COP30: Is Symbolism Enough Amid Climate-Change?

With the U.S. fed up and only 100 governments left willing to attend COP30 in Brazil on combatting carbon-emissions and the related global warming, the question of whether the basis of the annual conference, voluntary compliance, is sufficient and thus should be enabled by the staged meetings. Even to continue to have the conferences annually can be viewed as part of a broader state of denial, given that the 1.5C degree maximum for the planet’s warming set at the Paris conference a decade earlier was by 2025 universally acknowledged by scientists to no longer be realistic; the target would almost certainly be surpassed. It is in this context that any progress from COP30 should be placed.

At the end of the pre-COP30 meetings, the “European Union and Brazil launched an appeal calling on other nations to recognize carbon pricing as a pragmatic way to cut emissions and fun the green transition.”[1] Crucially, the “declaration . . . is a symbolic way to encourage world nations to develop strategies and establish markets akin to the EU’s emissions trading scheme, ETS, in place since 2005. Under the ETS, the EU makes companies pay for the emissions they produce.”[2] Below the nice headline of the declaration and assurances of “partnerships” lies the key word, symbolic. To characterize countries as partners is already a red flag, for that is weaker than even alliances, which can be broken at a moment’s notice with impunity.

Immediately after the “declaration” was made public, critics were saying “that putting the spotlight on carbon pricing could divert attention from real emissions-cutting, like investing in restoring natural carbon sinks, like forests and oceans.”[3] Even in putting “real emissions-cutting” in terms of restoring forests and oceans—COP30 ironically being held near the increasingly deforested Amazon rain-forest—minimizes the urgency in staving off warming from greatly exceeding 1.5C degrees. Real decreases in carbon-emissions were needed, and yet only 100 national governments were meeting in Brazil to consider voluntary action at the country-level.

The elephant in the living room, invisible to almost everyone, is the assumption that voluntary decisions by national governments in the face of economic and political immediate costs can be relied upon to solve the problem, even when it was clear in 2025 that the 1.5C degree maximum “decided” at the COP15 in Paris would be surpassed. Like the tremendous risk of destruction to the species from nuclear war, which the belligerence of the Russian and Israeli governments for two years as of 2025 means that the irrational decision to unleash nuclear weapons is not at all unrealistic, the risk to the species’ very survival from climate change justifies the establishment of a world federation with just enough governmental sovereignty, backed up militarily, to push back against wayward national governments in order to keep the worst of human nature from being unleashed with hitherto unimaginable ferocity and mass destructiveness. Anyone with the irrational fear that such a world federation, which Kant recommends in his writings, would produce the Anti-Christ might want to look at the Russians in Ukraine and the Israelis in Gaza as of 2025 for a clue as to where in the tiered system evil has already been manifest. Stalin and Hitler provide easy examples from the twentieth century.

In short, symbolic international conferences and absolute national-sovereignty should no longer be relied on so much by our species if it hopes not to go extinct. If that does happen, the wound would almost certainly be self-inflicted. Yet even then, with blood dripping from the knife being held by our species, still word of the deed will not have reached us. As Nietzsche writes of the unconscious discrediting of God (which Nietzsche opposed, for he was not an atheist), word of the deed did not reach the culprits, as in light from a far star not having reached Earth yet and yet the explosion has already happened. So too, our species has been oblivious concerning what is sufficient to stave off the destruction even of the species itself. The human mind discounts even mass-destructive possibilities that are thought to be low-probability and far off in the future, and thus flinches from agreeing to set up adequate safeguards.

In issuing the warning here with an acknowledgement of utter futility, I may be writing only to future descendants who are already dead. I am time, the destroyer of worlds, Lord Krishna tells Arjuna in the Hinduism’s Bhagavad-Gita. Left to its own devices by a feckless, stubborn, and greedy species, time may indeed see the extinction of homo sapiens, the “wise” species of Man, while the gods laugh at our primped-up seriousness as if we had been children pretending to be adults. Pathetically, we even take ourselves to be adults as we marvel at our own symbolic feats.

---

1. Marta Pacheco, “COP30: EU Back Global Carbon Market Alliance to Crack Down on CO2 Emissions,” Euronews.com, 10 November, 2025.
2. Ibid., italics added for emphasis.
3. Ibid.

Wealth as a Societal Value in the E.U. and U.S.: The Case of Financial Reform

The E.U. and U.S differ markedly in the degree to which the interests of big business are etched in the respective societies and polities. That is to say, the difference goes beyond the question of the relative influences of the lobbyists. I contend that the relative proclivity societally in favor of business in the U.S. tilts the political playing-field excessively in the direction of the financial interests at the expense of the public good, which I take to be well represented generally by a full, equally-weighted spectrum of views. I further contend that influence is easier for financial-sector lobbyists in the United States than in the European  Union because the societal values in the former lean more in their favor. By analogy,  it is easier to run downhill than even on a flat surface.
These points can be discerned from the respective financial reforms in the E.U. and U.S. in the wake of the financial crisis of 2008. Because the financial sector was viewed as culpable in both societies, the ensuing respective financial reforms would be expected to be at the expense of the banks rather than conducive to their interests.

On March 10, 2010, the E.U. Parliament adopted a Resolution (536 votes in favour to 80 against) calling for the financial sector to contribute fairly towards economic recovery since the costs of the crisis are being borne by taxpayers. On 25 March, Members of Parliament’s special “Financial, Economic and Social Crisis Committee” debated the rationale behind a possible financial transaction tax. Stephan Schulmeister of the Austrian Institute for Economic Research in Vienna said short-term financial transactions can make short-term prices of currencies and other financial products such as derivatives and shares vary wildly. Schulmeister claimed that a tax on financial transactions of just 0.05% would eliminate these short-term transactions, bring greater stability and bring €300 billion of additional revenues to the E.U. While the tax would undoubtedly bring in revenue, it is not clear to me that short-term transactions would be eliminated, as they can be worthwhile even with such a tax. Moreover, the financial crisis of 2008 shows us that the volitility can come from the market mechanism itself (in so far as it magnifies irrational exuberance). At any rate, even as there was division on the matter of such a tax in the parliament, that the proposal had been made distiguishes the legislative body of the E.U. from the Congress in the U.S., where such a proposal would undoubted have been blocked. Indeed, the E.U. Parliament went ever further.

On July 7, 2010, the EU Parliament approved some of the strictest rules in the world on bankers’ bonuses. In the legislation, caps were imposed on upfront cash bonuses and at least half of any bonus had  to be paid in contingent capital and shares. The legislative chamber also toughened rules on the capital reserves that banks had to hold to guard against any risks from their trading activities and from their exposure to highly complex securities. “Two years on from the global financial crisis, these tough new rules on bonuses will transform the bonus culture and end incentives for excessive risk-taking. A high-risk and short-term bonus culture wrought havoc with the global economy and taxpayers paid the price. Since banks have failed to reform we are now doing the job for them,” said MEP Arlene McCarthy. Upfront cash bonuses were capped at 30% of the total bonus and to 20% for particularly large bonuses. Between 40% and 60% of any bonus had to be deferred for at least three years and could be recovered if investments did not perform as expected. Moreover at least 50% of the total bonus had to be paid as “contingent capital” (funds to be called upon first in case of bank difficulties) and shares. Bonuses also had to be capped as a proportion of salary. Each bank had to establish limits on bonuses related to salaries, on the basis of E.U.-wide guidelines, to help bring down the overall, disproportionate, role played by bonuses in the financial sector. Finally, bonus-like pensions were also covered. Exceptional pension payments had to be held back in instruments such as contingent capital that link their final value to the overall strength of the bank. This was to avoid situations similar to those experienced in the wake of the financial crisis of 2008 in which some bankers retired with substantial pensions unaffected by the crisis their bank was facing. The rules applied to foreign banks operating in the E.U.and to subsidiaries of E.U. banks operating abroad. The law gave state regulators binding powers to take action against banks that failed to comply with the new rules. In contrast, the U.S. went after Arizona for trying to enforce US immigration law.

Clearly, the U.S. financial reform did not go nearly as far; it did not put nearly as much crimp in the American banks. This is no accident. The feeling among big bankers in the US was that they dodged a bullet concerning what could have been in the American bill. No “too big to fail” limit was put on a bank’s capital or size , or on the bankers’ compensation. The American media and President Obama were strangely silent on why. In the case of the health reform, the President silently removed his objection to an insurance mandate and dropped his desire for a public option after the lobbyist for the American health insurance companies told him that her support was contingent on these changes. 
My point is simply this: Were not American society leaning in a pro-business direction (e.g., economic liberty being salient in how liberty itself is viewed), the President might not have felt the need, or pressure without a sufficient countervailing wind, to bend in the banking lobbyists' direction. That is to say, the lobbyist would not have had so much leverage. Wall Street no doubt had massive influence in the crafting of the financial reform as it was making its way through Congress (even though the banks were culpable in the financial crisis—which is itself telling). I submit that the reasons go beyond the sheer power of money to unquestioned societal values.

Sources:
http://www.europarl.europa.eu/news/public/story_page/044-71441-088-03-14-907-20100329STO71433-2010-29-03-2010/default_en.htm

http://www.europarl.europa.eu/news/public/focus_page/008-76988-176-06-26-901-20100625FCS76850-25-06-2010-2010/default_p001c011_en.

Justice as Fairness: Writing Down Greek Debt

In 2012, 80% of Greece’s private creditors agreed to “voluntarily” convert their Greek debt into debt of a bit less than half the face-value (plus a lower interest rate). With such a proportion having agreed to the swap without triggering credit default swap insurance payouts, Greece could get the E.U. to agree to force the remaining 20% to involuntary write-downs. That would trigger the credit default swaps, at least in theory.

Because any write down of Greek debt by other E.U. states or the E.U.’s central bank (equivalent to the Federal Reserve) would be tantamount to additional aid to Greece, the E.U.’s basic law would again need to be amended (which must be unanimous). So the E.U. (and the international IMF) exempted themselves even as they pushed for “voluntary” write downs by private debt-holders. This hardly seems fair. Moreover, any pressure from the E.U. could have been sufficient for the credit default swaps to be triggered. To be truly voluntary, the write downs would have to have come from the private bondholders themselves rather than from governmental pressure. Even so, that 80% agreed, it is only fair that the remaining 20% be forced to capitulate. Otherwise, holding out could be a strategic competitive advantage financially. Refusing to compromise while other similar parties do is unfair whether between private creditors or governments.

In my view, Greece should have secured the E.U.’s approval on instituting the collective bargaining statute in order to get all of the state’s private holders of Greek bonds to take a write down. It would have triggered the credit default swap insurance claims, so the bondholders might actually have preferred being forced even if more of their Greek debt was written off. Furthermore, E.U. officials should have subjected the E.U. states to join the private bondholders. At the time of the 80% voluntary agreement in 2012, Greek debt in 2020 was forecasted to be at 120% of Greece’s total economic activity.[1] This is still quite high, particularly given the recessionary impact of the continued Greek austerity. Unfortunately, the (excessive) power of state officials at the E.U. level meant that a conflict of interest interfered with amending the E.U.’s basic law to permit the state governments and the ECB to take write downs.

In terms of ethical theory, one could apply John Rawls’ Theory of Justice here. In this theory, there is a veil of ignorance concerning where one will be in the system for which one is making rules. Not knowing whether one would represent a government or private bondholder, for example, one would not be likely to add the rule in which only the private bondholders write off their Greek bonds. Not knowing which E.U. state one would represent, one would not add a rule favoring Germany and France over Greece. Not knowing whether one is an official of the E.U. Commission or a member of a state legislature such as the Bundestag, one would not make a rule allowing the states to protect their interests at the expense of the E.U. Rawls adds that because of the veil, any rule would see to it that the position of the least well situated is improved. So it would not be the case that Germany could dictate to the E.U. or so successfully protect German interests at the expense of Greece. Indeed, the bias would be in seeing that the people least well off in the least well off state are not further downtrodden as a result of any proposed rule. This might be part of Rawls penchant for redistribution, however. At the very least, we could say that the rules enacted under justice as fairness would be in the interest of the system itself rather than any particular part thereof. In terms of the writing down of Greek debt, the E.U. could have been fairer in how it went about designing its rules. There was not exactly a veil of ignorance on the vested interests that were in a position to protect themselves at Greece’s expense.

1. Charles Forelle, Stelios Bouras, and Alkman Granitsas, “Greece Passes Key Debt Test,” The Wall Street Journal, March 9, 2012.

E.U. Presses Italy to Tax Church Businesses

One of the chief benefits of federalism is the ability of one system of government to check another within the overall federal system. In the European Union, the state governments have so much power at the federal level—in the E.U. institutions—that it is difficult for the E.U. Government to check excesses and abuses in the state governments. E.U. law, regulation and directives rely on the state governments, albeit to varying extents. In the United States, the case is the reverse. The U.S. Government holds so many of the cards that the state governments cannot act to check abuses in the federal government. Actually, for all of the power that the U.S. Government has amassed, it does a horrible job in aiding citizens against abuses in their own state governments. Fortunately, we can look to Europe for a bright spot: the E.U. Commission and Italy, á grace de Mario Monti who is both governor of the state of Italy and a former commissioner in the E.U. Commission (the E.U.’s executive branch).

The full essay is at "Essays on the E.U. Political Economy," available at Amazon.

A Structural Conflict of Interest in Feinberg's BP-Claims Disbursement Office

A year after the BP oil rig explosion in the Gulf of Mexico, only $4 billion of the $20 billion fund alloted by BP had been paid to claimants. Out of 800,000 claims submitted, two-thirds had been processed.  That is to say, two-thirds of the claims translates into 20% of the available funds. It appears that Ken Feinberg, the lawyer tasked with administering the funds, was being too stingy.

The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.