Democracy Challenged?

The idea of democracy – where the people make choices about who will lead them for a period of time and that these elected officials govern in the public interest – is in decline.

The European Union leaders, meeting today in Brussels, have chosen two major leaders to represent the interests of all within the twenty seven countries of the European Union. The selection was made without any transparency or any involvement of the institutions of the Union. It is a selection which will be made by side-deals, trade-offs and the personal agendas of the leaders. So much for democracy.

The bigger threat to democracy comes from the United Nations. In the negotiations for the Copenhagen meeting on climate change, the UN proposed treaty involved the creation of a new unelected international governmental body. This body would have considerable powers to intervene in national economic and trade matters on a country by country basis. For example, section 38 of the draft treaty creates an new intergovernmental organization which will have considerable powers of enforcement. Here is what the draft treaty says, the term “government” being used to refer to the new international body:

a) The government will be ruled by the Conference of the Parties (COP) with the support of a new subsidiary body on adaptation, and of an Executive Board responsible for the management of the new funds and the related facilitative processes and bodies. The current Convention secretariat will operate as such, as appropriate.

b) The Convention’s financial mechanism will include a multilateral climate change fund including five windows: (a) an Adaptation window, (b) a Compensation window, to address loss and damage from climate change impacts, including insurance, rehabilitation and compensatory components, (c) a Technology window; (d) a Mitigation window; and (e) a REDD (reduce emissions from deforestation and forest degradation) window, to support a multi-phases process for positive forest incentives relating to REDD actions.

c) The Convention’s facilitative mechanism will include: (a) work programmes for adaptation and mitigation; (b) a long-term REDD process; (c) a short-term technology action plan; (d) an expert group on adaptation established by the subsidiary body on adaptation, and expert groups on mitigation, technologies and on monitoring, reporting and verification; and (e) an international registry for the monitoring, reporting and verification of compliance of emission reduction commitments, and the transfer of technical and financial resources from developed countries to developing countries. The secretariat will provide technical and administrative support, including a new centre for information exchange.

Thus a major transfer of wealth and technology is planned, funded by developed nations, as well as Democratic countries hand over their cash, whether they like it or not. But more than that, there will be an interlocking series of technical panels which will have the right directly to intervene in the economies and in the environment of individual countries over the heads of their elected governments, provided they have the support of the Executive Board.

This idea of global government has been part of the thinking from the beginning of the UN’s involvement in climate change issues. Maurice Strong, who played a critical role in the negotiations leading to Kyoto and was instrumental in the formation of the IPCC, has made clear in a recent article. In an essay in the World Policy Journal, Strong, now 80, said "our concepts of ballot-box democracy may need to be modified to produce strong governments capable of making difficult decisions”, with his comments linked strongly to the need to dramatically reduce CO2 emissions. His point – competing interests of national governments get in the way of what needs to be done to reduce population, reduce emissions and “save the planet”. Democracy, in short, is problematic when global change is needed.

The Copenhagen draft treaty is yet to be endorsed and is unlikely to be in its current form, as President Obama and others made clear in the last several days. But beneath the surface of these negotiations are serious issues about the governance of wealth and technology transfer and the monitoring of national commitments to reduce emissions. Just as world financial systems are now integrated and the role of both the World Bank and IMF is being enhanced so as to create elements of a global financial regulatory regime, world leaders are looking for a similar set of mechanisms to regulate climate change. Both global financial regulation and global CO2 regulation will affect the daily lives of citizens directly. Do we trust our leaders to entrust a new intergovernmental agency on our behalf? Has anyone asked us?

Race is Over

So the results are in and the betting is over. The European Union has chosen its two top officials who will seek to raise the profile of the EU around the world. Both are seen as low-key consensual figures.

The new President of the Council of the European Union is Belgian PM Herman van Rompuy – a widely expected appointment, vigorously supported by France and Germany. He is a centre-right politician who has strongly supported the idea of expanded role for the EU in its member nations and the need for an EU tax to be part of each countries tax regime.

Mr Van Rompuy is seen as a consensus-builder and has been described as a pragmatic rather than a charismatic figure. During his time as budget minister in Belgium's Christian Democrat-led government, he took a tough stance on balancing the economic books, drastically reducing the country's public debt.

Britain played a smart card during the meetings on Thursday. Dropping its support for Tony Blair and persuading the seven-strong socialist group of governments to back EU Trade Commissioner Baroness Catherine Ashton for the foreign policy position, Prime Minister Gordon Brown may well have broken the logjam and vaulted a British candidate right into one of Europe's top jobs.

Lady Ashton was a junior Minister in the British Labour Government until 2007, when Brown appointed her Leader of the House of Lords and Lord President of the Council and elevated to the cabinet. In 2008 she was appointed Trade Commissioner for the EU, succeeding Peter Mandelson who left the EU to join the Brown cabinet and the House of Lords. She has never been elected to public office, having secured all her political roles from the benches of the Lords, to which she was appointed in 1999. She is married to journalist Peter Kellner, and has two children.

Lady Ashton is a surprise appointment. She has no substantial background in foreign affairs, except as they relate to trade issues (and this experience can be counted in months rather than years) and hardly any exposure within the EU. Appointing an unknown is clearly a side-deal aimed at appeasing a faction within the union. She will have a seat as vice-president of the European Commission, as well as a budget worth billions of euros and a new diplomatic service of up to 5,000 people. Many see the position as equivalent to that held by Hilary Clinton as Secretary of State.

It will be interesting to watch the leaders of the twenty seven nations rationalizing their choices over the next few days and then watch how these two roles emerge. So the race is over, now wait for the fireworks to begin.

Still Time to Place a Bet

The horses are at the starting gate for the two big prizes of the week – the Presidency of the European Union and the High Representative for Foreign Affairs. Belgium's Prime Minister Herman van Rompuy is reported to be the frontrunner for the job of European Council president, but his rivals include Dutch Prime Minister Jan-Peter Balkenende, former Latvian President Vaira Vike-Freiberga and the UK's former Prime Minister Tony Blair.

Italy's former Prime Minister Massimo D'Alema and Swedish Foreign Minister Carl Bildt are reported to be top contenders for foreign affairs chief.
Poland is suggesting that each candidate should present their ideas to the full Council of Heads of State before voting, with the winner being chosen by simple majority voting. Sweden will determine the process for selection, since they are the current holders of the rotating Presidency of the Union.

There is a strong backlash against the position of France and Germany, which may favour the compromise candidacy of anyone but Rompuy or Blair, with some strongly supporting the Iron Lady, Vaira Vike-Freiberga. But its anyones guess right now.
Paddpower, the online betting company, has two clustered close to the top of the odds - Rompuy (4/9) and Blair (4/1), with Blair showing a late resurgence. A total of eighteen candidates are in the Paddpower frame – the long odds being for Mary Robinson (former President of the Irish Republic), who is running at 25:1.

Unlike horse racing, form tells us little about the likely outcome. We do know that Blair is unlikely to be a compromise candidate – his ego is too big and you are either for or against him. The problem is that the front runner, Rompuy, has strong views about EU integration and the need for a EU wide tax to support the development of the EU, which is very unpopular in many EU states.

It is widely thought that the EU will make a decision on Thursday. Poland’s intervention – asking for interviews – may delay this decision. There is still time to place a bet.

The "No We Cant" President and Climate Change

With less than twenty days to go before Copenhagen meeting of world governments to agree a process by which a treaty to replace the Kyoto Accord can be replaced with a legally binding agreement, the rhetoric is now at full volume.

The latest clarion call to action comes from an alarmist scientific model prediction which suggests that average global temperatures will by up to 6C by the end of the century. Such a rise – which would be much higher nearer the poles – would have, say these modellers, cataclysmic and irreversible consequences for the Earth, making large parts of the planet uninhabitable and threatening the basis of human civilisation.

This modelling comes from the Global Carbon Project study, led by Professor Corinne Le Quéré, of the University of East Anglia and the British Antarctic Survey, which found that there has been a 29 per cent increase in global CO2 emissions from fossil fuel between 2000 and 2008, the last year for which figures are available. The results of this modelling activity, which makes assumptions about CO2 staying in the atmosphere longer and about a decline in the ability of the oceans to act as a heat sink, are published in an advanced article in Nature Geoscience entitled Trends in the Sources and Sinks of Carbon Dioxide. The findings are hedged with degrees of uncertainty and are, after all, computer generated `best guesses``.

On the same day, reports appeared that the snows of Kilimanjaro may disappear within the next two decades or sooner, according to researchers from Ohio State University and the National Science Foundation. The researchers are worried not only by the rapid retreat of the ice fields atop Kilimanjaro, but by the ice surface's thinning. They now believe that the volume of ice lost to thinning is equal to that lost by shrinkage, which is occurring on all sides of the famed Tanzanian mountain. While they do not say that global warming is to be blame – the more usual explanation is deforestation – the headline writers have found ways to insinuate that warming is the culprit.

Meantime, on the political front dithering President Obama now appears to have flip-flopped in less than a week in terms of what Copenhagen can achieve. On Saturday he was promoting a two stage process, with Copenhagen offering a political agreement and a legally binding agreement following sometime later. Now, in conjunction with the Chinese, he is saying that Copenhagen should provide the basis for a legally binding agreement for the developed world while others would follow some time later. Confusion. Obama is not in a position to sign a legally binding agreement on climate change without the support of Congress, and that support is not currently there.

According to Joss Garman of Greenpeace writing in Britain’s The Guardian newspaper, the US is now seen as a dead hand on the Copenhagen summit. Obama, rather than being a `yes we can`` President, is seen as an ``on and off`` dithering delayer. He is waiting for congress to pass a Bill that, at best, will have no real impact on emissions, offering to cut between 4-7% on 1990 levels. What is needed, according to Garman, is a 50% cut to keep global temperature rises to below the 2C the G20 committed to in the summer. No one involved now takes the US position “of the day” seriously.

Goodbye Christmass

The Deputy Leader of the Labour Party in the UK has introduced a Bill which, according to the British Catholic Bishops, outlaws Christmas. Known as the Equality Bill it seeks to strengthen protection for minority groups by placing a new equality duty on public bodies. Church officials said this meant town halls and other public organizations would be expected to foster good relations and equality of opportunity between people of different faiths.

It is, in essence a political correctness bill. This kind of thinking already leads to strange behaviours. For example, a local authority instructed tenants to take down Christmas lights in case they might offend Muslim neighbours. In another case, organizations have been removing the word Christmas out of cultural sensitivity to everyone except Christians – “we don’t want to offend anyone”.

A Lot of Hot Air

Over the last two weeks, a number of significant arrests have been made of those involved in the wind-power industry. The most high profile of these was the arrest of Oreste Vigorito, head of the IVPC Energy Company and president of Italy’s National Association of Wind Energy. The charge is fraud. Vito Nicastri, a Sicilian business associate of Vigorito, was arrested in Alcamo, Sicily. Two other men were arrested in Sicily and the Naples area, while 11 others were charged but not arrested.

The wind power industry is heavily subsidized. In the charge, it is alleged that the government subsidies were used to build wind farms that were not able to operate, with the owners pocketing large amounts of public funds while not returning any services to the public for these funds.


In the financial year 2007-08, UK electricity customers were forced to pay a total of over $1 billion to the owners of wind turbines. That figure is due to rise to over $6 billion a year by 2020 given the UK government's unprecedented plan to build a nationwide infrastructure with some 25 gigawatts of wind capacity, in a bid to shift away from fossil fuel use. Capacity is not the same as use. According to U.K. government statistics, the average load factor for wind turbines across the U.K. was 27.4%. Thus a typical two-megawatt turbine actually produced only 0.54 MW of power on an average day. The worst-performing U.K. turbine had a load factor of just 7%. These figures reflect a poor return on investment. This poor return is often obscured by the subsidy system that allows turbine operators and supporters to claim they can make a profit, even when turbines operate at very low load factors. They only profit from subsidy and a legal requirement for energy providers to use renewable energy.

Roger Helmer, the European MP who is skeptical about wind-farms, recently noted that all wind farms require back-up systems to provide energy when wind is low or power from the wind farms is intermittent. The British Wind Energy Association (BWEA) suggests that some 75% of capacity needs to be backed up by coal or gas fired power systems. Generating industry players like E-ON say over 90%, while a recent UK House of Lords Report suggests that some 100% back-up will be required, effectively cloning the capacity. The back-up generation capacity will run intermittently, variably and sub-optimally to compensate for wind variation — and therefore run inefficiently, with higher costs and emissions than necessary.

Subsidy levels vary by jurisdiction. In the US, the Production Tax Credit (PTC), recently extended for another year, is a 1.8-cent tax credit per kilowatt hour for the first ten years of the wind turbine's life. Average electricity rates fall between 7 and 11 cents per kilowatt hour, so the credit amounts to a subsidy of between 16 to 25%. This is not the only subsidy that wind energy industry gets. Several US states offer tax breaks on operating revenue, and allow write-offs for capital investment. State laws that require a certain percentage of electricity to be produced by renewables guarantee that there will be a market, no matter what the cost. In the UK, subsidy levels are now at wind involves a total subsidy of as much as £60 per MWh, the entire burden of which falls directly on electricity consumers, whether they want renewables or not.
The two motives for encouraging wind-power are CO2 reduction and job creation. On the CO2 front, things do not look good. For example, Denmark, with the highest intensity of wind generation in Europe, has amongst the highest per capita emissions in Europe. The German experience is no different. Der Spiegel reports that “Germany’s CO2 emissions haven’t been reduced by even a single gram,”

In Spain, a report by a highly respected economics unit found the nation’s push for huge expansion of alternate energy sources had no positive impact on job creation and instead appeared to have caused job losses by diverting resources in ways that hurt the overall economy. The jobs that were created required enormous subsidies – ranging from $752,000 to $1.4 million per position created – and often were only temporary. In Oregon, an investigation published in The Oregonian newspaper shows that a tax-credit program meant to spur the construction of solar and wind power plants in the state cost 40 times more than the administration told legislators it would. Lax oversight meant many dubious projects were given millions of dollars. Job gains were few.

So why is wind power so important? It is a sign that politicians can use to suggest that they are responding to the perceived threat of climate change. Fraud, subsidy, lack of impact and high costs together with the myth of job creation will not stop politicians committing to more wind-farms, with Alberta leading Canada’s rush to look responsive. It is a shame that no one is looking critically at what this rent-seeking and grant-farming industry is really all about. Perhaps the Italian courts will help us see the reality of this industry.

The Next President

On Thursday at a dinner in Brussels European leaders will decide who will occupy two key positions in the European Union - The President of the European Council and the odd sounding yet critically important High Representative for Foreign Affairs. Both are created as a result of the Lisbon Treaty, the new constitution for the EU which aims to make the EU more efficient and to enhance its role on the world stage. The job of managing this process, largely secretive and with not even a veneer of democracy, is in the hands of the Swedish Prime Minister, Fredrik Reinfeldt, currently President of the European Union.

It will be a difficult meal. In part because no one is really sure what kind of role they would like the persons holding these two positions to take and in part because France and Germany are seeking to shape the outcome through sheer brute force. The French President, Nicolas Sarkozy, and the German Chancellor, Angela Merkel, are said to have settled on the Belgian Prime Minister, Herman Van Rompuy, as their candidate for President. He is clearly the current favourite and if the decision was to made over lunch today he would secure the support of most nations in the EU. But there appears to be growing resentment that France and Germany are “running the show” and this could lead other nations to support Tony Blair, the former British Prime Minister.

Just a few weeks ago Blair was a front runner. But his support of the Iraq war, his alliance and close relationship with George W Bush and his smooth talking “spin” politics are all weighing against him. Angela Merkel in particular is against his appointment. There is also a concern that having a British person represent the EU when Britain itself is often ambivalent about many aspects of Europe and is not a member of the Eurozone would send unfortunate signals to other countries around the world. Blair wants the Presidency, but cannot be seen to be campaigning for it.

As for the "foreign minister" position, there is the possibility that David Miliband, Britain’s Foreign Secretary, could secure this position. Over the last month he has given a series of interviews and a detailed speech on Europe's place in the world. He said what many other European leaders wanted to hear. But over the last few days Miliband has ruled himself out. The BBC reports one official in Brussels as saying that his behaviour looks like a case of "political flirting". The more cynical see his behaviour as an attempt to position himself as the successor to Gordon Brown when Brown steps down, likely after the parliamentary elections in Britain, now widely expected in March 2010.

The Swedish Prime Minister is hoping to arrive at the dinner with just two names which he knows he has support for, but this is as much of a pipe dream as securing a binding climate change treaty in Copenhagen just a few days later. The “old firm” European countries and the newly arrived Eastern European members of the EU see the two positions in different ways, each requiring very different kinds of people. Poland has suggested that there be interviews and a selection committee. Germany has made clear that they do not want either position holders to consider themselves anything more than spokespersons for the EU – they are not policy makers. By the time desert arrives, it is likely that they will postpone a decision or chose candidates through so many compromises and side-deals that they devalue the positions themselves.

When George W Bush visited the EU in 2005 he famously said "You sure gotta lotta presidents in this Europe." That is part of the problem. While the EU wants to enhance its status in the world and saw these two positions as the vehicles by which this could be achieved, there are a lot of Presidents who want to secure the credit for being the voice of Europe. To complicate matters, The European Parliament voted in its own president, former Polish prime minister, Jerzy Buzek, in July. Earlier in the fall it gave its backing to Jose Manuel Barroso for a second term as commission president. Under Lisbon, the presidency of other councils (EcoFin, Agriculture, and Transport for example) continues to rotate every six months between member states, which will continue to seek some recognition and profile for their "presidencies". There is also the increasingly powerful presidency of the Eurogroup – the ministerial meetings of the Euro countries. George W Bush was likely more insightful than he could know.

Being a waiter at the dinner on Thursday would be an interesting position, and no doubt many journalists are practicing carrying trays and pouring wine. There will be a lot of talk and side conversations. Whether a decision will be made is anyone’s guess. It may be that, as someone remarked about Clement Atlee, “an empty taxi turned up at the dinner and the first President of the European Council got out”.

What are the Deniers Denying?

There is a growing anxiety amongst the supporters of a climate change treaty that the “deniers” are exerting an undue influence over the Copenhagen negotiations and are sowing the seeds of confusion and doubt in the minds of the general public. Australian Prime Minister, Kevin Rudd, has suggested that the deniers are "too dangerous to ignore" and that they are "holding the world to ransom".

But what are the deniers denying? Basically, the deniers are denying four things:

1. They are denying that CO2 is the primary cause of climate change. They do not doubt that climate change is occurring, it always has and always will and it is nature’s response to a complex array of conditions. While emitting CO2 in ever-growing volumes is not a desirable thing, reducing these emissions, even dramatically, will not unduly influence climate.

2. The deniers deny that there is a consensus within climate science that man is the primary cause of global warming. There are many areas of dispute amongst the scientific community with respect to climate, including explanations for changes in Arctic and Antarctic ice, the role of the sun in determining climate and the validity and robustness of computer models of climate change. As Einstein noted, it takes a single set of observations linked to an alternative theory to trigger a shift in thinking in science. The theory that humans are the primary cause of climate change is not, like Newtonian laws of mechanics, a closed theory – it is still open to question.

3. The deniers deny that many of the events attributed to climate change – the melting of the ice on Mount Kilimanjaro, hurricanes, the spread of malaria in Africa and so on – are connected to climate change. For each of these events there are other, more plausible explanations. For example, the melting of the ice cap on Kilimanjaro is strongly linked to deforestation of the area in close proximity to the mountain, which results in a lowering of moisture levels which impact ice formation.

4. Finally, the deniers deny that taxing carbon and developing carbon markets will have an impact on the climate. Indeed, the economists who are deniers are skeptical about the economics of many green “solutions” – wind farms, solar farms, cap and trade, carbon taxes and emissions control. They do not deny that reducing CO2 emissions may be desirable for other reasons – air quality being the most important. But they are not convinced that all of these investments will produce the return expected – a cooler planet.

To support their denials, deniers use peer reviewed scientific papers which call into question the currently dominant scientific view and comprehensive economic analysis. There are many such papers by experts in climatology, including some who are or have been part of the scientific team used by the UN to create the technical documents which are said to inform the Intergovernmental Panel on Climate Change (IPCC) reports. They also make extensive use of observational data and measurements of temperature, ocean level, emissions and so on. They do not put their faith in computer models, which in any case produce contradictory findings: rather they rely heavily on direct measures.

Because the deniers have been very vociferous, they have also come under attack. The attacks take three basic forms. The first is to question the scientific credentials of those why deny the man-made global warming thesis. The same standards are not applied to the IPCC itself or to many “warmists” – the head of the IPCC (a former railway engineer), David Suzucki and Al Gore, for example, have no qualifications in climatology. Second, there is the standard accusation that deniers are funded by big oil or the coal industry. This ignores the funding granted to the “warmists”, which runs into billions, by interest groups and governments which should not be regarded as neutral sources of funds. The final accusation is that they ignore the human suffering their denials may cause. This is not at all the case – the primary action plan suggested by the deniers is that we should focus our actions on adaptation and technologies to combat warming, cooling and the other effects of the natural cycle of climate change.

Skepticism is healthy and necessary condition of science. It is also a necessary condition of public policy development. Trying to weigh evidence and make decisions is tough, but the warmists refuse to debate with the deniers and the policy makers have their minds set on a course of action, despite growing evidence that it will make little difference to the climate over time.

As we get near to the December meeting of world governments in Copenhagen, now less than four weeks away, frantic attempts are being made to salvage something from the meeting. What now looks likely is a high-level political agreement to be followed by more talks. The deniers will be blamed for derailing what could have been a powerful moment in Copenhagen, leading to the creation of a powerful global governance organization for climate change strategy management. The deniers certainly influenced public opinion, but the failure of Copenhagen to produce a binding agreement is as much a failure of the intellectual quality of the argument for such an agreement as it is about the politics surrounding it.

The Real Agenda Behind Climate Change

In various buildings housing outposts of the European Union hang signs which boldly state “You Control Climate Change” and extol the virtues of lowering the personal carbon footprint of those employed by the EU.

Some employees, including senior officers, it seems, believe that drastically reducing carbon emissions will stop climate change. Others have another agenda.

That agenda sees the “climate-change crisis,” largely engendered by the media and a small group of scientists, as a valuable cloak by which to achieve sustainable development, wealth and technology transfers, energy security and a restoration of “balance” in the global economy. Put simply, many of the smart people in the EU organizations know that climate change is a natural process, but see it as a convenient means of furthering the pursuit of a new socio-economic policy.

The goal of the new policy is to slow global population growth, with a view to reducing poverty, especially in emerging economies. The first step to its implementation was the need to link economic development and growth with a renewed concern for the quantity, nature and quality of natural resources.

The next step to creating a sustainable world economy, the thinking goes, is the transfer of wealth and technology from the developed world to the emerging economies.

With that in mind, the EU is expected to recommend, at December’s Copenhagen global warming summit, that the developed world transfer $100 billion per year to the emerging world to create an essential pillar for accelerating economic development , a mechanism which is also known to slow the rate of population growth. Once the second strategic pillar – the rapid transfer of emerging technologies, especially “green” technologies – is added, it is believed that the seeds for rapid development of new and sustainable industry sectors will be well on its way.

For the United States, there are additional benefits to linking naturally-occurring climate change and energy security: it will be able to reduce its reliance on Middle Eastern oil and increase its ability to generate energy through wind, solar, nuclear and oil — provided it can be produced in a green and sustainable way from local neighbours, including Canada.

While energy security has been an avowed objective of US policy since the Nixon administration, US President Barack Obama has elevated it to the heart of the climate change policy debate.

To pay for energy security, governments need such new sources of revenue as carbon taxes and levies on fuels, airline travel and recyclable equipment, among a variety of other things. They are all also encouraging their citizens to become carbon-conscious, which also generates new transferable funds for governments to use. For example, the sale of carbon permits in the US, after the first allocations, is estimated to be worth over $600 billion.

Part of the rhetoric to sell this energy-security agenda revolves around the argument — yet to be proven in any jurisdiction — that a focus on renewable energy and energy security will create millions of new jobs. While there is no doubt that new jobs certainly will be created, they generally come with the loss of other jobs in more traditional carbon-intensive industries.

In Spain, for example, each of its new green jobs was connected to the loss of 2½ jobs from other sectors. The issue should not be the number of new jobs created in green industries, but net job gain as a result of new economic activity.

For some policy makers, the climate-change “crisis” affords them the opportunity to rebalance the economy away from wealth for a few as a result of globalization to a more equitable distribution of wealth. And in geopolitical and family terms, under such a scenario, wealth creation comes increasingly from sustainable economic activity.

Simply put, the climate change debate is being used by policy makers to eradicate poverty.

These serious-minded policy makers know that climate change is more complex than has been presented to the general public and that scientists have many complex views about what is happening and what might happen. But the cloak of a global crisis provides a unique opportunity to pursue what is, in their view, a noble agenda.

Compromise at Copenhagen

It is now clear that the Copenhagen summit of world governments, due to meet in less than twenty days, will not reach a binding agreement on climate change as was originally intended.

China, the USA, Britain and Canada working closely with host country Denmark, have agreed to a two step process. Step one, to be completed at the Copenhagen summit, is a global political commitment to combat climate change – reinforcing the key messages from Rio, Kyoto, Bali and the recent G20 meetings. This political manifesto will contain nothing new, though Obama is subtly seeking to shift the message so that it focuses on clean energy and not embrace the entire gambit of economic activity.

The second step, much more difficult given the failure to reach agreement over the last twenty four months, will be for the world leaders to agree on a timetable for a binding agreement that will dramatically reduce CO2 emissions, creating a technology and resource transfer funds for developing nations and commit the world to sustainable development. The UN have suggested that a conference in the spring of 2010 will seek to narrow the basis of such an agreement.

Time is running out. The Kyoto Accord, the last binding agreement, is due to expire in 2012. As it does so, legally binding treaty obligations which include the purchase of offsets, expire and nations can legally cease to spend billions in support of reforestation and other projects around the world said to be “green”. Despite the fact that the Kyoto Accord is a remarkable failure – global CO2 emissions continue to rise, even in countries which are signatories to the accord – many nations are seeking an agreement which is much more aggressive than Kyoto ever was. It is worth noting, however, that the EU stands as a group of nations which will likely meet its Kyoto obligations, with several countries (France, Germany, Britain, Greece and Sweden) doing so without the need to purchase offsets.

In this lies the problem. The drastic measures sought by the green lobby – an 80% reduction in CO2 emissions based on a 1990 baselines to be achieved by 2050 – coupled with the recommendations for a new global government agency for climate change are simply too much for many nations to take. The split between the developed world, especially the EU, and the developing world over the economic impacts and the growing distaste for global government agencies which flout democracy, each conspire to make a binding agreement more difficult to take. The new phenomena of a growing popular backlash against climate change policies, especially in the US, are causing politicians to be cautious. President Obama, for example, is downplaying cap and trade and focusing upon clean energy and energy security and rarely speaks of climate change as the focus for his agenda.

There are a few devices which will make the agreement in 2010 easier to reach. The first is to change the baseline date for calculating how deep to reduce CO2 emissions. Canada has already done this, having moved the baseline date for its policies from 1990 to 2006 – it is seeking a 20% reduction on the 2006 figure by 2020 and 60-70% by 2050. Doing so significantly reduces the amount of CO2 to be taken out of industrial processes, transportation and other economic sectors. The second is to focus on energy and see this as the centre of attention – narrowing targets to the energy sector, fixing a portion of a nations energy supply to come from renewable sources and demanding clean coal, carbon sequestration and carbon taxes on energy. The third big shift will be away from notions of global government and a strong focus on using existing mechanisms, such as the G20, as a basis for coordinating efforts.

Most interestingly, there is a move away from market mechanisms as a basis for carbon reduction. While the EU still favours a cap and trade mechanism, the US is quietly moving away from this and is looking systematically at a simple carbon tax. The White House continues to develop plans for an aggressive global warming bill early in 2010 that will be loaded with new spending on green technology and jobs paid for with tax increases. Democratic lobbyist Steve Elmendorf says the White House focus on deficit reduction could easily kill the cap-and-trade effort. “I think this means cap-and-trade has to go to the backburner,” he said. He also notes that, given the growing unpopularity of climate change talk – Al Gore’s speech was disrupted by chants and protests when he spoke to a small audience of some eight hundred in Florida about the need for strong and decisive action last Saturday - and the fact that 2010 is the year of mid-term elections, he expects modest rather than bold proposals.

The communications industry will go into overdrive to “spin” the Copenhagen political agreement as an important milestone in the work of governments to “stop” climate change. Don’t be fooled. It is really a spin on failure. At three summits this year – the G8, the G20 and the APEC summit – climate change agreements have been weak and nebulous. So will this one. Green lobby groups, funded largely by governments themselves, will rightly see Copenhagen as a failure. When Canadian Prime Minister muses that he may or may not go to Copenhagen, he is right to do so. Since nothing new will emerge, he would be better to spend his time looking at climate change data – he may be very surprised to see the difference between the rhetoric and the facts.

Man Bites Dog and Climate Change

The European Union made clear last week that there is a need to create a climate change fund to transfer directed funds to developing nations to help them mitigate the impacts of climate change. The EU leaders suggested that an annual sum of $100 billion is needed, yet they made no firm commitments to transfer any sum from EU sources. Just as the G8 leaders reached an agreement that average global temperature should not be allowed to rise more than two degrees this century, the vagueness of these commitments and the absence of detail permit the politicians to claim victory when it is plain for all to see that nothing has actually happened.

Green campaigners are, as might be expected, not at all happy. They were looking for a firm commitment by the EU on actual funds and a timetable for the transfer of these funds. They were also looking for agreements on the easy transfer of green technologies between developed and emerging economies. They regard the announcement, championed by Gordon Brown as a breakthrough, as a “greenwash” and a hollow rhetorical announcement in the lead up to Copenhagen’s world summit on climate change, now just five weeks away.

Within the EU there are strong disagreements. The Czech President, Vaclav Klaus, is a confirmed climate change skeptic and sees the taxing of carbon as a major economic challenge for the development of nations. Most of the former eastern bloc countries, led by Poland, are also finding the cap and trade and mitigation strategies being adopted by the EU as very problematic. The East-West split within the EU is making real decision making difficult. We can expect more symbolic and empty announcements, especially between now and Copenhagen.

Meantime, a new report makes clear that the economic impact on Canada of achieving the modest CO2 reduction targets set by the Canadian government – a twenty per cent reduction on 2006 emissions – would be considerable, with Alberta taking the brunt of the impacts. Written by the Pembina Institute and the David Suzuki Foundation and commissioned by the TD Bank, the report claims that Canada could meet these targets and reduce CO2 emissions. What it doesn’t say is that doing so will have no discernible impact on the climate.

There are other developments. Al Gore, Nobel prizewinner and champion warmist, now claims that sea levels will rise two hundred and twenty feet within ten years – ocean levels rose right inches over the last century and the IPCC predict rises of 1.26 inches per decade for the remainder of the century. Some have seen this claim as an example of the desperation warmist campaigners feel as they see the potential of a treaty being agreed at Copenhagen fading fast.

Some key campaigners are showing their desperation too. David Suzuki has repeated his suggestion that Premier Ed Stelmach of Alberta and Canadian Prime Minister Stephen Harper should be jailed for their policies on climate change. George Monboit, the British journalist and writer, also repeated his suggestion that, every time a flood occurs in Bangladesh, an airline executive should be jailed on the grounds that airline emissions are a major cause of warming. Gordon Brown has said that if Copenhagen fails to produce an agreement then it will be too late for mankind to act o “stop” climate change. Expect more high volume and bizarre rhetoric between now and December 7th, when the Copenhagen meeting begins.

Meantime, the planet continues to cool, oceans are not rising any faster this century than they did in the last and ice extent in both the Arctic and Antarctic continue to expand and Polar bears continue to thrive in all but two of the bear communities. Nature is sending its own message. It is unfortunate that most reporting ignore nature and prefers the Al Gore, proving that dog bites man is not as interesting as man bites dog in the news business.

Hancock's Moment of Truth

Alberta has a progressive Minister of Education, Dave Hancock. He has used 2009 as a year of dialogue and engagement. His aim was to create an informed basis for a reform of the Education Act and a repositioning of Alberta’s school system to better prepare students for life and work in the twenty first century. Widespread community based sessions, major conference events and serious consultation with the ATA and thought leaders throughout the Province have taken place. Hancock is now preparing to act.

Part of the background to this reform is that education in Alberta is seen to be successful, at least in terms of outcomes. Using standard measures, Alberta fairs well in international comparison of pupil performance – generally ranked among the top jurisdictions in the world and as the best performing Province in Canada. Where we are weak is in the number of students completing high school and the skills they leave with – many in the workforce have poor literacy and numeracy skills and poor innovation literacy.

The twenty first century demands many new skills from our school leavers – an ability to engage in lifelong learning, technology literacy, teamwork and problem solving skills, the ability to design, to create and to challenge as well as the core skills in science, math, language arts, social studies and language. Many, including the Alberta Teachers Association, have argued that our outcome heavy curriculum gets in the way of real learning and student engagement and that now is the time not just for a rethink of what students are asked to learn but also of how the students are being asked to learn.

In particular, the role of technology in teaching and learning is seen as a key issue. Many, but not all students have access to broadband enabled systems, gaming, the internet, social networking and other digital devices which can be used for learning. Yet, despite spending over $1.8 billion on technology for schools over the last ten years, many teachers are not using technology effectively as a learning resource and many schools have inadequate IT equipment to make real learning through technology effective.

In other parts of the world, educational reform has focused on structure and competitiveness. David Cameron, Prime Minister in waiting in Britain, has committed to a voucher like scheme which would permit for profit schools to offer the required educational programs and additional learning specialities in exchange for government cash. Similar reforms in Sweden have produced remarkable results, with over twenty percent of Swedish students attending private schools. One in eight schools are private and some fifteen hundred applications to establish a school are in progress. Ending the power of school boards to block Charter Schools, letting funds follow the child and funding schools directly through vouchers are all part of the scheme. Sweden also performs well on international outcome measures. The fear amongst some in Alberta is that Hancock will adopt the mega Board model used in the reform of Alberta’s health care system. Devolved authority is the key to performance improvement.

The big challenge for Alberta is that it has spent two decades centralizing control of curriculum, teaching and technology and, in the process, has de-professionalized teaching. While many teachers have seized opportunities to develop their professional skills and competencies through graduate degrees and professional development activities, curriculum control and testing now inhibits innovation and risk taking in terms of teaching. Many teachers do not have the skills sets needed to facilitate new forms of learning and new uses of technology.

A related challenge, which educators have been quick to draw the publics attention to, is that education is slated for budget reductions along with health, social services and all other Ministries in Alberta. A figure of $300 million in 2010-11 has been used to highlight this challenge. The Ministry of Education has some seven hundred staff and an additional one hundred full time equivalent staff on contract – a very large Department by any standard. Most of the required savings could come from reducing this bureaucracy and changing some of the ways in which the Department functions, for example, ending Grade 3 Provincial Achievement Tests.

There are three criteria by which we should judge Hancock’s reforms when they become known. The first is what they will do for the process of learning – how will it change as a result of the Hancock reforms? The second is what will the changes do to give greater levels of empowerment and control to schools directly – and, consequently, reduce control by the Department? Finally, we should ask what they will do improve student engagement, retention and performance?

Hancock is a vey capable Minister – his challenge will be to manage reform with a caucus which appears hesitant when faced with a chance to make significant change and reluctant to invest in the future at a time of budget restraint. Bold is what is needed – the dynamics are such that modest is what will occur. Major educational reform occurs only once in every generation. Lets hope Hancock rises to the challenge.

Blair 0 Milliband 1

Any hope Tony Blair had of becoming the first President of the European Union were dashed today as France and Germany signalled that they had an alernative candidate and would prefer not to have Blair in the chair.

His support of George Bush and the Iraq war provide one set of reasons for his rejection, but his smooth talking and spin-doctored presentation of policies were just as significant. Newly re-elected Chancellor of Germany, Angela Merkel led the opposition and persuaded Nicolas Sarkozy of France, who had previously supported Blair, to change his mind. Gordon Brown’s strong support probably did not help.

The new candidate who has secured the German and French support is Dutch premier Jan Peter Balkenende, now widely seen as the new favourite. While Balkenende vigorously denies any interest in the position, leaked conversations make clear that he is.

The Presidency of the European Union is a new position called for in the Lisbon Treaty, likely to be ratified next week, once the Czech Republic finalizes some special arrangements agreed to this week in a meeting of the EU’s leaders. The Czech constitutional court will rule on whether or not the treaty is legal or whether it breaches the Czech constituion on Thursday, 5th November.

The role of the President is to be chair of the leaders meeting and to be the public face of the EU between these meetings. The concern with Blair was that he was not seen as a Chair, more as a Chief Executive.

Britain may still get something from the situation. David Milliband,currently Britain’s foreign secretary, is now widely favoured for the position of first EU Foreign Minister, a position also called for in the Lisbon Treaty. Milliband, who many see as a potential leader of the Labour Party after Gordon Brown’s departure following his expected defeat at the next British general election, is young (forty four), seen as an effective communicator and mediator and has performed admirably as Britain’s foreign secretary. He and his brother, Ed Milliband, are the first siblings to serve at the same time in the British cabinet since Neville and Austin Chamberlain.

Blair will be disappointed. He had worked hard to secure this appointment. Its yet a further indication that his personality and performance are now seen as barriers rather than assets. Some have suggested that his preoccupation with religion in public life and his falure to make an impact on the middle east peace process, which is a key concern for him in his role as a Middle East Envoy for the “quartet” of interested parties (US, UN, EU and Russia), are factors which also weighed against him. He is also seen by some, including the Czech President, as an intellectual light-weight.

The decision on who will hold the Presidency and Foreign Minister roles will be made by the leaders of the EU within weeks of the Lisbon Treaty being approved.

Obama: Must Do Better

Barrack Obama is increasingly looking like the rookie Senator from Chicago, acting in the role of President. Despite the hoopla and ballyhoo surrounding his historic election, many now see Obama as “on probation” and the report card shows that he is potentially a failing President.

Obama has proposed just one specific piece of legislation and a budget. The legislation was the $787 billion dollar stimulus package he insisted on when he arrived in office and the budget is one which takes the US so deeply into debt based financing as to carry the potential of destabilising the world’s bond markets and forcing major cuts in US spending. Now that the US is officially out of recession, he may begin to claim that the stimulus funds were the critical ingredient in ensuring this quick recovery, despite the lack of evidence in support of this thesis. Whatever the merits of the theory that stimulus funds “saved” the US economy, the reality is that these same funds may also impair growth.

Indeed, the economic strategy being pursued by Obama is difficult to fathom. In less than a year in office, Obama has tripled the deficit and sent shivers down the bond market traders who have to find buyers for several billion dollars of government bonds each working day. The debt will rise and his plan to curtail government spending once the recession is over and growth returns to the economy looks, at best, wishful thinking and at worst, deceitful. Few economists, with the notable exception of Nobel Prize winner Paul Krugman, think that there is a strategy at all. Whatever the economic framework, it is threatened daily by new commitments and suggestions coming directly from Obama.

Obama’s desire to see health care reform is, to put it bluntly, a shambles. Rather than propose anything, he left the work of drafting legislation to Nancy Pelosi and her left-leaning friends in the House of Representatives. When the backlash came, Pelosi is hidden away and Obama hits the campaign train and begins the work of community organizing to try and get something passed so that it can appear as if reform has taken place. The so-called “public option”, which involves government managed insurance scheme, has been “in”, “out” and doing the hokey-cokey for weeks now (it is “in” the Senate bill at the time of writing, but may be dropped given the opposition my maverick sometimes Democrat Joe Lieberman) and exactly what the bill will change is as yet unclear. Not exactly an example of focused leadership.

His other big agenda item, climate change legislation, has been left to Senator John Kerry to develop and promote. This is a mistake. He denies that cap and trade has anything to do with government, thinks that the world is so imperilled by CO2 and that “science is telling us what to do” and is not at all clear on the socio-economic implications of his own bill. The Waxman Bill, another version of the same thing, is also on the rocks – facing hundreds of amendments in the Senate and a filibuster by republicans. Recognizing that the global summit on climate change in Copenhagen is a bust, Obama has repositioned this whole initiative in terms of green energy and energy security. This file is also a shambles.

Then there is Afghanistan. Not an easy issue for any President or Prime Minister to tackle, as Stephen Harper and Gordon Brown can attest. Nonetheless, Obama has to make a decision about whether or not he is supporting a surge and transferring troops who are now withdrawing from Iraq into Afghanistan. He also has to work behind the scenes to ensure that the election results from the run-off election are credible, whoever wins. Obama is taking his time. His Vice President, who rarely has both feet on the ground since at least one of them will be in his mouth, is opposed to the surge. His defence team are for it. The people seem, by and large, against being in Afghanistan. Obama’s response is to dither and wait. Another shambles.

Obama’s approval ratings have fallen twelve points since he became President. This despite, or perhaps because of, his almost daily appearance on television. Obama knows how to campaign and win votes, which is why he is out supporting mid-term electoral candidates across the US. But campaigning and governing through focused leadership are two different things. He may want to appeal directly to the American people so that they can influence the congress, but what is in fact happening is that his appeals for community action and producing more questions about his leadership and no meaningful results in congress. His campaigning is seen as a way of getting some “relief” from actually doing the job of President of the United States.

If the people could write a report card right now for Obama it would probably say that he is a strong and effective communicator, a solid campaigner and an imaginer. He is not yet proven himself to be an effective President of the United States. In the immortal phrasing of the millions of teachers who write report cards around the world “could do better” comes to mind. Indeed, for him to fulfill the promises he made at the time of his election, “must do better” should replace “yes we can” as his signature phrase.

Rebooting Alberta

As Alberta looks increasingly like a Province blowing in the wind – mounting deficits, no meaningful strategy to reduce spending or increase taxation, a government paralyzed by a leadership review of its Premier and the trials and tribulations of an emerging right wing Wild Rose Alliance party – a group of Albertans have decided to take some action. In late November a by invitation only conference in Red Deer, Reboot Alberta, will take place.

The team behind this – Ken Chapman, Don Schurman, Dave King and Michael Brechtel – are seasoned thinkers and players in Alberta’s political minefields. Their aim is not to create a new political party but to develop a series of policy and action frameworks that could reshape Alberta for the twenty first century. Focusing not just on reinventing democracy in Alberta, but also on green oil, rethinking schools and education, social policies and environmental policies, the sessions are intended to develop alignment of progressive thinkers.

Writing about Reboot Alberta on his widely read blog, Ken Chapman says “We need to look at our entire political culture, not just the government. We need to consider what needs to be controlled, what alternatives do we need to create and what can we dispose of and delete in order to deliver us from the current frozen state of ineffective politics and governance.”

Part of the rationale of the event, which is by invitation only, is that it is time for thinking citizens to outline what they see as policies in the public interest. Underlying this is the idea that the gap between the interests of the government and those of the public are widening, especially with respect to some key issues such as schooling, environmental policies and the economy. When the Premier ruled out tax increases and presented a view of the economy as “waiting for a turnaround”, many were disappointed. A key moment for rethinking the role of Government and the nature of the public service was lost. Despite a public appetitite for austerity, the Government thinks it can buy an election by continuing to spend. It may be surprised that this is not what the public see as in their interests.

On the environment, while some policy shifts have taken place under Stelmach, there is no real articulation of a green oil strategy that makes sense. The governments strategy can be seen as piecemeal, reactive and hesitant rather than a bold move to do demand higher royalties, higher standards of environmental responsibility and higher investments in refining capacity. As Satya Das has made clear in his recent book Green Oil (see review elsewhere on Troy Media web site), the interests of the owners of the oil sands – the people of Alberta – have become secondary to those of the oil companies.

On education, reform is in the air. But bold and courageous may not be. A bloated government department is working hard to protect “turf” and radical ideas for change, while being listened to, are always brought to caucus for dismissal. Yet the system needs to change and become much more responsive to the needs of a twenty first century economy.

Healthcare is, most people agree, a “wicked” problem which has difficult solutions. While Stephen Duckett brings his own brand of austerity to the health care system, the public is largely shut out of the process of health care reform and development. Government needs a long term health strategy which reboots the system and focuses on wellness and preventive work rather than continually boosting hospital and emergency care. Without a reboot, the system will fall into decay due to lack of funding.

These are some examples of the policy conversations which progressive people will engage in at the end of November in Red Deer.

A reboot, as those of us who work with computers know, restores some sanity to the chaos of a confused machine. While it takes some features of the machine back to benchmarked standards, it updates others and suggests modifications that users should consider. So too with reboot Alberta. It is time to take some of our government activities back to benchmark while others need to be modified. Some things need to be added to our suite of activities, others deleted. It will be an interesting conversation.

Rethinking Copenhagen

October is almost over, as is any optimism associated with the Copenhagen meeting on climate change, scheduled for December. Canada, in the form of Environment Minister Jim Prentice, has made clear that it does not think a consensus can be reached when the governments of the world meet in Denmark. At best, they are hoping that they can agree to keep the dialogue open and move towards a common understanding of the challenges nations face together with a range of bilateral and multilateral arrangements which will seek to mitigate varying consequences of climate change.

But major shifts are already taking place. President Obama, who spoke on climate change at MIT this week, has redefined the US climate change strategy as fundamentally about energy and energy policy – a very different focus from the one he had six months ago. The speech, watched carefully for signals of compromise with the increasingly skeptical US Senate, made hardly any mention of cap and trade and instead focused on the need to rebalance the sources of energy used by the US while at the same time strengthening energy security. The US environmental lobby reacted angrily to this reengaging of past commitments.

India and China are resisting a draft treaty which set binding carbon emission reduction targets, compensating for the negative economic impact with significant funds for technology transfer. They see these binding targets as limiting the potential for growth, slowing recovery from recession and making it more difficult to lift large numbers of people from poverty. They are not convinced that the developed world understands the opportunity they have created for real development and see climate change mitigation as a threat rather than an opportunity.

The US and Canada are interested in using Copenhagen to reach bilateral and multilateral arrangements with India, China and others. The European Union is looking at Copenhagen as a way of leveraging climate change to promote a world carbon market, which could be supported whether or not tough limits on CO2 are imposed by treaty arrangements.

The real challenge now is communication – how can world leaders explain what will look to many like a failure at Copenhagen?

Some will not be able to. Gordon Brown, who is nearing the end of his short time as Britain’s Prime Minister, has staked some of the last shreds of his fragile credibility on being a deal maker at Copenhagen. Ban Ki Moon, the UN Secretary General, has his sword sharpened ready to fall on following his rhetoric earlier in the year when a deal at Copenhagen looked faintly possible – his florid language and apocalyptic predictions may lead him to be a one term Secretary General if Copenhagen is seen to be a “failure”. Prince Charles, who has made it clear that we are all doomed if Copenhagen fails, is probably packing and making arrangements to move to a cooler planet than the one he currently spends most of his time on.

If the Copenhagen talks focus on rethinking global energy strategy, integrating “green energy” with carbon based energy, accelerating technology developments for green technology and stimulating low-carbon economic development in the emerging economies of the world, then some good could come out of it. The organizers need now to act swiftly to lower expectations, shift the focus to energy and economic development, give less emphasis to cap and trade mechanisms and more to technology transfer and sharing. There is also a need to focus some time and conversation on mitigating some of the other effects of climate change, notably any possible rise in sea levels or adverse effects on food supply and health.

A global summit is an expensive affair. Bringing thousands of public servants, politicians, lobbyists and journalists together in Copenhagen, not to mention a highly destructive event for the planet, is also a logistical nightmare. To use the time unproductively by focusing on a deal that cannot be done makes no sense. While the green lobby groups, mostly funded by governments, will be upset with any retreat from their luddite agenda, a rational approach to what is possible – energy, technology transfer, sea defense strategy and global health management – makes sense. Copenhagen, rather than being a bust, could be a new start for new technologies for energy and a different future for the emerging economies of the world.

Time for Real Leadership in Alberta

On Wednesday of this week two prominent Albertans gave important speeches.

The first speaker focused on the need to rethink the Alberta competitive advantage, especially as it relates to attracting new investment, restoring fiscal responsibility and developing strong communities. Based on a detailed and thorough analysis, the speaker recommended that Alberta needs to reduce public spending, cut the Alberta income tax and taxes on capital and impose a sales tax of eight per cent. Pointing to the fact that many other jurisdictions within Canada, never mind the US, are now more attractive destinations than Alberta for firms wishing to create new enterprises or expand existing ones, the speaker argued that urgent action was needed.

The second speaker, in a more folksy style, recognized that Alberta was facing a challenge but encouraged us not to panic. Because Alberta had stacked money under the mattress and could pay down the deficit the Government was incurring and could raise money through issuing bonds. He also suggested that wage freezes would also be needed for two years to stave off real trouble, but we shouldn’t panic – things would soon be back to normal and we could get back to growth.

The second speaker has been widely derided for his comments. They lack depth, they show an ignorance of the real structural challenges Alberta’s economy faces – a long-term change in the nature of natural gas pricing, shifts in investment patterns in oil and gas and a jobless economic recovery, over-spending and lax taxation – and project an ignorance of the political and social dynamics underlying Alberta’s current situation. The speaker was Ed Stelmach, sometime Premier of Alberta.

The first speaker, though recognized as having understood the economic problems Alberta faces, is widely thought to have solutions which many think Albertan’s would find tough to accept, even though they understand the need for both austerity and real change. While he caught the mood of the realist Albertan, his solutions are radical for a low tax regime. The speaker was Jack Mintz, formerly of the University of Calgary.

These two views of Alberta – “we’d better act differently to stave off real economic challenges” and “don’t panic, trust us, just don’t expect wage increases for a while” – suggest an emerging challenge for Alberta’s government. No one things that staying the course, with minor adjustments, will position Alberta well for the future. Most people think that significant change in strategy – major cuts in spending, increased taxation, reinventing the role of Government and finding solutions to long-standing problems like health care cost growth and environmental issues – will be necessary, but the Government does not appear to be listening.

The Wild Rose Alliance, which elects its new leader tomorrow, is voicing the concerns of thinking Albertan’s and their rise in popularity should also be triggering a significant rethink of strategy in the governing party. The fact that it isn’t speaks to the enmeshment of the cabinet in the hands of its caucus. Its time for the senior members of the party to break out of their capture by their own caucus and show real leadership for Alberta. It’s also time to recognize that the Premier, nice as he is, is no longer the right person to lead Alberta in the next stage of its development.

Alberta is a great place to live and work, kind of. But we don’t do great anymore and we are making it less and less likely that we ever will. What we are seeing in the Premiers address this week is an absence of bold, imaginative leadership. It is this that Alberta now needs.

All Change in Westiminster

David Cameron, the leader of the British Conservative Party, sits on top of a fourteen point lead in the latest opinion polls, suggesting a landslide victory with a majority of eighty or more in the next general election in Britain. Most commentators expect the election next May – it must be over before the first week of June under British electoral law – as Gordon Brown keeps hoping for either a significant economic turn-around or David Cameron to make a damaging campaign blunder. Gordon Brown is not helped by the news that the sight in his one remaining eye (he lost the sight in one eye as a teenager) is damaged.

Cameron had a reasonable party conference. He said enough to demonstrate that he could communicate effectively and that the new compassionate conservatism was focused, forthright and fiscally responsible, but not enough to worry the centrist voters. He left policy details for the election itself and focused on the major themes his party will pursue: getting Britain back to work, reducing the size and cost of government, getting out of Iraq and Afghanistan and tackling poverty. He balanced a government committed to austerity with one committed to compassion.

Most significantly, he offered a powerful and effective critique of the achievements of the Labour Government. He points out that since Labour came to power in 1997, the poor have become poorer, more young people are now long term unemployed than at anytime in recent history, inequality is rising faster under Brown than it did under Thatcher, crime rates in poverty stricken areas of Britain are rising, more schools fail to meet standards now than did a decade ago, more patients die in hospitals of medically mistakes and infections than at any time in the last fifty years, national debt (forecast to be £175 billion for 2010) is the highest since IMF intervention in the last Labour administration of Jim Callaghan. In fact, deficits and debt will define the social and economic policies of the next decade of British politics, with debt servicing in a single year costing more than is spent supporting schools.

This powerful critique is intended to point out the difference between the rhetoric of the Labour Party – a party for the people – and the reality of its achievements and to point to the history of the compassionate conservative party as the model for what is to come. It is an intellectually convincing argument, but people’s memories are fuzzy. Their images of conservatives don’t match this rhetoric – Cameron has a massive task ahead getting this message across in a way that is not patronizing or open to attack.

But fundamentally, the “new” Labour project of Blair, Brown and Mandelson has failed and done so spectacularly. Britain’s finances are in a shambles and it is selling off assets and printing money (now referred to as “fiscal easing”) so as to delay the inevitable increases in taxes and substantial cuts in public spending, which all major parties are committed to.

Brown will not go before the election and will fight to the end, but many in the Labour party are now resigned to the fact that they will lose the next election. Some three hundred and twenty five members of parliament will not return to the commons after the election – some 170 labour members are expected to retire, be forced to resign or lose their seats. As Labour begins to contemplate a decade or more in opposition, it will have some new blood to help it consider its future and will need a new leader.

Leadership candidates are already positioning themselves, while overtly supporting Gordon Brown. Ed Balls, currently Secretary of State for Children, Schools and Families, is a leading candidate as also is David Milliband, Foreign Secretary. Balls is a close ally of Brown, but is noticeably beginning to distance himself from Brown’s public policy positions. Milliband looked like a coup member earlier in the year, but backed off against significant threats to his political future by a rabid group of Brown acolytes who, it is said, make the mafia appear amateur when issuing threats. There is a growing view that, in order to have a chance of rebuilding, they need to skip the current generation and look to the next intake in the commons for a new leader. They will have time. No one will be looking to Labour for ideas and innovation for some time.

The New Prize Season

Written by Richard Cohen

In a stunning announcement, Millard Fillmore Senior High School chose Shawn Rabinowitz, an incoming junior, as next year’s valedictorian. The award was made, the valedictorian committee announced from Norway of all places, on the basis of “Mr. Rabinowitz’s intention to ace every course and graduate number one in class.” In a prepared statement, young Shawn called the unprecedented award, “f—ing awesome.”

At the same time, and amazingly enough, the Pulitzer Prize for Literature went to Sarah Palin for her stated intention “to read a book someday.” The former Alaska governor was described as “floored” by the award, announced in Stockholm by nude Swedes beating themselves with birch branches, and insisted that while she was very busy right now, someday she would make good on her vow to read a book. “You’ll see,” she said from her winter home in San Diego.

And again in a stunning coincidence, the Motion Picture Academy of Arts and Sciences announced the Oscar for best picture will be given this year to the Vince Vaughn vehicle “Guys Weekend to Burp,” which is being story-boarded at the moment but looks very good indeed. Mr. Vaughn, speaking through his publicist, said he was “touched and moved” by the award and would do everything in his power to see that the picture lives up to expectation and opens big sometime next March.

At the same press conferences, the Academy announced that the Jean Hersholt Humanitarian Award would go this year to Britney Spears for her intention to “spend whatever it takes to save the whales.” The Academy recognized that Spears had not yet saved a single whale, but it felt strongly that it was the intention that counted most. Spears, who was leaving a club at the time, told People magazine that she would not want to live in “a world without whales.” People put it on the cover.

The sudden spate of awards based on intentions or plans or aspirations was attributed to the decision by the Norwegian Nobel committee to award the peace prize to Barack Obama for his efforts in nuclear disarmament and his outreach to the Muslim world. (The committee said next year it will honor a Muslim who reaches out to the non-Muslim world.) Some cynics suggested that Obama’s award was a bit premature since, among other things, a Middle East peace was as far away as ever and the world had yet to fully disarm. Nonetheless, the president seemed humbled by the news and the Norwegian committee packed for its trip to the United States, where it will appear on Dancing with the Stars.

Obama and the Catholic Church

Barrack Obama’s Nobel peace prize came as quite a surprise to those of us who used to think that the Nobel prize actually meant something. I gather he is now considering joining the Catholic church so that sainthood is a possibility in his second term.

Making Innovation Investments Work

As budget season approaches, universities are once again making the claim that they can be a key part of economic recovery and growth because they are engines of innovation.

Universities are critical vehicles for research activities which, sometimes, produce breakthroughs – penicillin, canola, Gatorade, Google. But their fundamental purpose is the development of highly qualified people who are able to engage in creative problem solving, critical thinking and the pursuit of knowledge. Some of these highly qualified people, graduates of arts and social studies programs as well as science and technology, engage in advanced research. It is important that they do so, since knowledge based economies depend on both commercially attractive research but also on deepening our understanding of science, technology and social and cultural phenomenon.

We need more highly qualified people in our workforce. In comparison with other high performing innovative economies, such as Finland, we have around half the number of people with science and technology degrees as they do and we have significant weaknesses in high qualified managers leading our firms, especially those at an early stage of development.

We also have a low level of private sector spending on research. Our major research companies, recently denuded by the loss of the biggest research driven company in Canada – Nortel - number less than one hundred and twenty five and spend less per capita than most of our international competitors. This shows itself in the continued reduction in spending on R&D by firms but also in the decline in the ratio of private to public spending on R&D. In Finland, which is highly successful as an innovative economy, this ratio is close to 3:1 – in Canada it is closer to 1:1. Several research studies show that it is this ratio is a crucial driver for the commercialization of new products and services derived from research and the higher the ratio of private to public funds, the more commercialization takes place.

Our challenge is simple. Focusing funds on university research, while laudable, does not produce returns on investment which translate into economic growth. What is needed is a refocusing of our understanding of innovation as a commercially driven process, linked to the firms and a jurisdictions innovative capacity and the ability of people to lead, champion and manage change.


Five things need to happen if Canada is to leverage its knowledge based firms and research capacity for economic growth. First, we need to stop believing the rhetoric that research leads to innovation which leads to commercial products. It can be like this, but rarely is. We should accept that research is valuable in its own right and fund it, roughly at the level it is now. We should downplay the commercialization functions attached to universities and encourage them, through incentives, to find new and more engaging ways of working with firms.

Second, Canada needs to do all it can to stimulate R&D in firms. Extending the various tax credits to include marketing and consumer product testing, finding more ways of matching private firms spending and looking at different tax related strategies to encourage angel and venture capital funding of early stage, knowledge intensive firms.

Third, Canada needs to rethink its investments in learning and focus its immigration strategy on a dramatic increase in the number of highly qualified people with strong science and technology backgrounds working in firms. As part of this effort, we should pay attention to the frequent voices of the venture capital and investment community that constantly remind us to strengthen managerial capacity throughout Canadian industry, but especially in knowledge intensive early stage companies.

Fourth, we need to recognize that public service focused innovation – in health, education, social services, eldercare – is different from innovation intended to have direct commercial value. There are different buyers, regulatory requirements, competitive environments and product life cycles for “public good” based innovation versus widgets, sockets and socks. We need to consider what supports are needed by these public good sectors versus others and start to differentiate our support services accordingly.

Finally, we ought to see public policy and regulation as vehicles for stimulating commercialization. To take the “green economy” as one example, the faster Governments regulate a requirement to reduce water use in the oil sands, to reduce CO2 emissions dramatically, to end the production of tailing for the oil sands then the faster innovative technologies will emerge and provide a basis for what one author calls “Green oil”.

Investing more in the usual suspects and expecting different results is likely to lead us to fall further behind our competitors. It is time for a new and fresh thinking.

Our Universities

The Times Higher Education newspaper published its annual ranking of the world’s top two hundred universities this last week. The top five Universities in the world remain relatively constant – Harvard, Cambridge, Yale, University College London, Imperial College London, Oxford. What is more interesting is the position of Canadian Universities and the rapid emergence of Universities from Asia.

Canada’s top university, according to the list, is McGill (18th) followed by the University of Toronto (29th) and the University of British Columbia (40th). Dalhousie, which was on the list last year, no longer makes the top two hundred. Alberta has two universities of the list – the University of Alberta (59th) and the University of Calgary (149th), both of whom have made substantial gains over the last year, with the University of Alberta gaining fifteen places and the University of Calgary twenty one places, mainly due to their scores from students and employers.

Asian institutions are gaining ground. Japan has two in the top thirty – University of Tokyo (22nd) and the University of Kyoto (25th) - and China’s University of Hong Kong is also in this group. The National University of Singapore (30th) also ranks highly. This top thirty is dominated by the United States with thirteen and the United Kingdom with seven.

The lists are broad indications of the performance of institutions and only tell us a little about actual performance. The Times Higher Education list is largely about perception and experience. Other lists focus on actual performance and research – using measures of activity as opposed to staff, student and employer ratings as the basis for the ranking.

But such a list is timely. It reminds us to consider the quality of our Universities when making tough choices about funding, as Governments across Canada are now doing.

Strange things have happened in the world of Universities. We have the top five Universities in the country arguing that, due to their importance in terms of research and innovation, they should be treated and funded differently from other Universities. We have the growth of private universities offering undergraduate and graduate programs in a variety of modes – Meritus University, part of the group that also owns the University of Phoenix, Lansbridge, Yorkville, University Canada West, Quest and the University of Fredericton – all competing for students on pure market conditions with no funding from government. We have established private, non for profit university colleges, such as Concordia University College in Edmonton, offering quality undergraduate and graduate degrees. Then various Governments, but notably British Columbia and Alberta, have converted former community colleges to Universities. Two such conversions occurred in September, when Alberta converted Mount Royal College and McEwan College to universities.

It’s a confusing scene. What is actually happening is that being a “university” has been confused in the minds of politicians and administrators with being granted the right to award degrees. The result is a growing plethora of degree granting institutions competing for a declining population of students and demanding more from a shrinking pool of funding.

In all of this rush to upgrade our institutions, we are in danger of losing sight of three things. The first is the fundamental nature of a university – a place where scholarship and imagination is nurtured and research enabled, with the discovering minds of academics helping the growing minds of students come nearer to the frontiers of knowledge. Not all of the “new” universities and none of the private’s are engaged in research as a core of their beings as institutions. When this is absent or minimized, then the meaning of the “university” is devalued.

The second thing that is in danger of being lost is the conception of quality. Most quality assurance processes in Canada, and I am directly engaged in several, focus on student protection and the assurance that the institution is capable of sustaining the offering of quality programs to students, thus giving emphasis to teaching and minimizing (and, in some jurisdictions, ignoring) the role of a University in terms of research or the engagement in community service.

The third thing we are in danger of losing sight of is our academic standing in the world. As we diversify the offering of degrees through a range of different institutions and de-emphasize research, we lower Canada’s profile in the world. While a few institutions make modest gains on the league tables, such as the Times Higher Education ranking, the “new” and private universities operate knowing that they will never make the ranking process, never mind the list.

Universities are complex places. They have a teaching function, a research function and a community building and service function. In the rush to have a better educated work-force for the knowledge economy, we may be in danger of diluting our resources and creating several different leagues of institution that compete for resources, students, faculty and research funds. We are in danger of lowering our sights and missing the target: excellence.

Ireland Decides Tony Blair's Future

Ireland votes today on whether or not to approve the Lisbon Treaty agreed by twenty six other member nations of the European Union. It is likely that they will say yes. The result will be known on Saturday evening, Irish time.

Ireland is in serious trouble. Unemployment is at thirteen percent, the government is creating a “bad” bank to adopt the toxic assets of Ireland’s indebted banks so as to ease the flow of credit. Large corporations, once part of Ireland’s “roar” as a Celtic Tiger, are now leaving Ireland for less expensive and friendlier nations, many offering incentives for moving. They need the support of the European Union to get to the other side of the real crisis that Ireland faces. That support depends, in some measure, on how the people of Ireland vote today.

The “no” campaign has focused on the loss of sovereignty they see inherent in the Lisbon Treaty, which cedes powers to the European Union and unelected bodies within it. They also claim that the European Union will force social policy changes, especially about abortion, on Ireland which the Irish people do not want.

The “yes” side focus on the economic benefits that will be derived from the European Union and the potential of the Union for strengthening Ireland’s infrastructure as a knowledge based economy. They also point out that there have been concessions, both in terms of the Treaty itself and other matters, which support Ireland’s economic future and social development.

Ireland is the only nation bound by a referendum and most of the remaining nations have approved the Treaty, despite the fact that the Treaty was rejected by referenda is both France and the Netherlands. Two countries – the Czech Republic and Poland – have still to sign the treaty, though both of these countries are in a position to do so. The Treaty creates new institutions, formalizes majority decision making and creates the post of President of the European Union. It also permits a strengthening of the co-decision powers of the European Parliament, working collaboratively with the European Council of Ministers.

Watching the Irish vote anxiously is former British Prime Minister, Tony Blair, widely thought of as the front runner for the Presidency of the European Union, a post the EU wants to fill before the British general election, expected in May 2010. Several reports appeared this week suggesting that, if the Irish vote yes, Blair would be named President at the next meeting of the EU heads of government within a month. While there are other candidates - Jan Peter Balkenende, Prime Minister of the Netherlands; Herman Van Rompuy, the Belgian Prime Minister; Jean-Claude Juncker of Luxembourg; Felipe González, the former Spanish Prime Minister; Mr François Fillon, Prime Minister of France; and Wolfgang Schüssel, the former Austrian Chancellor – Blair has the formal support of Silvio Berlusconi, Italy’s Prime Minister, President Sarkozy of France and Angela Merkel of Germany. It looks like a done deal.

The Irish people are in a very powerful position: they will determine some key elements of the future of the European Union, the fate of the present Irish government and the career prospects of Tony Blair. Much will depend on turn-out and the mood of the people of Ireland. There is a lot at stake. The announcement of the vote will be watched with interest.

Posturepedic Politics

There is a lot of unhealthy posturing on parliament hill in Ottawa. The Liberals have tabled a “no confidence” vote and the NDP are threatening to bring down the Government on a softwood lumber “ways and means” motion. No one really knows where the Bloc stands, but it is likely that they will support the Government. But posturing continues.

One should never look at politics on the surface – there are always other layers to the reality. One layer is simple: the Liberals and the NDP would loose an election if it were held today. Any calculation suggests that an election before Christmas would provide either an extension of existing minority arrangements or a small majority for Stephen Harper. Ignatieff and Layton must be calculating that their postures and moves will not lead them into an election.

Another layer is also clear. Stephen Harper must realize that if he faces an electorate angry at going to the polls for a second time in less than a year and secures only a majority, he is starting a process of exiting from the leadership of the party and the work of the Prime Minister: he needs to win a majority to sustain his leadership.

A third layer is that the electorate look at Canada in comparison to others and, while they recognize that we have some problems, the country is in a strong position to move from staving off the depths of recession and starting a recovery. Many also recognize that it will be a tough journey and austerity will be key to restoring Canada’s fiscal health. The electrorate isn’t stupid. They know that the Liberals demanded more public sector spending and more “stimulus” and fiscal easing – they got it. They can hardly complain that stimulus spending leads to debt. Unlike almost every other nation, we had room in our economy to take on debt and did so. Now show us the plan to get us out of debt over time and the electorate will buy it if it makes sense. Such a plan will involve a combination of cuts to public service and higher taxes – so get used to it.

The final layer is people. As Rick Mercer, a seasoned political observer, noted, none of the leaders of the three major national parties are people you would throw a rope to if they were drowning in the harbour. They are not exciting or dynamic and in many ways are as dull as Angela Merkel of Germany or Gordon Brown of Britain. But the reality here is simple: they are all we have. So get used to this too.

Stephen Harper will never be dynamic, never have physicality and only rarely will “let himself go” and actually laugh out loud. Ignatieff is never going to appeal to your average worker and will only ever appeal to a small number. Jack Layton is, well, Jack. Nothing sexy about any of these white middle aged men. Worse, the people behind them are not as much fun as these three – it just gets worse. So voting in Canada will not be on the basis of personality – it cant be.

“We live in interesting times” is not the mantra we should apply to this situation. Rather we should simply observe that “the times in which we live are of interest to some”. Most people couldn’t care less. That’s the other reality.

The G20 Big Yawn - More to Come

The G20 summit in Pittsburgh was essentially a bust. The big decision is that the G20 will replace the G8 as a mechanism for coordinating the response of the major economies of the world to development global challenges – the economy, climate change, global health issues and terrorism. This is something that Canada’s former Prime Minister, Paul Martin, was promoting some time ago. Now, five years later, the G20 agrees.

Other than that, the agreements reached were modest:

1. Most but not all banks, but not other financial institutions, will be required to increase their capital. Specifics are left to a Working Committee. Monitoring and enforcement is left to the national governments.

2. Bank salaries and bonuses are to be restricted and made to conform to performance over a three year period. Specifics are left to a Working Committee. Monitoring and enforcement is left to the national governments. These prospective rules will not come into force until 2013 – after the next US Presidential election and the British general election. Britain is likely to lead the way with reforms to be announced this week in the run-up to the British general election.

3. Leaders agreed to work to reduce the economic imbalance between those countries that have large balance of trade surpluses and rely heavily on export trade (e.g. China, Germany) and those who have large, chronic deficits and consume too much, i.e. the United States and Great Britain. Specifics are left to a set of Working Committees and the goodwill of the governments involved.

4. Some adjustments will be made in the voting quotas of the IMF to give greater weight to Brazil, Russia, India and China (the BRIC nations). The U.S. retains its veto and the power shifts only modestly.

Not much to boast about here, though more than most finance ministers thought possible when they met two weeks before the summit itself. These decisions come after three meetings of the G20 (and close to $500 m spent on organizing them).
Noticeably absent were any substantive agreements on the link between economic recovery and the economic response to climate change. Each of the Presidents and Prime Ministers present had lauded “green jobs” as the cornerstone of sustainable recovery as well as the focused response to climate change. Yet the communiqués from the G20 said nothing, despite the fact that the world leaders are working to negotiate a treaty to replace the Kyoto Accord, which expires in 2012.

The fact that climate change and the economy were not a substantive focus for this meeting is significant. It indicates what many have been saying for some time, namely that progress towards a global climate change treaty is stalled and that the US Government is backing off – lowering expectations for the Copenhagen meeting of over one hundred governments in December. In the US, given the furor over health care reform, climate change legislation is now very much on the back burner.

If this is the level of G20 decision making, then we have little to fear from the emergence of the G20 as a new mechanism of global governance. Just as the United Nations demonstrates its impotence on a daily basis, the G20 now does so quarterly. All of the issues they “decided” in Pittsburgh were also decided in principle at each of the past three meetings. This is the one “green” thing they are doing – recycling old press releases, reusing old rhetoric and reducing their significance. I bet you can’t wait for the next meeting in Huntsville, Canada in 2010.

Lost in Translation

Gerard Hoffnung was a raconteur and wit on the BBC in the 1950’s. His speech to the Oxford Union, available on iTunes, is a classic piece of period of humour – a must listen to recording. Amongst the gems on that CD is a selection of letters received after inquiring about hotel accommodation in the Dolomites, contributed by readers to The Spectator. Wonderful comic material – “we are poor in bath, but good in bed” or a brochure which said “Standing among savage scenery, the hotel offers stupendous revelations. There is a French widow in every bedroom, affording delightful prospects”. Another refers to the manager on the telephone saying “I can offer you a commodious chamber with a balcony imminent to the romantic gorge, and I hope you will want to drop in”. But my own favourite from The Spectator collection, as recited by Hoffnung, is the motto posted at one hotel which simply said “Our motto is 'Ever Serve You Right'”.

The good news is that the tradition of mangling English persists in restaurants, hotels and public places, as a recent tour of France confirms. A sign in a hotel in Nice made clear that “Being dressed well is compulsory in the dining room” – French fashion week is obviously a constant. In another hotel, this time in Monte-Carlo, offered different room rates for different times of the year, with extra charges for “manifestations”. I had two, one with tonic. It in fact refers to public holidays. Outside a small hotel in Menton was a clear and illuminated sign, “Parking in the Back Side”, which I am not sure was all that feasible, unless you were driving a small car.

In Paris, at the Hotel des Academies, there was a simple sign saying “please leave your values at the front desk”, suggesting that this was the place that many European politicians stayed at. A dress shop on the Montparnasse had a sign that enticed some, but not many, to enter: “dresses for street walking”. I am still trying to understand the sign in our rented apartment in the Luberon: “please avoid coca watering, cream cleaning, wet towels wrapping, and ironing drying” – but we complied to the best of our ability. In the Super-U supermarket in a small French town where many English tourists spend time, we spotted a sign that said “For your convenience, we recommend courageous, efficient self-service” and they were not kidding. This supermarket has given rights to people with disabilities to go directly to the front of any line-up and all French people we met appeared to have one or more disability, or at least felt they had. In a laundry in Gordes there is a sign that says (in French) “Ladies, leave your clothes here and spend the afternoon having a good time”. Its nice to see that old French traditions die hard.

Menu translations are also a source of great entertainment. Once in a restaurant, the waiter explained that one dish was of pigeon, another or rabbit and a third of rat (meaning ratatouille). In a Chineese restaurant we saw the main items as “sheep leg, cowboy leg and local steaks” – the cowboy leg came with sides (also known as chaps). The same eatery had a menu item that simply said “juice of steams the fish mouth”, which we couldn’t be talked into.

In a street-side café the menu included a special cocktail for “Ladies with nuts”, which I feel sure was warranted. The same café also made clear that the water was safe to drink – “the manager has personally passed all the water here”.

A friend suggested to me that there should be an international centre for translation where any organization can send their menu, street sign or draft brochure and have it translated into a version of English that more of us could understand. I disagree. In a hot day after a long walk and many museums, such translations lift the spirit and encourage recuperative laughter, and I am all for that. That’s why I am still laughing at the sign in the taxi we took which said “We take your bags and send them in all directions” – a skill they probably learned in an Air Canada workshop.

The New German Politics

Angela Merkel, Germany’s Chancellor, won more than a second term today in a general election – she also defeated her left-leaning former coalition partners, the Social Democrats, and helped the more conservative and pro-business Free Democrats. Merkel and the Free Democrats will now form a Centre-Right coalition for the next four years. The Social Democrats experienced their worst political defeat in sixty years. Merkel continues, but there is a real and radical change of government.

The new coalition can begin to scale down the stimulus spending demanded by the Social Democrats, the scale of which Merkel did not fully approve, and begin to refocus and redefine the role of Government in German society. A period of spending cuts and a reinvention of Government can be expected.

In her first election, Merkel talked of “radical economic reform”, but compromised so as to secure the Chancellorship and some stability in the coalition. But now she has more freedom of action with like-minded partners. She is a pragmatist, but she is also a fiscal conservative. She also wants to strengthen the position of Germany in the EU.

At the top of her agenda is the economy. Germany has experienced high unemployment and an exodus of manufacturing jobs to other countries, notably in Asia. Also key to her strategy is the greening of Germany’s economy, something already well under way. This is important for Merkel, who is a conservative environmentalist, not just because “green jobs” may help grow the economy but also because the Green Party improved their standing during the election.

Her second priority is the war in Afghanistan and the withdrawal of German troops. It is most unpopular war and the strategy she wishes to pursue mirrors that of Canada – shifting the mission to one of development and social support and away from military action. She is also concerned about the widespread corruption within the Afghan government and the absence of the rule of law. Germany has over 4,500 troops in Afghanistan and, during the election, there were hints of a pull out by 2013. Merkel and Gordon Brown have called for a rethink of the Afghan mission – something American President, Barrak Obama, is now having to consider.

Merkel’s election is bad news for Gordon Brown. It shows a major European ally dissatisfied with left leaning political and economic strategies and more interested in economic and fiscal responsibility, smaller government and a smaller role for the State in daily life – precisely the strategy the British conservative party is pursuing in the run up to the election in Britain.

Projecting the image of a global leader, Merkel has overcome an image of a pragmatist and policy “wonk” to be a quiet, but confident leader of the German people. She appeared surprised at the scale of her success in the election, having stumbled a little in the last few days before polling. Her victory signals a period of stability in German politics, as the left will now spend time diagnosing its failure and reorganizing for the future, possibly with a new leadership team. Merkel will savor her victory.