Posts Tagged ‘OECD’

India says that OECD claim of $57 billion in 2013/14 for “climate finance” was grossly exaggerated and actually only $2.2 billion

November 30, 2015

The propaganda tsunami for the Paris climate conference is reaching a peak just in time for the 147 leaders who fly in for today’s opening. Many organisations and lobby groups and newspapers have brought out special issues and reports to sell their viewpoint. No matter how little Paris agrees on, it will be presented as a major breakthrough (too many have now invested too much to allow any other spin).

The OECD is one such organisation and they have just issued a report “Climate Finance in 2013-14 and the USD 100 billion goal” to try and show the position of the developed nations that a great deal of “climate finance” is already flowing.

OECD Climate-Finance in 2013-14

The OECD claims that developed countries and their private sectors had provided $62 billion in climate finance flows in 2014 — up from $52 billion in 2013 — and an average of $57 billion annually over 2013-14.

But this is all spin and hot air. All kinds of money flows are, by tortuous reasoning, allocated to “climate finance”. The Indian government’s Department of Economic Affairs is not amused.  They have performed a due diligence on the OECD’s claims of $57 billion disbursement in 2013/14. They find double-counting, mislabelling and misreporting and find that  “the only hard number currently available in this regard is $2.2 billion in gross climate fund disbursements from 17 special climate change finance multilateral, bilateral and multilateral development bank funds created for the specific purpose”The DEA report goes on to say “the Paris Conference and negotiators will unfortunately need to worry about the credibility of the new OECD report”.

Of course the OECD wants to show numbers bigger than they are and developing countries such as India want to show them as small as possible. The very concept that man-made emissions are going to control climate is arrogant, decadent and deeply flawed.  But climate conferences are about money flows not about climate.

The Hindu

The estimate of $57billion in assistance during 2013-14 is flawed; the only number available is $2.2bn, says Finance Ministry paper.

On a day when Prime Minister Narendra Modi left for Paris to participate in the global climate change conference beginning Monday, Economic Affairs Secretary Shaktikanta Das said that India has questioned the correctness of the recent Organisation for Economic Co-operation and Development (OECD) report which claimed that significant progress had been made on a roadmap towards the goal of $100 billion in climate change finance flows annually by 2020.

In the foreword of a discussion paper titled, ‘Climate Change Finance, Analysis of a Recent OECD Report: Some Credible Facts Needed’, the Secretary said: “We asked our Climate Change Finance Unit of the Department of Economic Affairs (DEA), Ministry of Finance, and its experts to undertake a careful review of that OECD report. Their conclusion: the OECD report appears to have over-stated progress.” ….. 

The DEA paper said the OECD report had mentioned that developed countries and their private sector had provided $62 billion in climate finance flows in 2014 — up from $52 billion in 2013 — and an average of $57 billion annually over 2013-14.

The DEA paper quoted the French Foreign Minister as saying, “estimates demonstrate that considerable progress has been made. We must mobilize our efforts to provide the remaining $40 billion.” The paper then countered these claims saying, “We are very far from the goal of $100 billion in climate change finance flows annually by 2020.”

Describing the OECD as ‘a club of the rich countries’, the DEA paper said the Paris Conference and negotiators will unfortunately need to worry about the credibility of the new OECD report. …… 

Terming the figure of $57 billion average for 2013-14 as one that was exaggeratedly reported by the OECD, the DEA paper said the only hard number currently available in this regard is $2.2 billion in gross climate fund disbursements from 17 special climate change finance multilateral, bilateral and multilateral development bank funds created for the specific purpose. ……

The OECD report is deeply flawed and unacceptable, the DEA paper said, adding that the OECD report repeats a previous experience of double-counting, mislabelling and misreporting when rich countries provided exaggerated claims of ‘fast-start climate financing’ in during 2010-12 which were widely criticized by independent observers.

Reporting of the Paris conference will see a lot of spin. But there are only 2 real questions

  1. Are any emissions targets legally binding? and
  2. Are any money flows legally binding?

And I expect nothing of substance will be legally binding – thank goodness.

Advertisements

Without immigration OECD populations will be in decline and in crisis

January 17, 2014

In times of high unemployment the anti-immigration voices are raised very high everywhere and especially in many European countries. Much of the sentiment is rooted in racist views whether against those of Asian or African or East European origin. In Japan it is seen as threatening the homogeneity of the country. But what every politician well knows – but which some will not dare to admit for fear of losing their populist base – is that  without net immigration in, OECD countries will face an increasing crisis of declining populations, declining labour force and an increase in the  proportion of the aged. They are all very well aware that expanding the working population to at least match the increase in the “aged” proportion is critical to maintaining the standard of welfare and health care that they have become accustomed to. Increasing the retirement age – which is already on the table as trial balloons – is unavoidable because even with immigration the proportion of the working population relative to the “aged” is in decline.

In OECD countries fertility rates are already well below the replacement level of 2.1 per woman. It is higher only in Israel, Iceland and New Zealand, and in India, South Africa and Indonesia. China is already down at 1.6 and India is down to 2.63 and declining fast.

The Local

France’s fertility rate has fallen below the symbolic level of two babies per woman and 2013 saw the slowest population growth in the country for well over a decade, new data revealed this week.

The 280,000 births in 2013 marked a 1.3 percent decline from 2012 with France’s fertility rate falling from 2.03 children per woman in 2010 to 1.99 children last year, according to the France’s national statistics agency INSEE. …… 

Despite the drop in the birth rate, France remains second only to Ireland when it comes to Europe’s most fertile nations. Women in Ireland, where the population is 4.6 million, had on average 2.01 children each in 2013.

These figures stand in stark contrast to Germany and Portugal, which had the lowest fertility rates on the continent. Germany recorded a rate of 1.38 per woman, followed by Portugal with 1.28 offspring per woman.

Korea, Hungary, Spain and Japan are the other countries where fertility rates are less than 1.4.

Fertility rates (2010 data) by country is here: OECD Total fertility rates 1970, 2010

Statistics are from the OECD Library:

Total fertility rates in OECD countries have declined dramatically over the past few decades, falling on average from 2.7 in 1970 to 1.7 children per woman of childbearing age in the 2000s. In all OECD countries, fertility rates declined for young women and increased at older ages. A modest recovery in total fertility rates started in the early 2000’s, to an average level of 1.7 in 2010. The total fertility rate is below its replacement level of 2.1 in most OECD countries except Israel, Iceland and New Zealand, and in India, South Africa and Indonesia.

The last few years have seen various trends emerge in fertility rates. A drop in fertility rates has occurred, for example in Australia, New Zealand, Spain and the United States, while rates have continued to rise in Iceland, Israel, Sweden, and Switzerland. The increase in fertility stopped in many other countries. The effect of the economic downturn is as yet unknown, but persistent economic uncertainties can impact downward the number of children women may have over their reproductive life.

OECD Fertility trends

OECD Fertility trends

OECD fertility table

The difference between the decline in fertility rates between India and China is of particular interest. While some of the difference is due to different rates of development, most of the difference can be attributed to the draconian one-child policy in China. But that is now being relaxed as the coming decline in the Chinese population becomes obvious..

The shortages of the proportion of working population – unless immigration is used to mitigate the shortfall – is inevitable and will really begin to bite over the next twenty years or so.

Chasing losses for Corporate tax planning

September 2, 2011

Loss making companies have acquired a new value in M & A activity, especially if they have accumulated losses which can be carried forward against future profits.  In some countries carry-forward losses are as high as 25% of GDP.

Shifting profits to tax havens has been used by corporates (and individuals) increasingly since the 1970’s, but shifting losses to high-taxed countries can be just as effective. A new report has just been issued by the OECD, Corporate Loss Utilisation through Aggressive Tax PlanningISBN Number: 9789264119215, Publication Date: 12/08/2011, Pages: 92

An OECD press release  states:

30/08/2011Due to the recent financial and economic crisis, global corporate losses have increased significantly. Numbers at stake are vast, with loss carry-forwards as high as 25% of GDP in some countries. Though most of these claims are justified, some corporations find loop-holes and use ‘aggressive tax planning’ to avoid taxes in ways that are not within the spirit of the law.  

This aggressive tax planning is a source of increasing concern for many countries and they have developed various strategies to deal with it. Working cooperatively, countries can deter, detect and respond to aggressive tax planning while at the same time ensuring certainty and predictability for compliant taxpayers.

.. countries have identified financial instruments that create artificial losses or obtain multiple deductions for the same loss. They have also seen loss-making companies acquired solely to be merged with profit-making companies and loss-making financial assets artificially allocated to high-tax jurisdictions through non arm’s length transactions.

Reuters reports that

The OECD report, which singled out one industry — financial services — said banks headquartered in high-tax countries were buying and selling derivatives among operating subsidiaries in low-tax jurisdictions and then shifting losses to higher-tax jurisdictions to “manage large loss-making financial assets” held on their balance sheets.

Martin Sullivan, an economist at Tax Analysts, a trade publication, said he thought the majority of the loss-shifting described in the report “pertains to banks, since they are the ones that had huge losses in 2008 and now are making profits.”

The tax-boosting principle at work centers on loss carry-forwards, a legal accounting technique that allows corporations to apply their current year’s net operating losses to profits in future years. While the move is designed in part to help companies avert bankruptcy, it also allows them to reduce their tax bills. ..

The OECD report identified what it called three high-risk schemes designed to maximize the tax value of carry-forward losses. They are:

  • Corporate reorganizations, in particular those in which profitable companies buy money-losing companies solely for the tax benefits of their losses, which is illegal in the United States.
  • Certain financial instruments, including currency swaps and schemes that “refresh” soon-to-expire losses.
  • Non-arm’s-length transfer pricing, or the prices companies charge between subsidiaries for goods and services. This is not legal in the United States and is a subject of growing scrutiny by the Internal Revenue Service.

US Recession officially over – but what about the second dip

September 20, 2010

http://economix.blogs.nytimes.com/2010/09/20/the-recession-has-officially-ended/?hp

The recession officially ended in June 2009, according to the Business Cycle Dating Committee of the National Bureau of Economic Research, the official arbiter of such dates.

As many economists had expected, this official end date makes the most recent downturn the longest since World War II. This recent recession, having begun in December 2007, lasted 18 months. Until now the longest postwar recessions were those of 1973-5 and 1981-2, which each lasted 16 months. Recession and expansion dates are based on various economic indicators, including gross domestic product, income, employment, industrial production and wholesale-retail sales. The Business Cycle Dating Committee typically waits to declare that the economy has turned until well after the fact, when it has a longer track record of economic data to confirm a new trend.

But the double-dip remains a distinct possibility even if the OECD believes the US may just escape it.

A graph of the Early 1980s recession in the Un...

Triple-dip in the 1980's

The United States will experience a slow, jobless recovery from its deepest and longest downturn since the 1930s but will avoid a double-dip recession, the Organisation for Economic Co-operation and Development said today. In its annual health check of the world’s biggest economy, the Paris-based OECD said that it expected activity to expand by 2.6% in both 2010 and 2011 without having a marked impact on the country’s near double-digit jobless rate.

But the optimism is speculative and not shared by everybody. Some believe that jobs growth is not happening at a speed sufficient to avoid the double-dip.

The U.S. economy has a “significant likelihood” of entering a double-dip recession if the government doesn’t step in to help the unemployed, economist Robert Shiller told MarketWatch News Break in August. The Yale University professor and author of the best-selling book “Irrational Exuberance” pinned the probability of a double-dip recession at more than a 50-50. Shiller pointed to the nation’s stubbornly-high unemployment as a root cause of lingering economic woes. And with the Federal Reserve running out of bullets to fight a second recession, he urged Congress to join the battle and focus on putting people back to work.


%d bloggers like this: