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China’s economy to outgrow America’s by 2030 as world faces ‘tectonic shift’

National Intelligence Council also sees water and food shortages and suggests world is at a ‘critical juncture in human history’
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Chris McGreal, US correspondent

guardian.co.uk, Monday 10 December 2012 20.38 GMT

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The report said: ‘China alone will probably have the largest economy, surpassing that of the United States a few years before 2030.’ Photograph: Toshifumi Kitamura/AFP

A US intelligence portrait of the world in 2030 predicts that China will be the largest economic power, climate change will create instability by contributing to water and food shortages, and there will be a “tectonic shift” with the rise of a global middle class.

The National Intelligence Council’s Global Trends Report, published every five years, says the world is “at a critical juncture in human history”.

The report, which draws in the opinion of foreign experts, including meetings on the initial draft in nearly 20 countries, paints a future in which US power will greatly diminish but no other individual state rises to supplant it.

“There will not be any hegemonic power. Power will shift to networks and coalitions in a multi-polar world,” it says.

The report offers a series of potential scenarios for 2030. It says the best outcome would be one in which “China and the US collaborate on a range of issues, leading to broader global co-operation”. It says the worst is a world in which “the US draws inward and globalisation stalls.”

“A collapse or sudden retreat of US power probably would result in an extended period of global anarchy; no leading power would be likely to replace the United States as guarantor of the international order,” it says, working on the assumption that the US is a force for stability – a premise open to challenge in Iraq and elsewhere in the Middle East and beyond.

The NIC report draws a distinction between what it calls “megatrends” – things that are highly likely to occur – and “game-changers”, which are far less certain. Among the megatrends is growing prosperity across the globe. “The growth of the global middle class constitutes a tectonic shift: for the first time, a majority of the world’s population will not be impoverished, and the middle classes will be the most important social and economics sector in the vast majority of countries around the world,” the report says.

With prosperity spreading across the globe will come shifts in influence and power. “The diffusion of power among countries will have a dramatic impact by 2030. Asia will have surpassed North America and Europe combined in terms of global power, based upon GDP, population size, military spending, and technological investment. China alone will probably have the largest economy, surpassing that of the United States a few years before 2030,” the report says.

That change will mean that the economic fortunes of the US and European countries will have a diminishing impact on the global economy. “In a tectonic shift, the health of the global economy increasingly will be linked to how well the developing world does — more so than the traditional west. In addition to China, India, and Brazil, regional players such as Colombia, Indonesia, Nigeria, South Africa, and Turkey will become especially important to the global economy.

“Meanwhile, the economies of Europe, Japan, and Russia are likely to continue their slow relative declines.”

The report also says that “individual empowerment” will accelerate with the growth of the global middle class and reduction in poverty combined with new types of communications. The NIC warns that also has a downside.

“In a tectonic shift, individuals and small groups will have greater access to lethal and disruptive technologies (particularly precision-strike capabilities, cyber instruments, and bio terror weaponry), enabling them to perpetrate large-scale violence – a capability formerly the monopoly of states,” it says.

The megatrends also point to increased instability because of rising demand for water, food and energy compounded by climate change.

“Demand for food, water, and energy will grow by approximately 35, 40, and 50% respectively owing to an increase in the global population and the consumption patterns of an expanding middle class.

“Climate change will worsen the outlook for the availability of these critical resources. Analysis suggests that the severity of existing weather patterns will intensify, with wet areas getting wetter and dry and arid areas becoming more so. Much of the decline in precipitation will occur in the Middle East and northern Africa as well as western Central Asia, southern Europe, southern Africa, and the US south-west.”

The NIC says that a world of scarcities is not inevitable but “policymakers and their private sector partners will need to be proactive to avoid such a future”. It says any solution will require more able countries to help more vulnerable states.

Among the less predictable but possible “game changers” identified by the report are the collapse of the euro, a severe pandemic, or a nuclear attack by Pakistan or North Korea. It also says a democratic or collapsed China, or the emergence of a more liberal regime in Iran, could have a significant impact on global stability.

The report warns that a number of countries are at high risk of becoming failed states by 2030, including Afghanistan, Pakistan, Rwanda, Uganda and Burundi. The risk of civil wars and internal conflicts remains high in Africa and the Middle East, but is declining in Latin America.

The intelligence assessment will add to pressure on Barack Obama to address the Israeli-Palestinian conflict, because it backs the president’s view that the issue feeds instability in the Middle East alongside Iran’s alleged pursuit of nuclear weapons. But it says the Arab spring could prove a stabilising force.

“On the one hand, if the Islamic Republic maintains power in Iran and is able to develop nuclear weapons, the Middle East will face a highly unstable future. On the other hand, the emergence of moderate, democratic governments or a breakthrough agreement to resolve the Israeli-Palestinian conflict could have enormously positive consequences.”

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Pyne caught red-handed with the airbrush

Date December 10, 2012 – 1:15PM Category Opinion 424 reading now
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Lenore Taylor

National Affairs Correspondent for The Sydney Morning Herald

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Christopher Pyne … “I was simply making the point that the Coalition’s economic management is better than Labor’s.”

Christopher Pyne had his airbrush out yesterday – erasing the entire global financial crisis from Australia’s economic history.

“Well if there had been a Coalition government for the last five years … I think most people accept that we would have had continuing surpluses,” he told Sky television.

Actually most people do not accept that.

In 2009, a forecast $20 billion surplus became a $57 billion deficit in part because Labor spent more than $50 billion as stimulus in the face of an international economic meltdown and in part because company tax revenue collapsed due to the financial crisis.

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What Coalition leader Malcolm Turnbull said at the time was that we should have spent less on the stimulus – maybe $25 billion or $30 billion. The Coalition waved through the first $10.2 billion stimulus package but opposed the second $42 billion package on the basis that it was too big – and that spending of about $15 billion to $20 billion would have been more appropriate.

It’s pretty safe to assume that revenue would have collapsed just the same, no matter who was in the Lodge.

In retrospect, what Mr Turnbull said looks pretty smart (he also argued it was implausible to effectively and efficiently spend $16 billion on school halls in the timeframe proposed and that the pink batts scheme should be means-tested or require a co-contribution from the householders, which might have saved a whole lot of pain) But even if Australia had done exactly as the Coalition said we should do at the time, we’d still have come out of the crisis about $180 billion in debt, rather than $200 billion. And the nation would still have run very large budget deficits.

Mr Pyne has every right to question where the Gillard government intends to get the money to pay for its promises on a national disability insurance scheme and the Gonski education reforms, and it is possible that a Coalition government might have now been in a better fiscal position. But breezy statements that the Coalition would have “got through the global financial crisis quite easily” do not match the facts.

For the record, he told Fairfax Media we were were taking his statements “too literally . . . I was simply making the point that the Coalition’s economic management is better than Labor’s”.

Read more: http://www.smh.com.au/opinion/politics/pyne-caught-redhanded-with-the-airbrush-20121210-2b4rq.html#ixzz2EcZUkSCo

Doha climate change deal clears way for ‘damage aid’ to poor nations

EU, Australia and Norway also sign up to new carbon-cutting targets as fortnight-long conference in Qatar closes
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Fiona Harvey in Doha

The Observer, Saturday 8 December 2012 19.19 GMT

Delegates attend the last day of the UN climate talks in Doha, where poor nations secured a pledge of ‘damage aid’. Photograph: Karim Jaafar/AFP/Getty Images

Poor countries have won historic recognition of the plight they face from the ravages of climate change, wringing a pledge from rich nations that they will receive funds to repair the “loss and damage” incurred.

This is the first time developing countries have received such assurances, and the first time the phrase “loss and damage from climate change” has been enshrined in an international legal document.

Developing countries had been fighting hard for the concession at the fortnight-long UN climate change talks among 195 nations in Qatar, which finished after a marathon 36-hour final session.

Ronald Jumeau, negotiating for the Seychelles, scolded the US negotiator: “If we had had more ambition [on emissions cuts from rich countries], we would not have to ask for so much [money] for adaptation. If there had been more money for adaptation [to climate change], we would not be looking for money for loss and damage. What’s next? Loss of our islands?”

Ruth Davis, political adviser at Greenpeace, said: “This is a highly significant move – it will be the first time the size of the bill for failing to take on climate change will be part of the UN discussions. Countries need to understand the risks they are taking in not addressing climate change urgently.”

Ed Davey, the UK energy and climate secretary, said: “It’s about helping the most vulnerable countries, and looking at how they can be more resilient.”

But the pledges stopped well short of any admission of legal liability or the need to pay compensation on the part of the rich world.

The US had strongly opposed the initial “loss and damage” proposals, which would have set up a new international institution to collect and disperse funds to vulnerable countries. US negotiators also made certain that neither the word “compensation”, nor any other term connoting legal liability, was used, to avoid opening the floodgates to litigation – instead, the money will be judged as aid.

Key questions remain unanswered, including whether funds devoted to “loss and damage” will come from existing humanitarian aid and disaster relief budgets. The US is one of the world’s biggest donor of humanitarian aid and disaster relief, from both public and private sources. It will be difficult to disentangle damage inflicted by climate change from other natural disasters.

Another question is how the funds will be disbursed. Developing countries wanted a new institution, like a bank, but the US is set against that, preferring to use existing international institutions. These issues will have to be sorted out at next year’s climate conference, in Warsaw, where they will be bitterly contested.

Davis said: “This [text] is just the beginning of the process – you need to have a finalised mechanism. But it will concentrate minds on the fact that it is in the best interest of countries all over the world to start cutting their emissions quickly.” Governments also rescued the Kyoto protocol, the initial targets of which run out at the end of this year. The EU, Australia, Norway and a handful of other developed countries have agreed to take on new carbon-cutting targets under the treaty, running to 2020.

A separate strand of the negotiations, set up to accommodate the US because of its refusal to ratify Kyoto, was closed. This will allow unified discussions to begin on a global climate treaty that would require both developed and developing countries to cut their emissions. The treaty is supposed to be signed in 2015, at a conference in Paris, and come into effect in 2020.

The next three years of negotiations on the treaty will be the hardest in the 20-year history of climate change talks because the world has changed enormously since 1992, when the UN convention on climate change was signed, and 1997, when the Kyoto protocol enshrined a stark division between developed countries – which were required to cut emissions – and developing countries, which were not.

China was classed then as a developing country, and although it still has about 60 million people living in dire poverty, it is now the world’s biggest emitter and will soon overtake the US as the biggest economy. It has made clear its determination to hang on to its developing country status, and that the countries classed as developed in 1997 must continue to bear most of the burden for emissions cuts, and for providing funds to poor countries to help them cut emissions and cope with climate change.

Public health expert removed from water quality authority

Date December 10, 2012 28 reading now
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Sean Nicholls

Sydney Morning Herald State Political Editor

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Illustration: David Rowe

THE agency set up in response to the city’s worst drinking water crisis, the Sydney Catchment Authority, has been left without a public health expert on its board for the first time in its history, prompting concerns about the oversight of its operations.

The decision, part of a complete overhaul of the authority board, has been defended by the state government, despite its own legislation stipulating the need for the board to have public health credentials.

The catchment authority was established following the 1998 crisis during which Sydneysiders were forced to boil their drinking water after it was found to be infected by the pathogens crytosporidium and giardia.

Since its inception, its board has included an expert in public health.

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The first was Dr Kerry Chant, who is now the NSW Chief Health Officer. Dr Chant was succeeded by Dr Stephen Corbett, the director of the Centre for Population Health with the Sydney West Area Health Service.

But the Primary Industries Minister, Katrina Hodgkinson, has replaced the entire board without making an equivalent appointment.

The legislation that governs the authority stipulates board members must, individually or collectively, have ”qualifications and experience relevant to water quality and public health”.

Ms Hodgkinson said the new board was chosen ”on the basis of their collective depth of experience across a range of measures including water quality and public health, catchment management and protection, and water supply planning and asset management”.

The authority itself had ”extensive technical skills and expertise” to manage risks to water quality or public health, she said.

But a senior lecturer at the University of NSW and a member of the water quality advisory committee to the National Health and Medical Research Council, Dr Stuart Khan, said the presence of a public health expert was crucial.

”Managing water quality to protect public health is the core mission of the Sydney Catchment Authority,” Dr Khan said.

”It’s essential that appropriate expertise exists at the highest levels to ensure that this remains fundamental to the culture and focus of the organisation.”

There are also concerns about the appointment of a former treasurer of the federal Liberal Party, Mark Bethwaite, to the board.

Mr Bethwaite, who is set to become chairman, is a former director of two of Australia’s largest mining companies, North Limited and Renison Goldfields, but is also on the board of the Foundation for National Parks and Wildlife.

The appointment has raised fears about the authority’s future position on mining activity in the catchment.

A company not associated with Mr Bethwaite, Apex Energy, has plans to drill for coal seam gas in parts of the catchment area.

”One of the key challenges facing the new board will be the management of water-quality risks associated with coal seam gas drilling in Sydney’s water catchment,” the chief executive of the Nature Conservation Council of NSW, Pepe Clarke, said.

The opposition environment spokesman, Luke Foley, said 4.5 million people relied on water supplied by the Sydney Catchment Authority.

”The appointment to the board of a former Liberal Party official with an extensive background in the mining industry, while leaving it without a public health expert, is an abandonment of the obligation to protect public health,” he said.

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Read more: http://www.smh.com.au/national/health/public-health-expert-removed-from-water-quality-authority-20121209-2b3e7.html#ixzz2EbKV0FbT

Punt on pokies proves a big winner for Woolworths

Date December 10, 2012 31 reading now
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Colin Kruger

Business Reporter

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BETTER known for selling bread and milk, supermarket operator Woolworths is rapidly emerging as one of the world’s biggest poker machine operators.

With 11,700 machines in operation across Australia Woolworths pubs and gambling venture, ALH, runs more poker machines than six of the largest casinos in Las Vegas combined.

And what it earns from its gaming arm has changed significantly in recent months.

According to one industry estimate, Woolworths is now on track to earn more than $200 million a year from gaming.

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This means its gambling earnings will nearly match that of Australia’s fourth largest listed gaming operator, the Tabcorp spin-off Echo Entertainment.

The earnings boost has been triggered by changes to Victoria’s poker machine licence system in August, which smashed the monopoly of gambling giants Tabcorp and Tatts.

What was not known at the time is that the largest single beneficiary is Woolworths.

Woolworths’ ALH arm now operates more than one-third of the poker machines in Victoria’s pubs – 4677 machines – which is about the maximum allowed under current licensing arrangements.

Last month Woolworths shareholders rejected a proposal by GetUp! and poker machine reformers for a $1 bet limit across the company. A 2010 Productivity Commission report on problem gambling suggested $1 bets as a way to help reduce problem gambling.

According to the investment bank Citi, Woolworths’ pubs and gaming group ALH generated $140 million in earnings before interest and tax last year. The new licence model in Victoria means it will generate an additional $72 million in annual earnings.

”Profitability … should increase dramatically as per the new arrangements,” a Citi analyst, Craig Woolford, said. ”Although tax rates are increasing, the biggest benefit goes to ALH [Woolworths].”

The big change is that the $2.6 billion spent annually on 27,500-odd poker machines in Victorian pubs and clubs will no longer be split between three parties.

Tatts and Tabcorp have been removed from the equation and the spoils are now split between the state government and the pubs and clubs which act as owner-operators of the machines on their premises.

Woolworths has committed to spending more than $164.3 million on poker machine entitlements and a further $26.2 million on new machines. Indeed, Woolworths now operates 16 per cent of the poker machines in Victoria when the 2500 operated by Crown Casino are included in the statewide figures.

”The $164.3 million amount is in effect paying for the [gaming machines] that we already have,” a Woolworths spokesperson said.

”The transition means that we now have to buy machines and maintain them.”

The Baillieu government expects to receive $1.12 billion from taxes on poker machines this financial year, but it faces more than $1 billion in legal claims from Tatts and Tabcorp over the decision not to compensate them for the loss of their licences.

Read more: http://www.smh.com.au/business/punt-on-pokies-proves-a-big-winner-for-woolworths-20121209-2b3mu.html#ixzz2EbJbpGtJ

Climate change conforming to UN predictions: scientists

ABCUpdated December 10, 2012, 9:36 am

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A new report has confirmed the world is warming at a rate consistent with a 22-year-old prediction from the United Nations’ science body.

In 1990, the Intergovernmental Panel on Climate Change (IPCC) forecast the rate at which temperatures would rise over a 40-year period.

A report published today in the journal Nature says that at the halfway mark, the rate of warming is consistent with the original predictions.

Professor Matt England from the University of New South Wales says the findings send a message to doubters.

“Anybody out there lying that the IPCC projects are overstatements or that the observations haven’t kept pace with the projections is completely off line with this … the analysis is very clear that the IPCC projections are coming true,” he said.

“We’ve sat back and watched the two decades unfold and warming has progressed at a rate consistent with those projections.”

Recent climate change reports have shown global emissions are increasing by 3 per cent per year, with emissions now sitting at 58 per cent above 1990 levels.

Professor England says the IPCC has prepared forecasts for low levels of emissions right through to the high end.

“At the moment we are tracking at the high end in terms of our emissions and so all of the projections that we look to at the moment are those high-end forecasts,” he said.

“Without any action on greenhouse gas emissions, it will be those high-end IPCC scenarios that are extremely costly to society in terms of extreme events bearing out in time.”

Doha talks

The finding has been released in the wake of the latest climate talks in Doha, Qatar, which some critics say achieved little.

At the marathon talks, which had to be extended due to lack of consensus, almost 200 nations, including Australia, agreed to extend the Kyoto protocol till 2020.

But the world’s worst emitters, such as the US and China, are not part of that agreement.

Green groups say the Doha talks delivered a weakened Kyoto Protocol and no new money for helping poorer nations achieve cuts in emissions.

But Climate Change Minister Greg Combet says the talks were a stepping stone towards striking a deal by 2015 that will include biggest polluters.

“The science is telling us very clearly that we need a wider international agreement including all the major emitters, including the US and China, they’re the biggest polluters in the world,” he said.

“At this conference we’ve taken further steps towards having those countries included in a wider agreement.
“The Kyoto protocol is just a stepping stone on that path.”