Gerard Wynn,
On 12:36 GMT, Thursday 10 December 2009
COPENHAGEN
(Reuters) - Billionaire financier George Soros told Reuters on Thursday
he had found a way to unlock a stalemate on climate finance using
International Monetary Fund assets.
Soros wants to invest $1 billion (613.5 million pounds) of a total
of his own $25 billion funds in low-carbon assets.
U.N. talks in Copenhagen, meant to agree the outline of a new
climate treaty to succeed the Kyoto Protocol, are stuck on splitting the bill
to cut carbon emissions and prepare for more droughts, floods and
rising seas.
Poorer
nations want rich countries to spend 1 percent or more of their
national wealth on emissions cuts in the developing world, or at least
$300 billion annually, about double the closest estimates by
industrialised countries.
"I've found a way for someone else to
pay ... to mobilise reserves that are lying idle," said Soros, on the
sidelines of the December 7-18 conference which world leaders will
attend in the closing two days.
"The whole conference might break
down because of this, and this $100 billion fund I think could just
turn this conference from failure to success."
Developed
countries could invest a portion of $283 billion IMF special drawing
rights (SDRs) in carbon-cutting projects in developing nations, he said.
The
IMF made the rights available to help combat the recession, by
unlocking financial liquidity after panic froze debt markets --
including more than $150 billion for the 15 biggest developed
economies, Soros said.
The low-carbon projects themselves would
pay the interest on the proposed $100 billion to be spent over the next
decade, from earnings which would depend on a carbon price for example
under a global market in offsets and other carbon emissions permits.
IMF
gold reserves would guarantee the principle and interest. Soros
acknowledged a series of obstacles to his proposal, including U.S.
Congress approval, IMF director approval and a global carbon price.
"The
IMF directors are not keen to use it (gold reserve). If you on the
board of directors you like to have this nice substantial reserve to
sit on so they won't actually do this of their own free will," he said,
adding political will was needed to drive his initiative.
Other
ideas on the table to unlock climate finance include a levy on
transport fuels in shipping and aviation, a tax on rich nation carbon
emissions rights or a fund raised from countries according to their
contribution to climate change and ability to pay.
(Reporting by Gerard Wynn, Editing by Janet Lawrence)
Soros says world is witnessing end of pure,
unregulated capitalism model
Posted Feb 23rd 2009 3:00PM by Joseph
Lazzaro
Billionaire investor George Soros
told
Bloomberg News
that the current global financial crisis originated during the
deregulation of the 1980s, and signals the end of the free market model
that has dominated capitalist countries, and indeed much of the
developed world, since the the end of the Cold War with the break-up of
the Soviet Union in 1991.
The end of market absolutism?
Speaking at a private dinner for economists and bankers at Columbia
University in New York, Soros said liberalization of the financial
industry started by the Reagan administration in 1981 has led to a
series of crises requiring government intervention,
Bloomberg
News reported.
Further, Soros added that the U.S. housing sector's collapse has
"damaged the financial system itself" and the philosophy of "market
fundamentalism" was now in doubt because, contrary to economic
conservatives' theory, markets have proved to be inefficient and
affected by bias, rather by all available information,
Bloomberg
News reported.
Soro also reiterated that the Obama administration's plan to buy toxic
assets from banks won't be enough to normalize credit flows. Two weeks
ago, Soros wrote in
The Wall Street
Journal
that a better plan, among other measures, would involve injecting
capital into the banks, and cutting minimum capital requirements. (
Subscription
required.)
Currently, Soros is chairman of the Soros Fund Management, LLC, a hedge
fund, and is also is founder of the
Open
Society Network, a private, grant-making foundation that focuses on
democracy and human rights issues.
Soros
is perhaps best known
for one of the most cunning and successful short-term plays in
investment fund history. In September 1992 Soros sold short more than
$10 billion of the British pound, after the Bank of England failed to
raise interest rates. Soros' profit on the ensuing fall in the pound:
about $1.1 billion.
Market / Economic Analysis:
Much to stir on from Soros. Briefly, Soros is in agreement with most
economists that deregulation went to far, and that toxic asset removal
by itself will not solve the financial crisis. Less convincing, at
least at this juncture, concerns assessments of free markets. At
present, what we can argue is that markets provide incentives and, over
time, are more efficient than other economic systems, but they are not
self-corrective / self-regulating and are subject to crises. Still, the
above does not negate the market model, but rather argues for mixed
capitalism, as opposed to pure capitalism.
During the Bush
administration (but not every deregulation act started during 'Bush
43'- - some originated before), the U.S. went from 'markets represent
the best model and deploy resources efficiently,' to 'markets are
self-correcting' and 'markets are not subject to crises.' That shift is
in large part responsible for where we are today - - experiencing the
worst systemic conditions in generations. Hence, after the system has
been stabilized, the regulatory reform must proceed from the following
premise: that markets provide incentives, but there must be limits and
safeguards to prevent excessive risk, incompetence, fraud, and greed
from jeopardizing the flow of credit.
Dec. 9 (Bloomberg) -- Billionaire investor George Soros,
who helped push the U.K. out of the European Exchange Rate
Mechanism in 1992, said France and Germany would like to see
London’s financial-services industry “sink.”
“There is thinking in continental Europe that would like
to rein in London and see London sink,” Soros, 79, said today
at a conference organized by the London School of Economics.
“There is this Franco-German alliance, I nearly said
conspiracy, an alliance or common ground.”
The European Union is considering proposals that have been
criticized in the U.K. financial community as undermining
London’s competitive position as a global money center. France
and the U.K. have been divided over the Nov. 27 appointment of
Michel Barnier,
an ally of French President Nicolas Sarkozy,
as
the EU’s new finance chief. Sarkozy and British Prime Minister
Gordon Brown
are to meet tomorrow in Brussels.
At the London conference today, Soros said hedge funds had
been wrongly blamed for the financial crisis. Hedge funds that
“overstepped” the market, were wiped out, he said.
“They are not subject to ‘too big to fail,’” Soros said.
“They did fail.”
Soros is chairman and founder of New York-based hedge fund
firm Soros Fund Management LLC and also runs the political
organization Open Society Institute.
In 1992, Soros and other investors helped push the U.K. out
of the ERM, an event that undermined the credibility of the
then-Conservative government.
To contact the reporter on this story:
Tom Cahill in
London at tcahill@bloomberg.net
Financier-philanthropist George Soros says climate talks could fail
without more money
December 10, 2009, 9:26AM
Anja Niedringhaus, Associated PressGeorge
Soros, businessman and philanthropist, announces during a news
conference a plan to generate an additional 100 billion US dollars for
climate change relief.
By Charles J. Hanley, AP Special Correspondent
COPENHAGEN
— The $10 billion a year proposed by rich nations to help the poor
adapt to climate change is "not sufficient," and the gap between what's
offered and what's needed could wreck the Copenhagen climate
conference, American billionaire George Soros said Thursday.
The
investor-philanthropist, one in a line of international notables
visiting the 192-nation meeting, told reporters he had developed a
partial solution. Soros suggested shifting some International Monetary
Fund resources from providing liquidity to stressed global financial
system to a new mission of financing projects in developing countries
for clean energy and adapting to climate change.
About $100 billion in a one-time infusion could be generated, said
Soros, a major supporter of causes in the developing world.
But he acknowledging a major roadblock in Washington.
"It
is possible to substantially increase the amount available to fight
global warming in the developing world," he said. "All that is lacking
is the political will. Unfortunately the political will will be
difficult to gather because of the mere fact that it requires
congressional approval in the United States."
Soros said he had
"informal discussions" with Obama administration officials and they
recognized the difficulty of getting congressional approval. But he
said the issue was too important to sweep aside.
"I think it is
already becoming apparent in the negotiations that there's a gap
between the developed and developing world on this issue which could
actually wreck the conference," he added.
The international
financier dropped in on the two-week conference on its fourth day, as
rich and poor nations pressed on behind closed doors and in open forums
to bridge wide differences and reach agreements on how to combat global
warming.
They have just a week to deliver something for
President Barack Obama and more than 100 national leaders to sign in
the finale of the Copenhagen climate summit on Dec. 18.
In one
key area, delegates are trying to agree on how much industrialized
nations should reduce their emissions of carbon dioxide and other
global-warming gases after the 2012 expiration of the 1997 Kyoto
Protocol, which covered 37 richer nations. The U.S. had rejected Kyoto.
The
second key area involves climate change financing. That involves money
for poorer nations to build coastal protection, modify or shift crops
threatened by drought, build water supplies and irrigation systems,
preserve forests, improve health care to deal with diseases spread by
warming, and move from fossil-fuel to low-carbon energy systems, such
as solar and wind power.
The World Bank and others project that
hundreds of billions of dollars a year, in public and private money,
will be needed eventually for the climate change shift.
Yet
industrialized countries thus far are talking only about a quick
package — three years of funding at $10 billion a year. Much of that
would go toward training, planning and getting a fix on needs.
Developing
nations are pressing the U.S., Europeans, Japanese and others at
Copenhagen for more upfront money and for assurances about long-term
financing so they can plan on a stable source for many billions more.
"Financing
should be the 'crunch issue' here next week, for the heads of state to
deal with," said Alden Meyer of the U.S. Union of Concerned Scientists.
Soros said the $10-billion-a-year short-term plan is "more than
nothing, but not much, it's not sufficient."
He
suggested climate financing be boosted with some $100 billion in
Special Drawing Rights, the artificial "currency" of the International
Monetary Fund, formulated as a basket of major currency values and held
in reserve for lending in financial emergencies.
In response to
the recent global financial crisis, the IMF created more than $200
billion in new Special Drawing Rights. But Soros noted that the Obama
administration had difficulty getting U.S. approval for that through
the U.S. Congress.
He had found "quite widespread support" from
other governments, but "other countries are reluctant to do something
that is uncomfortable for the United States," Soros said.
On
Wednesday, the U.S. and China exchanged barbs at the Copenhagen climate
talks, underscoring the abiding suspicion between the world's two
largest carbon polluters about the sincerity of their pledges to
control emissions.
U.S. chief negotiator Todd Stern urged China
— now the world's biggest polluter — to "stand behind" its promise to
slow the growth of the country's carbon output and make the declaration
part of the Copenhagen agreement.
China rejected that demand,
and renewed its criticism of the U.S. for failing to meet its
17-year-old commitment to provide financial aid to developing countries
and to reduce emissions of carbon dioxide and other gases warming the
Earth.
"What they should do is some deep soul-searching," said Yu Qingtai,
China's chief climate negotiator.