EFTA Document EFTA01763816

From: Office of Tene Rod-Larsen Sent: Saturday, October 27, 2012 5:49 PM Subject: October 25 update 25q=pan> Article 1.</=> Article 2.<1=> Muftah=/p> Iran'= Economic Crisis: A Failure of Planning Reza Ghasimic=span> Article 3.</=> Center for St=ategic and International Studies Cautiou= Optimism on Egypt Jon B. Alterman Article 4.<1=> The Economist=/span> Turkey,=Syria and the Kurds Article 5.</=> Foreign Affai=s No Wars=for Water Shlomi Dinar,=Lucia De Stefano, James Duncan, Kerstin Stahl, Kenneth M. Strzepek, Aaron =. Wolf EFTA_R1_00070612 EFTA01763816 Article 6.<1=> Foreign Polic= Scienti=ts are looking at some radical options to save our planet</=> Gernot Wagner=, Martin L. Weitzman Article 1.</=pan> The Washington Institute For Near Ea=t Policy Iran and the next U.S. President Dennis Ross October 24, 2012 -- Regardless of who is elected on November 6th, Iran's nu=lear program is going to be one of the most important challenges the next =resident is going to have to confront. Unless Iran's leaders shift course =nd suddenly decide to suspend their ongoing enrichment of uranium, the continuing progress of the Iranian nucl=ar program will require additional moves by the United States and the inte=national community. From an American standpoint, it is important to rememb=r that both President Barack Obama and Governor Mitt Romney have committed themselves to preventing Iran from=acquiring nuclear weapons and not containing it after it has done so. At t=e current pace of Iran's nuclear efforts, the Iranian nuclear program will=reach a point some time before the end of 2013 where the accumulation of low and medium enriched uranium =ill make it difficult for the United States to know with confidence that i= could prevent Iran's leaders from presenting the world with a fait accomp=i -- meaning the Iranians might well be able to produce a nuclear weapon so quickly that we would not have=time to prevent it. To be sure, the Iranians could decide to slow the pace of their efforts eit=er because they fear a military response or to try to gain sanctions relie= given the economic pain they are experiencing. But that would require a c=ange in Iran's behavior. Barring that, either a re-elected President Obama or a newly elected Governor Romn=y will have to decide what else needs to be done to fulfill their objectiv= of prevention. For President Obama, this is probably an easier task. He has lived with thi= issue for the last four years and thought it through. He has developed a =trategy of increasing the pressure on the Iranians and the cost they pay f=r their continuing defiance of the international community, while also leaving them a diplomatic way out =f they choose to take it. And there is no doubt that the Iranians are payi=g a terrible economic price: crippling sanctions have been imposed and led=to a dramatic reduction in Iran's oil production and sales -- the principal source of revenue for the Irania= government. Iran's currency by some estimates is being devalued by half e=ery two months, meaning that inflation is raging upwards, goods are dramat=cally more expensive and savings are losing their value. Doing business internationally has been made nearl= impossible. 2 EFTA_R1_00070613 EFTA01763817 Iran's Supreme Leader, while maintaining a posture of defiance, recently de=cribed the sanctions as "brutal." Previously, he always spoke of=how the sanctions would make Iran stronger and more self-sufficient. Now h= calls on Iran's officials to stop blaming each other for the economic maladies sanctions are imposing. None of this =eans that Khamenei, the Supreme Leader, is about to change course, but it =oes mean that for President Obama, the strategy of pressure is having an e=fect. Still, the Iranian centrifuges keep spinning and the Iranians keep accumulating enriched uranium. As a re=ult, President Obama is likely to look for ways to intensify the pressure =conomically and coercively -- further emphasizing that the time for diplom=cy is running out and all options are on the table. Governor Romney has not lived with the issue for the last four years. Shoul= he be elected, he will need time to establish his Administration and cond=ct a review of the issue. He is far less likely than President Obama to be=able to move quickly on the issue, but like the President, he probably will see the value of increased econom=c and military pressure as a way of not simply raising the costs to the Ir=nians but also conveying to them that if diplomacy fails we will be prepar=d to use force. Such a posture and such messaging will also give the Israelis a reason to c=ntinue to cooperate with the United States on the next steps vis-a-vis Ira=. In his speech to the United Nations, Prime Minister Netanyahu focused on=the importance of Iran seeing that there is a red-line it should not cross in its nuclear development. His re=-line was on limiting Iran to less than a bomb's worth of medium enriched =ranium; in truth, what he was getting at is how to define the meaning of p=evention and ensuring that Iran does not pass the point where prevention can no longer be achieved. In thi= connection, applying greater pressure on the Iranians matters to the Isra=lis, particularly because it conveys a readiness to do what is necessary t= prevent Iran from gaining nuclear weapons. But it will also be important to discuss our respective views on =ow to ensure prevention -- as the Obama Administration is doing with the I=raelis. No doubt that will continue if President Obama is re-elected or if=Governor Romney becomes president. But there is one other thing both are likely to do. Each is likely to try a=more dramatic diplomatic initiative or end-game proposal with the Iranians= They will do it not just to test the possibility that Iran may yet be pre=ared to accept an outcome that provides them civil nuclear power but with restrictions that would prevent=them from having a break-out capability to nuclear weapons. They will do i= not just to expose the Iranians before the world and their own public if =hey turn down such a proposal. They will do it also to show the American public that we went the extra mi=e if force proves necessary. No American president will resort to force without such a demonstration. Th= stalemated talks between the 5+1 and the Iranians have focused largel= on a step by step approach designed to have the Iranians show they are pr=pared to bring their nuclear program into compliance with their international obligations. If there was plenty =f time to let the pressures build on the Iranians, the step by step approa=h might yet work. But with 2013 looming as a decisive year one way or the =ther, either President Obama or Governor Romney is likely to see the need to accelerate the diplomatic pro=ess to create far greater clarity. If there is to be a diplomatic way out =f the conflict with the Iranians over their nuclear program, sharpening th= choice for Iran's leaders may also be the only way to produce it. Dennis Ross is counselor at The W=shington Institute. Article 2. Muftah =span style="font-size:28pt">Iran's Econ=mic Crisis: A Failure of Planning Reza Ghasimi=/span> 3 EFTA_R1_00070614 EFTA01763818 Oct 22, 2012 -- Rec=ntly, Iran's currency, the rial, dropped to historic new lows. By Octobe= 1, 2012, the currency had plummeted <http://www.nytimes.com/2012/10/02/world/mid=leeast/irans-rial-plummets-against-the- dollar.html?_r=2&hp&> =0 35,000 rials to the dollar — it had stood at 25,000 rials to the dolla= only a week earlier. Only a few days later, the currency dropped even further to 40,000 rials to the dollar. In response, protests erupted4=pan> <http://www.bbc.co.uk/news/world-middle-east=19812482> outside Tehran's old and largest bazaar. The government closed currency =xchange shops and rounded up hundreds of illegal money changers, in the ho=es of curbing the rials' financial slide.=span style="font-size:18pt"> These events have c=ntributed to disruption and instability in the Iranian economy, which alre=dy suffers from high unemployment, low output, and soaring inflation. As reflected in the October 2012 World Economic Out=ook, prepared by the International Monetary Fund, the Iranian economy face= a number of challenges. According to the report, in the coming year, the =ranian economy is predicted to have growth of -0.9 percent, unemployment of over 14 percent, and a wild i=flation rate of 25 percent. A combination of mi=management, bad economic planning, inadequate attention to the adverse imp=cts of international economic and financial sanctions, and the strained relationship between Iranian businesses and th= outside world has contributed to Iran's current economic woes. The situ=tion has been further aggravated by low tolerance within the Iranian gover=ment for constructive criticism, lack of interest in expert opinions, lack of flexibility in dealing with t=e outside world and a disinterest in looking to the experiences of other c=untries to find solutions to similar economic issues. p> Following the end o= the eight-year war with Iraq, the Islamic Republic of Iran focused on for=ulating and carrying out Five Year Development Plans (FYDPs). The 4th and 5th FYDPs, respectively launched in, 2005=06 and 2011/12, were part of a 20-year economic and social vision that was=expected to improve the Iranian economy's international ranking.<=span> Unfortunately, howe=er, these plans contained many implausible targets and set largely unattai=able goals. While the 4th FYPD set a target of 8% growth in GOP, the actual average growth in GDP during this period w=s 5%. GDP performance has also been inadequate during the initial years of=the 5th FYDP. Similarly unrealist=c objectives for employment, inflation, liquidity, productivity, domestic =nd foreign investment, poverty reduction, oil exports, and research and development also remained unachieved during =hese periods. The government's =ubsidy reform program is a particularly salient case study in the failure =f Iranian economic planning. The reform aims at compensating households through cash handouts for energy price increase=. The 20- month period for implementation of subsidy reforms, the 5th FYDP=92s cardinal reform package, was, however, unsatisfactory. Despite the ref=rm program's boldness, several shortfalls—e.g., cash compensation to everyone, both rich and poor, and disregard for the e=periences of other countries—contributed to a number of negative outcome=. Large cash compensation payment deficits intensified government de=endence on Central Bank resources. This accelerated already high levels of liquidity in the Iranian economy. This =n turn increased inflation, which was in fact to be redressed by the subsi=y reform program. The 4th and 5th FYD=s represent one third of Iran's 20-year economic vision cycle. In develo=ing the 5th FYPD, policy makers failed to learn from the outcomes of the 4th FYDP and based the remainder of the 20-year v=sion upon feeble, quivering pillars. These plans failed =o pay attention to the adverse effects of international economic and finan=ial sanctions, which unfavorably harmed the government's normal operations and adversely affected the Iranian busine=s 4 EFTA_R1_00070615 EFTA01763819 communities' relationships and approach to the outside world. Cl=sing the Plan and Budget Organization, which was responsible for the prepa=ation of annual budgets, development plans and the monitoring of their implementation, and replacing it with a small =lanning unit, annexed to the president's office, was a major misstep. De=ying input from technocrats and experienced economists in the planning pro=ess resulted in the pursuit of unrealistic goals and objectives. Low tolerance for constructive criticism and a disre=ard for the experiences of other countries resulted in a lack of deep anal=sis and constituted another shortcoming of the 4th and 5th FYDPs and the 2=-year vision. To transform the Ir=nian economy into a regional leader, the 5th FYDP and the 20-year vision s=ould be revised to incorporate lessons learned so far under these plans. These planning strategies must also remain compa=ible with the country's domestic capacity, encourage the sharing and inc=rporation of experts' opinions, and be subject to deep analysis based on=other countries' experiences. The revised plans s=ould present clear priorities for private sector development, establish ea=e of business entry and exit, and present realistic strategies for attracting foreign direct investment and modern t=chnology. The plans should be implemented via stable rules and regulations=and be supported by reliable judicial and regulatory frameworks. For example, with r=gard to the subsidy reform program, the government should continue with it= reforms but should organize a group of experienced economists and administrators to supervise day-to-day reform operations, r=main open to expert advice, and if necessary, modify reform measures. The Iranian plannin= experience has also revealed a clear disengagement between five-year plan=, annual budgets, and government economic policies. Under these conditions, development and integration of a M=di um Term Expenditure Framework (MTEF) within the revised 5th FYDP and fut=re plans is indispensable to creating a multi-year budgetary framework tha= links five-year plans. Recently, Iranian a=thorities have alluded to developing a "resistance economy plan" that =ould contest international sanctions through a mixture of policies, including financing imports from non-oil exports. I=ternational financial sanctions have drawn attention to Iran's uncertain=and reluctant private sector and to the complex hurdles it faces with rega=d to both oil and non-oil exports. These conditions pr=sent Iran with two challenging choices. First, while remaining under=international economic and financial sanctions, Iran could incorporate "resistance economy plan" features within the r=vised 5th FYDP and the 20-year vision to avoid designing another complicat=d plan that adds to an already sizable menu of options and accumulates sti=I more unrealized expectations. Second, while avoiding further international economic and financial sanctions, Ira= could adopt a conciliatory international posture that would diminish curr=nt sanctions and allow it to implement the revised Sth FYDP and the 20-yea= vision in an improved domestic and international environment. The second choice would appear to pre=ent a more attainable approach to facilitating a return to normal life for=many hardworking and deserving Iranian people. These and other iss=es facing the Iranian economy and its 4th and Sth FYPD are discussed at le=gth in a comprehensive report I have written: The Iranian Economy under Its Fourth and Fifth Five Year Development Plans= The report is linked below and will be of great interest to anyone seekin= detailed information about how Iran's economic planning strategies have=led to its current economic crisis. Reza Ghasimi is&=bsp;a retired staff member of the World Bank, where he was a Senior Econom=st. He received his BA in economics from Lancaster University (Eng-land), his MSc at the London School of Economics, and hi= PhD in economics from Cambridge University. Reza has published books and =rticles on the economies of Iran, Tajikistan, and Armenia. </=pan> 5 EFTA_R1_00070616 EFTA01763820 Article 3. Center for Strategic and Internation=l Studies Cautious Optimism on Egypt Jon B. Alterman <http://csis.org/expert/jon-b-alterman> Oct 23, 2012 -- Everyone expected Eg=pt to be working out better by now, especially Egyptians. Spending a week =n Cairo earlier this month, there was barely a whiff of the euphoria of early 2011, when the country united to bring do=n the government. Even so, there is an energy in Egypt that wasn't there=before. Egypt's "new normal" isn't quite normal, but it still give= cause for optimism. That may seem a strange thing to say= because few Egyptians are especially optimistic. Immediately after Hosni =ubarak's downfall, loose talk about the supposed $70 billion embezzled by the president and his family led many to=believe that the end of Egypt's problems was nigh. Repatriation of those=funds, and plugging the leaks in the economy that had let the ruler amass = fortune, would soon make Egypt a middle-income country, they thought. Ending the corruption that had enrich=d Mubarak's entourage would free billions more. Yet, there were no billions to be fo=nd. Money has become harder to come by rather than easier, as wealthy Egyp=ians stash funds overseas and foreign investors cautiously wait for a clearer political picture. Foreign tourists are also=waiting for a clearer picture before they return in large numbers, and the=police remain a shadow of what they once were. Strikes seem to be a daily =ccurrence. Altering multibillion dollar subsidy programs without devastating tens of millions of Egypt's =oor will take years to do; repairing the rest of the rot in the Egyptian e=onomy will take years more. Politically, the seemingly endless c=cle of elections and referenda that began shortly after Mubarak's fall h=ve not let up. Many more rounds are to come. To the consternation of many, the Muslim Brotherhood's political promine=ce seems likely to be a permanent feature of Egyptian politics. Not only a=e their organizational skills and discipline unsurpassed in Egyptian life,=but they seem to be the only institution that emerged from 60 years of authoritarian rule with a sophisticated poli=ical sensibility. The Brotherhood's governing skills=have been somewhat less impressive. President Muhammad Morsi made a litany=of promises for his first 100 days, but according to the independent "Morsi Meter," he was able to fulfill just over 15 =ercent of them and make progress on another third. New government official= continue to make rookie errors, and veteran officials wonder about their =wn futures. Meanwhile, the economy is still ailing, and a deal with the International Monetary Fund—which a=l agree is an essential foundation for economic recovery—remains elusive= The saga of creating a new constitution continues to drag on, with colorf=l disputes grabbing headlines amidst uncertainty over whether the current constituent assembly drafting the con=titution will ever finish its work or be pre-empted by the president appoi=ting his own committee. And yet, amidst all of this is good =ews. 6 EFTA_R1_00070617 EFTA01763821 The biggest part of the good news in=Egypt is that no group is under the illusion that it can govern alone. Wha=ever its electoral strength—some of which is comparative rather than absolute—the Brotherhood understands it needs=a coalition to rule the country. Further, it appears to have concluded tha= liberal and independent voices make more durable political partners than =he other religious parties, which by their nature challenge the Brotherhood's religious legitimacy. This d=namic began to play itself out in parliament before it was dissolved, and =t continues to play itself out in the constitution-writing process. There =s no Islamist supermajority. The Brotherhood has also proven caut=ous in its dealings with the military. The headlines in August were over t=e dismissal of Field Marshall Hussein Tantawi, Chief of Staff Sami Anan, and Director of General Intelligence Murad Muwaf=, but closer observation suggests that the military has returned to its tr=ditional role more than it has suffered a defeat. Egyptian policy toward t=e United States and Israel, which was the foundation of the U.S. relationship with the Egyptian military, ha= changed only modestly. The elected government seems to have little appeti=e for taking on the United States, Israel, or the military itself.<=span> Economically, the government needs a=I the help it can get, and it has sought allies rather than enemies overse=s. Closer to home, there have been no massive expropriations or nationalizations. Anticorruption prosecutions have been =imited to the highest echelons of the former regime. Tellingly, there is n= massive exodus, among businessmen or anyone else. Panic seems absent in E=ypt, and virtually all Egyptians seem to feel there is a possibility that they will be able to protect thei= interests in the new order. Even the dysfunction in the constitu=ional drafting process has its silver lining. A swift and bold constitutio= process that deeply engaged the public would almost certainly polarize the population and set off pitched politic=l battles. The more drawn out and uncertain process Egypt is undergoing no= holds out the prospect of grudging acceptance with less risk of violence.=/font> Almost all of Egypt's problems sti=I lay in front of it, and some seem insurmountable. Yet, among the most da=gerous outcomes of the last 20 months would be a process in which a large swath of Egyptians had concluded there was n= way politics could meet their needs and their only options would be to ta=e up arms or leave the country. That has happened in neighboring countries= but it has not happened in Egypt. Instead, expectations have been lowered and timelines expanded. Political tensions in Egypt are not = sign of failure, but rather a sign that politics are working. Politics, a=ter all, are about juxtaposing contrasting views as much as about unifying a constituency. Even more important, the d=fining characteristic of a democratic system is not people's willingness=to win. Instead, it is their willingness to lose, because they have faith =hat they just might win the next time. Many have lost in Egypt. So far, the= are behaving like democrats. Their legitimate concern is that the winners=behave like democrats, too. Jon B. Alterman holds the Zbignie= Brzezinski Chair in Global Security and Geostrategy and is director of th= Middle East Program at the Center for Strategic and International Studies in Washington, D.C.<=p> 7 EFTA_R1_0007061 8 EFTA01763822 Article 4. The Economist =span style="font-size:28pt">Turkey, Syria=and the Kurds Oct 20th 2012 -- A =IANT Kurdish flag undulating atop a raised plateau inside Syria faces the =own of Senyurt in Turkey's mainly Kurdish south-east. At the local headquarters of the ruling Justice and Developmen= (AK) party, a grey slab engraved with Ataturk's aphorism "Happy is he=who calls himself a Turk" gathers dust under a stairwell. Across the str=et at the gendarmerie, another slogan—"Loyalty to the army is our honour"—glints through barbed wire.</=pan> The scene encapsula=es Turkey's Kurdish (and Syrian) impasse. The Turkish prime minister, Rerep Tayyip Erdogan, has long called for Syria's president, Bashar Assad, to go. Turkey now hosts over 100,000 refugees fro= Syria. Tensions between the two countries have almost tipped into open wa=. Yet there is no sign of an early end to the Syrian conflict. And the wit=drawal of Syrian forces from mainly Kurdish towns along the border has raised the stakes in the Turkish state=92s 28-year battle with the Kurdistan Workers' Party (PKK). The towns are now run by the PKK's Syrian franchise, the Democrati= Union Party (PYD). As well as setting up Kurdish-language schools and Kur=ish outfits, the PYD is busily arming itself, forming three battalions so =ar. It claims this is to defend against the chaos that may ensue after Mr Assad's fall. But in the eyes of an in=reasingly hawkish Mr Erdogan, the PYD is the PKK—and its main enemy is T=rkey. The Kurds fear they, not Mr Assad's forces, are the target of Turk=sh troops and tanks deployed along the border. They think a bill just adop=ed by the Turkish parliament to authorise the army to intervene abroad is =imed at them. This is overwrought. Yet Turkey is clearly rattled by the prospect of a quasi-independent Syria=-Kurdish entity emerging beside the Iraqi-Kurdish statelet in northern Ira=. In Nusaybin, farther along the border, the Kurdish Peace and Democra=y Party (BOP) mayor, Ayse Gokkan, gestures at the Syrian town of Kamishli,=partly under PYD control. When the Kurdish flag was raised over Kamishli, =housands of locals took to the streets in celebration. "These borders are artificial, for centuries we =ived as one, our hearts are one, our aims are one, our suffering is one,=94 she sighs. At the BDP-run Mitanni cultural centre, young Kurds are maki=g up for lost time, performing dramas and songs in the most widely spoken Kurdish dialect, Kurmanji. "Independ=nt maybe, autonomy definitely," grins a teenager playing the role of Ham=et. The PKK often seems=less concerned with Kurdish rights than with undermining the AK party. The=rebels have escalated their violent campaign inside Turkey, killing scores of soldiers and policemen. And right across =he south-east, the PKK has embarked on a terrorist spree, burning governme=t buildings, raiding schools, wounding children and kidnapping teachers to=weaken the state's grip. The fiercest fighti=g has been in the mountains around Semdinli, a town wedged between Iran an= Iraq. Cemil Oter, leader of the powerful Jirki tribe, which has fought on the side of the army against the PKK, sug=ests that Turkish rule over Semdinli has become a polite fiction. Mr Oter,=once an ardent supporter of Mr Erdogan, used to tell his people to vote AK= "He gave us more hope than any other Turkish leader," acknowledges Mr Oter. But "now he has become ju=t like the others, we won't vote for him again." = AK is the BDP's sole rival in the region. It swept up half the Kur=ish votes in the south-east in 2007. In 2009 Mr Erdogan came tantalisingly=close to peace, first by taming Turkey's meddlesome generals and then by=introducing reforms that gave the Kurds greater linguistic and cultural freedoms. He also began secret talks with =he imprisoned PKK leader, Abdullah Ocalan, in hopes of ending an insurgenc= that has cost nearly 50,000 lives. But Mr Erdogan's 2009 "Kurdish ope=ing" was closed after he was re-elected last year. Critics claim that Mr Erdogan ditched the Kurdish opening in a =ynical bid to court nationalist votes that may carry him to the presidency=when it becomes free in 2014. They also say his promises of a new democrat=c constitution will come to nothing. The government retorts that, by stepping up its terrorist attacks, the PKK=has made it impossible to get the Turkish public on board. Even as Turkish=fighter jets rained bombs on PKK camps in northern Iraq this week, the gov=rnment was unveiling textbooks for Kurmanji classes in state schools. An official Kurdish-Turkish diction=ry is in the works, and defendants will be allowed to speak Kurdish in cou=t. Yet with each new concession, the PKK keeps raising 8 EFTA_R1_00070619 EFTA01763823 the bar. The rebels=now insist they will not resume talks unless Mr Ocalan is moved out of solitary confinement and placed und=r "humane conditions" (ie, house arrest). Hundreds of PKK prisoners ha=e gone on indefinite hunger strike to this end. Mr Ocalan, who is revered =y Kurds, could yet be the key to peace. But after 13 years of solitary confinement his health is waning and so is =is grip. Indeed, as the PYK consolidates its hold in Syria, a solution see=s to be slipping out of Turkey's hands. Many believe that Mr Erdogan's=Syrian policy, especially his support for the opposition Free Syrian Army, is to blame. "They freed the border=from Assad, only for the PKK to step in," says one opposition MP. Moreov=r, by seeking to oust Mr Assad, Turkey has antagonised his chief allies, l=an and Iraq, prompting them to rekindle their alliances with the PICK. The economic c=st is also rising. Turkey has lost an estimated $3 billion in annual trade= Nusaybin, a former hub for suitcase traders, has been hit hard since its =order with Syria was sealed in December. Shuttered shops line the streets. Unemployment, says Mrs Gokkan, has rocke=ed to 90%. With few prospects, Nusaybin's youths are natural recruits fo= the PICK. Article 5. Foreign Affairs =span style="font-size:28pt">No Wars for W=ter Shlomi Dinar, Lucia=De Stefano, James Duncan, Kerstin Stahl, Kenneth M. Strzepek, Aaron T. Wol= October 18, 2012 --=The world economic downturn and upheaval in the Arab world might grab head=ines, but another big problem looms: environmental change. Along with extreme weather patterns, rising sea levels, and other =atural hazards, global warming disrupts freshwater resource availability -= with immense social and political implications. Earlier this year, the Of=ice of the Director of National Intelligence published a report, Global Water =ecurity <http://1.=sa.gov/Ruuh8h> [1], assessing hydropolitics around the world. In it, the authors show tha= international water disputes will affect not only the security interests =f riparian states, but also of the United States. In many parts of th= world, freshwater is already a scarce resource. It constitutes only 2.5 p=rcent of all available water on the planet. And only about .4 percent of that is easily accessible for human consumpti=n. Of that tiny amount, a decreasing share is potable because of pollution=and agricultural and industrial water use. All that would be bad enough, b=t many freshwater bodies are shared among two or more riparian states, complicating their management.4=pan> Of course, the poli=y community has long prophesied impending "water wars." In 2007,=UN Secretary General Ban Ki Moon warned that "water scarcity ... is a potent fuel for wars and conflict." Yet history has=not witnessed many. In fact, the only official war over water took place a=out 4,500 years ago. It was a conflict between the city-states of Lagash a=d Umma in modern day Iraq over the Tigris river. More recently, there have been some close calls, especially in the =rid Middle East. About two years before the 1967 War, Israel and Syria exc=anged fire over the Jordan River Basin, which both said the other was over=sing. The limited armed clashes petered out, but the political dispute over the countries' shared water so=rces continues. In 2002, Lebanon constructed water pumps on one of the riv=r's tributaries, which caused concern for downstream Israel. The project n=ver provoked any formal military action, but with peace in the region already precarious, verbal exchanges =etween the two countries prompted the United States to step in. Both parti=s eventually accepted a compromise that would allow Lebanon to withdraw a =redetermined amount of water for its domestic needs. 9 EFTA_R1_00070620 EFTA01763824 In short, predictio=s of a Water World War are overwrought. However, tensions over water usage=can still exacerbate other existing regional conflicts. Climate change is expected to intensify droughts, floods, and o=her extreme weather conditions that jeopardize freshwater quantity and qua=ity and therefore act as a threat-multiplier, making shaky regions shakier= So what river basin= constitute the biggest risks today? In a World Bank report</=pan> <http://bit.ly/NGXAO7> [2] we published in 2010 (as well as a subsequent article in a special iss=e of the Journal of Peace Research chttp://bit.ly/RwrJ7l> [3]) we analyzed the physical effects of climate change on international r=vers. We modeled the variability in river annual runoff in the past and fo= future climate scenarios. We also considered the existence and nature of =he institutional capacity around river basins, in the form of international water treaties, to potentially =eal with the effects of climate change. According to our re=earch, 24 of the world's 276 international river basins are already experi=ncing increased water variability. These 24 basins, which collectively serve about 332 million people, are at high =isk of water related political tensions. The majority of the basins are lo=ated in northern and sub-Saharan Africa. A few others are located in the M=ddle East, south-central Asia, and South America. They include the Tafna (Algeria and Morocco), the Dasht=(Iran and Pakistan), the Congo (Central Africa), Lake Chad (Central Africa=, the Niger (Western Africa), the Nile (Northeastern Africa), and the Chir= (Ecuador and Peru). There are no strong treaties governing the use of these water reserves in tense terr=tories. Should conflicts break out, there are no good mechanisms in place =or dealing with them. By 2050, an additio=al 37 river basins, serving 83 million people, will be at high risk for fe=ding into political tensions. As is the case currently, a large portion of these are in Africa. But, unlike today, rive= basins within Central Asia, Eastern Europe, Central Europe, and Central A=erica will also be at high risk within 40 years. Some of these include the=Kura-Araks (Iran, Turkey, and the Caucasus), the Neman (Eastern Europe) Asi-Orontes (Lebanon, Syria, Turkey)= and the Catatumbo Basins (Colombia and Venezuela).</=> CROSSING THE NILE</=ont> Among the larger Af=ican basins, the Nile has the greatest implications for regional and globa= security. Tensions over access to the river already pit Ethiopia and Egypt, two important Western allies, against one =nother. Egypt has been a major player in the Middle East Peace Process and=Ethiopia is an important regional force in the Horn of Africa, currently a=ding other African forces to battle Al-Shabbab in Somalia. Over the years, a n=mber of international water treaties have made rules for the basin, but th=y are largely limited to small stretches of it. In particular, only Egypt and Sudan are party to the 1959 Nile Rive= Agreement, the principal treaty regarding the river. Egypt, which is the =urthest downstream yet is one of the most powerful countries in the region= has been able to heavily influence the water-sharing regime. Upstream countries, such as Ethiopia and Burundi= have been left out, hard-pressed to harness the Nile for their own needs. In 1999, with incre=singly vitriolic rhetoric between Egypt and Ethiopia sidetracking regional=development, the World Bank stepped up its involvement in the basin. It helped create a network of professional water=managers as well as a set of investments in a number of sub-basins. Still,=the drafting of a new agreement stalled: upstream countries would not comp=omise on their right to develop water infrastructure while downstream countries would not compromise on pr=tecting their shares. In 2010, Ethiopia signed an agreement with a number =f the other upstream countries hoping to balance against Egypt and Sudan. =ore recently, the country has also announced plans to construct a number of large upstream dams, which could =ffect the stability of the region. By 2050, the enviro=mental state of the Nile Basin will be even worse. That is why it is impor=ant to create a robust and equitable water treaty now. Such a treaty would focus on ways to harness the river's hydro=ower potential to satiate the energy needs of all the riparian states whil= maintaining ecosystem health. The construction of dams and reservoirs fur=her upstream could likewise help even out water flows and facilitate agricultural growth. Projects such as 10 EFTA_R1_00070621 EFTA01763825 =hese, mitigating damage to ecosystem health and local populations, would b=nefit all parties concerned and thus facilitate further basin-wide coopera=ion. UP IN THE ARAL Another water basin=of concern is the Aral Sea, which is shared by Kazakhstan, Kyrgyzstan, Taj=kistan, Turkmenistan, and Uzbekistan. The basin consists of two major rivers, the Syr Darya and Amu Darya. During th= Soviet era, these two rivers were managed relatively effectively. The bre=k-up of the Soviet Union, however, ended that. The major dispute now is be=ween upstream Kyrgyzstan and downstream Uzbekistan over the Syr Darya. During the winter, Kyrgyzstan needs flowing=water to produce hydroelectricity whereas Uzbekistan needs to store water =o later irrigate cotton fields. The countries have =ade several attempts to resolve the dispute. In particular, downstream Uzb=kistan, which is rich in fuel and gas, has provided energy to Kyrgyzstan to compensate for keeping water in its large=reservoirs until the cotton-growing season. Such barter agreements, howeve=, have had limited success because they are easily manipulated. Downstream=states might deliver less fuel during a rainy year, claiming they need less water from upstream reservoir=, and upstream states might deliver less water in retaliation. Kyrgyzstan,=frustrated and desperate for energy in winter months, plans to build mega =ydro-electric plants in its territory. And another upstream state, Tajikistan, is likewise considering hydro-elec=ricity to satiate its own energy needs. Meanwhile, Uzbekistan is building =arge reservoirs. Although these plan= might make sense in the very near term, they are inefficient in the mediu= and long term because they don't solve the real needs of downstream states for large storage capacity to protect agai=st water variability across time. In fact, both Kyrgyzstan and Uzbekistan,=along with Kazakhstan, will see substantial increases in water variability=between now and 2050. And so, the need to share the benefits of existing large-capacity upstream reservoirs =nd coordinate water uses through strong and more efficient inter-state agr=ements is unavoidable. A stabilized Aral S=a basin would also benefit the United States. With its withdrawal from Afg=anistan, Washington has been courting Uzbekistan as a potential alternative ally and provider of stability in the region. T=e Uzbek government seems willing to host U.S. military bases and work as a=counter-weight to Russia. Kyrgyzstan is also an important regional player.=The Manas Air Base, the U.S. military installation near Bishkek, is an important transit point. The country is a=so working with the United States to battle drug trafficking and infiltrat=on of criminal and insurgent groups. Regional instability could disrupt an= of these strategic relationships. If the past is any =ndication, the world probably does not need to worry about impending water=wars. But they must recognize how tensions over water can easily fuel larger conflicts and distract states from other=important geopolitical and domestic priorities. Since formal inter-state i=stitutions are key to alleviating tensions over shared resources, it would=be wise, then, for the involved governments as well as the international community to negotiate sufficient=y robust agreements to deal with impending environmental change. Otherwise= freshwater will only further frustrate stability efforts in the world's v=latile regions. SHLOMI DINAR is =ssociate professor in the Department of Politics and International Relatio=s and associate director of the School of International and Public Affairs at Florida International University. LUCI= DE STEFANO is associate professor at Complutense University of Madrid and=researcher at the Water Observatory of the Botin Foundation. JAMES DUNCA= is consultant on natural resource governance and geography with the World Bank. KERSTIN STAHL is senior scie=tist at the Institute of Hydrology in the University of Freiburg. KENNETH =. STRZEPEK is research scientist with the Massachusetts Institute of Techn=logy Joint Program on the Science and Policy of Global Change. AARON T. WOLF is a professor of geography in =he College of Earth, Ocean, and Atmospheric Sciences at Oregon State Unive=sity. </=pan> 11 EFTA_R1_00070622 EFTA01763826 Article 6. Foreign Policy =span style="font-size:28pt">Scientists ar= looking at some radical options to save our planetaspan> Gernot Wagner, Mar=in L. Weitzman October 24, 2012 --=How serious is the threat of global warming? One way to figure out is to t=ke your cues from some leading climate scientists: They have moved on. That doesn't mean they've abandoned the issue, but the= are looking beyond what all agree is the most obvious solution -- decreas=ng the amount of carbon we spew into the atmosphere in the first place. These scientists ar= beginning to look for a Plan B. There are <http://royalsociety.org/policy/publications=2009/geoengineering-climate/> under consideration -- sucking carbon out of the atmosphere, or creating a= artificial sun shield for the planet. The former, which involves reversin= some of the very processes that are leading to the climate problem, is ex=ensive. The latter just sounds scary. David Keith <http://keith.seas.harvard.eduh , a leading thinker on geoengineering, calls it "chemotherapy" for=the planet. "You are repulsed?" he says. "Good. No one shou=d like it. It's a terrible option." Repugnant or not, w=th the globe failing to develop other ways to halt climate change, geoengi=eering is increasingly becoming an option. The science and engineering are relentlessly marching on: Most research so=far has focused on computer modeling, but some has started to move beyond =- trying to test, for example, how to deliver particles into the upper rea=hes of the atmosphere. This summer, an entrepreneur conducted a rogue experiment, dumpingapan style=""> 100 tons of iron into the Pacific in an attempt to "seed" the oc=an and spur the removal of carbon dioxide from the atmosphere. This episod= represents a particularly apt example of science -- in this case, self- ex=erimentation -- speeding far ahead of public opinion and oversight. The high costs of d=ing nothing If the world can't =et its act together to limit carbon emissions, geoengineering may be the o=ly option we have. Distill the climate problem down to the essentials, and it becomes obvious that global warming is fund=mentally a market failure: All seven billion of us human beings are "=ree riders" on a planet that is heating up. We put billions of tons o= carbon dioxide into the atmosphere every year, and largely aren't required to pay for the privilege. There's too li=tle incentive to stop polluting. Americans are some =f the world's worst offenders. Every U.S. citizen, on average, emits aroun= 20 tons of carbon dioxide a year -- twice that of the average European. All kinds of things contribute to that numbe=. Driving the 12 EFTA_R1_00070623 EFTA01763827 average U.S. vehicle in an average year accounts for more th=n 5 tons. The full carbon footprint of the average thrice- weekly cheesebur=er: half a ton a year. One roundtrip cross-country flight: one ton. Each of these tons =f carbon dioxide causes <http://wwwl.eere.energy.gov/buildings/appli=nce_standards/commercial/pdfs/smallmotors_tsd/sem_finalrule_appen dix15a.pd=> at least $20 worth of damage in adverse health effects, flooded coastlines= and other effects of climate change. By mid-century, that figure will ris= to at least $50. And a truly catastrophic event caused by a warmer climat=, like Antarctic ice sheets collapsing long ahead of schedule or Arctic methane bubbling up at precipitous rates,=resulting in runaway global warming, could increase those costs by a facto= of 10 or more. How do you put a price tag on even a 1 percent risk <http://wsl.ad.economics.harvard.edullaculty=weitzman/files/GHGTargetsInsuranceAgainst.pdf> of altering the climate so much that it could destroy civilization as we k=ow it? Few of us are payin= our fair share for the damage that we're doing to the planet. For example= airlines don't add $20 to ticket prices in order to pay for the damage caused per passenger by flying back and for=h across the country. That decreases costs up front, but it also comes at =normous cost to society down the road. The world's population -- led by th= one bi=lion or so global high emitters chttp://www.pnas.org/content/early/2009/07/040905232106.abstract> -- are doing many hundreds of billions of dollars of damage to the planet,=and in the near future the costs will skyrocket into the trillions. "Free riding&q=ot; also plagues relations between countries. Some, like the European Unio= have a cap or tax on carbon pollution. Most are still waiting on the sidelines. Why should any single country cut its carbon emi=sions when it knows that its reductions will only be a drop in the bucket =oward solving climate change -- and other nations aren't asking their citi=ens to pay their fair share? Blame it on short election cycles, partisanship, or fossil energy interests, the=political will often doesn't exist -- whether in Washington or the latest =lobal environment gathering in Rio de Janeiro. Sitting in the driv=r's seat "Free riders&q=ot; are only half the problem. "Free drivers" may be as importan=. The allure of geoengineering derives from the simple fact that - given what little we know about it at the moment - it appears to be a co=paratively cheap way to combat climate change. And it doesn't take a globa= agreement to act. It takes one actor - one country - in the driver's seat= If, for example, th= very existence of an island, nation, city, or agricultural region is thre=tened by global warming, the question among its leaders will no longer be whether geoengineering is an option, but wha= the effects, positive and negative, might be and how it could be carried =ut. That's also where the science stands today, and the economics points i= the same direction. One option that wil= inevitably come under consideration is the possibility of shooting reflec=ing particles into the upper atmosphere to create an artificial sun shield for the planet. Blocking some of the sun's=rays from hitting the planet may sound like science fiction or hubris, or =oth. But geoengineers are already looking at which particles would work be=t, and how to deliver them: Planes, balloons or multiple mile-long hoses are all contenders. All these options h=ve one thing in common: They are cheap - at least from the narrow perspect=ve of those doing the geoengineering. Hence the "free" in "free driver." In fact, the price =ag of these geoengineering strategies is likely to be negligible relative =o the purported benefits: Columbia University's Scott =arrett <http://www.sipa.columbia.edu/academics/dire=tory/sb3116-fac.html> among others, has calculated that it would cost pennies to offset a ton of carbon dioxide from the atmosphere. By comparison, it c=sts dollars per ton to reduce carbon dioxide emissions in the first place. 13 EFTA_R1_00070624 EFTA01763828 The higher cost of =ttacking the problem head-on, by reducing carbon emissions, would still be=a bargain compared to the financial, ecological and human costs of unchecked global warming. But "free riding" i= so much easier, politically and financially. That's what makes t=e "free driver" effect so powerful. Geoengineering is seductivel= cheap, and it doesn't take the collective will of billions of people - or policies guiding those billions - to have a major =ffect. Anyone capable of flying a fleet of planes at high altitudes could =onceivably have a go at altering the planet's atmosphere, and do so at a f=action of the cost of decreasing carbon dioxide pollution. But here's the catch: Nobody knows the costs of =otential unknown and sometimes unknowable side effects, and there could be=grave political and legal repercussions when someone starts playing God wi=h the climate. Proof by volcano What makes scientists believe geoengineering could work? It's been tried before - by nature, n=t by humanity. When Mount Pinatuborerupted in June 1991, it forced the evacuation of 200,000 Filipinos and sh=t 20 million tons of sulfur dioxide into the stratosphere. The added sulfur counteracted the effect of 1,100 billio= tons of carbon dioxide that had been accumulating in the atmosphere since=the dawn of the industrial revolution. In 1992 and 1993, it decreased glob=l temperatures by a bit less than 1 degree Fahrenheit by reducing the amount of sunlight that hit the earth'= surface. That was about the same amount temperatures had risen at that po=nt from carbon added to the atmosphere by human activity. In other words, =ount Pinatubo alone offset all temperature increases from the beginning of the Industrial Revolution. The aftermath of Mo=nt Pinatubo's eruption suggests the limitations of this kind of geoenginee=ing. The excess carbon dioxide in the air isn't being removed - geoengineering would simply add millions of tons of =ulfur dioxide (or some custom designed material) to the atmosphere. That m=ght lower temperatures -- but it would not address other problems caused b= global warming. For example, it wouldn't stop the ongoing acidification of the oceans, which may kill much=of the life they hold. And there will prob=bly be a host of unknown, unexpected consequences. For example, some clima=ologists blame the Mount Pinatubo eruption for flooding along the Mississippi River in 1993 and for droughts in sub-S=haran African. That still pales in comparison to the 1815 eruption of Moun= Tambora in present-day Indonesia, which caused the "year without a s=mmer" linked to some 200,000 deaths across Europe in 1816. Incidentally, the eruption also had some unexpected=cultural repercussions: All those overcast days also forced Mary Shelley a=d John William Polidori to spend much of their Swiss summer holidays indoo=s, jumpstarting the creation of both Frankenstein and The Vampyre (an inspiration for Dracula). It doesn't take muc= imagination to see that pumping one pollutant into the atmosphere in an a=tempt to offset the effects of another could backfire. It may also be impossible to demonstrate which adverse climate e=ents were caused by which single geoengineering intervention. That throws = wrench into the traditional research model: It's one thing to study the e=fects of a past volcanic eruption or to fiddle in a lab with self-contained experiments. It's quite another =o devise an experiment that could be conducted in the real world. It would=be all too easy to blur the line between experiment and deployment. That a=d many other questions need to be answered, lest we enter wholly unchartered territory when it comes to p=aying with the atmosphere of our shared home. Seat belts are good= but there's no avoiding speed limits Talk of geoengineer=ng inevitably leads to the question of "moral hazard." Will the =xploration of these technologies lull humanity into thinking that it need not act responsibly and cut carbon emissions? Perhap=. Seat belt laws may make some drivers feel so safe that they drive more r=cklessly. Still, that is hardly an argument against those laws. 14 EFTA_R1_00070625 EFTA01763829 While the internati=nal community should not abandon efforts to limit carbon emissions, scient=sts must also be prepared to take geoengineering seriously. Humanity may already have passed so many global warming tipping=points that - even with radical action to cut emissions - it may be import=nt to have some form of geoengineering in our toolkit. The worst we can do=is fall into the trap of thinking geoengineering is a panacea to our clima=e change problem. While its initial costs may be seductively low, no one knows the unintended consequences of trying=to alter the planet's atmosphere. Just as it seems to cost almost nothing =o emit carbon - leading all of us to emit more than we ought to - geoengin=ering may appear cheap at first, only to leave humanity and nature to foot a much larger bill later on. &qu=t;Free riding" turns out not to be cheap after all. "Free drivin=" may face the same conclusion. Nor is it likely th=t everyone will face the same costs. Climate change does not affect all ar=as of the globe evenly. Neither will geoengineering. What if it leads to a further drying out of the southwestern United States=or of sub- Saharan Africa, or to flooding elsewhere? While the risks can=ot be ignored, not even considering geoengineering research is clearly not=an option. Desertification and flooding are also among the many consequences of unchecked global warming. The benefit-=ost calculation of geoengineering must take these effects into account. The fact that climate change's effects are di=tributed unevenly around the globe may also lead some nations to experimen= with geoengineering on their own. India's national security advisor would='t be doing his job if he didn't at least consider countering the monsoon effects of carbon with relatively small am=unts of extra sulfur. And Bangladesh's finance minister would be remiss if=he didn't weigh the all-too-real costs of moving tens of millions of peopl= against the benefits of cloud-brightening (another possible way to deflect more sunlight back into space). </=pan> In short, it will n=t just be up to U.S. scientists or a handful of technologically advanced c=untries to weigh the pros and cons of geoengineering. These technologies will be available to many countries - and as we see tod=y, world leaders don't always succeed in working together to combat the th=eat of climate change. All it takes is a s=ngle actor willing to focus on the purported benefits to his country or he= region to pull the geoengineering trigger. The task with geoengineering is to coordinate international inaction while=the international community considers what steps should be taken. The fate=of the planet cannot be left in the hands of one leader, one nation, one b=llionaire. Fortunately, we are still many years off from the full "free driver" effect taking h=ld. There's some time to engage in a serious global governance debate and =areful research: building coalitions, guiding countries and perhaps even i=dividuals lest they take global matters into their own hands. In fact, that is where the discussion stands at the momen=, with a governance initiative convened by the British Royal Society, the Academy of Sciences for the Dev=loping World, and the Environmental Defense Fund, among other deliberation= guiding how geoengineering research should be pursued. <http://www.srmgi.org/> With time come the =quot;free drivers" The clock, however,=is ticking. A single dramatic climate-related event anywhere in the world = think Hurricane Katrina on steroids - could trigger the "free driver" effect. That event need not be global =nd it need not even be conclusively linked to global warming. A nervous le=der of a frightened nation might well race past the point of debate to dep=oyment. The "free driver" effect will all but guarantee that we will face this choice at some point. "Free ridi=g" and "free driving" occupy opposite poles of the spectrum=of climate action: One ensures that individuals won't supply enough of a p=blic good. The other creates an incentive to engage in potentially reckless geoengineering and supply a global bad. It's tough=to say which one is more dangerous. Together, these powerful forces could =ush the globe to the brink. =font color=110000ff">Gernot Wagner <http://www.gwagner.com/> , the author of But Will the Planet Notice= How Smart Economics Can Save the World <http://www.gwagner.com/plane=> is an economist at the Environmental Defense Fund, an adjunct assistant pr=fessor at Columbia University's School for International and Public Affair= and a research associate at Harvard University's Kennedy School of Govern=ent. 15 EFTA_R1_00070626 EFTA01763830 <http://www.econom ics.ha rva rd.edufia culty/weitz m an> is professor of economics at Harvard University and the author of numerous=seminal articles in environmental economics as well as two books, includin= <http://books.google.com/books/about/Inc=me_Wealth_and_the_Maximum_Principle.html> </=pan> 16 EFTA_R1_00070627 EFTA01763831