Southern governments demanded the conference as the economic crisis started to grip the world last November. Despite repeated offers by UN secretary general Ban Ki-Moon to host talks on the crisis, rich countries have preferred their own company. They have, however, used the relatively unheard of G20, rather than the G8, to add a sprinkling of legitimacy to decisions – and, more importantly, because the financial reserves of countries such as China and Saudi Arabia are essential to stimulating the global economy.

The fightback on behalf of the UN was led by Latin American countries. After months of attempts by rich countries to downplay and delegitimise the summit, it finally happened on 26 June.

Central to the process was the president of the UN general assembly, Reverend Miguel d’Escoto Brockmann. D’Escoto, a leftist priest from Nicaragua, enraged rich countries by offering a radical paper for nations to debate that declared ‘globalisation without effective global or regional institutions is leading the world into chaos’.

That this former Sandinista foreign minister should encourage 192 countries to air their views on matters of global importance caused the British – and other western delegations – a touch of indigestion. A suitable programme to discredit d’Escoto was launched. Rich country diplomats told Reuters that the UN summit was a ‘joke’, a ‘tragedy’ and a ‘waste of time,’ accusing d’Escoto of hijacking the conference in order to put capitalism on trial and threatening to boycott it.

D’Escoto replied that rich countries could not control the conference and that ‘it must speak to the hundreds of millions across the globe who have no other forum in which they can express their unique and often divergent perspectives.’ He warned countries not to turn the UN summit into an ‘international charade’, adding, ‘I earnestly believe that this is an opportunity the world cannot afford not to take advantage of.’

The UN versus the G8

Western hostility could be clearly seen in the level of representation they sent. Gordon Brown, Barack Obama and other western leaders shunned the summit, but found the time to turn up to the annual photoshoot known as the G8, which met only two weeks later in L’Aquila, Italy.

The G8 discussed aid, climate change and energy security, keeping announcements firmly within the western comfort zone, trying to pre-empt a UN agreement on climate change in December and refusing to subject itself to criticism from upstart countries.

But then this is exactly the point of the G8 and always has been. The G6, forerunner to the G8, first met in Rambouillet in 1975, amid another economic crisis and with the aim of excluding the majority of the world from decision-making. In 1974 the troublesome UN general assembly had passed a far-reaching proposal for economic reform, the ‘new international economic order’, that outraged the west.

Had the world listened to the calls for change in the 1970s – for corporate regulation, fair prices for raw materials and equitable trade rules – we would not have embarked upon the three decades of free market fundamentalism that have brought the economy and environment to breaking point.

Structural reforms

The UN was a thorn in the side of western leaders for decades from the 1950s, hence their strong desire not to go back to those days. Perhaps it was no surprise, then, that proposals to the UN conference on the economic crisis looked so different to the business-as-usual agenda set out by the G8 in Italy, and indeed the G20 at the London summit in April.

Central to that G20 agreement was the resuscitation of the International Monetary Fund (IMF). The institution has been promised £450 billion (though much of this is still to be seen), very little of which is for the poorest countries.

In addition, of course, the IMF is a deeply flawed institution, which seems to have learned little in the 10 years since its policy impositions turned a disaster into a crisis in south-east Asia. A recent report by the European Network on Debt and Development (Eurodad), ‘Bail-out or blow-out?’, shows that, of 10 recent IMF loans to low-income countries, all required spending cuts, five mandated wage bill freezes or cuts, five forced governments to pass on food or fuel price rises to citizens and all include some sort of structural reforms such as privatisation, increases in indirect taxation or trade liberalisation.

The rest of the money promised by the G20 is for ‘export finance’ – helping companies to invest overseas. In the UK this means the infamous export credit guarantee department, which has used taxpayers’ money to hold up the British arms industry for decades.

At the UN, meanwhile, former World Bank chief economist turned globalisation critic Joseph Stiglitz put forward a range of structural reforms on behalf of President d’Escoto. He was clear that ‘the international trade and financial system needs to be profoundly reformed.’ The Stiglitz commission recommended a powerful global economic co-ordination council at the UN to bring the World Bank and IMF to heel, an end to the practice of forcing economic policies on developing countries, an international debt work-out process that would allow for far greater and fairer debt cancellation and a new reserve currency to replace the dollar.

Agreeing with many developing countries, Stiglitz was said that ‘without a truly inclusive response, recognising the importance of all countries in the reform process, global economic stability cannot be restored.’

Moving away from the self-selected club

The final result was – predictably, given the intransigence of rich countries – less radical. The conference agreed few concrete measures, short of setting up a working group to examine many of the issues raised – though this itself is an important step forward. The conference also laid the blame for the economic crisis firmly at the feet of the developed world, conceded rights to developing countries in terms of economic sovereignty and acknowledged that many countries were unhappy with the dollar as global reserve currency.

Sadly this was too much for the US, which promptly started distancing itself from a document it had just agreed to.

The real significance comes not in the formal agreement, however, but in the fact that the conference took place in the teeth of such strong opposition. As Stiglitz said: ‘The UN showed that decision-making needn’t be restricted to a self-selected club, lacking political legitimacy, and largely dominated by those who had considerable responsibility for the crisis in the first place.’

Unlike the G20 or G8, negotiations at the UN were transparent and open to civil society groups across the world. Moreover, developing countries have shown themselves able, for the first time in many years, to express a common vision of a more equitable world. The G77 plus China group (actually a group of 130 developing countries) has shown a remarkable level of unity over the economic crisis and climate change.

Forum for alternatives

The weakness of the UN has led some social movements to sharply criticise its usefulness in bringing about radical change. It is no wonder some regard the UN as a tool for imperialism given its recent history and championing of initiatives such as the Global Compact – a weak and unenforceable code on companies that turns the likes of Coca-Cola, Nestlé and BP into ‘good corporate citizens’. But the crisis summit shows, at least, that the UN can be a forum for an alternative economic and political agenda.

The UN is something that can and should be fought over – not simply conceded by ordinary people and developing world states to the powerful. There are still UN institutions that consistently produce radical analyses of the world economy. If developing countries can find the unity to fight for it, real change is achievable. For example, China’s criticism of dollar hegemony makes massive changes in the global financial system possible, ending the insane system whereby China and other developing counties continue to fuel US over-consumption by effectively lending it trillions of dollars at low rates of interest.

While western leaders may scoff at D’Escoto’s words, they can surely provide a rallying cry for hundreds of millions of people across the world: ‘The anti-values of greed, individualism and exclusion should be replaced by solidarity, common good and inclusion. The objective of our economic and social activity should not be the limitless, endless, mindless accumulation of wealth in a profit-centred economy but rather a people-centred economy that guarantees human needs, human rights, and human security, as well as conserves life on earth. These should be universal values that underpin our ethical and moral responsibility.’

As we head towards the Copenhagen climate summit, as the economic crisis further devastates Southern economies, the UN might again become a battleground on which we can win important victories.

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The Eurodad report Bail-out or blow-out? IMF policy advice and conditions for low-income countries at a time of crisis is available online here

Making the cut

Scientists have called for a reduction of at least 50 per cent in global greenhouse gas emissions from 1990 levels by 2050 to stave off disaster. To do this, historically large emitters like the US and European countries will have to curb emissions by around 80 per cent. But conventional wisdom says that the US will not sign a treaty unless China also commits to binding targets. In Europe, Poland, which is heavily dependent on coal for electricity, is leading a nine-member ‘coalition of the unwilling’ to fight the EU’s plan for 20 per cent reductions by 2020. And the UK’s new Climate Change Act, which sets a binding 80 per cent target for emissions decreases by 2050, could see this undermined by allowing industry to purchase limitless offsets from developing countries in place of cutting pollution at home.

The battle over which countries should slash greenhouse gases, and by how much, is one in a larger struggle to define obligations. Through the principle of ‘common but differentiated responsibility’, the UN climate convention attempts to account for countries’ role in causing the climate crisis. It creates a mandate for wealthy countries to provide financial support to poorer nations to cope with adaptation to ‘locked-in’ climatic upheaval and develop clean energy economies. But the existing Kyoto Protocol, which promotes carbon trading to meet this aim, provides richer nations with a means to buy their way out of responsibility instead of tackling their own emissions and over-consumption.

Developing countries will be looking for firm cash commitments from Northern governments on a range of issues, from deforestation to the deployment of low-carbon technologies. In each case, this could lay the groundwork for moving beyond ‘business as usual’ approaches, by promoting small-scale solutions and local, democratic resource control – although there are many potential pitfalls too.

UN climate talks are furthest along on adaptation. In Bali, an Adaptation Fund was established whose executive board has a majority of seats held by developing countries. This could be used by affected countries to exchange the myriad grass-roots adaptation techniques that already exist – such as seed swaps, a return to small-scale irrigation, and new forms of community organising. However, some critics warn that the money could end up being channeled to agribusiness – via new spending on GM crops – and other transnational corporations.

Deforestation, a second ‘pillar’ in the talks, accounts for about 20 per cent of global emissions. A global agreement on Reducing Emissions from Deforestation and Degradation (REDD) could channel billions of dollars from North to South, but the question is – who gets the money?

As currently conceived, governments could bank payments from a forest carbon market for keeping trees in the ground even if forests are really conserved by indigenous peoples. Logging companies might also be eligible if the definition of ‘forests’ includes ‘sustainably managed’ plantations.

Alternatively, negotiations could link fighting deforestation with the implementation of the UN Declaration of the Rights of Indigenous Peoples, requiring governments to legally recognise land tenure and territorial rights as a precondition for participating in a REDD scheme.

Financial crisis v climate crisis

The financial meltdown has raised concerns that developed countries will be reluctant to spend money to tackle the climate crisis, although there is potentially a silver lining in new calls to reinvent whole institutions.

Chief among these is the World Bank, which – with the backing of the G8 – has been positioning itself as the leading international agency for tackling the climate crisis. Industrialised countries have pledged $6.1 billion towards the Bank’s new suite of ‘climate investment funds’, but environmentalists argue that these remain skewed towards destructive projects like coal power plants and large dams. The funds have been snubbed by India, China and the G77 group of developing nations, who argue that the loans offered by the Bank for adaptation leave poorer countries to foot the bill for coping with a problem they did not create.

The current economic disorder illustrates the danger of relying on poorly regulated and little understood free market instruments, such as carbon trading, to solve real-world problems. It reveals the importance of new institutions, such as an International Renewable Energy Agency, to provide the 1.6 billion people living without electricity access to truly clean energy. And it compels those working for climate justice to propose alternatives to a development paradigm that pits limitless economic expansion against a resource-constrained reality.

Janet Redman is a researcher for the Sustainable Energy and Economy Network at the Institute for Policy Studies in Washington