Hot Air from the G-8: No Solutions to be Found in Japan
The G-8 summit in Japan this year seemed more interested in harmony than in making progress on a number of pressing issues. From climate change to world finance, courage was nowhere to be seen.
It was hardly to be expected, but in the end, the G-8 did actually make a bit of progress when it comes to combating climate change. Last year, when German Chancellor Angela Merkel put the issue high up on the agenda for the G-8 summit in Heiligendamm, many of her world-leader colleagues were unimpressed. But this year, many of the points she proposed in 2007 were adopted with little opposition. The global warming assessment produced by the International Panel on Climate Change (IPCC), for example, was embraced as was the demand that an international agreement on reducing greenhouse gas emissions must be negotiated under the aegis of the United Nations.
World leaders gather for a group photo in Toyako, Japan, on Wednesday.
Which makes the first step of any UN agreement extraordinarily difficult -- that of assigning emission reduction targets to developed and developing nations. The US will never agree to any targets as long as developing countries don't do their part -- and China, India, Brazil, Mexico and South Africa, for their part, will never agree to any targets as long as industrialized countries in the West aren't required to make drastic cuts. Just what that means became obvious on Tuesday: They expect the West to reduce greenhouse gas emissions by 95 percent by 2050 against the level of 1990. Such a demand leaves plenty of room for failure.
In meetings with the G-8 on Wednesday, China and India went further in clarifying their positions: For now, they aren't interested in any measures at all to cut their CO2 emissions.
When it comes to the developing worldwide crisis over food prices, the results of the G-8 meeting are just as thin. The group was late to take on the issue, and in Japan this week, expressed its "serious concern." Almost none of the 10 billion ($15.7 billion) committed by the group to address the problem comes from new pledges -- rather it has been committed in the months since January. Even the 600 million ($944 million) pledged by Chancellor Merkel comes primarily from development money long since earmarked. Farming and export subsidies in the Western world, difficult to ignore as one of the causes for the struggles of the farming sector in developing countries, were hardly addressed at all -- and no reduction targets were set.
Indeed, there was no shortage of such examples at this year's G-8 Summit -- examples that lead one to the conclusion that the G-8 remains little more than a club intent on defending its own interests and those of the Western world. It is a group full of ideas when it comes to world trade -- but only when its members are not negatively affected.
Further examples were provided by the statements on the global financial system, on raw materials and on food prices. The G-8 supports the new transparency rules of the Financial Stability Forum. But the real and more fundamental problem facing the financial system worldwide is the lax interest rate policies in recent years, particularly those followed by the US and Japan. They led to more and more money flowing around the globe and, with low interest rates, looking for profitable investment opportunities. Speculative excesses followed, all of which ended in crises. The list of bubbles and their consequences runs from Asia to the Russian financial crisis in the 1990s to the collapse of the hedge fund Long Term Capital Management in the late 1990s all the way to the bursting of the new economy bubble and, most recently, the US sub-prime crisis. Even the spiking commodity markets can be seen as a result of the huge amount of cheap money available to speculators.
But the massive failures of monetary policy weren't mentioned at all. Instead, the G-8 encourages countries around the world to produce more oil and invest more in other energy sources -- and to intensify agricultural production.
Indeed, when one looks at the results of this year's G-8 Summit, one would be hard pressed to identify any new or even courageous ideas. Part of this dearth can be laid at the doorstep of weak G-8 leadership from Japan. In the lead up to the summit, Prime Minister Yasuo Fukuda added nothing of his own, essentially adopting the agenda of Chancellor Merkel from the previous year. And during the discussions, he had one single priority: harmony. Any debates that might have led to progress toward solutions were completely missing.
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