Yekaterinburg could well be a name to remember much like Maastricht, Yalta, Bretton Woods and other places that carry major political history on the back of their relative obscurity. A few weeks ago the big 4 players, Brazil, Russia, China and India, met to in Yekaterinburg to discuss the vexed issue of the $, US assets and US global financial dominance.

As I’ve discussed before there is a major shift underway in the way the global market is structured. Not just in terms of currencies but also trade and influence. The BRICs have a powerful case to make: 40% of global currency reserves and almost half the world’s population (though Russia’s population is declining, a somewhat serious issue).

There is a strong feeling that the US has acted recklessly overt he last 30 years in flooding the world with $ and creating huge imbalances which have caused such chaos in global markets. So whilst there is always plenty of posturing and grandstanding, especially from the Russians, there is a real case for the US to answer:

- Global trade imbalances.

- Cowboy capitalism.

- Turbo boosted monetary expansion.

- Instability in global financial markets.

It’s also interesting that the meeting of the SCO (Shanghai Cooperation Organization) was held at the same tim and the US was not invited even though it wanted to attend. There is a strong argument that there is no real alternative to the $ but that doesn’t excuse the facts. One dominant currency has not helped create a stable system. It has simply allowed to issuer to experience huge profits from seigniorage and wield extraordinary political and economic power.

And can we really take the rating agencies seriously? They are all US based organisations. Ultimately whether the $ loses influence or not depends on the alternatives. I still believe a commodity backed currency is a likely development, given the nations involved.

At the same time the development of local currencies will help create a more stable and complex system. For now though expect more talk about a $ alternative and expect it to be driven by the BRIC crew starting with the upcoming G8 summit in Italy.

Another high level global conference and another list of innocuous plans and goals.

Fiddling whilst the plant burns seems to be infectious. With the global economy collapsing around their ears policymakers have never had a better opportunity to declare a move to a quota based system of fossil fuel extraction.

With oil prices at 5 year lows, down $115 from the highs earlier in the year, I am sure that producers would be willing to sit down and listen.

Whilst global demand is down there is an opportunity to slow emissions at source by setting a target as per the Sustento Framework and making it stick. All the talk of the last few years has been about increasing demand for fossil fuels and the impossibility of reigning that in.

Well right now any demand would be welcome. There has never been a better time to lay it on the line. It’s time to stop pissing around with talk fests and policies which will never actually reduce emissions in any meaningful way.

Set a target for global annual fossil fuel extraction and then stick to it.

It’s taken a bit of time but someone decided to publish my climate change proposal. After being rejected by the Journal Of Climate Change for being too grand, the Environmentalist, the publication of the Institute of Environmental Management and Assessment in the UK, published an amended version last month.

You can read it here if you haven’t read the old version.

The key theme is that we must control what we take out of the earth rather trying to control emissions after use. It also stresses the need for a global carbon budget.

Nothing has happened in recent years to change my thoughts on it. It is a large canvas with many themes to explore. If anyone wants to take on some of those themes in a new piece of research just let me know.

The NZ government has announced a delay in implementing the proposed Emissions Trading Scheme. The 5 year pushback for the transport sector comes at a time when fuel prices are going through the roof and the government is concerned about the impact of further price rises on consumers.

Forgive me for wondering if that isn’t the whole point. First up it was the carbon charge which was dumped back in December 2005 and now the brand spanking new ETS which looked full of holes and now is barely recognisable as a piece of effective policy.

The main concern cited by “critics” is that higher costs may be passed onto consumers. Well the goal of the carbon charge and the ETS is to raise prices in order to lower demand. However, fuel prices are generally regarded as inelastic i.e. demand does not fall as prices rise, which consigns a price approach to the bin. Of course, there is some level of price at which demand will certainly fall. According the research it is when the price increase exceeds income rises i.e. the is the affordability as opposed to higher prices.

Or to put it more succinctly as long as money is available fuel will be purchased regardless fo the absolute price. So the supply of money is a major player in this equation. Now with the credit crunch bedding down money has become less available and so the impact of higher fuel prices is starting to kick in.

So given fuel prices have nearly doubled in the last 3 years, one would expect to have seen a huge fall off in fuel consumption. This has not been the case.

One can conclude that price measures will not reduce emissions and therefore any policy based on this approach is doomed to fail.

Why, you may ask, is no one clamouring for quotas to be implemented? The answer to that is very simple. It’s too hard.

So let’s keep pouring millions of $ into schemes that won’t do the job and keep the veneer of pretending to do something about climate change. They’d be better off spending the money on something important like child poverty and education.

Following a huge campaign the death sentence on Pervez Kambaksh was lifted and we finally heard from him about his experience at the hands of the Afghani justice system.

Stories about the Taliban’s treatment of women and those who try to help them are legendary in their barbarism.

Now we hear about the treatment of women in Saudi Arabia. It’s one thing to treat women with violence (we have plenty enough of that terrible behaviour in the non-Islamic world) but the dis-empowerment via lack of rights and education is really unacceptable at the most basic level. It means there really is no escape from a life of slavery.

This extremist form of Islam does a dis-service to mainstream Islam and shows how vast and wide that congregation is in terms of beliefs and practices.

You wont hear anyone in power being critical of Saudi Arabia because their strategic position is so important and of course they buy a lot of weapons and sell a lot of oil. The hypocrisy of human rights and trade is summarised nicely here.

This year it’s the 60th Anniversary of the UN Declaration on Human Rights. The UN better start pulling its finger out before it gets done under the trades description act.

A week of food riots has seen the Haitian Prime Minister fired by the Senate. Food is right up there on the National Security watch list along with climate change, peak oil and water. This has been simmering for a while now but is starting to loom as a serious global problem.

It’s not a problem that can be considered in isolation. Speculation in land (financial asset bubble), population growth, the bio-fuel issue and climate change have all contributed to a serious problem with the food chain.

Rising oil prices have just been the icing on this unpalatable cake. Is this likely to be contained to developing or poorer nations? Not so say some. In developed nations just-in-time delivery and stocking systems work on very tight margins. Food banks are under serious strain with a whole new layer of users appearing in recent times.

There’s no simple solution to this situation but governments need to take it very seriously.