Policy Paper §8: Circular Economy Missions

Policy Paper §8: Circular Economy Missions

Teodor Kalpakchiev

the-enpi.org // Project #Sustainability

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The following paper would focus on the circular economy missions as externalization of EU’s domestic market order as well as cyber governance of trade flows for solving unsustainable telecouplings, emission leakage and sovereign debt unsustainability.

Theoretical Framework

It would seek indicators and Explore the relationship between:

  • City expansions and Emission certificates, peri-Urbanism as a way of dealing with the past
  • Creating Urban Forests and Vertical Gardens as a way to internalize global debt
  • Recycling Electric Cars and the Usage of Batteries for Low-carbon urban transitions
  • Open method of coordination, liquid democracy and block chain contracts
  • Externalization of domestic legal and policy orders, fiscal governance of debt and unsustainability
  • Externalizing good governance and anti-corruption in resource governance schemes (fossil and non-fossil), food sovereignty and virtual water as a foundation of a healthy society
  • Reflexive learning through a network of foundations for policy expertize

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Project #Governance, Policy Toolbox §1: Methodology of the ad-hoc Think-Tank deployment

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Project #Governance, Policy Toolbox §1:

Methodology of the ad-hoc Think-Tank deployment

Teodor Kalpakchiev

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  1. Each participant will choose one of these three pairs and will discuss both of them during the fourth day. Our methodology will be based on the World Café, but will be adapted for the purpose of achieving more substantial inputs. After receiving guidance by our guest speakers, the participants will sit at the one of the six tables, which corresponds to the choice they have given. After that they choose a person within the group, who is going to be responsible for arranging all the ideas and inputs on the flipcharts, connect them and visualize them if needed.
  2. What follows is a brainstorming session on what is the current state of affairs, which means that with a two-three sentences long statement the participants in each of the focus groups need to define in a very concise way what is currently happening. This will help them in determining a specific problem and illustrating it with a problem statement, which ideally is only one sentence long.
  3. After having these foundations the participants move on to the next step with a new chart, which is the identification of all the reasons behind the emergence of this issue. What comes next is the visualization of a spiderweb with possible logical correlations to the five dimensions, which the other groups are discussing. This can happen for example by means of positioning the current dimension on the centre of the chart and the other five around it. Then, with the help of arrows with a definition of the correlation, the participants connect their dimension to the other five. This will be of great avail, when the participants will have to discern all the actors involved in this dimension, which can be positioned outside the spiderweb. For example actors can be national governments or specific ministries, the civil society or specific NGOs (such as the Anna Lindh Foundation), certain International and Regional Organizations (apart from the EU, its seven institutions and  numerous agencies, the Internation Labour Organization, the UNHCR, OSCE, Council of Europe, Transparency International, The United Nations Environmental Programme, The European Investment Bank), movements (Alter-EU), companies (for example those interested solely in extracting resources), etc. If possible, below each of the actors the participants can define its role in overcoming the current stalemate.

NB! From here onwards the participants, especially if they have creativity break, free to go on a “mission”, which would mean stand up and go around to see what is happening in the other focus groups, or if needed raise their hand and ask for the help of a moderator.

  1. On a new third chart, the participants brainstorm on possible future developments of the current state of affairs, if no specific involvement takes place, which ideally would be three. These can be for example graded in a positive, neutral and negative scenario and subsequently defined with one or two sentences or bullet points. After that the participants assess the scenarios by giving certain percentages (1-100%) which correspond to the probability of theirs coming true. Subsequently, the participants go on to define an “if” statement, which should follow the formula of “if x does not do y, then z will happen”.
  2. After the subsequent break for networking, the participants will already have a clearer idea of where the future outcome of the situation should stand. Thus, it will be easier for them to define a set of problems that are standing between the current state of affairs and their desired future development. These should be visualized on a new chart with bullet points in a clear and structured way, so that later it is easier for the participants to address them with certain solutions. After that, on separate charts for each of the problems the participants can begin brainstorming and creating a map of all the factors and all the actors involved, in away similar to step 3. Factors could be anything beginning from cultural misunderstanding, to earthly forces and natural disasters, stagflation, low trust in public institutions, media and political distortions of facts, etc., whilst the actors remain the same, or if needed – they are switched / reorganized / their list is expanded.
  3. The next step represents the most vital, significant and substantial part of the policy exercise, which is coming up with certain policy recommendations. These should be formulated in a realistic way, which should make them as feasible, workable and accomplishable as possible. They can range from creating a specific sectoral redistribution of assets or liquidity, to creating checks and balances, reaching out for specific groups or actors, increasing spending, opening certain centers to creating funds / institutions etc., which a relatively ambitious solution.
  4. In order for the policy cycle to be completed or to repeat itself, the participants should bring forth certain benchmarks, which typically include a measurement indicator in terms of cost, time, quality that are intended to quantitatively and metrically evaluate all the important aspects of the proffered policy recommendations. They should serve as a reality check to whether the very same indeed can act as solutions. Subsequently, the participants create a timeline of proposed actions and position their policy recommendations on it. Typically, these are divided into short, medium and long term, but it is up to the participants to decide what time measurement they will use (months, years, periods, etc.).

Policy Paper §7: Circular Solutions to Telecoupled Externalities of EU’s Green Economy Transition

Policy Paper §7: Circular Solutions to Telecoupled Externalities of EU’s Green Economy Transition

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Teodor Kalpakchiev

2-07

Globalization has triggered an enormous momentum in coordinating global value chains. However, as microeconomic optimization does not necessarily internalize ecological or anthropocentric concerns, subjecting trade to a range of instruments such as voluntary certifications, international agreements, collaborative and participatory mechanisms, tariff and non-tariff barriers is meant to adjust the negative environmental effects of EU’s domestic greening of the economy.

 

Untitled
Visualization of Telecoupling (Liu et al., 2014)

Long-distance relationships designated as telecoupling are oftentimes caused by the drive for sustainability leadership in the EU, which counts on redistribution of wealth towards renewable energy, renewing resource flows, optimizing resource use, etc. However, as land on the continent is relatively scarce and there is competition for its use (e.g. urbanization, food, biofuels, photovoltaic plants), which forces is to count on imports of biofuels from Eastern Europe or further, of renewable energy from North Africa, but also leads to excesses in (oftentimes processed) food that is shipped towards the rest of the world, while wholemeal grains, fruits and vegetables with little to no added value for the produced (had it not been for the fairtrade certification schemes) are imported.  Agents working within these relationships are government officials, shipment and logistics companies, workers unions as well as companies acquiring land both within the EU and abroad.

Effects that manifest telecoupling of anthropocentric governance and the ecological balance are, for example, EU’s rising environments for the increase of biofuels within the transport mix, heavy planting of palm oil, maize, sugarcane that damage traditional subsistence and the structure of the economy. Oftentimes the plantations are used as cash crops that induce energy in bioplants, while having additional exhaustive effects on the soil and are polluting rivers and the rest of the environment with pesticides. In target countries, telecoupling also results in blurring the rural-urban divide, as increased travels between those in order to sell/buy necessary resources produce new emissions (oftentimes from old vehicles).

Trade of Land
Land Trading Networks (Seaquist et al, 2014)

The question is whether and which instruments the EU could use to induce a more nuanced trading regime that makes use of the non-reciprocal relationship towards countries in need of economic growth, but with stagnant governance reforms. Interestingly, post-sovereign formations elsewhere oftentimes forego the ability to adjust such responses to global demand, as with a non-completed single market, reduced regulatory capacity and oftentimes insufficient transfer of sovereignty they do not manage to induce action in state actors. Hereby come handy namely the horizontal and vertical anthropocentric coordination efforts, as they aim to improve the understanding of local externalities of the EU’s external trade regime. These feedback loops are meant to derive the causal relationships that exist and potentially address them.

From the perspective of distant flows of goods that induce carbon emissions from transportation, as well as the intensified land use, a circular approach would entail greater use of the principle of bio-regionalism, resp. local sourcing of goods, which in this case would mean preference for goods produced in the vicinity. This can be done via EU Neighbourhood-wide labelling for origin, as well as differentiated tariffs between associated and countries with no particular status. For example, nuts grown in North Africa would receive preference than those grown in South America. When we speak of waste shipments, resp. end-of-live vehicles or computers that are oftentimes intended for repairs in Africa, but end on dumpsites, there should be sufficient waste processing facilities, whose secondary market resources should have preferential buyout prices on the EU market. The same would apply to biofuels, which are normally shipped from sugarcane grown in Brazil or Palm Oil grown in South-East Asia. These can easily be substituted with reprocessed oil for cooking that’s collected from industrial production sites and franchise chains. As for biofuels produced, e.g. in everything but arms countries or simply trade partners, these should be preferably redirected to the closest possible country where demand exists. In order to avoid damage to soils and land, DG Trade could assign a label or tariff reduction for crops rotation and bio-production.

Additionally, from a governance perspective one should deem the expansion of carbon-wide emissions and forestry clean development mechanisms (EU ETS, FLEGT) by incorporating the EU neighbourhood. To achieve faster replication of circular solutions, a city-to-city network between EU’s Eurozone core, its eastern European periphery and the neighbourhood should be established, whereby each of the three cities should be a rotating coordinator of green transition initiatives. While this would ensure learning on the micro scale, the Committee of Regions could ensure mutual learning through horizontal sector-focused collaborative epistemic networks. The normative approach of communicating EU’s external policy should therefore include messages such as that the EU supports the regional economic integration of distant economies through green transition initiatives, thus embedding a values-driven policy mechanism into its trade-for-aid aspirations.

In short:

  • Embedding bioregionalism through labelling, certification and tariff schemes
  • Tri-city policy partnership with rotating presidency
  • Incorporate neighbourhood countries into clean development mechanisms
  • Ensure sufficient waste treatment capacities in partners and facilitate secondary material imports
  • Use visualization and communication tools to ensure wider awareness of spill-over systems as triggers and regulators of telecoupling

Policy Paper §6: Matching EU‘s Circular Economy Missions with Circular City Networks

Policy Paper §6: Matching EU‘s Circular Economy Missions with Circular City Networks

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Teodor Kalpakchiev

2-07

The global neoliberal take (resources) – make (products) – dispose (waste) paradigm has brought unprecedented levels of overconsumption and damage to the ecological stability of the earth that includes negative repercussions on the overall liveability of the planet. Waste enters our bodies through marine litter or the usage of plastics in drinking water, through contaminated soil into our food, as well as through the air we breathe in, as we oftentimes have to incinerate it to create energy.

The European Union has projected itself as a multi-faceted, multi-level, interdisciplinary policy-making machinery that engages in hybrid multilateral actions, one of the most peculiar ones is the Circular Economy Missions that already took place in Chile, China, Colombia, South Africa. In September 2017, a further one will be taking place in New Delhi, India.

Besides adjusting global trade in agricultural goods imported from one place to be used elsewhere for feedstock or upscaling without considering the negative effects on the environment, these missions are aiming to promote and facilitate trade in sustainable goods, foster circular and sustainable enterprises and provide a forum for sharing and upscaling solutions. Thus, albeit academically, the circular economy has been premised within the de-growth paradigm, in reality the missions aim to foster economic growth based on green goods and sustainable energy. Thus, with US and China positioning themselves as the world’s largest producers of electrified cars and storage batteries and possibly engaging in trade wards, the EU is trying to capitalize on the proliferation of its trade regime through a network of sustainable enterprises and initiatives.

From a governance perspective, besides this form of a region-to-country cooperation, one of the best ways to foster further networks would be the expansion of the already existing city networks, which could function as a stepping stone towards practice and expertise sharing, as well as inclusive planning for circularity. What would a circular city entail though?

 

 

Circular Cities

Cities are a juncture of human activity, material exchanges, capital accumulation and produce a number of outputs. Their most essential parts are road and railway infrastructure, housing, small to medium sized service spots, manufacturing and industry.

Information and guidance on existing rules are an integral part of communicating the functioning of a circular city. These can take up the form of conceptual graphics explaining the flows of resources, commodity costs, as well as opportunities for re-usage of resources.

The usage of land in a city is essential to creating a functional, liveable and stimulating environment that improves living conditions, material efficiency and creativity for establishing new ventures. Land could take the form of ecologically sustainable green spaces that serve as an example of urban gardening that improves food security, electrification landmarks, such as photovoltaic installations that store power for mobile phones and electric bikes, large scale depots for end-of-life interior, clothing and other material belongings that are transformed into repair and upscale facilities, where people create furniture, electronic equipment or engage in crafts and arts, etc.

Due to the overt production of plastics with limited use in most world cities and their relative small size, large scale usage of plastics, such as their compression for the creation of flat and durable pavement, which can be used for paving tertiary and rural routes at a limited price, the separation of different land usage or the protection of coastal waters against earthly force majeure induced by climate change.

Excessive food waste could be dumped in sites at critical junctions of the city, where there are plentiful of restaurants and working spaces, and be collected daily to create nutritious compost for the gradual reforestation that lead to the creation of green belts around the city limits, which also serve as natural bio-habitats, as well as open space sports and leisure centres. On the other side of the problematic, the increasing pressures on food insecurity mean that peri-urban and urban farming of food in cities could foster the return to traditional livelihoods, while reducing carbon pressure.

Farming in the developing world could benefit from regenerative agriculture practices, such as crop rotation, usage of the shared economy to foster the wider use of technical capital, such as plough machinery, as well as ICT tools that enable knowledge sharing and facilitate supply chains via mobile phone apps, as well as optimization of the care for agriculture through sensors that sense change in the soil, the weather and guide robotized solutions based on e.g. drones. Naturally, all these should be part of the leasing society, which fosters continuous repairs for the provision of monthly instalments, while the product ownership remains in the hands of the producer.

Idealist Perspective

Circular cities would be a place where you commute to share the results of your research through a carbon-emissions free public transport system, whereby the transportation would consist mainly of circular train networks driven by carbon engines that exhaust drinkable water and electric bike system, charged by decentralized home-based prosumption of renewable energy from photovoltaic systems. Mechanization of transport, logistics and manufacture would result in two tendencies – the necessity for more hardware maintenance positions and the redistribution of welfare through the adoption of an universal basic income (upon the condition that part of it will be reinvested in one’s own readjustment to the labour market).

A modern workplace would not be office based, as urban gardening would make the city a much more creative space, where collaborative networks would engage in solving social and sustainability challenges.  Separate employees would participate in meetings, which define the tasks and then seek alliances through his/her network. Stability would be the norm only for administrative and managerial positions, whereas everybody else would aim at flexibility of the work loci. The advent of MOOCs and distance learning would decompose class structures and would allow the inclusion of economically disadvantaged social strata.

Global expertise would be pooled in sectoral e-platforms that are targeted directly by recruiters, thus making HRs one of the most powerful positions. The push action of finding a job that is already redundant would gradually be substituted with publicly available registers of performance. Capital gains will not be measured solely with financial assets, but also with human and environmental capital. Corporate social responsibility and philanthropy will define the strong market players of the day due to their increased visibility. In comparison with today working hours and unemployment would shrink and larger shares of capital gains will be used for research and development. Continuous health insurance will substitute pensions.

The capitalist consumerist culture will be substituted by malls, where creative laboratories would make the best use of secondary materials. Old toys and electronics would be transformed into household appliances and furniture would be used to recreate social spaces. Heating of malls and public spaces such as railway stations would be warmed by people’s naturally emitted heat. Additionally to food vouchers, people would receive greening vouchers that can be used to improve one’s sustainability lifestyle through buying biofood, biofuels, planting trees or donating to specific causes.

Top-Down Governance

While the missions could serve as tools to identify existing production capacities and potential needs for sustainable goods, the city networks could further enhance these by regionalizing the approach and making it easier for certain areas to specialize, while taking note of the existing knowledge base and human capital. One of the vital questions remaining, however, would be how to make sure that the untapped resources of the developing world are equitably shared or exchanged for technology.

Policy Paper §5: Sofia’s Council of EU and China 16+1 Summit Presidencies – Pathway to a Resilient Neighbourhood?

Sofia’s Council of EU and China 16+1 Summit presidencies –

pathway to resilient neighbourhood?

3-07

Teodor Kalpakchiev

the-ENPI.org

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Abstract: The article reviews the legal, historical and policy boundaries of Bulgaria’s current commitments to institutionalized summits in 2018, as well as the conceptual transferability of the idea of resilience in the Neighbourhood that can be achieved through non-sensitive policy initiatives.

eprs-briefing-579065-budget-common-foreign-security-policy-v2-jpg
Source: EPRS

How do foreign policies come to being? 

Eastern Partnership of the EU was evoked during the Czech presidency of the Council of the European Union and further developed by most notably by Sweden and Poland. The executive of their governments thus capitalized on the chance not only to continue and conclude legislative dossiers, which take up to two years from the conceptualization to the promulgation, but also to propose a new direction in EU’s common foreign policy, an agenda-setting prerogative exclusive to the Presidency. The domain has been largely restricted by a number of factors. As many other supranational bodies, its functioning depends on a country’s overall welfare, as only a prosperous country would find utility in paying lavish salary to second its experienced bureaucrats, who could spread their ideas internally. Additionally, EU’s foreign policy, often decided at meetings of one of the ten configurations of the Council of EU and chaired by the HRVP, has been difficult to coordinate, both due to the discrepancy of weighting member-states positions embedded in their overall normative performance, as wells as their divergent preferences, which make reaching anonymity almost impossible. Recently, many have begun also to ponder over EU’s ability to maintain the resilience of the pro-European communities not only its vicinity, but also in its internal periphery, which largely corresponds to the countries not willing to sacrifice their sovereignty of having an own monetary policy. Among these there are member states whose foreign and defence ministries are led by ministers mandated by nationalist or populist parties or staffed with elderly personnel belonging to the old conjuncture might have a desire to simply gain access to documents requiring security clearance. Hence, more often than not foreign policy comes to being as a top-down endeavour of the bureaucratic leadership – be it the HRVP, the College of Commissioners, or the EPSC advisory body to the Commission’s President. Of course, there is also the possibility that that a member of the MEP self-commissions a legislative report that is put on AFET’s agenda and voted on with an absolute majority in the plenum – an act, on which the Commission must follow up according to its own inter-institutional agreement with the EP[1].

Bolgars
Source: Wikipedia

Bulgarian origins, soft power influences and identity.  

Bulgarians, as many other Balkan nations, suffer from an identity disorder. While some focus on the Eurasian trajectory of their ancestry, which leads back to the aboriginal origins that point towards Uzbekistan and western Kazakhstan, the Old Great Bulgaria around the Azov Sea and possibly extending to North Caucasus (due to the presence of the Kabardino-Balkaria north of Georgia), as well as а number of settlements along the Black Sea coast (near Odessa, Constantsa, Odesos, etc.), as well as the Bolgar Tatarstan region in Russia, some genetic scientists emphasize Thracian influence and discard the Slavic thesis, which was used during Soviet times to draw the country closer to itself (incl. through the simplification of Old Bulgarian language, used until 1920s). More recently, Russia’s soft power comes into play also through the channels that have become well known to the Eastern Partnership countries – hybrid diffusion of ideas and alternative discourses through internet, usage of the Russia population’s feigned friendship to get the best private property along the coast, as well as the promoting a more conservative liberal mind-set through the Orthodox church, which also is a sense a juxtaposition of West European multilateralism and liberalism.

In particular, this transliterates into the presence of the Donetsk People’s Republic flag on national holidays, which is then shared in internet, the ownership of more than 500 000 private properties by around 200 000 thousand Russians, as well as the recent interference of the Bulgarian Orthodox Church into the dialogue concerning the Istanbul Convention. It has focused on Art. 3. c), which defines gender in the context of gender-based violence against women as „socially constructed roles, behaviours, activities and attributes that a given society considers appropriate for women and men“[2]. Naturally, within a country at the crossroads of influences from the west, south and east, this claim was contestable.

What made a bigger impression was the nearly omnipotent political discontent with this claim that included most notably the socialists in opposition, whose previous leader (born in Kherson, Crimea and is currently heading the Party of the European Socialists) committed personally to the adoption of the declaration on European level, the United Patriotic Front (which holds the Defence, Economics and Demographics portfolios). Both of these parties have been accused of some form of cooperation with Russian business groups, leadership or intellectuals (such as A. Dugin, who appears on photos with Volen Siderov, head of ATAKA, which is in turn the most Russophile, populist and nationalist element of the patriotic front). With the rapprochement of Russia and Turkey that comes down to the failed South Stream natural gas pipeline project (discarded due to lack of compliance with the Third Energy Package of the EU and abandoned despite the advancement of the Nord Stream II) that has transformed into the TANAP, the divided and side-lined Movement for Rights and Justice (DPS) might have wanted to vote against the convention, but thus it would have blocked the way for coalition with the ruling Christian-democrats. Although the previous DPS leadership (Ahmet Dogan) has been accused of being seconded by the Turkish intelligence in Bulgaria to overcome the friction that followed the „Great Excursion“, resp. the deporting of Muslims unwilling to change their names by the former Communist party, it has found its allies on both sides of the political spectrum (possibly also due to previous ties with the current Prime Minister, who was back then the private security guard of the communist leader Todor Zhivkov and subsequently also the king-in-exile, who became a prime minister), the new leadership might still be unable to position itself. Although accused of pro-Russianism due to his proposal to review the sanctions against Russia, after the prolongation of the sanctions by the Council of EU in December, the current president Radev (a nomination of the Socialists) has toned down his position and slowly emancipated himself. One clear deduction from the aforementioned facts is that virtually all parties (possibly with the exclusion of the Greens) have had something to do with Russian interests or stakeholders and that it is the advent of the country’s Council of EU Presidency that has transformed these into delegitimizing factors. A further factor in the direction is also the lacking drive for an all-encompassing lustration despite reinvigoration of the Vergangenheitsbewältigung (dealing with past) through uncovering the truth about labour camps or socialist cadre policy, beneficiaries of which still run many public entities (esp. in education, research and intelligence).

But how does this distant and recent past transliterate into identities? The question is asked in plural, as by default the country has been said to consist of at least three ethnicities (proto-Bulgarian, Thracian and Slavic) and support for EU membership just slightly above 50%. With a thesis about a central Asian origin supported during socialism and another about a Pamir-Hindu Kush supported by Turkish and English scholars, previous influences from Iran, Ostrogoths, Celts, with some Armenian and Jewish minorities living inside the country, Bulgarian minorities alongside its borders, as well as in Ukraine, Armenia and Russia (Tatarstan, Chuvashia and Kabardino-Balkaria), the picture becomes even more complicated. To this one should add that there is more work force abroad than in the country itself, as well as that demographic projections are dystopian. Bearing the latter in mind, many are sticking to conservative values and protectionism over the last remaining assets that have not been sold to offshore companies that don’t pay taxes (latest assets sold include most malls in the capital, a large bank, the national tobacco company, as well as gold and wood extraction, etc.). Last but not least, the country is boasting many negative labels, such as most corrupt, the one with the least free media, the poorest, etc., which only support encapsulation, distrust towards the unknown and support for a seemingly strong leadership that legitimizes itself with the support of printed press spread to an aged population and owned by the largest magnate – Delyan Peevski, responsible for a bank outburst that ate nearly four billion Euro of taxpayers’ money.

16_1_initiative
Source: ECFR

Geopolitics – a case of small, unreformed member of the Union.

Superimposing geopolitical aspirations over a plethora of domestic concerns seems to the most noted feature of the Bulgarian Council of EU Presidency. It begins with the Western Balkans – a domain with long history that was a feature of the head of the Socialist International Georgi Dimitrov’s and Tito’s aspirations for seclusion from the Soviet Union that resulted in the subsequent plundering of the country (incl. its gold reserves, human capital through resettlements, as well as natural resource endowments) during its time as USSR-satellite. Bulgaria holds also probably the highest number of scholars researching on the region, as well as a large number of former dissident-traders that were active during the Yugoslav embargo. Cultural affinity and susceptibility of socially constructed irregularities could definitely be of use to the wider Union, should Bulgaria manage to conduct the necessary domestic reforms and showcase regional leadership.

But this is not its single geopolitical feature. In November 2017, the Prime Minister and the former king in exile met with their counterparts in Saudi Arabia, thus turning their back on an African Union – European Union Summit in Cote d’Ivoire, possibly thus avoiding the politicization of contentious nature of the migration policy. In the aftermath of its Council of EU Presidency Bulgaria will hold also the next edition of the China – CEE 16+1 Summit, which is by far the best chance to capitalize on the ownership of the trajectory of the One Belt, One Road. Hence, the Bulgarian Presidency must make sure that corruption is eradicated in the domains where the biggest amount of EU funds are distributed namely transport, railway and energy networks, as well as that its trade-off between South Stream and the Commission support for a Balkan Energy hub finds an additional supporter in the face of China. Additionally, its ability to facilitate dialogue learned during the Council Presidency should make sure that Chinese investments do not take the form of loans, but rather a combination of toll taxes, management and technical engineering expertise (as the current performance of reviving the national railways is rather low). Additionally, it should use the competition for control of ports between Russia and China not only to expand the capacity of its own ports, but also to put illicit maritime networks (oftentimes starting from Sevastopol), the clandestine militarization of the Black Sea (Russian and NATO ships often travel without flags), as well as the Blue and the Circular Economy as its preferences, as China holds strong expertise in the latter. Beijing also supports the autonomous regionalisation of the region, which could mean both support for the further institutionalization of the Black Sea Economic Cooperation, as well as of the Polish Intermarium, which remains largely a geopolitical aspiration, rather than a pragmatic instrument (such as PESCO).

Circular Economy
Source: COR

What about resilience in the Neighbourhood?

Notwithstanding China’s soft power and multilateral commitments in the trade-sustainability-economic development nexus on the rise, Bulgaria’s current commitments towards the best performers in the Eastern Partnership remain difficult to identify. As the Union’s poorest country it finds it hard to disburse significant amounts of aid (UN commitments remain at 0.7% of GDP) and focuses these predominantly on the Western Balkans and the Neighbourhood. Education projects and twinning of best practices remain its reserved domain. Bearing in mind the EU’s most recent reprogramming of the EU’s Neighbourhood Policy essentially in the direction of technocratic policy cycles and transferrable resilience, Bulgaria should make best use of both its strengths within the EU institutions, as well as China’s expertise. The Bulgarian European Commissioner Gabriel is currently responsible for the intersection among Digital Economy, Cyber Security and the Energy Union – areas, which are of utmost importance to the resilience of the Eastern Neighbourhood to external influence through resource dependency and alternative discourses. Since 2013 the most pronounced problems in Ukraine in this realm were the dependence on Russian gas, whose abolishment has been conditioned by EU to the liberalisation of the energy market, as well as Russia’s distribution of alternative discourses related to the crisis in Crimea. Bulgaria could, for example, seek the accelerated inclusion of the DCFTA countries into the digital single market, as well as the mediation between Eastern Partnership countries and Russian perceptions on the conflict by inviting them as observers to the 16+1 summit and proposing projects of common interest in non-sensitive areas, such as the Blue, the Shared and the Circular Economy, improving railway, maritime, energy and digital connectivity, ethical questions related to usage of the new global currency – personal data and establish horizontal ties between donors from the AIIB, NDB, DEVCO,  BSTDB to improve aid effectiveness and twinning of best practices. Such an approach can not only be beneficial to the regional ownership of the OBOR, but also result in positive externalities towards issues that are existential to the major actors in the vicinity and beyond – EU, Russia and China. For that purpose, the aforementioned legal and institutional possibilities must be maximised and party confrontation – depoliticized through a focus on shared identities and technocratic policy-making by the advent of the summer.

[1] Eva-Maria Poptcheva, Parliament’s legislative initiative, Library of the European Parliament, 24.10.13, http://www.europarl.europa.eu/RegData/bibliotheque/briefing/2013/130619/LDM_BRI(2013)130619_REV2_EN.pdf

[2] Council of Europe Convention on preventing and combating violence against women and domestic violence, https://www.coe.int/en/web/conventions/full-list/-/conventions/rms/090000168008482e

Policy Paper §4: Supranational hybrid materialism: Two strategies for own resources of the European Union after 2020.

Supranational hybrid materialism:

Two strategies for own resources of the European Union after 2020.

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Teodor Kalpakchiev, Head of Research, the-ENPI.org

2-07

Executive Summary

The continuous reduction restrictions to expanding the own resources of common budget of the EU and the trajectory of United Kingdom’s exit has reinstated the need for generation of own resources for the common EU budget. This policy paper puts forward two proposals based on hybrid finances and quasi-monetary markets based on taxing non-renewability, which altogether would create a form of supranational hybrid materialism that will be transformed into capital feeding into the common EU budget.

  1. Establishing a supranational hybrid finance system.
  • Countering large-scale tax evasion through externalization of EU’s competition policy.
  • Transformation of all aid mechanisms to investment-related ones in order to overcome the donor-recipient relationship, which is harming the reciprocity of interregional relationships, which are ultimately the goal of European regional governance.
  • Creation of a supranational oversight mechanism that ensures that capital control is maximized and extrapolation of financial blending based on investing taxpayers’ money into infrastructure assets, while providing guarantees for the multiplication of the venture through private capital.
  • Acquisition of state debt and collaterals from the American equity market through national development banks and the creation of integrated national capital markets in non-Eurozone countries.
  • Taxation of bitcoins and establishment of a technology adjustment fund to create dedicated servers inside Europe, where operations will be both generated and oversighted.
  1. Creating quasi-monetary markets based on taxing non-renewability.
  • Usage of the clean development system to generate own resources for the adaptation towards sustainable production and competitiveness (e.g. through emissions trading, REDD+)
  • Integration of quasi-markets into EU’s own resources through the concept of carbon leakage and the liability of foreign enterprises.
  • Creating a system of green trade, which is based on export promotion of environmental goods and creation of monetary restrictions to goods non-compliant with EU’s internal regulatory regime
  • Taxing waste (incl. its material and carbon externalities) inside the EU and non-circular products entering the EU
  • All taxes on external borders to be channelled to EU’s common budget

For the full research (incl. annexed review of EU ETS and Parliamentary positions):

 

 

 

Policy Paper §3: Economic Consequences of the Western protectionist emancipation

Policy Paper §3: Economic Consequences of the Western protectionist emancipation

Teodor Kalpakchiev

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3-07

Since his election Trump has embarked on a more restrictive economic policy, which includes reshuffling domestic policies, re-negotiating trade deals, as well as restricting America’s participation in multilateral organizations, thus reviewing traditional relationships with other countries.

The impending economic disjuncture

Globalization, as per popular conviction and theoretical underpinnings, is a result of the expansionary industrialization of England and USA combined with an attempt to structure value chains via exploiting the natural and human endowments of former colonial territories. Additionally, the block has been a stark proponent of deregulation, which provides a boost to emerging domestic economic operators by allowing them to float freely in the global economy. In order to secure a global market for its companies, the Obama administration embarked on coalescing these by materializing the interregional trans-Atlantic and trans-Pacific deals respectively with EU and East Asia. The strenuous process had a sobering effect on these counterparts, which realized that the globally present American companies would relish excessive advantage in competing with theirs, as well as sizeable extra-judicial protection. Trump’s motives mirrored a number of contrasting concerns, such as China’s GDP growth being continuously three times bigger while retaining parity in purchasing power and leverage in high-tech exports and monetary reserves[1]. The strong dollar and retrieving value chains from the regional NAFTA meant to him an opportunity to foment job places and incentivize growth, thus increasing American citizens’ ability to purchase imported goods and restoring USA’s place as the leading global economy. We may define his pledge to cut regulation by 75%[2], reduce corporate taxes and instigate trade barriers as protectionist neoliberalism, aimed at absorbing the waning fossil fuel prices and stagnant commodity prices’ growth. Thus, in contrast to Russia’s willingness to pave its way towards expansionism to the poles, Trump rather aims to maximize the attraction force of the Singaporean economic freedom and accumulate capital for the further modernization of America.

The trade – sustainability nexus

The juxtaposition between USA and China is expected to lead to a war between two camps in the global economy – that of neoliberalism and of regulatory statehood. Concerning trade, the new constellations are already taking shape. The first camp will be under the leadership of the English speaking-western camp, which will attempt to align to itself India, Australia and potentially Brazil. The second camp will be under the leadership of the European Union and China, which are the ripest emanations of regulatory statehood. The EU’s exclusive competence over the trade domain has led to the proliferation of trade negotiations with the different state and regional counterparts in Asia, as well as with Mercosur and South Africa[3]. While TTIP is still high on the agenda of the EU, it has become clear that the EU and the US would find it difficult to find a common denominator of the negotiations. Rather, the EU would reverse its available expertise in negative economic integration into a positive one by transforming its environmental and market standards into trade barriers. For the environmental domain is one of the essential legitimizing factors for the existence of the European Union, the European leadership would potentially adjust to the new reality by increasing its ownership over the environmental domain together with China. This would accrue further losses for the English-speaking world, as environmental goods hold the key to future economic growth.

Post-sovereignty or realist hegemony?

Trump and May have advanced themselves as proponents of a realist world, where hegemonic core-states would assume the role of agenda-setters globally. Their preferences clash substantially with the EU’s externalization of a post-sovereign order, whereby the EU uses its market to externalize both standards and organizational patterns[4]. The USA would rather prefer countries from the developing world to lack a form of self-organization, which would give them leverage in the trade negotiations. On the contrary, the EU sees in these potential like-minded collaborators, who are interested in advancing a forward-looking, post-sovereign agenda. Trumps’ and May’s neoliberal protectionism is an attempt to redirect taxpayers’ money from multilateral and regional organizations back to their own states. In addition to the financial disruption of post-sovereign establishments, Trump is deliberately propagating further „Exits“ of European Union member states, defining NATO as redundant[5] and phasing out the sustainable development goals from his agenda. For UK and US are nominal net payers, who are securing the functioning of regional and multilateral organizations, their phasing out would drastically cut available expenditures.

The consequences in the security domain would necessitate the reinvigoration of the existing security architecture in Europe. Although the OSCE has lived through a downfall, the revival of the East-West dichotomy will possibly necessitate a revision of the consensus-driven, non-binding rules making, as well as the low degree of institutionalization[6] of the organization. The possible withdrawing of NATO has resulted in the strengthening of the European Defence Agency’s capacity, as well as in programs for pooling of the capacities of EU member-states, which is rather directed at creating a pan-European defence procurement market, as well as increasing the effectiveness of research and innovation in the domain. In the environmental sustainability domain, the EU would continue with its manifold efforts at exporting its regulatory standards and shaping multilateral environmental negotiations. Concerning global multilateral efforts, it is quite probable that the EU would focus on increasing investment in environmental goods and technological transfer through the liberalization of trade in environmental goods among the highly industrialized states. It is namely there, where the EU would probably focus its protectionist efforts to undermine deregulation trends.

Effects on different regions

Along the security problematic, further research will explore whether the economic effects of the transition towards protectionism and the erosion of transnational institutions will actually take place, as well as how the new cooperation constellations will look like.

The most profound changes will be happening in East Asia, where China’s appetite for the territories in South China Sea is combined with an effort to step up globalization along domestic convictions for an uptake of inclusivity and sustainability. With the fall of the Trans-Pacific Partnership, China has reoriented itself into creating a free-trade area with ASEAN, Central Asia and other smaller countries that surround it. Its accession in the WTO, as well as the availability of capital reserves would allow it to prop up investments in the modernization of the economy, as well as the rewriting of the trade rules alongside new developments. Its One Belt, One Road initiative has increased the competition among other regional establishments in Asia and is likely to have substantial effects on Russia’s immediate neighbourhood, as well as on the programming of EU’s collaborative action eastwards. The American isolationism is rather seen as an opportunity for China to take over its place as global hegemon via the discussed plans.

Seemingly, OPEC countries in the Middle East have realized that the falling oil prices would result in maintaining good export volumes. However, the revenues from these are likely to be reinvested in an infrastructure that increases their own energy independence. While militant groups and issues with public health shake most of West and Central, and partially East Africa’s stability, regionalization and ceremonial public diplomacy is on the rise. African leaders are concerned mainly with development-oriented goals, such as securing access to water, food, shelter and education as a mean to offset expansionary growth. The European Union is readily investing in these sectors with its development aid, while attempting to build state institutions via horizontal cooperation. The expectation that Africa’s population will increase from 1.2 billion to almost 2 billion also makes such actions a necessity, as to avoid another migration crisis that will completely shatter Europe. Potentially, should UK exit the European Union, East and South Africa could be compelled to join the Global Britain project together with India and Australia.

South America, which was severely shaken by the oil bust, is focusing on diversification and poverty alleviation, with regionalism being largely on the rise with projects such as MERCOSUR, the Andean Communities, UNASUR and CELAC. The European Union is largely interested in a horizontal sharing of expertise, as well as the conclusion of an inter-regional trade agreement, modelled possibly on the lessons from ASEAN. While traditionally the North-South exchange on the continent was much stronger, Trump’s retaliation towards Mexico would serve as a lesson for the continent, which would seek alliances that will make it more independent.

[1] World Economic Forum, The world’s top economy: the US vs China in five charts, 05.12.16 https://www.weforum.org/agenda/2016/12/the-world-s-top-economy-the-us-vs-china-in-five-charts/

[2] The Atlantic, Trump’s Promises to Corporate Leaders: Lower Taxes and Fewer Regulations, 31.01.2017 https://www.theatlantic.com/business/archive/2017/01/trump-corporate-tax-cut/514148/

[3] European Commission, DG TRADE, Overview Of Fta And Other Trade Negotiations, February 2017 http://trade.ec.europa.eu/doclib/docs/2006/december/tradoc_118238.pdf

[4]  Sandra Lavenex & Frank Schimmelfennig (2009) EU rules beyond EU borders:

theorizing external governance in European politics, Journal of European Public Policy, 16:6,

791-812, http://tandfonline.com/doi/full/10.1080/13501760903087696

[5] Piotr Buras, Prepare for a New Europe, Stefan Batory Foundation, February 2017, p. 5-7 http://www.batory.org.pl/upload/files/pdf/rap_otw_eu/Prepare%20for%20a%20new%20Europe.pdf

[6] Leah Pybus, To Be or Not to Be: The OSCE in the ‘New Europe’, Interstate – Journal of International Affairs Vol. 1996/1997 No. 1.

Policy Brief §3: The G20 Summit between self-globalizing states and military buildup.

The G20 Summit between self-globalizing states and military buildup.

licence

Teodor Kalpakchiev

3-07

The world is now heading to the Hanseatic city of Hamburg, which has been one of the beating economic hearts of Germany for 800 years. However, for its hosting of a number of news outlets, it was a target of the violence of the extraparliamentary opposition, organized by the RAF in the 1970s. With the G20 Summit it seems that these two dimensions are converging. Since the global financial crisis, a stillborn balloon of the laissez-faire that brought one-third of the world’s wealth in the United States, many have taken rather distinct views. The EU, a supranational, state-like, non-state entity remains continuously committed to bringing together the best of world’s political philosophy in its trade deals by incorporating the odd externalities of liberalism such as welfare inequalities, environmental injustice and societal alienation. The isolationist West is dearly concerned with sharing its economic attainments with newcomers, while the East, led by China’s fast paced rebirth from a backward looking poverty stricken communist experiment to a blend of state-like control over the effects of capitalism with a globalization of the inner self.

To many, this is an expensive political meetup in times when problems are manifold. The sum of their actions construct non-governmentalism, which oftentimes takes a subjective and radical approach to societal problems. With G20 Germany has intentionally added up a new branch to world’s governance, which is inspired by the Sozialemarktwirtschaft and the culture of creating networks of structures. In essence, the inclusion of a civil society and youth component marks a transgression from the word “summit”, which in German translates as a meeting on the peak (das Gipfeltreffen). The tradition, which stems from the times of the German Staemmen (tribes) emphasizes the importance of equality over hierarchy. Its significant benefit is the ideational inclusion, which however grants a form of authority in its modern sense. With the police, the supreme organ of control over anarchistic propagations, being stripped of its own, the rise of ultra-leftist formations in Europe such as the Left in Germany and DiEM25 in Greece could easily utilize the potential clash between an authorizing society and disloyal state organs that are the embodiment of the all-encompassing bureaucratic and elitist alienation. However, the left not simply a synonym of the humanistic societal foundations, but also an allegory for the Eurasian alternative for political governance. Albeit not interchangeable, they reveal yet another mean for pressure over democracy in a social market economy.

With the Russian fast-paced incorporation of its newest democratic self-determined constituents in the background, the pressure over the buffer zone beyond EU’s eastern borders has renewed the concurrent manifestation of strength by the United States. For being largely isolated by Western powers, he has decided to play the forsaken card of historical memory that provides him psychological advantage over Germany, which still feels ill at ease with the topic. The EU’s continuous investment in Polish infrastructure has brought Warsaw much closer to the West not only in terms of outlook, but also in terms of economic practices. The polish voice is the strongest within the sub-regional backlash against what is seen as German externalization of internal historical responsibilities onto the European policy agenda. The recent Austrian plug into the V4’s favour of control over excessive migration uploads the topic onto the agenda consisting of trade, globalization, poverty and security issues.

LogoG20_teaserbild

What can one expect during the meeting of G20? Trump would most probably try to use his new allegiance with the Shia and the anti-migrant rhetoric to plunge into a well-organized, structured discussion. For the EU is attempting to establish its own security community, his is intent on being identified as the biggest troublemaker for Russia, thus cementing Ukraine as the biggest dividing factor and dooming any possible advancement of the Minsk 2.0 accords. China’s 11$ billion funding of Russia’s state development bank could be seen as a fortification of the one belt aspirations and could be utilized by Germany to press over the Ukrainian issues. The trade-globalization-development nexus would definitely stand firm on top of the agenda, as the readjustments of the winners and losers of globalization is probably what German social market democracy has most answers for. With no concessions planned for Brexit, the crucial aim of the hosts would be to multiply European standards of governance in the developing world and according to the high aspirations of its trade agreements with the rest of the global north.