Session II: Global Governance

Chair: Dr. Robert Kappel.

Participants:

Prof. Dr. Cord Jakobeit, Emerging Powers and Global Governance

Prof. Dr. Joachim Betz, The Future of the International Climate Governance

Dr. Uttam Kumar Sinha, The Future of the International Climate Governance

Chaired by Dr. Robert Kappel , the panel focused on Global Governance and explored how (if at all) emerging powers are changing the rules of international governance of various areas of contemporary concern.

Dr. Cord Jakobeit, presented case studies of international trade and development finance to explore the role of emerging powers in global governance. He argued that it is generally agreed that the world is witnessing a return to multi polarity after the US’ unipolar era. However, there are two major schools of thought on the contours of this multi polarity. While the neo-realist view holds that the coming world order will be shaped by a re-emergence of nationalism, rising competition and even military confrontation, the neo-liberal-institutionalist-constructivist view argues that it is very likely that emerging countries will accept the current liberal world order and see the importance of engaging with multiple stakeholders to seek cooperative solutions to common problems.

In the case of international trade, Dr. Jakobeit explained that there are already several institutional mechanisms in place, which promote cooperation and integration. In fact, there has been a sharp proliferation in such mechanisms since the institution of the WTO. Yet, the failure of the Doha round was the result of emerging powers becoming strong enough to veto proposals, even as they are unable to shape these proposals and outcomes. At the same time, bilateral trade deals are increasing, and are often considered a safeguard against the collapse of the WTO. Thus, it is difficult to see any substantial increase in global integrative activities.

Similarly, in development finance, decision-making remains dominated by Bretton Woods actors. Yet, there is evidence suggesting that FDI and remittances are far more important for enabling economic development rather than ODA. While emerging powers are becoming an important source of development finance, it is difficult to quantify the volume of their contribution. Furthermore, whereas emerging powers diverge from the Washington Consensus, their ODA comes with a different set of strings attached.

Thus, these case studies suggest that the emerging global order is likely to be more “messy” and more complicated than the two dominant schools of thought argue. Furthermore, while the West seems to favor the neoliberal-institutionalist-constructivist perspective, such an outcome will only be possible if the West is more willing to question and reform its own policies. Dr. Jakobeit concluded that although emerging powers are working on changing some of the rules of global governance, they remain divided and lack consensus (despite a few exceptions).

Dr. Joachim Betz, focused on global financial governance. He argued that prior to the 2008 financial crisis, there was no global governance of financial markets; rather, there were only loose coordinating mechanisms and standardizing institutions. He argued that insufficient national and global financial regulations were in fact one of the main causes of the financial crisis.
However, in the aftermath of the financial crisis, the reassertion of national authority over national and global financial markets has become more visible.

Dr. Betz said that the financial crisis in fact spawned a previously unprecedented coordinated stimulus response, which also resulted in massive bank bailouts. Another significant consequence of the crisis was the enlargement of the G7 to the G20 with the inclusion of several emerging economies. Dr. Betz observed that one of the significant characteristics of the G20 is that so far, there has not been bloc-building along traditional lines within the forum. Rather, member states have tended to form issue-specific ad-hoc alliances according to national interests. However, despite the G20’s success in helping coordinate a response and avert a bigger crisis, it remains a talk shop as the forum lacks the power to impose binding regulations. Furthermore, he argued, the forum struggles with issues regarding balancing legitimacy and efficiency.

Dr. Uttam Kumar Sinha spoke on the future of international climate governance, which remains one of the foremost concerns for global governance. Dr. Sinha observed that the issue of climate change is becoming increasingly “curious”. Although scientific opinion on climate change is beginning to reach consensus, climate change politics is becoming more and more contentious particularly due to financial issues, emerging power blocs and self-interests of individual states.

Dr. Sinha further argued that three issues have featured prominently in climate change debates: equity, responsibility and justice. Tracing the evolution of climate governance debates, he observed that in the period of 1972-1992, the focus was on mainstreaming the issue of climate change into policy making. During this stage, the linking of environment, poverty and development was significant, ultimately giving rise to the concept of sustainable development. He stated that India was quite instrumental in this aspect. During the second stage of 1992-2002, the agenda was driven by negotiations and posturing based on self-interest. Dr. Sinha observed that going forward, the principles enshrined in the UNFCCC must be considered the guiding light of global climate governance. He also argued that emerging powers are attempting to rewrite some elements of the UNFCCC in a bid to revive its text rather than mount an “assault” against the UNFCCC.

Dr. Sinha also presented four levels of investigation required to engage with global governance issues: 1. The ideological underpinning and overall direction of institutions and principles of global governance must be interrogated; 2. The pattern of engagement between as well as within institutions needs to be examined; 3. States need to be help accountable for their acts; 4. Power differentials and bloc formation within institutions needs to be better understood.

Dr. Sinha concluded by arguing that climate governance can only be strengthened by generating new empirical knowledge on climate change and how it may be mitigated, as well as operationalizing issues that have already been debated such as the Green Development Fund and the Climate Technology Initiative. Finally, sustainable development and the Rio principles will remain central from the perspective of developing and emerging countries. Thus, climate governance structures will have to be fair to gain acceptance.

Presentations by the various speakers were followed by an engaging discussion. Dr. Arvind Gupta remarked that, in India, the G20 has been seen as a positive development, despite its limited achievements. He also observed that India’s positions on climate change and WTO have consensus at home and any deviation from the stated positions will be difficult. Furthermore, emissions are a survival issue for developing countries like India, whereas it is a lifestyle issue for the developed countries.

Dr. Betz observed that more than simply effectiveness, the bigger question regarding the G20 is how to include emerging economic which are becoming more important in international trade and banking and finance, but are currently not part of the forum. Dr. Kappel expressed the opinion that the G20 is a good initiative because it fosters discussion and cooperation among nations. While it is not fully representative and inclusive, the forum does identify and tackle some important problems.

In response to a question from Dr. Jain regarding the future of collaboration with Europe on climate change, Dr. Sinha said that there is significant trust between the EU and India. The EU’s positive emissions cuts and efforts to bring climate change mitigation into policy making in the last few years boost confidence. With economics and finance experiencing a slump, technology transfer is a more meaningful and practical avenue for cooperation.

The remainder of the discussion included comments on issues such as legitimacy, efficiency and equity in global governance, as well as development finance.

Report prepared by Ms Manali Kumar