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3311. Coronavirus, Oil and Latin America: The Urgency of Economic Diversification and Energy Transition

Author:
Carlos Monge
Publication Date:
08-2020
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Key messages: Companies are demanding temporary bailouts, requesting that governments subsidize them with breakeven prices over sale prices, and allow them to postpone tax and royalty payments and agreed investments. Such actions may be necessary to preserve jobs and ensure domestic energy supplies. Governments are considering lowering social and environmental standards, fast tracking procedures and providing long-term subsidies to support ongoing projects and to attract new investments. For an industry already facing its twilight, these actions are not justified. Governments must urgently move ahead with economic diversification and energy transitions to ensure the availability of jobs, energy and fiscal incomes that the oil industry currently provides.
Topic:
Energy Policy, Oil, Diversification, Renewable Energy, Coronavirus, and COVID-19
Political Geography:
Colombia, South America, Central America, Mexico, and Peru

3312. Coronavirus, Mining and Latin America: A Baseless “Race to the Bottom”

Author:
Carlos Monge
Publication Date:
08-2020
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Mining companies are asking governments to make consultation and environmental procedures more flexible to mitigate production risks and attract new investments. However, there is no real reason to slacken regulations in order to promote mining in Latin America. Conversely, the region should strengthen these standards to prepare for a possible new mining cycle fueled by the transition to clean energy. In the event of a new mining cycle, governments should safeguard against overreliance on commodity exports and the use of fossil fuels. Instead, governments and companies should explore ways in which the mining sector can contribute to economic diversifications and energy transitions. Demand and prices for minerals produced in the region have fallen as a result of the global recession. Logistical issues resultant from pandemic-related lockdowns have slowed internal production. Consequently, mining taxes and royalties will likely fall this year. Prices have not fallen enough to threaten the commercial feasibility of current projects, the global investment budget remains robust, and the region is attractive to mining investors. Furthermore, the global transition to clean and sustainable energies will most probably increase the demand and prices for the critical minerals (copper, silver, lithium and others) produced in the region.
Topic:
Energy Policy, Commodities, Mining, Coronavirus, and COVID-19
Political Geography:
Latin America

3313. A Race to the Bottom and Back to the Top: Taxing Oil and Gas During and After the Pandemic

Author:
David Manley, David Mihalyi, and Colin Fleming
Publication Date:
10-2020
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Earlier this year as people around the world responded to the coronavirus pandemic, their demand for oil tumbled. At the same time, OPEC and Russia initially failed to agree to coordinate supply cuts. Consequently, the price of a barrel of Brent crude oil fell from $60 in December 2019 to $20 in April 2020. As of this publication, the price is $43. If the price stays low, and if oil executives expect the price to remain low, companies may lobby governments to reduce taxes and other costly regulations. Payments to governments are often larger than costs for a company, so there is pressure on governments to reduce taxes to keep projects viable. This briefing considers the following key questions: Where will the oil price go next? What is the impact on currently operating projects, undeveloped projects, and those that are yet to be discovered? How should governments respond in changing oil and gas taxes? Will governments try to “race to the bottom,” but then lose a race back to the top? Key messages: There’s no certainty over future prices. Some rise is likely in the next few years, even if an energy transition results in a structural decline in the oil price in the longer-term. Governments must consider this uncertainty and probable rise when taxing oil and gas. Tax breaks on most currently operating projects are likely a waste of public money. Some governments may be pressured into reducing tax on projects awaiting development. But they must identify which projects would become viable with lower taxes, and which do not need a tax break. If in doubt, governments should consider whether a project that needs a tax incentive really will provide value for the country. For most countries, relative to total oil and gas produced, the production from projects that could be delayed or cancelled is small. But not so for the “new producer” countries like Senegal and Guyana. Changing taxes to make a country more attractive has the most impact before companies have invested – e.g., in attracting investment in licensing rounds. But setting low taxes now could force a government to raise taxes later if prices rise again. If a tax break is unavoidable, governments could use a “sunset clause” to limit the duration of the tax break. Ideally, governments should set progressive tax regimes that respond to changes in profit. But as many taxing authorities struggle to measure profit, governments could set simpler tax regimes based on sales revenue or prices – but must prepare to change tax rates in the future, and be prepared for the repercussion for a government’s credibility with investors. Governments should disclose contract terms detailing tax changes, tax exemptions, incentives and estimated break-even prices of projects to help government auditors, local think tanks, and the public check and support tax policy decisions.
Topic:
Oil, Natural Resources, Gas, Tax Systems, Commodities, Coronavirus, and Revenue Management
Political Geography:
Global Focus

3314. Academic Co-operation with the People’s Republic of China: Dangers and Temptations

Author:
Märt Läänemets
Publication Date:
04-2020
Content Type:
Policy Brief
Institution:
International Centre for Defence and Security - ICDS
Abstract:
Critical Article from University of Tartu’s magazine was not published at first due to pressure coming from university’s the administration, that was afraid of the negative impact to its collaboration with Huawei. Members from the Estonian Oriental Society condemned university’s reaction, because they saw it as threat to freedom of speech and academic freedom. Besides the silencing effect of Chinese funding, this brief addresses other potential threats from scientific espionage to soft power based influencing activities.
Topic:
International Cooperation and Academia
Political Geography:
China and Asia

3315. China’s Sovereignty and Internet Governance

Author:
Kadri Kaska and Maria Tolppa
Publication Date:
06-2020
Content Type:
Policy Brief
Institution:
International Centre for Defence and Security - ICDS
Abstract:
Increasingly, China’s expanding role in the evolution and development of both the global economy and digital technologies must be acknowledged. A vivid example of this is the active debate over the development of 5G networks over the past few years, in which countries increasingly understand that the impact of new technologies on national security interests must be taken into account when they are implemented. Recent amendments to the Electronic Communications Act in Estonia will create a basis for managing such security risks in our country. Major conceptual difference is that China treats the internet above all as an information space that, to be protected from “subverting state power, undermining national unity [or] infringing upon national honour and interests”, must be strictly organised and controlled by the government.
Topic:
Science and Technology, Governance, Cybersecurity, Internet, and Economy
Political Geography:
China and Asia

3316. Estonia’s Partners in the EU Coalition Machinery: Maximising Influence in the EU through Coalition-building

Author:
Kristi Raik and Josef Janning
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
International Centre for Defence and Security - ICDS
Abstract:
This policy paper examines Estonia’s partners in the European Union with the aim of identifying ways to enhance its influence on policy-making. Effective coalition-building is also important for the EU as a whole, since it can improve the Union’s capacity to take decisions and act. The paper highlights that: Estonia has a relatively strong position in the EU, considering its small size and limited resources. It is particularly well-connected with the Nordic-Baltic partners and should seek ways to use this grouping more effectively as a means to reach out to larger member states and shape decisions in the Union. The main challenge is to build stronger links with France and Germany, something that has become all the more important due to Brexit. Teaming up with other countries that are better connected to Berlin and Paris, such as Finland, Sweden, the Netherlands and Belgium, is one way to pursue this goal. It is too early to draw conclusions about the impact of the latest change of government in Estonia on the country’s influence and image among partners in the EU. However, the research interviews show some indications of a weakened position. Estonia should avoid losing its reputation as a results-oriented member state that takes into consideration the priorities of others while pursuing its own interests in a constructive manner.
Topic:
Security, Foreign Policy, Regional Cooperation, and European Union
Political Geography:
Europe and Estonia

3317. Climate-related Security Risks and the African Union

Author:
Vane Moraa Aminga and Florian Krampe
Publication Date:
05-2020
Content Type:
Policy Brief
Institution:
Stockholm International Peace Research Institute (SIPRI)
Abstract:
There has been considerable attention on the conventional climate mitigation and adaptation debate in Africa, including the prominent efforts of the African Group of Negotiators on Climate Change in global climate forums. However, there is little understanding of how the African Union (AU) is discussing and responding to the security implications of climate change. This Policy Brief outlines key strengths of the African Union’s response, such as a rapidly evolving discourse around climate security and efforts to improve collaboration and coordination among different parts of the institution. But also, key weaknesses in the discourse around AU policy responses, such as the lack of tangible policy operationalization as well as financial unpreparedness and limited member state accountability. The Policy Brief makes recommendations highlighting entry points for advancing the understanding and response to climate-related security risks within the AU, such as: (a) develop and institutionalize coordinated responses to climate-related security risks, (b) develop strong climate security leadership within the African Union, and (c) change the narrative to focus on shared problems and therefore shared solutions—multilateralism rather than nationalism.
Topic:
Security, Climate Change, Multilateralism, Risk, and African Union
Political Geography:
Africa

3318. Towards an Even Stronger Japan-US Alliance

Author:
Taro Hayashi
Publication Date:
11-2020
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
Sixty years ago, Japan and the United States signed the Treaty of Mutual Cooperation and Security marking the beginning of the Japan-US Alliance as we know it today. The two countries have made a commitment to core values such as democracy, respect for human rights, and a rules-based international order. The Alliance has played an integral role in ensuring the peace and security of the two countries as well as realizing their shared vision of a free and open Indo-Pacific through security cooperation.
Topic:
Bilateral Relations, Economy, Alliance, and COVID-19
Political Geography:
Japan, Asia, North America, and United States of America

3319. Europe under US Monetary Hegemony: How the COVID-19 Pandemic Will Undermine a 100-Year-Old Relationship

Author:
Brendan Brown
Publication Date:
10-2020
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
This policy study is based on the newly released book, Europe’s Century of Crises under Dollar Hegemony: A Dialogue on the Global Tyranny of Unsound Money, by Brendan Brown and Philippe Simonnot, published by Palgrave Macmillan. One hundred years ago, the United States emerged from the First World War and its immediate aftermath, including the Spanish flu pandemic, as the global monetary hegemon, exercising immense power over the Old Continent. This new power quickly became the source of huge instability in Europe, culminating in the collapse of the Weimar Republic. After World War II, the Bretton Woods system set new contours for US monetary hegemony, ultimately resulting in the great economic crisis of 1973–75. This woeful history continues to the present day: Dollar hegemony has not been a force for good. It could have been different. The United States and Europe would both have gained from a US hegemony based on sound money principle. Instead, the guiding characteristic of US monetary power has been inflation, especially around election time. According to the doctrine made notorious by Treasury Secretary John Connally, who served under President Nixon, “the dollar is our currency but your problem.” The US monetary regime’s further lurch toward fundamental unsoundness during the COVID-19 pandemic is not getting the new century of US monetary hegemony off to a new start. The “known unknown” is whether forces will emerge in Europe that will again challenge US inflationary dominance, as occurred under Germany’s leadership in the 1970s. Could high inflation in the post-pandemic US economy cause US monetary hegemony over Europe to crumble?
Topic:
Economics, International Trade and Finance, History, Monetary Policy, Hegemony, Transatlantic Relations, and COVID-19
Political Geography:
Europe and United States of America

3320. Moscow’s Disinformation Offensive During COVID-19: The Case of Lithuania

Author:
Richard Weitz and Aurimas Lukas Pieciukaitis
Publication Date:
10-2020
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
Russian media outlets have waged a comprehensive disinformation campaign throughout the COVID-19 pandemic. Both the US State Department’s Global Engagement Center (GEC) and the EU External Action Service (EEAS) have identified numerous stories in Kremlinlinked accounts that have sought to discredit the policies and performance of Western democracies, while conversely painting Russian actions in a most positive light. According to the GEC, throughout the pandemic, “the full Russian ecosystem of official state media, proxy news sites, and social media personas have been pushing multiple disinformation narratives.”
Topic:
Health Care Policy, Media, Repression, Coronavirus, COVID-19, and Disinformation
Political Geography:
Russia, Central Asia, and Lithuania