UN climate change draft sees risks of irreversible damage

Risk of “serious, pervasive and irreversible impacts”; governments, scientists to meet in Copenhagen on UN report; still time to limit warming, says IPCC draft

Climate change may have “serious, pervasive and irreversible” impacts on human society and nature, according to a draft U.N. report due for approval this week that says governments still have time to avert the worst.

Delegates from more than 100 governments and top scientists meet in Copenhagen between October 27, 2014 and October 31, 2014 to edit the report, meant as the main guide for nations working on a U.N. deal to fight climate change at a summit in Paris in late 2015.

They will publish the study on November 2.

European Union leaders on Friday agreed to cut emissions by 40 per cent below 1990 levels by 2030, in a shift from fossil fuels towards renewable energies, and urged other major emitters led by China and the United States to follow.

“The report will be a guide for us,” Peruvian Environment Minister Manuel Pulgar-Vidal, who will host a U.N. meeting of environment ministers in Lima in late 2014 to lay the groundwork for the Paris summit, told Reuters.

He said the synthesis report by the Intergovernmental Panel on Climate Change (IPCC), drawing on three mammoth scientific reports published since September 2013, would show the need for urgent and ambitious action in coming years.

Many governments want the 32-page draft to be more clearly and punchily written in warnings of more powerful storms, heat waves, floods and rising seas. The United States said some tables “may be impenetrable to the policymaker or public”.

In a paragraph summing up the risks, the draft says that a continued rise in world greenhouse gas emissions is “increasing the likelihood of severe, pervasive and irreversible impacts for people and ecosystems”.

It adds that “a combination of adaptation and substantial, sustained reductions in greenhouse gas emissions can limit climate change risks”.

ALL AFFECTED

Among more than 2,000 comments on the text by governments, the European Union said the IPCC should add that “all regions are affected, regardless of wealth”.

The United States called for clarification of the meaning of “irreversible”. Jonathan Lynn, spokesman of the IPCC, said that the meeting would take account of all comments.

Past reports have warned that warming could, for instance, trigger impacts irreversible on human time scales such as a runaway meltdown of Greenland’s ice that would raise sea levels and swamp coasts from Florida to Bangladesh.

Two artists were to unveil 100 tonnes of ice on Sunday in 12 massive blocks brought from near Nuuk, Greenland, outside Copenhagen’s City Hall to remind delegates of the risks.

“We can save the ice by burning less coal, conserving electricity, and driving better cars,” Danish Climate Minister Morten Helveg Petersen said of the Ice Watch exhibit.

The IPCC says that it is at least 95 per cent certain that human activities, led by the burning of fossil fuels, are the main cause of climate change since 1950, up from 90 per cent in the previous assessment in 2007 and 66 per cent in 2002.

Opinion polls indicate many people, especially in the United States, are unconvinced and suspect that natural variations in climate are to blame. That gap between public and scientific opinion is a big complication for work on the Paris accord.

India off Fragile Five list, says IMF

‘If government undertakes structural reforms it can achieve 7-8 per cent growth’

The International Monetary Fund’s (IMF) India Mission Chief has said that among emerging markets and BRICS countries, India stands out for accomplishing the sharpest turnaround in its macro economy since the U.S. Federal Reserve started reversing its zero-interest rates monetary policy. As a result, of all these economies, India is best prepared to deal with the Fed’s monetary policy actions.

Earlier this month, the IMF raised its 2014 India growth forecast to 5.6 per cent as against its 5.4 per cent April projection while cutting its world Gross Domestic Product (GDP) growth projection to 3.3 per cent. If the new government follows through with structural reforms India can see a growth of 7 per cent to 8 per cent, IMF India Mission Chief Paul A. Cashin told The Hindu.

“India is the odd man out from the emerging markets and BRICS economies that were being called the Fragile Five last year… But the story for India changed quickly… India is better prepared for shocks today than when the U.S. Fed’s tapering started and more prepared than other emerging markets,” Mr. Cashin said.

The Fed’s initiation of the tapering of its monetary policy triggered sharp volatility in the rupee and a spike in the current account deficit. The CAD is down from the level of 4.7 per cent of the GDP to 1.7 per cent of GDP. “Three percentage points down is a lot... in the IMF’s history there are very few cases of that,” Mr. Cashin said. Substantial dollar inflows have led to India’s foreign exchange reserves rising from $270 billion in August to $315 billion.

The only red flags that Mr. Cashin raised were on retail food inflation and structural reforms in the infrastructure, labour and energy sectors. “Retail food inflation in India has been growing at a 10 per cent plus rate … Few countries have had such problems for such long periods of time,” he said.

Walking is a super pill, says survey

“Walking is super pill,” according to the findings of a recently released survey which was conducted among doctors who are treating the four most rampant chronic diseases in the present times -- obesity, cardiovascular, asthma, joint and backache.

“If sitting is the new smoking of the current generation then walking is the super pill prescribed by doctors across categories. But the survey found that the patients are not always following the right dosage of the pill for the desired effects,” noted the findings of the Max Bupa survey.

‘The Max Bupa Walk for Health Survey 2014’, the first of its kind conducted among doctors noted that the aim of the project was also to decode the benefit of walking for patients suffering from various ailments. For the study, general physicians, specialists in respiratory diseases, orthopaedics and cardiologists were interviewed along with 1,000 patients in Delhi and Mumbai.

The study noted that walking is the most prescribed exercise for obese patients (84 per cent), followed by diabetics (76 per cent) and patients suffering from blood pressure (72 per cent), cholesterol (65 per cent) and cardiovascular diseases (56 per cent).

Right pricing petrol & diesel

companies should price their products according to their own cost structures

Fuel pricing has been the bugbear of many a government in India. Though de-licensing of oil refining and marketing, and decontrol of products such as naphtha, fuel oil, lubricants and aviation turbine fuel were one of the first accomplishments of the reform process in the early 1990s, freeing the pricing for transportation fuels — petrol and diesel — remained a challenge.

Last week’s decision by the Centre to deregulate diesel prices has to been seen in this context. For the first time since the short-lived experiment in 2002 when petrol and diesel prices were freed for a short period, oil companies will have the freedom to manage retail price of diesel on their own and adjust it at periodic intervals to reflect market levels. Petrol prices were deregulated in June 2010 but fortnightly revisions have been a reality only since January 2013.

Both petrol and diesel are politically sensitive commodities but unlike petrol, diesel price changes have a cascading effect across the economy on everything from bus and rail fares to vegetable and fruit prices. Governments have, therefore, been wary of freeing diesel pricing and the sustained rise in global oil prices from 2002 until the crisis in 2008 did not help matters. The Modi government has now grabbed the opportunity provided by a falling global oil price regime — prices of benchmark Brent have fallen from around $105 a barrel in April to about $86 a barrel now— to push through deregulation of diesel and it needs to be complimented for this. Yet, deregulation of diesel, noteworthy as it is, is only the first step in much-needed reform of the oil sector.

What we immediately need is some transparency and reform of the methods followed by the oil companies while setting fuel prices, whether petrol and diesel or cooking gas and kerosene. The concept of ‘under-recovery’ has to be jettisoned and competition between the different players — public and private — needs to be encouraged. That alone will allow proper price discovery for these economically sensitive fuels.

The concept of ‘under-recovery’ is unique to India. ‘Under-recoveries’ are nothing but the difference between the oil companies’ ‘desired’ price of a fuel, say diesel, and its prevailing retail price in the domestic market. This ‘desired’ price is calculated on trade-parity basis that takes into account the landed cost of imported fuel and the price at which it is exported by domestic refineries. Presently, the ratio is 80:20 in favour of landed cost. For instance, if the price of a litre of diesel as calculated on trade-parity basis is, say, Rs.70 a litre and the oil companies are selling diesel in the retail market at Rs.65 a litre, the ‘under-recovery’ will be Rs.5 a litre.

‘Under-recovery’ is not the same as a loss which happens when a producer is forced to sell his product below cost. Oil companies refine crude oil to produce diesel (and other products such as petrol, cooking gas and kerosene) in their own refineries in India. They have not been importing diesel or petrol for a decade now, thanks to a sharp increase in domestic refining capacity.

Given this, why should the landed cost of imports, which includes items such as freight, insurance, handling charges and, of course, customs duty, be considered for fixing domestic retail price? This is the unfair part about ‘under-recoveries’, a word that is often cleverly used interchangeably with losses. Let this be clear: ‘under-recovery’ is a notional concept and does not necessarily mean a loss. The only exception when it could include a loss is where global crude oil prices surge to abnormal levels and the retail price of fuels remains unchanged. There has not been such a situation in recent years.

But why do oil companies harp on ‘under-recoveries’ and demand that domestic price should be linked to that? Simply because the landed cost, which includes duties and other levies, offers them protection to cover up possible inefficiencies in their operations. This protection is unnecessary and unfair to domestic consumers and all it does is promote inefficiency. It is no secret that the public sector oil companies are saddled with high costs for reasons ranging from excess staff to duplication of facilities between them. By linking retail price to ‘under-recovery’ all that the government does is ensure that such inefficiencies are passed on to consumers. Again, global prices of crude oil and refined fuels such as petrol and diesel do not always move in tandem. The forces that drive their respective markets are different. For instance, the international market price of petrol and diesel can spike if there is a refinery outage somewhere in the world causing supply disruption. There have been instances in the past when refined fuel prices have surged due to a fire or a maintenance shutdown by a particular refinery. Crude oil prices are not affected by such factors. By taking into account landed cost of refined fuels rather than crude oil, the oil companies may be forcing consumers to pay a higher price when there is really no supply problem within the country.

Cost-plus pricing

The ideal way to go is for oil companies to price their products according to their own cost structures. Each company has a unique cost structure which is a factor of its refining efficiency. The final market price should be discovered on the basis of the cost of crude plus refining costs and the margin of the oil company.

This can happen only in a competitive environment where the oil companies compete with each other and against the three private players — Reliance Industries, Essar and Shell. As of now , the PSUs operate as a cartel when pricing their products, which is an anti-competition practice. Clearly, the next item on the agenda for the government should be to push the oil companies truly into the market era where fuel prices are linked to efficiencies and vary not just between the different players but between petrol stations of the same player based on which one is more efficient. That will be real reform.

Clean Yamuna, a possibility soon

Interceptor sewer project to be inaugurated on Monday

A big step towards cleaning the Yamuna in the Capital is being taken this week, with the Delhi Jal Board getting ready to launch the first package of the ambitious interceptor sewer project on Monday.

Trial runs on the first package of the 59-km-long interceptor started in September. “The trials have been a success, but it is a hugely challenging project as we are laying a 59 km trunk sewer in a populated city,” said DJB CEO Vijay Kumar on Saturday.

The first package, which will be inaugurated by Union Urban Development Minister Venkaiah Naidu, takes sewage from the Palam drain in Dwarka to the Pappankalan Sewage Treatment Plant.

“Right now, we have added about six to10 MGD to our sewage treatment by the first package. Overall, 210 MGD of sewage will be diverted for treatment when the project is complete in June next year,” said Mr. Kumar.

The six packages of the interceptor are along the city’s major drains – Najafgarh, Supplementary and Shahdara – and will collect sewage from around 180 subsidiary drains. While the project is tricky, Mr. Kumar said everything is going as per plan.

Come next summer, pollution in the Yamuna is expected to fall with the biological oxygen demand (BOD) decreasing by 60 to 70 per cent. Water quality (in BOD) in the Yamuna will fall from 41 mg/l to 12 mg/l.

Reforming the health care sector

Obamacare and other such examples make a compelling case for seeking the right combination of roles for the public and private sector in health reform in India

Nail or screw? Which is best to join pieces of wood? In carpentry, the answer is that each offers benefits depending on the application. With health care reform, the choice of public or private sector financing, delivery and regulation is subject to a more polarised discussion. Advocates proclaim that one or the other is always superior. The sharp division of views, and the political friction it causes, can paralyse needed movement toward health care reform.

As India joins many other nations, including recently the United States, in debating how best to reform the health care sector, it is critical that we are thoughtful carpenters. We do not have to choose between the public and private sectors but can use each where its application is best. The new government has initiated discussions which could shape new policies and initiatives. The official announcements are broadly of two types. One, there is articulation for increasing government-provided infrastructure at multiple levels, including primary health centres, speciality hospitals, medical colleges and more. Second, the Prime Minister announced his intention to introduce a universal health insurance, perhaps along the lines of Obamacare. During the previous government’s tenure, there were a few calls for a British or Canadian style universal health service both financed and provided by the government.

Strengths of public sector

How do we know when to reach for the hammer or screwdriver as we design health care reforms? We can start by recognising the strengths of public sector approaches. The government can tax and distribute revenues in a manner that can lessen health care access disparities that might otherwise exist. This redistributional ability of the public sector is consistent with the popular view that health care is a right, not a privilege.

 “The redistributional ability of the public sector is consistent with the view that health care is a right, not a privilege”

Thus, many countries give the public sector a dominant role in funding health care. Even in the U.S., often thought of as a bastion of private sector, nearly half of health care expenditures come from government. There is also a very strong argument for the public sector in funding and delivering health care services where their benefits are realised by those who do not incur their costs. An example is public health campaigns such as vaccination drives. We all benefit when our neighbours don’t carry communicable diseases. Public sector entities also have an important role in policing the health sector to root out fraud and certify quality. While private entities undertake self-regulation, participation is usually voluntary. In contrast, public entities can insist that, for example, doctors meet licensing standards and that pharmaceuticals are safe. At the same time, proponents of a strong public sector role in health care reform must acknowledge that the private sector has its strengths.

This is especially evident when we consider the potential benefits of competition and the profit motive. As in other areas of the economy, private sector competition can drive quality improvement and cost efficiency. When those in need of health care are treated like consumers, competitors must deliver value or risk losing them to competitors.

The private sector has a better opportunity than the public sector to match supply to demand. Whereas government delivered health care often has shortages of doctors and other providers or even denial of care, private sector health care can increase supply by quickly adjusting incentives for providers.

The private sector also has a proven record for innovation in the delivery of care and in the creation of techniques, tools, and products that improve and preserve health. The entrepreneurial spirit involves risk taking wherein capital is accumulated and risked on the development of health care improvements.

One example is the medical products sector. While the public sector has played a critical role in basic research, the record is clear that it is only private sector companies that have had the incentive to take risks to develop this knowledge into new medicines, vaccines, and medical devices.

Lessons from a mixed approach

Thus, even a cursory review of the benefits of each sector reveals that health reformers must sort their options with care for the gains that are possible by employing each. The recent experience in the U.S. with the health reform that has come to be known as Obamacare offers an example. While still highly controversial, the programme provides lessons in a mixed public-private approach. The law relies heavily on the government to provide financing to ensure that access to care is not limited to the wealthy. It also contains a large new public sector role in establishing and policing the rule of competition among health care insurance providers and private employers that provide insurance to their workers.

At the same time, Obamacare relies primarily on private sector competition in insurance provision and in health care delivery. Even ostensively public sector programmes such as Medicaid that provide health care to the poor are increasingly being delivered by competing private sector companies. The law also largely eschews government price setting in favour of allowing the competitive market to establish prices.

This experience and that of others around the world make a compelling case for seeking the right combination of roles for the public and private sector in health reform. It should help the carpenters of Indian health care reform to choose their tools wisely.

Brazil's Rousseff wins second term

Left-leaning President Dilma Rousseff was re-elected Sunday in the tightest race Brazil has seen since its return to democracy three decades ago, giving the juggernaut Workers’ Party its fourth-straight presidential victory and the chance to extend its social transformation of the globe’s fifth-largest country.

Ms. Rousseff took 51.6 percent of the votes and centre-right challenger Aecio Neves had 48.4 percent, with almost all ballots counted. The result reflected a nation deeply divided after what many called the most acrimonious campaign since the return to democracy, with charges of corruption, nepotism and ample personal barbs thrown by both sides.

The re-elected leader faces an immense challenge of reigniting a stalled economy, improving woeful public services that ignited huge anti-government protests last year, and trying to push political reforms through a highly fragmented congress where the governing coalition has less support than it did four years ago.

Speaking in front of a banner that read “New Government, New Ideas” and a giant photo of Ms. Rousseff from her days as a militant who fought against Brazil’s long military regime, she thanked her supporters, starting with her political mentor and predecessor Luiz Inacio Lula da Silva, who picked her to take his place in 2010.

“My dears, my friends, we have arrived at the end of a campaign that intensely mobilized all the forces of this country,” Ms. Rousseff said. “I thank every Brazilian, without exception.”

She added that she “thanks from the bottom of my heart, our No. 1 militant, President Lula,” as the former leader used a handkerchief to wipe tears from his eyes.

Ms. Rousseff sounded a conciliatory tone, saying during the live broadcast that she understood the heightened demands of Brazilians. “That’s why I want to be a much better president than I have been until now,” she said.

During the Workers’ Party time in power, the government has enacted expansive social programmes that have helped pull millions of Brazilians out of poverty and into the middle class, transforming the lives of the poor.

But the globe’s seventh-largest economy has underperformed since 2011, with some fearing it could put the social gains at risk.

“Dilma has social inclusion on her side, but the macroeconomic policies during her first four years in office have been very weak,” said Carlos Pereira, a political analyst at the Gertulio Vargas Foundation, Brazil’s leading think tank. “Inflation has returned, the country is in a technical recession and public spending is out of control. It is less likely she will be able to offer social inclusion and macroeconomic stability at the same time.”

The choice between Ms. Rousseff and Neves split Brazilians into two camps those who thought only the president would continue to protect the poor and advance social inclusion versus those who were certain that only the contender’s market-friendly economic policies could see Brazil return to solid growth.

Ms. Rousseff and Neves fought bitterly to convince voters that they can deliver on both growth and social advances. This year’s campaign is widely considered the most acrimonious since Brazil’s return to democracy in 1985, a battle between the only two parties to have held the presidency since 1995.

Neves had hammered at Ms. Rousseff over a widening kickback scandal Petrobras, with an informant telling investigators that the Workers’ Party directly benefited from the scheme.

Ms. Rousseff rejected those allegations and told Brazilians that a vote for Neves would be support for returning Brazil to times of intense economic turbulence, hyperinflation and high unemployment, which the nation encountered when the Social Democrats last held power.

“We’ve worked so hard to better the lives of the people, and we won’t let anything in this world, not even in this crisis or all the pessimism, take away what they’ve conquered,” Ms. Rousseff said before voting in southern Brazil.

In Brazil’s biggest city of Sao Paulo, thousands of Workers’ Party supporters gathered on a main avenue, waving banners as a truck with giant speakers blasted Ms. Rousseff’s campaign jingles.

“I’m very happy because I think the construction of Brazil has barely begun and now we will have continuity,” said Liliane Viana, a 56-year-old retired federal government worker. “I was afraid we were going to move backward. Now I am extremely excited.”

Neves was a two-term governor in Minas Gerais state who left office in 2010 with a 92 percent approval rating. He surged at the end of the presidential race to score a surprise second—place position and force a runoff vote against Ms. Rousseff.

Speaking from his hometown of Belo Horizonte, he thanked the “more than 50 million Brazilians” who voted for him.

“I will be eternally grateful to each and every one of you who allowed me to dream again of the construction of a new project,” he said. “I fought the good fight. I fulfilled my mission and I kept the faith.”Cara-Sania win doubles title at WTA Finals

Cara Black and Sania Mirza cruised to the doubles title at the WTA Finals with an authoritative 6-1, 6-0 win over defending champions Peng Shuai and Hsieh Su-Wei on Sunday.

For Black, it was the third time she had won the doubles crown at the WTA Finals, while for Mirza it was her first victory at the season-ending championships.

It was a surprisingly one-sided final, given Peng and Hsieh entered the match with a 12—0 record in doubles finals, including this year’s French Open and Wimbledon in 2013.

The winning pair received $500,000 in prize money.