Andrew Goodall

Climate change sceptics and the precautionary approach

Hugo Rifkind is depressed. Everyone has a reason for thinking they're right, he says. "On climate change, though, I just can't see it." Rifkind says in today's Times:

"If Copenhagen collapses, that's a triumph for the layman sceptic, newly armed with their half-understood leaked emails from the University of East Anglia."

He complains about the quality of debate but does nothing to enhance it when he asks:

"Layman sceptics, how did we end up with those? They're depressing enough in themselves. They're a sign that the internet has not raised the quality of debate, but lowered it to a bicker. Maybe that's the future. People who know slightly more than nothing, shouting."

Everyone has a reason to be sceptical, and some sceptics know more than others. They have a right to be heard. But Rifkind has a point when he adds:

"What gives them the nerve? If they doubt the science, with the stakes so high, how can they not doubt themselves? How can they not wake up at night, dripping in sweat, suddenly wondering if, for the sake of a snappy column or a pithy post on a blog, they've just helped to drown their own great-grandchildren?"

This is another way of saying something that I don't think I've read or heard for a while, but it deserves a hearing. It's about the precautionary approach.

The fact that the Copenhagen conference is happening at all shows that the vast majority of scientists and policymakers all over the world accept that something must be done to avoid catastrophic climate change. If I was not convinced of that I would have to ask myself, in the face of the "overwhelming" evidence:

"What if I'm wrong?"

As a CAFOD volunteer I was interested to see CIDSE, a coalition of 16 Catholic development agencies, say this in a November 2008 policy paper:

"CIDSE underscores the precautionary approach affirmed by the UNFCCC and believe that enough is known to justify and obligate preventive action on climate change, in particular because of its disproportionate and devastating impact on the poor."

The United Nations Framework Convention on Climate Change said at Article 3.3:

"The Parties should take precautionary measures to anticipate, prevent or minimize the causes of climate change and mitigate its adverse effects. Where there are threats of serious or irreversible damage, lack of full scientific certainty should not be used as a reason for postponing such measures, taking into account that policies and measures to deal with climate change should be cost-effective so as to ensure global benefits at the lowest possible cost."

There you are. Lack of full scientific certainty should not be used as a reason for postponing such measures. It makes sense because there is only one chance to get this right. It makes sense because no-one can prove what will or will not happen, but we get only one chance. As Bryan Appleyard put it, in the Sunday Times:

"The climate is warming. It is almost certain this is caused by emissions of greenhouse gases caused by human activity. Nobody has come up with an alternative explanation that stands up. If the present warming trend continues, nasty things will probably start happening to humans within the next century, possibly the next decade. Something must be done. If nothing is done, then the benign climatic conditions that have sustained human civilisation for 10,000 years are in danger of collapse to be replaced by ... well, write your own disaster movie. You will note that there is some wiggle room in these statements. It is 'almost certain' that humans are responsible; nasty things will 'probably' happen. That is because all science can ever be is the best guess of the best minds."

Global poverty – DFID white paper on country-by-country tax reporting

The UK government is discussing with international partners whether initiatives including country-by-country reporting of tax payments "could offer an effective and suitable means of advancing the tax transparency agenda". This is good news. The announcement follows DFID's publication of a report that suggested that many estimates of revenue lost to developing countries due to tax evasion and avoidance were not based on reliable data. But that report also made it clear that further research is needed, and it recommended a number of possible directions for further research to "improve our understanding of tax avoidance and evasion and the implications of these activities for revenue mobilisation in developing countries". The World Bank and others have left it to a handful of committed individuals and a few NGOs to provide the only meaningful research available so far.

Yesterday's white paper Eliminating World Poverty: Building our Common Future said this about taxes:

1.28 Our common prosperity depends on shared, sustainable growth. Britain's fastest growing export markets are low and middle income countries. Today there are more middle income people in India than the entire population of the United States. We all suffer from weak financial regulation, the financial impact of imbalances in trade, and the action of tax havens.

2.1 It is easy to see why growth matters. It creates the livelihoods that support growing populations. Higher incomes lead to a reduction in infant deaths, increased school enrolment, and give us greater freedom to make our own decisions about our lives. Growth provides the tax revenue for states so they can fund public services, build accountable government and reduce reliance on external support. Growth provides countries and individuals with a ladder out of poverty.

2.9 ... Ineffective taxation undermines countries' ability to provide the basic services that underpin fairness as well as growth.

2.34 ... We will help countries establish sound taxation systems [and] make it easier for developing countries to benefit from the new co-operative tax environment.

2.44 Prosperity is not just a matter of good economic policies. A fair and sustainable market economy depends on an effective state and strong political commitment. Without this enabling environment, individuals and firms will have no confidence to invest for the future.

2.45 The UK has supported improved governance for more than a decade. It has never been more important than in this downturn and recovery. Systematic political economy analysis is needed to inform our approach to growth, to identify policies that have broad political support. This is particularly important in fragile and conflict-affected countries.

2.46 Effective tax systems are central to effective states. Raised in ways that encourage economic growth and promote political accountability, taxes provide the resources to fund public services, leading to an eventual exit from aid dependence.

2.47 The UK will consult on a proposal to create a new International Taxation Centre to improve research in this area. The Centre would be a partnership hosted by a research institution and would work with international partners such as the International Tax Dialogue. It would help developing countries build the legitimacy and effectiveness of their tax systems.

2.48 There is increasing concern that tax systems in developing countries are undermined by international banking secrecy, including in tax havens. The London Summit made real progress on this issue, and the UK will work to ensure that the commitments on standards and sanctions are met, as well as the decision to develop proposals by the end of 2009 to make it easier for developing countries to benefit from the new co-operative tax environment.

2.49 The UK believes it is important for all jurisdictions to implement their commitments to the international standard for the exchange of tax information and will work in particular with its own Crown Dependencies and overseas territories to ensure that they can meet or exceed the agreed international standards.

2.50 Along with other members of the G20, the UK is ready to take action against jurisdictions that do not meet these international standards. CDC, which has sought to avoid unco-operative jurisdictions in the past, will in future only commit capital to new funds and direct investments in jurisdictions substantially implementing the international tax standard. CDC will also continue to invest directly in the developing countries they are trying to help. CDC will review all existing investments in jurisdictions committed to, but not yet implementing, the international tax standard, following the next G20 Summit in September 2009.

2.51 In addition the Government is discussing with its international partners whether other initiatives, including country-by-country reporting of tax payments, could offer an effective and suitable means of advancing the tax transparency agenda.

Most tax gap estimates are flawed, academics claim

Oxford researchers highlight 'shortcomings' but civil society groups were forced to produce estimates in the absence of research by international institutions, say campaigners

Information regarding revenue losses in developing countries caused by tax evasion and avoidance is very limited, partly due to a lack of data and partly due to "methodological shortcomings of existing studies," according to new research.

Clemens Fuest and Nadine Riedel of the Oxford University Centre for Business Taxation prepared the report – entitled Tax evasion, tax avoidance and tax expenditures in developing countries: A review of the existing literature – for the UK's Department for International Development (DFID).

The report's publication came as the UK Treasury was reported to be preparing to voice support for country-by-country reporting. Christian Aid has been lobbying the big four accounting firms to use their influence at the International Accounting Standards Board to argue for the reform. The charity has estimated that tax revenue lost by developing countries due to "trade mispricing" by multinationals amounts to US $160bn a year.

Fuest and Riedel concluded that some of the existing estimates of revenue losses due to tax avoidance and evasion by firms – in particular, some studies on corporate profit shifting – "systematically overestimate the losses".

They added: "Other studies are based on assumptions which are so restrictive that the results are difficult to interpret. Overall, it is fair to conclude that most existing estimates of tax revenue losses in developing countries due to evasion and avoidance are not based on reliable methods and data.

The report recommended a number of possible directions for further research to "improve our understanding of tax avoidance and evasion and the implications of these activities for revenue mobilisation in developing countries".

The Tax Justice Network's research was among the papers reviewed in the Oxford report. Responding to the report, the TJN pointed out on its blog that "in the absence of any useful research emanating from the IMF, World Bank, and indeed academic bodies far better funded than we are, almost all of the literature under review here originates from civil society organisations".The TJN had been “forced” to produce estimates based on whatever datasets become available “in order to challenge those institutions which should be taking these issues seriously to produce estimates of their own,” it said.

The current issue of Tolley's Practical Tax newsletter (3 July) has more on this and other very recent developments including:

• Private residence relief claimants under fire – but HMRC guidance spells out how longstanding exemption written into tax law saves capital gains tax
• Finance Bill progress
• HMRC has 'serious problems' with online trust returns
• 'Vodcast' shatters accountant stereotype, claims ACCA
• New SAYE bonus rates offer 'almost no return'

Zimbabwe – five undercover reports

BBC Radio 4's Today programme's ran a series of five reports by Mike Thompson:

9 June: Violence threatens Zimbabwe calm

10 June: 'Harsh life' of Zimbabwe's orphans

11 June: Zimbabwe's children 'do their duty'

12 June: The collapse of Zimbabwe's education system

13 June: The collapse of Zimbabwe's health system

Related:

BBC Radio 4 Today, 13 June: Zimbabwe 'can't cope' without aid

BBC Radio 4 Today, 13 June: How can Britain help Zimbabwe?

BBC news website: Zimbabwe – New era?

Zimbabwe's 1.5m orphans

The BBC's Today programme has this (audio file):

"Malaria, poverty, HIV and political violence have left Zimbabwe with more than 1.5m orphans in a country of just 11m people - more per head of population than anywhere else on earth. Correspondent Mike Thomson, in the second of his undercover reports from Zimbabwe, reports on the plight of Zimbabwe's orphaned youngsters. Note: The BBC is not allowed to operate legally in Zimbabwe so some names and places in Mike's report have been changed to protect the identities of some of those he's spoken to."

Related:

Today programme website: Zimbabwe's children (audio slideshow)

Today programme website: Under Zimbabwe's skin

BBC News: Zimbabwe 'facing fresh violence'

CAFOD: Zimbabwe

Save the Children: Zimbabwe

A good day for civil society and peaceful protest

The Put People First coalition that organised today's march in London ahead of the G20 summit has a long and impressive list of supporters (see below). The PPF is an alliance of more than 150 unions and environment, charity, faith and development groups, formed "in response to calls for a fair, sustainable route out of recession".

The coalition calls on the UK government to "create a 'Green New Deal' to create jobs in the environmental sector; invest in essential services including social housing; provide emergency funding to countries that need it to protect jobs and provide social protection; tackle tax havens – especially those linked to the UK; insist on democratic reform of the World Bank and IMF; make all financial institutions and multinational corporations transparent and accountable; ensure that poorer states are allowed to take responsibility for managing their own economies rather than having liberalisation measures forced upon them; introduce robust regulatory requirements and financial incentives at national level and push for them at international level to stop climate chaos; and commit to substantial new resource transfer from North to South to support low carbon development".

Here is the list from the PPF website:

Media partner: New Internationalist Supporter organisations: ACORD ActionAid AJCC ADD ACTSA Advocacy International Akina Mama Wa Africa AMREF UK Article 12 in Scotland ASLEF ATL Avaaz BECTU BIF BOND BOVA BRAC UK Bretton Woods Project Cafédirect CAFOD CCC CBM CDD CAWN CSP Change is Coming Childhope Christian Aid CEL CND COIN Compass Concern Worldwide (UK) Co-operative News Connect CWU Dalit Solidarity Network UK Defend Council ousing DoSomethingAboutIt Down2Earth EAP ECCR Ekklesia Engineers Against Poverty EQUITY Everychild Fairtrade Foundation Fatima Women's Network FBU Find Your Feet Footprint Friends Friends of the Earth GardenAfrica GCAP GMB Green New Deal Group Greenpeace Health Unlimited HelpAge International Hives Save Lives Interact Worldwide InterHealth International Service John MacMurray Fellowship Jubilee Debt Campaign Justice for Colombia LabourStart Lattitude Learning for Life Merlin Micah Challenge UK MRDF Musicians Union Muslim Council of Britain NAPO NASUWT NCVO NEF No weat NPJG Novas Scarman NPC NSC NUJ NUS NUT One One World Action 100 Months Operation Noah Oxfam Pants to Poverty PCS People and Planet Performers Without Borders PSG Plan UK Priced Out Progressio Project Hope UK Prospect Red Pepper RHM RMT Salvation Army Save the Children SCIAF SEAD Share the World's Resources Shelter Sightsavers Skillshare International SOAS Activists' Forum SoR SPEAK Stamp Out Poverty STOP AIDS Campaign Stop Climate Chaos Sudanese Women for Peace Synergy Centre Tax Justice Network Tax Research LLP Teach a Man to Fish Tearfund The Bihar Development oundation UK The Other Tax Payers' Alliance The Rights Practice Thirty-eight degrees TFSR Tourism Concern Trade Justice Movement TUC Trading Visions Traidcraft Transnational Institute TSSA UCATT UCU UK Aid Network UNISON UNITE United Nations Association UPSU USDAW VSO War on Want WCIA WILPF Womankind Worldwide WOW World Development Movement World Vision WWF