Greed-driven pandemic still killing millions

Jomo Kwame Sundaram and Nazihah Noor

KUALA LUMPUR: Failure to vaccinate most in poor countries sustains the COVID-19 pandemic. Rich country greed and patent monopolies block developing countries from affordably making the means to protect themselves.

Mutant menace

The SARS-CoV-2 virus has been mutating as it replicates. Numerous replications in hundreds of millions of hosts have generated many variants. Some mutations are more resilient than others, and better able to overcome human defences.

Early data suggest the B.1.1.529 Omicron variant is more transmissible than others, including Delta, and possibly more resistant to existing treatments and vaccines. Health authorities the world over are concerned WHO’s latest ‘variant of concern’ may trigger a new wave of preventable infections and deaths.

South Africans first scientifically identified the new variant, alerting global health authorities immediately. Instead of appreciating its prompt actions, southern African nations are being punished with travel restrictions.

In fact, Dutch health authorities acknowledge the new Omicron variant was already in western Europe before the first South African cases. Punitive responses – e.g., travel bans – may deter other governments from rapid action and notification, so essential for effective international cooperation.

Promises, promises

With huge inequalities in vaccinations – especially between high-income countries (HICs) and low-income countries (LICs) – the virus has been enabled to continue replicating, mutating, infecting and killing, especially those least protected.

Richer countries have taken more than half the first 7.5 billion vaccine doses. Rich countries have bought many – up to five – times their populations’ needs. Ten HICs will have more than 870 million excess doses by year’s end.

While some HICs have been shamed into pledging vaccine doses to LICs and lower middle-income countries (MICs), delivery has fallen well short of their modest promises. By late October, only about a tenth of the over 1.3 billion vaccine doses pledged had been delivered.

Most rich countries have ignored WHO appeals to suspend boosters until the rest of the world is vaccinated. Ex-UK premier Gordon Brown notes that for every vaccine reaching LICs, there are six times as many boosters in rich nations.

US President Biden’s September summit set an end-2021 target of 40% vaccination of the world’s 92 poorest countries, but at least 82 are unlikely to meet this target.

As Brown observed, although the US accounts for half the vaccines donated, it has only delivered a quarter of its pledge. Most other rich countries have delivered less than a fifth. Only China and New Zealand have given over half of what they promised.

Apartheid victims

With vaccines being hoarded by HICs, less than 3% of LIC populations are fully vaccinated. By late November, only 5.8% in LICs had at least one vaccine dose, compared to 54% of the world.

Most LICs do not even book via COVAX – the global programme to distribute vaccines – as they cannot afford to pay for them. Also, the programme has never secured enough vaccine doses since its inception.

COVAX was supposed to provide two billion doses by end-2021, but under 576 million were actually delivered by November. Also, the WHO appeal to G20 countries to give COVAX priority has gone largely unheeded.

With LICs unable to vaccinate their populations, the pandemic will go on for years. WHO now expects around 200 million more infections in the year from 21 October, with total deaths expected to double from the five million to date! Unsurprisingly, vaccine apartheid’s worst victims are in the LICs.

Profits block progress

The World Trade Organization (WTO) ministerial meetings – scheduled to start on 30 November – were expected to decide on the waiver proposal. With no resolution likely, the meeting has been postponed indefinitely, ostensibly due to Omicron.

First proposed in October 2020, it is now supported by well over a hundred of WTO’s 164 member states. The elaborated waiver proposal, co-sponsored by 63 countries, would allow others to more affordably make the means to fight the pandemic, without fear of intellectual property (IP) litigation.

But over 14 months later, the proposal remains blocked. Most European countries continue to oppose the waiver request to temporarily suspend IP rights protecting corporate monopolies on COVID-19 medical technologies and products for the pandemic’s duration.

As the pandemic increasingly infects and kills in poor countries, the public is being misled about the waiver proposal. It is dishonestly claimed that new vaccines cannot be developed without patent protection. Worse, all developing countries are falsely said to lack technical expertise to make vaccines.

Profits against people

LICs have received than one percent of all Pfizer-BioNTech vaccines and 0.2 percent of Moderna’s. Instead, the three have prioritized their most profitable contracts with rich governments, while paying lip service to poor countries.

Pfizer expects to sell three billion doses by year’s end, and four billion more in 2022. With COVID-19 now endemic, Pfizer CEO Alberto Bourla expects to sell boosters for years to come, while Moderna recently announced an Omicron-specific booster.

Using the firms’ own earnings reports, the People’s Vaccine Alliance (PVA) estimates mRNA vaccine manufacturers – Pfizer, BioNTech and Moderna – will make pre-tax profits of US$34 billion this year.

Maximizing profits by blocking the waiver is effectively prolonging the pandemic. Instead of vaccinating those who have not yet had their first shot, they make much more by selling booster vaccinations to HICs.

Despite getting over US$8 billion in public funding, the three have refused to transfer vaccine technology to developing countries. Instead, Pfizer’s Bourla has dismissed technology transfer to developing countries as “dangerous nonsense”.

Profitable catastrophe

The main barrier to vaccinating the world is profits. Clearly, the Omicron danger is due to the world’s failure to vaccinate billions of vulnerable people in developing countries. This catastrophe has been worsened by ongoing European opposition to their effort to suspend IP monopolies.

The 12 billion vaccines made in 2021 could have vaccinated the entire world, but clearly did not. Omicron is plainly due to corporations’ ability to profiteer from the pandemic, refuse to share knowledge and know-how, and bully governments into unfair contracts.

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Climate change: Adapt for the future, not the past

Anis Chowdhury and Jomo Kwame Sundaram

SYDNEY and KUALA LUMPUR: Funding for developing countries to address global warming is grossly inadequate. Very little finance is for adaptation to climate change, the urgent need of countries most adversely affected. Also, adaptation needs to be forward-looking rather than only addressing accumulated problems.

Suicide pact?

Climate change poses an existential threat, especially to poor countries with little means to adapt. Rich countries’ failure to deliver promised financial support has only made things worse. COVID-19 has dealt another knock-out blow, worsened by rich countries’ “health apartheid”.

The COP26 deal was undoubtedly a “historically shameful dereliction of duty” and “nowhere near enough to avoid climate disaster”. Glasgow’s failure shows up lack of real progress and inadequate policy responses. Worse, no significant new resources came with the “Glasgow Suicide Pact”.

The United Nations Conference on Trade and Development (UNCTAD)’s Trade and Development Report 2021 laments rich countries’ unwillingness to address grave challenges facing developing countries. After all, Agenda 2030 for Sustainable Development was in trouble even before COVID-19.

Climate policy responses involve both mitigation and adaptation. Mitigation seeks to reduce greenhouse gas (GHG) emissions through more efficient energy use, and by using renewable energy instead of fossil fuels. Adaptation involves strengthening resilience and protection to minimize adverse effects on human lives.

National adaptation needs get far less international funding than mitigation for the world. Thus, poor countries struggle alone addressing global warming mainly caused by others. Adaptation challenges are also wide-ranging, due to varying country vulnerabilities.

Risky approach to risk

Governments have been advised to reduce vulnerability to shocks by improving data and risk assessment. Most measures to strengthen resilience use conventional financial risk management methods. These seek to better protect existing assets, and to provide temporary financial support when shocks happen.

Climate adaptation is thus addressed via disaster risk assessment, early warning systems, improved ecosystem management and better social safety nets. But the approach hardly distinguishes climate change from other risks.

Relying on past experience, the conventional approach is hardly forward-looking in addressing new challenges. Recommended measures tend to deploy scarce resources to address past and current effects of climate change.

Focussing on current vulnerabilities enables adapting to extant climate threats. This may provide some temporary resilience and relief. But it does not prepare for new threats. Thus, the approach ignores future problems, not providing much protection from or reducing vulnerability to emerging threats.

Counting on pricing and other market techniques for climate adaptation risk assessment is also limiting. The approach tends to focus on what is predictable and incremental, rather than on what is more uncertain and systemic.

With its roots in financial risk management, the approach favours returning to some assumed norms of normality and stability. It thus rejects considering new possibilities, including a more dynamic approach to sustainable transformation.

Furthermore, returning to ‘normal’ for many communities implies exploitation and precarity. Preservation and coping are also favoured by the approach. Typically, these are hardly enough to address the complex challenges faced. Worse, they may inadvertently cause maladaptation.

Avoid maladaptation

A transformative approach to climate risk is needed instead. The only lasting solution may be to reduce developing countries’ reliance on climate sensitive activities, such as cattle breeding, through far reaching changes to create more resilient economies.

This requires moving away from de-risking in favour of a more integrated and systemic approach to diversify economies for greater resilience. More diversified economies are more supportive of sustainable development, and much less vulnerable or likely to be disrupted by external shocks.

In recent years, this has been clear from the greater vulnerability of primary export-dependent economies to economic shocks originating elsewhere. But it is also true of climate shocks. Thus, climate adaptation requires a new vision of common goals, instead of merely avoiding risks and worst-case scenarios.

Diversification crucial

Thus, climate adaptation in the global South needs to be addressed through development. Moving from de-risking to diversification requires a developmental state committed to ‘green’ industrial policy – involving investment and technology – to do so.

Diversification involves two cumulative processes working in tandem. First, shifting from primary production to manufacturing and higher value services. Second, moving resources from less to more capital-intensive activities.

Developing countries have to pursue sustainable development, keeping emissions and resource consumption within ecological limits. This requires economic diversification, raising productivity and improving social conditions.

Such new transformation strategies must recognize ecological and climate constraints. Developing country policymakers have limited means to address such challenges. With uneven ‘neo-liberal’ globalization, they are also handicapped by institutional weaknesses, e.g., even in mobilizing domestic resources.

Multilateralism key

Some rich countries – e.g., the UK and Australia – have cut their aid budgets and not deployed their unused Special Drawing Rights to help developing countries. They have done little to encourage private creditors to enable developing countries to invest to develop out of the multiple crises they face.

Thus far, measures for debt relief are very modest and grossly inadequate, “kicking the can down the road”. Deferring debt simply means borrowings are due to be paid later, as compound interest accumulates. Meanwhile, debt burdens continue to grow.

The UNCTAD report warns that measly climate funding is accelerating global warming, undermining prospects for decarbonizing the world. It highlights the need for pro-active multilateralism and support for developing countries to address the climate and pandemic induced crises.

“Global challenges clearly require multilateral responses”. But so far, only the IMF has provided some real relief by cancelling debt service obligations for 28 countries – worth US$727 million – between April 2020 and October 2021.

The end of the first Cold War undermined the felt need for UN-led multilateralism. If US President Biden really seeks to emulate President Roosevelt, he can begin by reviving the UN-led multilateralism FDR envisaged, instead of recklessly pursuing the new Cold War favoured by neo-conservatives in his team.

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Profiting from the carbon offset distraction

Anis Chowdhury and Jomo Kwame Sundaram

SYDNEY and KUALA LUMPUR: Carbon offset markets allow the rich to emit as financial intermediaries profit. By fostering the fiction that others can be paid to cut greenhouse gases (GHGs) instead, it undermines efforts to do so.

Committing to achieve ‘net-zero’ carbon emissions has become a major climate change policy goal. But most climate scientists agree the target is dangerously misleading. Ostensibly promoting decarbonization, it actually allows carbon emissions to continue rising.

Breakthrough?

On 28 January 2021, two High-Level Climate Action Champions, the COP25 and COP26 Presidents, and the United Nations Framework Convention on Climate Change (UNFCCC) Executive Secretary launched the Davos’ World Economic Forum’s ‘Race to Zero Breakthroughs’ initiative.

More than 130 countries pledged in Glasgow to reach net-zero carbon emissions by 2050. Despite well-known setbacks, the COP26 Glasgow Climate Pact has been hailed as a breakthrough on the “path to a safer future”.

Before COP26, many cities, regions, businesses, investors and higher education institutions joined the 120 countries already committed then. Achieving net-zero via offset trading has thus become the main climate action distraction.

Following difficult, protracted negotiations after the 2015 Paris Agreement (PA), Article 6 was the last of its 29 Articles agreed to. Article 6 unifies carbon offset trading standards in order to minimize ‘double counting’.

Offsetting allows countries and companies to continue emitting GHGs instead of cutting them. Buying offsets lets them claim their emissions have been ‘cancelled’. Thus, offset markets have slowed climate action in the rich North, responsible for two-thirds of cumulative emissions.

Cheap cheats

Clearly, Article 6 does not stop emissions of carbon dioxide (CO2) and other GHGs. The Kyoto Protocol’s Clean Development Mechanism (CDM) also enables not cutting GHG production by paying others to do so. Thus, offset markets enable the wealthy to avoid cutting GHG discharges at little cost.

But why pay for emission cuts which would have happened anyway, even without being paid for via offset sales? At best, net-zero is a zero-sum game maintaining atmospheric GHG levels. But progress requires CO2 reduction, i.e., being net-negative, not just net-zero.

Many carbon credits sold as offsets do not additionally remove carbon as claimed. For example, J.P. Morgan, Disney and BlackRock have all paid millions to protect forests not even under threat. A CEO agreed its offset – buying into a Tanzania forestry programme – “is cheating”.

The Economist sees carbon offsets as “cheap cheats”. By ramping up the supply of offsets, prices were kept low. Much scope to game the system remains. Energy-intensive companies collude and lobby against high carbon prices, insisting they damage competitiveness.

Often buying in bulk, they pay too little for carbon credits to incentivize switching to renewable energy. Averaging only US$3 per tonne of CO2 in 2018 cannot accelerate desirable energy transitions.

Less than 5% of all offsets actually reduce CO2 in the atmosphere. A 2016 European Commission study of CDM offset projects found 85% provided no environmental benefits.

Making money instead

The Glasgow Financial Alliance for Net Zero (GFANZ) – a US$130 trillion investor club of over 450 financial firms in 45 countries – was launched at COP26 in Glasgow. It is chaired by former Bank of England Governor Mark Carney, now UN Special Envoy for Climate Action and Finance.

The GFANZ claims to be leveraging the power of big finance to innovatively achieve the PA goal of keeping the temperature rise over pre-industrial levels under 1.5 degrees Celsius.

Advocates claim this will unlock trillions of dollars to protect forests, increase renewable energy generation and otherwise mitigate global warming. But GFANZ does not even seek to cut finance for GHG-intensive industries.

GFANZ members pay ‘experts’, non-governmental organizations (NGOs) and governments to achieve net-zero ‘pathways’. Offset markets have enabled environmental NGOs to make money from supposed climate mitigating projects or by certifying other schemes.

Meanwhile, big businesses burnish their green credentials with offset purchases. After all, there are no agreed metrics to ensure portfolio alignment with the PA. Unsurprisingly, the Marshall Islands’ climate envoy urges remaining “vigilant against greenwashing”.

Touting market solutions, the World Bank has noted a recent surge in demand from major financial investors, including Goldman Sachs, Morgan Stanley and Lansdowne Partners. But much goes to profits from arbitrage, speculation or trading for third parties – not decarbonization or net-zero.

Even Larry Fink – CEO of Blackrock, the world’s largest asset manager – is sceptical, “We are lying to ourselves if we think we can do it just by conveniently asking banks and financial service companies, public companies, to conform to TCFD reporting. We are creating the biggest capital arbitrage of our lifetimes.”

Selling the sky

Offset markets have meant new opportunities to create new tradable assets. By aggregating all GHG emissions – from fossil fuels, deforestation, landfills, agriculture, etc. – profitable new financial products have been engineered for emissions trading and carbon credits.

The implicit premise is that market-based approaches always work best to address problems, in this case, to reduce GHG emissions. They do not distinguish between ‘luxury emissions’ and those due to the poor’s livelihoods.

Meanwhile, the world’s wealthiest 1% produces twice the total carbon emissions of the poorest 50%! Worse, emissions from private jets, mega-yachts and space travel of the super-rich greatly exacerbate global warming.

As with CDM and voluntary offset markets, the burden of emissions reduction has been shifted from North to South. While rich countries continue emitting GHGs, developing countries are now expected to ‘come clean’!

But no money for poor

At the GFANZ launch, Mark Carney claimed, “Make no mistake, the money is here, if the world wants to use it”. But developing countries are still waiting to see the promised US$100bn yearly to help finance their mitigation and adaptation efforts.

Following strong US opposition at the Article 6 negotiations, developing countries failed to secure ‘international transfers of mitigation outcomes’, i.e., mandatory contributions to the Adaptation Fund from the proceeds of international emissions trading among parties to the PA.

The US and European Union also successfully blocked a ‘loss and damage’ fund to finance recovery and reconstruction after climate disasters. Thus, Glasgow failed to deliver any significant additional climate finance for poor countries – for climate change adaptation as well as losses and damages.

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