By Adam Vaughan and Anna Menin Britain must continue to be a world leader when it comes to acting on global warming despite the EU referendum result last week, the UN’s climate chief has urged. Christiana Figueres warned that should article 50 be triggered it would bring uncertainty for two years but cooperation on climate change could be one area of continuity between the UK and EU. “Should that be the case [article 50 being triggered], there is going be quite a lot of uncertainty, transition, volatility for at least two years,” she told an audience of business leaders in London on Tuesday. “However, let us remember that the Brexit vote was not about climate change, it was not about should the UK continue to modernise its industry and its manufacturing, and it was certainly not a vote about innovation, which is fundamentally the opportunity that we have by acting on climate change,” said the outgoing executive secretary of the UN Framework Convention on Climate Change. Figueres, who played a key role in forging the Paris climate deal last December and is believed to be considering running for UN secretary general, riffed on the world war two poster “keep calm and carry on”. “Over these next two years, my suggestion would be to use the proverbial UK [message]: ‘stay calm and transform on [to a low-carbon economy]’. It’s not ‘stay calm and do nothing’, it’s ‘stay calm and transform on’ because the UK and EU have had a very important leadership on climate change, there’s no reason to change that whatsoever.” Asked if the Brexit vote would become an obstacle to action on climate change, she said: “No. Climate change action is by now unstoppable. It is global.” Weekly briefing: Sign up for your essential climate politics update A pre-referendum poll found that leave voters were more likely to be climate sceptics than remain voters, and green groups have raised fears that the Brexit vote could lead to “the climate change-denying wing of the Conservative party” being strengthened.
The collapse of world markets is telling evidence of capitalism’s stake in maintaining a renewed Cold War, indispensable to its logic of global confrontation as a sustaining developmental force and dependence on a disproportionate, heavy-laden defense sector for America and drawing in its allies. The European Union, historically, was first and foremost the economic underpinning to solidify NATO, itself from first to last an obviously military alliance. Together, EU and NATO represented America’s stalking horse in its posture of world intervention and counterrevolution. Obama’s “pivot” to the Far East, his Pacific-first geostrategic framework, complements and extends the US geopolitical vision of global, unilateral dominance—military, ideological, economic.
With Britain’s vote, we see a magnificent—even if Britons voted on other grounds—objective determination to put a roadblock into the American Grand Design of universalizing its own brand of monopoly capitalism (and heading off a projected nuclear holocaust), in which systemic financialization erodes and supplants the US manufacturing base via outsourcing, foreign investment, and securing predictable sources of raw materials, including of course oil.
Consternation and worse reigns supreme in both the capitalist and defense communities, the architectural splendor of simultaneous containment, even isolation, of Russia and China, now on hold, yet hardly surrendered, as America, for its own self-identity, reified the idea of the Pervasive Enemy to accompany its doctrine of Permanent War. Blowback, after all, has some validity, as America’s warmongers pressed too far: Obama’s modernization of the nuclear arsenal, provocative incursion in the South China Sea, pressures on NATO to occupy the borderlands of Russia. Whether or not inadvertent, Britons have thwarted the US move toward the greater fascistization of a once-democratic polity, yet no longer recognizable as such.
How will America react to the British vote? Probably by intensifying, as is already happening, its Cold War rhetoric, and translating that into more aggressive policies of containment vis-a-vis a growing list of enemies presumed waiting in the wings. Counterterrorism, which has become a catch-all for creating a mindset for ideological conformity, will be a useful instrument for confusing radicalism and terrorism, in order to suppress the former as in Latin America and Africa. Secretly, I suspect, American policy makers hoped for the Britain-EU outcome, so as to beef up European defenses, continue the rearming (encouragement of a nuclear capability) of Abe’s Japan, and feel relief in pursuing the abominable policy of armed drone targeted assassination…. read more…
…. On the broad front, the impact has been staggering.
First, David Cameron has already announced he will be stepping down as British Prime Minister and new elections will be called (probably for early fall).
Second, Brussels (the seat of the EU) will now go into damage control and the animosity between the continent and London will ramp up significantly.
Third, this may be the first of several “shoes to fall.” The Spanish parliamentary election this weekend will provide us the initial read on similar views elsewhere in the EU. My contacts now expect Ireland, Portugal, and even the Netherlands to experience similar exit pressures.
Fourth, this morning Spain has also already fired the first salvo. It is now demanding control over Gibraltar – the UK’s exclave at the southern tip of Spain – in the wake of the British departure from the EU.
Fifth, the Bank of England has promised “unlimited” liquidity support for the British pound sterling after it collapsed worse than at any time over the three decades. Nonetheless, the currency will be under pressure for some time and that will have a toll to exact from the British economy.
Sixth, hundreds of thousands of trade, investment, business, banking, and fiduciary arrangements ae now in limbo…as are hundreds of thousands of jobs. Seventh, the Euro will come under intense pressure as the contagion spreads throughout Europe. But it gets worse… London’s Significance will Fade
Oh yes, Daesh (the name for ISIS that the group itself hates) issued a statement applauding the “death of Europe.” This time around, on the other hand, it could not find a way to claim responsibility.
Other ducks will be falling shortly. Markets throughout the world are awash in tidal waves of red ink. The dollar and U.S. fixed instruments (bonds) are once again becoming a “safe haven” for international investors. Against this backdrop, rapid aftershocks are occurring in energy. Following hours of discussions with contacts in Europe and Asia, these are the immediate consequences:
Both WTI (West Texas Intermediate) and Brent, the two leading international benchmarks for oil trading, posted 5% losses in overnight markets. The losses have since leveled off. You see, the sudden drop in both pounds and the Euro is strengthening the dollar, which makes oil more expensive abroad, pushing demand and prices down. This is likely to rebalance, but there will be some choppy forex waves to overcome.
On the plus side, global demand is increasing and supply balance is taking shape. But the volatility spawned by the UK exit vote will provide some hefty headwinds for oil in the short-term.
The vote has also done major, perhaps fatal, damage to “The City” (London’s financial district) and its position as the world’s preferred location to raise energy project capital. For years more money has been raised for energy projects within a radius of two miles from Liverpool Station and St. Paul’s than anywhere on earth. This will now end. Banking and fiduciary action will move to New York (almost initially by default) and Dubai (the more moderate-term beneficiary). Frankfurt and even the Russian fledgling exchange in St. Petersburg will also increase in activity.
Meanwhile, a range of cross-border holdings based in London and involving oil, natural gas, and renewable controlling structures are now in jeopardy. And the pound sterling collapse will linger, having an adverse impact on Brent remaining as the dominant international benchmark. Since the vast majority of contracts are denominated in dollars, the exchange problems will be gravitating toward spreads favoring WTI.
Now, the effects won’t be limited to just Europe…
… Britain was a staunch European leader in offshore wind production that nevertheless “firmly opposed the EU Commission’s interference in determining the national energy mix in favour of renewables. That was clearly a step backwards, since shifting towards renewable energy is an inevitable component of an effective climate mitigation strategy that is capable of drastically reducing greenhouse gas emissions.” Now, however “to achieve a positive European future, characterized by a green and low-carbon economy, state sovereignty and national self-interests are going to have to recede,” Bosak wrote. “Purely national solutions are simply not going to be enough to solve complex environmental problems, such as climate change, pollution and biodiversity loss which often pay no heed to national borders.” But Canadian energy journalist Andrew Nikiforuk counters that the Union’s size and unwieldiness has been its own undoing. “In the end, bigness—like any empire—concentrates power and delivers misery, corruption, and waste,” he writes. “And that’s the problem today with the European Union, with big corporations, large governments, and a long parade of big trade pacts.” In a “global labyrinth of bigness,” he adds, the EU “has become another symbol of oversized ineptness, along with a technological deafness that ignores locality, human temperament, culture, ecology, tradition, democracy, and diversity.” Nikiforuk cites a recent open letter that recalled the Union’s original positive promise. “There is nothing about freedom, solidarity, or friendship in the European Union. The European Union has proven to act on behalf of the interest of banks, multinational enterprises, and groups in the shadow, as advised by professional think tanks and lobbyists, not in favour of its people,” a group of Greek citizens wrote to Britons last week. “The European Union is designed as a cartel and typically, there is a lack of democratic structures and processes: democracy becomes a disturbing factor.”