it only in English will make it more difficult to circulate among the EU member countries and more difficult to leak it to the public.  The document has, nevertheless, been leaked and is available to read here. 

The mandate includes various clauses which aim to protect the interests and traditions of the EU and its member states, but all of these can be overturned by the "Investor-State" protection mechanism described below.

Leaving aside, for the moment, any claims for economic benefits, and ignoring the clear cut advantages of the removal of import duties on both sides of the Atlantic, what will be the other effects of such a trade agreement? 

Removal of non-tariff barriers to trade

Non-tariff barriers to trade can be anything from product labelling regulations, to employment law, to state subsidies, to manufacturing standards - not forgetting Health and Safety requirements.  This Wikipedia article lists 28 different types.  

It would be virtually impossible to conduct multilateral negotiations in all of these areas and successfully remove the majority, or even a significant proportion, of such non-tariff barriers so the EU Mandate envisages a different approach.  It gives the power to private companies to identify non-tariff barriers, which adversely affect their ability to compete in a particular nation, and then to challenge the national government in an arbitration.  Clause 23 of the EU Mandate promotes the inclusion of "investor-state dispute resolution" clauses in the agreement which are intended to achieve this objective.

Investor-State Dispute Resolution Clauses

As the mandate currently stands any private company, which wishes to invest in another country in the TTIP trading bloc, will have the right to challenge national or local laws, regulations or standards if they consider that these put them at a disadvantage compared to the situation in their country of origin. This short video explains it well.

If you think that I’m exaggerating about the scope and power of this mechanism, it has already been demonstrated in the 20 year old North American Free Trade Agreement (NAFTA), and is about to happen under the Trans-Pacific Partnership. 

Examples of Arbitration Cases under the NAFTA

1. In Canada, the courts revoked two patents owned by the US drugs firm Eli Lilly, on the grounds that the company had not produced enough evidence that they had the beneficial effects it claimed. Eli Lilly is now suing the Canadian government for $500m under the NAFTA provisions, and demanding that Canada’s patent laws are changed.  
2. The American chemical company Ethyl prosecuted Canada for a 1997 law which outlawed a diesel additive containing manganese in the form of MMT, a neurotoxin. This compound is banned in all developed countries and 85% of all fuel sold in the USA is free of MMT.  Under the NAFTA provisions, Ethyl was awarded $13 million in compensation and Canada had to amend the law and make a statement to say that there were no known adverse health effects of Ethyl’s product. 
3. An ongoing case against Canada concerns a toll bridge owned by the Detroit International Bridge Company, which links the American and Canadian towns, both called Windsor, on either side of the river Detroit.  The original bridge, which carries 25% of the trade goods between the two countries, was saturated. Canada obtained an agreement with the State of Michigan to build another bridge with public funds.  The Detroit International Bridge Company is claiming $3,500 million in compensation because it considers that it has the sole rights to a bridge crossing in that location and any toll revenues that might be generated. 

Independent Arbitrators and their Role

If the TTIP agreement is passed, in a form which mirrors previous US trade agreements, the mechanism for ruling on such “investor-state dispute” claims will be by means of an arbitration by three international lawyers. Under agreements which the USA has already negotiated, such as NAFTA, there is no appeal process, the meetings are held in secret, judgements do not have to be published and are binding.  There are no checks and balances, there is no transparency and the arbitrators are lawyers who usually work for private companies. They are paid by the hour. There is no supra-national body overseeing the selection, standards of independence and conduct of arbitrators, nor the way in which they function. 

It’s also a one way process.  The litigants have all been private companies and the defendants have all been nations. Under such an agreement a litigant cannot sue the government in its country of origin.

During 20 years of the operation of the NAFTA agreement Canada has had 30 cases brought against it by private US companies and it has lost 30 times. Mexico has had 5 cases against it by US firms and has lost 5 times resulting in compensation payments of $204 million. Canada and Mexico have brought 22 cases against the US and the US has won 22 times.   All together it’s an outstanding record for so-called independent arbitrators.

Juan Fernandez-Ermesto

Here’s what one of the arbitrators, Juan Fernandez-Armesto, says about his role.

“When I wake up at night and think about arbitration, it never ceases to amaze me that sovereign states have agreed to investment arbitration at all … Three private individuals are entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts, and all laws and regulations emanating from parliament.” 

The Effect on Policy Making

But there's another danger. To quote George Monbiot in his article in the Guardian - 

“Even if these suits don’t succeed, they can exert a powerful chilling effect on legislation. One Canadian government official, speaking about the rules introduced by the North American Free Trade Agreement, remarked, “I’ve seen the letters from the New York and DC law firms coming up to the Canadian government on virtually every new environmental regulation and proposition in the last five years. They involved dry-cleaning chemicals, pharmaceuticals, pesticides, patent law. Virtually all of the new initiatives were targeted and most of them never saw the light of day.” Democracy, as a meaningful proposition, is impossible under these circumstances.” 

What are the Consequences?

A Race to the Lowest Standards

So typically, between the USA and the EU who has the lowest standards?  Of course you already know! 

Genetically modified crops; chlorine rinsed chickens and hormone treated beef and pigs are normal in the USA but have all been rejected by the EU.

So you might say we’ll choose not to buy US goods, but be aware that in March 2014 the Americans proposed that all markings of geographical origin should be removed from all consumer goods, including wines.

The Imposition of Fracking

Fracking to produce gas from schist is well developed in the USA, but following public pressure permits have been refused here in France. 
Under clause 37 of the Mandate, however, free and lasting access to raw materials, including sources of energy, must be granted to private firms.  In France everything from 100 metres below your property downwards belongs to the state, so one wonders how France and the EU will deal with this contradiction.

A US company Lone Pine is already suing Canada under the NAFTA investor-state protection clauses for US$250 million over a moratorium on controversial shale gas extraction (fracking) in Quebec. 

Health Services

Many US citizens consider the concept of the UK National Health Service (or the French Securité Sociale) to be dangerously socialist.  Remember the bitter fight Obama had with the Republicans when introducing his healthcare legislation?  
Public services are included in the scope of the EU Mandate. Under clauses 15 and 24, a private US healthcare company wishing to set up a hospital in the UK could demand central government funding on the same basis as an NHS hospital trust.  If this was refused they could launch a case for arbitration.

Alternatively they could demand compensation for unfair (subsidized) competition and demand that the state run institution be privatized.  Since health provision under the nationalized NHS in the UK costs around 5% of GDP and in the USA the total spend is estimated at more than 17% of GDP, it's clear that private companies would have a financial incentive to dismantle the NHS and push up fees and costs.

Fundamental US/European Differences Concerning the Role of Government

The US and Europe have very different ideas concerning the role of government. Reducing "BIG Government" is a rallying cry for Republicans. In Europe it is considered that governments and the EU are mandated to act in order to regulate and protect their citizens and the environment.

Retrospective Class Actions

In the US it’s up to individuals, after they have been adversely affected by a private company’s actions, to get together and mount a class action against the company.  They have to prove cause and effect to a jury, but when they do damages are colossal and can include a punitive element, which acts as a disincentive to similar companies to risk the same results.  The law firm, of course, takes their 40%.

Goodbye to the Precautionary Principle

In Europe we expect national governments, or the EU, to vet the safety of food and consumer goods before anyone has suffered injury or loss through inadequate testing or insufficient monitoring. 

Under the “Investor-State dispute resolution” clauses of the TTIP any such precautionary approach can be challenged and compensation demanded on the grounds that the risk of adverse effects is not proven. If the government loses, not only must it pay the compensation but also amend or repeal its laws. 

So because of its very dissimilar history and traditions Europe works differently from the USA and makes itself a soft target for any multinational US company seeking compensation under the “Investment Protection” clauses included in any eventual agreement. 

The Economic Benefits - London Centre for Economic Studies Report

So why would any government, not to mention the whole of the EU, give up their sovereignty and freedom of action in such a way?  Surely they must be expecting enormous benefits in terms of growth and employment!

Less than a 0.5% increase in GDP by 2027

In their comprehensive study report, prepared at the request of the EU commission, entitled “Reducing Trans-Atlantic Barriers to Trade and Investment”, the London Centre for Economic Studies in table 16 on page 46 predicts a 0.48% increase in Gross Domestic Product averaged across the whole EU by 2027 (the end date for the extrapolation of their economic model).  This is for the most ambitious scenario that they examined involving the removal of all tariff barriers and 25% of the costs of non-tariff barriers to trade.

Interestingly the EU Commission press release of 14 June 2013  quotes from 0.5% up to 1% of increased GDP (which don’t forget is not expected to be achieved before 2027). They seem to have added another speculative 0.5%!

Neither the LCES study nor the EU’s explanatory document “Transatlantic Trade and Investment Partnership - The Economic Analysis Explained”,  issued in September 2013, attempt to quantify any overall employment benefits (see paragraph 2.2.3).  Although the LCES study does find that the disruption between employment sectors, i.e the transfer of employees from shrinking sectors to expanding sectors, will be well within the normal annual levels and not significant in a flexible labour market.

If you have the time listen to Karel De Gucht answer a few hard questions.

Conclusions

So the benefits from the EU’s own reputable economic study are minimal, representing less than 0.5% increase in GDP across the EU by 2027.  The risks to EU governments from arbitration claims and to European standards for the protection of its citizens and the environment are, on the other hand, high and these start from the moment the agreement is ratified.

Governments would hand over their rights to regulate and take decisions to private firms whose only concerns are profitability and which are only answerable to their shareholders.

If it succeeds in its present form, and the investor-state dispute resolution clauses are based on previous “Trade Agreements” involving the USA, it will be a charter for private companies to impose their narrow commercial viewpoint on national governments. At the same time they would profit by doing nothing except launching a case for arbitration.

So forget the centuries of measured and cautious development, under a democratic process, of European legislation concerning environmental protection, consumer protection, working conditions and public services.  Say hello to a Europe in which the standards in all those areas are driven downwards to the lowest level by private multinational companies in the name of free trade and fair competition.

I agree with George Monbiot that the negotiation of a treaty based on the current EU mandate is “A Full Frontal Assault on Democracy”. 

What Can You Do About This?

Firstly, spread the word to all your active friends and contacts.  The more people who know about this, the less likely it is that an agreement will be signed in its present form without significant changes to the Mandate.

Secondly, find out the contact details for your European Parliamentary Election candidates.  Write to them asking what they think about the secret negotiations for the TTIP and wait for their replies.  If they don’t answer, or you don’t think that their answer is well informed and shows awareness of the issues, you will know what to do on Election Day!

It’s not a Done Deal!

Under recently granted powers the European Parliament has to ratify any such agreement, and the agreement itself must be passed unanimously by all EU Member States.

The European elections are programmed for 25^th May 2014.

Raoul Marc Jennar
Thanks to Raoul Marc Jennar who is busy touring France to alert people to the risks of the TTIP using public meetings.  He calls it "Le Grand Marche Transatlantique - GMT".  He has published a short book on the GMT in French and he will make his Powerpoint presentation, which is also in French, available to anyone who asks for it here.  He speaks good English so if you don't speak French don't worry.