Wednesday, December 16, 2009

Small Island States Hold Keys to Climate Talks

While most commentators look at the role of US and China in the climate talks, as indeed they are the biggest polluting nations, we rarely think of those small islands as having much to put on the table, but a closer look tells us more.

First of all, many small islands will lose significant parts of its territory under water if sea levels rise.

The most extreme example is Tuvalu is the surpricing broker at the COP15 talks, with its highest point at 4.5 metres above sea level, the tiny nation has already established evacuation plans for the 11,600 inhabitants of the nine coral atolls to settle in New Zealand as climate refugees. Tuvalu, in short, has everything to lose from a bad deal in Copenhagen, and should demand a maximum increase of 1.5 C as the acceptable rise in global temperatures.

Already 1,500 of its citizens work as seafarers on the seven seas of the world, trained by the Asian Development Bank, and some 2,000 have settled in New Zealand, more may need to follow.

On the revenue side, according to the Asian Development Outlook 2008 Tuvalu made US$ 5.39 million from the combined sales of its 'extractive' industires of fishing rights and .tv internet domain sales, adminstered via a California-based company called DotTV. Meagre results considering the size of the potential fish catch in its territorial waters. One gap in the revenue graphs was tax, only 31% of all revenues.

Secondly, small island states tend (though not all) to be secrecy jurisdictions that contribute to illicit financial flows. Reversing such flows hold the key to adaptation and mitigation.

The Alliance of Small Island States (AOSIS) have organised a collective lobby at COP15, led by the prime minister of the Grenadines, has the hard task of asking for more aid. But, why not raise taxes home instead on capital gains, corporate taxes, and progressive income taxes? Many of the AOSIS states live on finance and are also secrecy jurisdictions, just like the USA with its state of Delaware, Luxembourg, Switzerland and UK with the city of London.

This doesn't mean that all small island states are culprits of the resource flow from the South to the North. Tuvalu has no financial secrecy provisions, and it may rather be losing from underpriced fish revenues but, for instance, the current president of the AOSIS group of countries, St. Vincent and the Grenadines, is featured on the 39th place (ouf of 60) on the list of secrecy jurisdictions.

It would be about time to evaluate the consequences of secrecy. In this light, 'financial services' are far from bring 'green' industries.

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