Resources on Water, Human Rights, and Business

Our colleagues at the Business & Human Rights Resource Centre have compiled (below) some great resources on water privatization in advance of World Water Day. Many experts, including Martin Khor, the new executive director of the South Centre, are indicating that water shortages will be where society first feels the pinch of a warming planet.

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22 March 2009 is World Water Day. In the preceding week the World Water Forum (16-22 March) and the Alternative Water Forum (20-22 March) are being held in Istanbul. Below is a range of related material focusing on private sector dimensions.

- “World Water Forum is All About Commercialising Water”, interview with water rights activist Tahir Öngür, Bıa news centre (Turkey), 17 Mar 2009

- "World Water Forum Starts with a Bang: Activists Challenge Corporate Hypocrisy", Mark Hays, Corporate Accountability International, 16 Mar 2009

- "IBM Unveils Global Innovation Outlook on Water", IBM, 16 Mar 2009

- "Preparing for Water Quarrels, if not Wars", Hilmi Toros, Inter Press Service, 15 Mar 2009

- "Chilean Town Withers in Free Market for Water", Alexei Barrionuevo, New York Times, 14 Mar 2009

- "New report highlights crucial role of water in development", UNESCO, 12 Mar 2009
- "The United Nations World Water Development Report 3 - Water in a Changing World", 2009

- "Secretary-General, in message for World observance, underscores potential of water as unifying force rather than catalyst for conflict", UN, 11 Mar 2009. Urges "Governments, civil society, the private sector...to recognize that our collective future depends on how we manage our precious and finite water resources."

- "Global Release: Water disclosure 2.0", UN Global Compact and Pacific Institute, 11 Mar 2009

- "CEO Water Mandate: Independent review of 2008 Programme of Activities" [PDF], Arthur D Little, 11 Mar 2009

- "Coalition urges UN to stop providing cover for life-threatening privatization of water", Polaris Institute, 11 Mar 2009
- Letter from 118 organizations to Ban Ki-Moon calling on him to withdraw support for CEO Water Mandate [PDF]

- "Multinationals control the agenda at World Water Forum", Water Justice, Mar 2009

Earlier relevant report: "Draft report: Business, Human Rights & the Right to Water - Challenges, Dilemmas & Opportunities - Roundtable Consultative Report" [PDF], Institute for Human Rights & Business, Jan 2009

Further materials are in the Access to water section of our site.

Climate Change Fairness Questions Loom

Countries that buy Chinese exports (hint, hint, America and Japan) should be held responsible for the carbon emissions it took to manufacture those goods in climate change negotiations, according to a Chinese government statement this week. And the debate over what is fair in climate change talks heats up. Shinsuke Sugiyama of Japan's Ministry of Foreign Affairs said 2009 will be a "make or break" year in achieving progress on a new global deal. Some scientists have even said we have passed that point.

Last month, when I traveled to Tokyo, I met with one of Toyota's senior executives in charge of climate change issues. He seemed comfortable speaking to the ethical concerns many in Japan have over climate change negotiations, suggesting that the very moral underpinnings of climate change negotiations are in debate.

He questioned the fairness of the Clean Development Mechanism (CDM). In the Kyoto Protocol, Japan has a target of reducing emissions by 6%, and Japan's industries have a "Voluntary Action Plan on the Environment." But Nippon Steel, a highly efficient company in steel production, still has to buy CDMs from less developed countries. Meanwhile, Mittal is the world's largest steel company but doesn't have to buy CDMs even though they bought European steel companies with weaker standards than Nippon Steel. This just goes to show that developing countries, under this scheme, can sell both steel and credits, he said.

Emission trading is a flexible mechanism to get to a target, so we can avoid free riders. In Japan, there are no free riders thanks to business association Keidanren, he said. He argued that Japan is different; it is a country that has other mechanisms to avoid free riding, using pressure through organizations, especially Keidanren. "It's more of a culture than a requirement," he said.

Japan, which sees itself as a nation of seafaring traders, generally questions the ethics of trading the right to emit CO2. This point has come up in multiple interviews, including with METI and Japan's New Energy Development Organization (NEDO). The Toyota official called CO2 a "fragile commodity. We don't like it. It's subprime. CO2 has no value, so any agreements are artificial, so we're doubtful."

A better alternative is proper regulations and harmonization of standards, he said. Toyota takes the "top runner approach" based on vehicle weight. For example, in 1998, JAMA started top runner and set a target, and top runner was the biggest program impact.

Can Japan's approach be used in China? Maybe not, the Toyota official said. The Chinese have no Keidanren and no democracy. Japan started regulations 1500 years ago, but China is always about "great men," not regulations. Also, Japan has a culture of avoiding waste (mottainai).

Many in Japan have questioned the fairness of expectations on Japan to reduce emissions when its industry has already become so efficient. It's not fair to Japan because Japan has already achieved efficiency, he said. Japan's Kyoto Protocol commitment—a 6 percent reduction in greenhouse gas emissions below the 1990 level by 2012—has been described by Japanese officials as akin to trying to wring water out of a dry towel.

The Toyota official asked: How can less developed countries be supported in conjunction with developed countries' targets? We have clean development mechanisms but some negotiators say rich countries should pay for everything, but that's not fair. Less developed countries always ask for money from developed countries, but developed countries can't afford it. We should substantially decrease emissions on our own and contribute to less developed countries. Most Japanese don't know these mechanism, so the government needs to explain it: how much of the target is their own effort or by their taxes? National costs borne by individual countries are hidden.

Finally, there is an intellectual property rights question about climate change mitigation technology. He said China may claim that these technologies are analogous to AIDS vaccines (they should be shared on behalf of the global public good) but watering down the property rights of this privately-developed technology could reduce incentives to innovate.

Photo: "stuffed japanese shop in Nagasaki chinese quarter" by colodio

U.S. Navy's Global Public Goods and "Elegant Decline"

I participated on a panel about US-China relations on Press TV in New York City last week. One of the major themes was the recent "spat" between US and Chinese ships in the South China Sea, near Hainan island where China is reportedly building its first aircraft carrier. From a very insightful Time magazine article, "But despite the soothing words of the two top diplomats, it's a safe bet that more such incidents can be expected in the future. The Pentagon was quick to note that the mariners aboard the U.S.N.S. Impeccable (pictured here from the U.S. Navy website) were civilians working for the Military Sealift Command, while the Chinese side stressed that the confrontation involved local fishing boats. The reality is that the incident occurred because both sides are preparing for war — "shaping the battlefield," in military jargon — for a conflict that both hope will never happen." Indeed more of this sort of thing will happen.

Beyond the classic international relations 101 analysis that what we are seeing is tension between an established power, the United States, and a rising power, China, there are other issues at play. One is that there is disagreement over the interpretation of the UN Convention on the Law of the Sea; but that China and the United States are arguing about the law's interpretation--rather than whether the law should exist at all--is a good sign. It is further evidence that China wants to operate within the basic parameters of the international system.

But another is that as China increasingly relies on international trade for its prosperity, it will want a greater role in protecting its merchant fleet. Which gets me to the main point I made on Press TV: China may wish to have a greater say in the management of trade routes, but that will imply that it must also be willing to provide the global public good of safe sea lanes (as Robert Kaplan calls a "global commons" that benefits all nations). Unless China can provide public goods like these, its aggressiveness will be perceived as only that: aggressive.

Kaplan has written about this issue in a variety of places, including the recent issue of Foreign Affairs in his article "Rivalry in the Indian Ocean." From a Dec. 2008, Washington Post essay titled "A Gentler Hegemony: U.S. Hegemony May Be in Decline, but Only to a Degree," Kaplan writes here is "where we are now, post-Iraq: calmer, more pragmatic and with a military -- especially a Navy -- that, while in relative decline, is still far superior to any other on Earth. Near the end of the Cold War, the U.S. Navy had almost 600 ships; it is down to 280. But in aggregate tonnage that is still more than the next 17 navies combined. Our military secures the global commons to the benefit of all nations. Without the U.S. Navy, the seas would be unsafe for merchant shipping, which, in an era of globalization, accounts for 90 percent of world trade. We may not be able to control events on land in the Middle East, but our Navy and Air Force control all entry and exit points to the region. The multinational anti-piracy patrols that have taken shape in the Strait of Malacca and the Gulf of Aden have done so under the aegis of the U.S. Navy. Sure the economic crisis will affect shipbuilding, meaning the decline in the number of our ships will continue, and there will come a point where quantity affects quality. But this will be an exceedingly gradual transition, which we will assuage by leveraging naval allies such as India and Japan"--what Kaplan calls U.S. "elegant decline" in his Foreign Affairs article.

Regulation of Financial Markets: A Review of the PERI Literature

Our colleagues at the Political Economy Research Institute have compiled some of their best work on financial regulation, globalization, and the roots of the economic crisis. Here's their list of papers, books, and articles on "creating and regulating a more workable, stable, and equitable financial marketplace."

Recommendations for Market Regulation & Policy

Coalition of progressive economists: Progressive Program for Economic Recovery and Financial Reconstruction

Coalition of progressive economists: Principles For Economic Recovery And Financial Reconstruction From Progressive Economists

James Crotty & Gerald Epstein: Proposals for Effectively Regulating the U.S. Financial System to Avoid Yet Another Meltdown

The Political Economy of Monetary Policy and Financial Regulation: A Conference in Honor of Jane D'Arista

Robert Pollin: Ending Casino Capitalism

Robert Pollin: Tools for a New Economy: Proposals for a Financial Regulatory System

Robert Pollin, Dean Baker & Marc Schaberg: Securities Transaction Taxes for U.S. Financial Markets

Robert Pollin & James Heinz: Evaluation of a Proposal to Reinstate the New York Stock Transfer Tax

How We Got Here: The Roots of the Crisis & Economic Theory

James Crotty: Structural Causes of the Global Financial Crisis: A Critical Assessment of the ‘New Financial Architecture’

James Crotty: If Financial Market Competition is so Intense, Why are Financial Firm Profits so High? Reflections on the Current ‘Golden Age’ of Finance

Özgür Orhangazi: Financialization and Capital Accumulation in the Non-Financial Corporate Sector

Thomas Palley: Financialization: What It Is and Why It Matters

Robert Pollin: Financial Structures and Egalitarian Economic Policy

Robert Pollin: The Relevance of Hyman Minsky

Globalization & International Markets

Robert Boyer: The Political Economy of Macroeconomics, Institutions, and Financial Crisis in Europe and the U.S.

Lilia Costabile: Current Global Imbalances and the Keynes Plan

Jane D'Arista: U.S. Debt and Global Imbalances

Alternatives to Inflation Targeting: Central Bank Policy for Employment Creation, Poverty Reduction and Sustainable Growth, conference organized and journal edited by Gerald Epstein and Erinc Yeldan

Minqi Li: U.S., China, and the Unraveling of Global Imbalances

Carlo Panico & Marta Vàzquez Suàrez: A Scheme to Coordinate Monetary and Fiscal Policies in the Euro Area

Robert Pollin: Globalization, Inequality and Financial Instability: Confronting the Marx, Keynes and Polanyi Problems in the Advanced Capitalist Economies

Other Related Work

Christian Weller: Have Differences in Credit Access Diminished in an Era of Financial Market Deregulation?

Andong Zhu, Michael Ash, Michael & Robert Pollin: Stock Market Liquidity and Economic Growth: A Critical Appraisal of the Levine/Zervos Model

Relevant books by PERI authors, former students, and colleagues:

Does Financial Deregulation Work? A Critique of Free Market Approaches by Bruce Coggins

Transforming the U.S. Financial System; Equity and Efficiency for the 21st Century edited by Gary A. Dymski, Gerald Epstein & Robert Pollin

New Perspectives In Monetary Macroeconomics: Explorations in the Tradition of Hyman P. Minsky edited by Gary Dymski and Robert Pollin

Financialization and the World Economy edited by Gerald Epstein

Macroeconomic Policy after the Conservative Era: Studies in Investment, Saving and Finance edited by Gerald Epstein & Harold Gintis

Why The Bubble Burst: US Stock Market Performance since 1982 by Lawrance L. Evans Jr.

Financialization and the U.S. Economy by Özgür Orhangazi

Contours of Descent: U.S. Economic Fractures and the Landscape of Global Austerity by Robert Pollin

The Macroeconomics of Saving, Finance and Investment edited by Robert Pollin

Confronting the Global Water Crisis

Further to Christina Madden's Policy Innovations article "Managing Water Well," Peter Rogers recommends some technical and managerial adaptations in Project Syndicate this week:

- Trade virtual water—the amount of water that is embodied in producing a product (usually food) and shipping it somewhere else to be used. This saves the recipient from using his own water, which can be saved for higher-value activities;

- Conserve irrigation water. Because agriculture routinely accounts for 75 to 90 percent of all water consumed in a country, a 10 percent efficiency gain would save as much water as all the water used by the country's municipalities and industry. Another way of improving irrigation efficiency is by developing crops that produce more food with the same, or less, water. Research on such genetically modified (GM) foods is well advanced in several of the largest water-scarce countries, such as China and India;

- Exploit advanced desalination. Modern developments in desalination have brought the cost per unit of desalinated seawater to levels comparable to obtaining fresh water from natural sources (approximately $0.05 per cubic meter).

- Expand wastewater recycling. Urban areas typically dispose of about 85 percent of their fresh-water intake as wastewater, often in neighboring water bodies. The wastes could be treated and used to replenish groundwater. Emerging low-water-using sanitation technologies such as urine-separating dry-composting toilets could also significantly reduce urban water demands if properly developed;

- Develop creative pricing policies for urban water and wastewater. Protecting human and ecosystem health are difficult to price, because they form part of the pervasive externalities associated with water use. Nevertheless, many water uses would respond well to more efficient prices.

Although avoiding a global water crisis will not be easy, we have at hand policies and technologies that, if properly applied, could see us safely through the next several decades, even in the face of increasing—and increasingly wealthy—populations.

Baseball Takes a Swing at a Real World Series

It's always been something of a joke that Major League Baseball calls its championship tournament the World Series. With one exception – the Toronto Blue Jays – every franchise in the league is based in a U.S. city.

For decades, the league has actively looked for ways to increase its global fan base. But without a showcase like FIFA's World Cup of soccer or the Cricket World Cup, MLB executives sensed that the game’s international growth would be limited.

The organizers of this month's World Baseball Classic hope the 16-team tournament will attract global interest and introduce new fans and players to the game with the parochial reputation as "America's national pastime."

I spoke recently with John Genzale, co-director of Columbia University's graduate program in Sports Management and a paid consultant to the Italian national team.

"It's huge – it could be huge. It could do wonders for baseball's popularity in Italy. Especially if they win a few games," he said.

Fearing their highest-paid stars would get hurt and miss time during the regular season, MLB franchise owners resisted the idea of an international tournament. But they relented in 2005 when baseball was voted out as an Olympic sport.

Though American teams are run for profit, many countries charter and support national baseball federations with government funding. MLB has promised to distribute $15 million in proceeds from the Classic to the 127 members of the International Baseball Federation for the promotion and development of grassroots initiatives.

"European teams are more like bureaucracies than commercial enterprises," said Genzale.
"There is less a dependence on sponsorship. The main source of revenue comes from these national organizations."

From a financial point of view, the WBC already has two strikes against it. The banking crisis has hit the baseball world hard.

Bank of America and the New York Yankees recently ended a long-term sponsorship arrangement. Jeff Wilpon, the owner of the New York Mets, is said to have invested hundreds of millions of dollars in Bernard Madoff's ponzi scheme. Though Citicorp's $400 million deal to purchase naming rights for the Mets' new ballpark will proceed, political pressure has forced many large firms to significantly scale back their sports marketing budgets.

"In the short term, everything is affected," said Joe Favorito, a sports marketing and public relations consultant who has worked for the New York Knicks and the U.S. Tennis Association. "Teams have to find other means to attract revenue."

Developing foreign players is one way to do it. Currently, nearly 30 different countries are represented on MLB rosters, including players from Aruba, the Netherlands, Australia, South Korea, Taiwan, and Japan, as well as the better-known playing fields of Central and South America.

The Pittsburgh Pirates made headlines last fall when they signed two young Indians – one a cricket bowler, the other a javelin thrower – to minor league pitching contracts. The club is undoubtedly hoping to "capture" the Indian market with this bit of stunt casting. Japanese firms pay big bucks for signage behind home plate when a superstar such as Hideki Matsui is batting for the Yankees. When Ichiro Suzuki and the Seattle Mariners come to town, teams expect a spike in attendance from local fans of Asian decent.

"What we see in baseball is an acknowledgement that with satellite TV and online video, the fan has changed," Favorito told me. "When person emigrates, they are no longer cut off from the sports culture in their home country. So signing foreign players and developing this tournament gets the brand out internationally and helps the immigrant fan to understand the sports landscape before getting here."

photo of baseball in Ghana by super.heavy

A Green Map Grows in Harlem

From Policy Innovations contributor James Marshall:

March 2009 marks the beginning of an ambitious project by the Center for the Study of Science and Religion, a subsidiary of Columbia University's Earth Institute, to develop a "green map" of Harlem. This initiative involves Harlem religious leaders, community activists, and Columbia students working cooperatively to locate environmental public health hazards and issues of food justice affecting the Harlem community. In partnership with Green Map System, participants will use the data to create a map designed for community education and advocacy. The resulting green map of Harlem will be revealed at the CSSR Symposium "Common Ground: Science and Religion in Dialogue for a Sustainable Future" (Low Library, May 3-4, 2009).

The lessons learned in creating this particular green map will reverberate beyond Harlem. Thanks to a grant from Columbia's Earth Institute, a documentary film is being created about the project. The film will have its public premiere at the "Common Ground" symposium in May. In addition, it will be streamed on the Internet to educate other communities about the innovative use of "green mapping" for community empowerment.

The documentary is a collaboration between CSSR and the Carnegie Council for Ethics in International Affairs, whose Global Policy Innovations program is a cosponsor of the "Common Ground" symposium. The Carnegie Council recently teamed up with award-winning documentary production company Dorst MediaWorks to create a documentary series on innovations in social entrepreneurship, entitled Ethical Innovators. CSSR's work on a green map of Harlem will be the pilot episode of this series thanks to generous support from the Earth Institute.

Other organizations partnering with CSSR on the development of a green map of Harlem include West Harlem Environmental Action, a nonprofit, community-based environmental justice organization; New York Faith Leaders for Environmental Justice; and the Ecologies of Learning Project, a center studying the impact of religious communities in urban settings.

Stay tuned for further details on these projects and events.