Green Finance: The Way Forward?

Green finance is very simple in practice; a financial activity (product or service) that ensures a better environmental outcome. It is proving to be an effective way to meet the growing needs of both environmentalism and capitalism. It can take many forms, but broadly its divided into banking, investment and insurance products which ensure sustainable development.

Why is it important?

Climate change is an ever more pressing issue and gaining consensus in how to solve it is proving challenging. Commentators have high hopes for green finance in helping to facilitate meaningful change. The UN is working to align international financial systems to its own sustainable development agenda, believing it plays a vital role in delivering its goals.

Green finance can incentivise sustainable innovation, green projects such as carbon capture technology have had considerable backing which has only bolstered is growing success, bringing more people and more money into the industry. This approach aims to have a trickle-down effect, and we could expect to see changes for the better across all areas of our lives, from high tech energy solutions to how we get to work each day.

The effectiveness of focusing on an industry in such a fashion is ironically displayed perfectly by fossil fuels. Subsidies for fossil fuel production have been used to facilitate cheap energy with the aim to stimulate economic growth. The US is a particular expert in this field, having been written into their tax code. The International Monetary Fund (IMF) found that in 2017 fossil fuels received over $5.2 trillion in subsidies. Perhaps here lies the problem, it is no secret that where the money goes, people go. Proper and effective incentives drive production exponentially and focusing this on sustainability could prove invaluable.

What steps are the UK taking?

As a global financial hub, it is important for the UK to be a leader in this field, they need a post-Brexit approach, or they risk falling behind. Chancellor of the Exchequer, Rishi Sunak recently announced a series of new measures aimed at making the UK a world leader in the green finance sector. The UK will be the first country have a task force on climate related disclosures (TCFD). The task force provides a means for companies to better provide information to investors, insurers, stakeholders etc. on climate-related financial risks. It also aims to help investors understand their exposure to climate risks. The task force will enforce these measures and they will be fully mandatory by 2025.

A ‘green taxonomy’ has also been proposed as a framework to determine which activities are environmentally sustainable. It provides an understanding of the impact a firms’ activities and investments have on the environment and aims to drive a sustainable economy by highlighting climate risks.

Growing international interest

Despite the UK aiming to be a world leader, the US, China and France are the largest holders of Green bonds. The European central Bank hold around 20% of the Euro-dominant green debt. Both signals that this is an area set for increasing growth. Whether this is being done for the good of the world or for economic gains is neither here nor there. This is where green finance comes into its own, it satisfies those who are only concerned about the economy and making money and those with real interest in sustainability and tackling climate change. The City of London Corporation is hosting the Green Horizon Summit, looking at the role green finance can play in the economic recovery after Covid-19. The main goal is to find a way for public and private finance to aid a sustainable future. With the election of Joe Biden as US president, we can expect to see the US re-join the Paris Agreement and a greater commitment to green finance. Having the world’s largest economy back on board is major coup for a sustainable future.

It is important to remain realistic, the International Energy Agency predicts that coal will still hold a 30% share of global energy consumption in 2040 despite any efforts to halt its consumption. Positive steps but fossil fuels are not going away.  

A Threat Beyond Extremist Networks? Recent Attacks in France Raise Concerns

So far in 2020, France has had an increasing number of lone wolf terror attacks. This increase sets a worrying precedent for not only the French intelligence services but that of the international community too.

None of the individuals carrying out the attacks that have taken place since September were known to the intelligence services. They were not linked to a terror group, no group claimed them, and they had no stated political agenda. The only signs of radicalisation were on social media, and they were tenuous at best. When more sophisticated weapons are used, the knowledge and materials are hard to come by and their research often leaves a trail that intelligence services pick up. However, what these attacks have in common is that kitchen knives were used, generally an innocuous purchase.  

Within France, tough questions are being asked of the government and intelligence services on how to combat the threat. These recent attacks are a far-cry from the highly organised and sophisticated attacks of 2015. The Former head of the French intelligence services, Bernard Squarcini, has commented that France is confronted with ‘a new generation’ of extremists. 7 of the 9 attacks this year have been carried out by individuals unknown to intelligence services.

The trigger for the most recent attacks was the republication of caricatures of the Prophet Muhammad by the magazine Charlie Hebdo. The result was huge protest overseas, most notably in Pakistan where videos surfaced of protesters wielding knives. Zaher Hassan Mahmood, repeatedly watched videos of the protests before buying a butcher’s knife and stabbing two outside the former offices of the magazine in September. The beheading of a schoolteacher followed a similar timeline, Anzorov was triggered by hearing the teacher, Samuel Paty, showed the caricatures to school children. On the same day of the attack he was looking for individuals on twitter who had offended Islam. The most recent attack came from Brahim Aouissaoui, who killed 3 with a knife in Nice. His family and friends said he showed no signs of radicalization and was seeming a normal young adult. Experts in the field are calling these individuals fanatics rather than jihadists, in essence ‘lone wolf’ attackers without a political agenda.

It may be easy for some to say the French intelligence services could be doing a better job; however this new threat challenges many of the previously effective surveillance tactics used to combat extremism. There are very few signs these individuals were radicalised, and the signs often came on the day of the attack.

The response of the French government has come under fire for being ‘inappropriate’ and ‘counterproductive’. The government have given the attacks a political dimension that experts don’t believe they warrant. Islamic separatism is what the state says is the main threat, as a result there has been a crackdown on Muslim individuals and organisations deemed to be Islamist. Policies and comments like these from the French government have angered many countries, including Turkey, who have called for a boycott of French goods. Commentators also criticised the policies saying these attacks are not a result of religious indoctrination. All the individuals in recent attacks were described by all as normal young adults looking for better opportunities in France. They were spurred on by a trigger event, the republication of caricatures of Muhammad, not a long process of radicalisation.

It is important to note the importance of the global pandemic in this too. Some sources have indicated such a rise in attacks was only a matter of time. National lockdowns and lacking opportunities for younger generations as a result of the pandemic are a melting pot for radicalisation. Social isolation, more time online and strains on mental health only serve to exacerbate disillusionment with society, making people vulnerable. Extremists and radicalisers know this and will aim to exploit these vulnerabilities. These most recent attacks may not be a result of direct contact with radicalisers, but it would not be unreasonable to suggest that the socio-economic consequences of the pandemic had an impact on these individuals. Without the support points normally available, like friends, social activities, school and the wider community, isolation can very quickly have a disastrous impact. According to the national coordinator for Prevent (part of the UKs counter-terrorism strategy), referrals from the community were down by 50% during the first lockdown in the UK. This is not a case of fewer people needing help, but that fewer people are getting access to it. A very worrying sign for the UK and coupled with the events in France, the terrorism threat level in the UK has been raised to ‘Severe’.

Russia’s strategy in Africa: Why it want’s to increase it’s presence

Vladimir Putin has stated that Africa is one of Russia’s main foreign policy priorities. There are a number of triggers for this, increasing involvement of Western powers on the continent is one but the immense economic and strategic opportunity the continent offers may be more important. In 2018, the US ramped up its involvement in Africa to counter the influence of China and Russia, signifying Russia’s potential to benefit.

The Kremlin’s aim to build new alliances on the continent is proving to be successful. Back in 2014 they persuaded more than half of African states to oppose or abstain from the UN General Assembly’s resolution condemning the annexation of Crimea. Whilst these nations are not global players like EU states are, it is still of major significance that Russia has this support.

The recent coup in Mali is a huge blow to French diplomacy in West Africa but a triumph for the Russian Government, who were reportedly involved in the coup. Strategically this is very important, the French were heavily invested in the previous regime. This now opens opportunity for Russia to supplant French influence in the region.

Russia is a favourable ally for many African nations compared to Western powers as an alliance comes with increased abilities to manoeuvre around international rules. A tool used by many developing nations is to play the US and Russia against one another. When Washington pushes for improvements on democracy and human rights, governments threaten to increase their relationship with Russia, prompting an easing of diplomatic pressure.

It’s main export to Africa is a problematic one, its security expertise. The over reliance on private military companies, such as the Wagner Group, risks upsetting stability across the continent. Toppling reluctant governments to advance their own agenda is a fear many western states have. The Malian coup d’état is thought to be a case of just this. There have been several reports that high ranking members of the Malian army had not long got back from two months of training in Russia before the Coup. Local media outlet ‘aBamako.com’, reported that they had in fact been in Russia for more than a year. Although not confirmed, the Wagner Group were thought to be involved militarily in the coup. Having said this, the US is training the militaries of more than 20 African nations. It is hardly surprising that Russia are doing something similar.

Russia’s alleged use of mercenaries across Africa is proving an effective tool to exert influence within the region and internationally. The Wagner Group is reported to be operating alongside Russian troops in the CAR and independently in Sudan. If used in the Malian coup it provides perfect evidence of their effectiveness. The Russian state can claim innocence while benefiting diplomatically. The Kremlin has bolstered Russian presence in the region at the expense of the French because of its alleged involvement. These companies are a comparatively low cost and low risk military option increasingly used in modern conflicts.

There are clear economic incentives for involvement in Africa. Natural resources are a key part of the Russian economy and Africa is a resource rich continent. Russian companies are aggressively pursuing lucrative deals. They have a agreement to mine Bauxite in Guinea confirmed, in the process of securing a diamond mining contract in Angola and offshore gas rights in Mozambique to name just a few. The damage done to French diplomacy in West Africa also gives an advantage to Russian owned Nuclear power company, Rosatom, to invest in the region over its French counterpart, Avenda.

Russia’s push for increased ties in Africa could be in part down to the Crimea-related sanctions imposed in 2014. Traditionally they have been an arms supplier to the continent, but as has been mentioned, they are going far beyond that. It has tripled its trade from $6.6 billion in 2010 to $18.9 billion towards the end of the decade. The most important trade deals in the Sub-Saharan region are still with the US, China and India. The same trend is seen with development aid with the EU, US, China and Japan outspending Russia. It is true that Russia is increasing its influence, but currently is only tied to a handful of states that offer limited strategic importance.

China and Cambodia sign free trade agreement: What is the significance?

China and Cambodia signed a landmark free trade agreement (FTA) on Monday (12/10/2020), the first such deal between Cambodia and a foreign state. The agreement covers tourism, trade, agriculture and investment, of which more than 90 percent will be tariff free.

Cambodia has been an important ally for China in recent years. It has been accused of giving China de-facto veto power in ASEAN’s decision-making process in return for economic support. This has of course been denied by both parties and Cambodia insists its foreign policy is not influenced by China. It is inevitable that a strong relationship with Cambodia will give China some level of influence in the region. I must add this is by no means a new tactic on the international stage.

Cambodia is the first on China’s four stop tour of Southeast Asia. Engagement with Southeast Asian states is vital for China, as its rivalry with the US intensifies the importance of economic allies in the region increases. Observes suggest China is acting as the economic backbone to ASEAN states in the wake of the pandemic caused economic downturn. This will embed strong Chinese relations for years to come, ensuring influence and support in the region. Similarities can be drawn to the US’s role post-WWII, propping up European economies in part to keep the USSR at bay. In this sense, possibly a measure to keep US influence in the region to a minimum.

This soft power tactic is clearly taking an increasing role in Chinese foreign policy. Not only is there a focus on trade, investments into infrastructure are a key component. As part of the agreement, there is a project to improve hospitals and the development of sewage systems across Cambodia. They have also offered Chinese vaccines in the fight against Coronavirus, another potential hit for the huge pharmaceutical companies of the US and the UK. Taking this holistic approach focusing beyond economics is proving beneficial for Beijing.  

Comments were made about US foreign policy in the region by Chen Xiangmiao, a research fellow at the National Institute for South China Sea Studies. Perhaps quite rightly, Chen suggests that cooperation like this should not be classified under the US cold war mentality, meaning Cambodia is either with the US or against it. He goes on to say that China has no intention of forcing a nation pick sides and that China ‘offers a helping hand while the US stands idly by armed with pressure and threats’. Those in western states may disagree with this analysis but perhaps that is the problem, this potentially outdated way of thinking is limiting cohesion on the international stage. Chinese investment in Cambodia should not mean to say it has picked a side, China and the US could work alongside one another. Harmonious and cooperative relations between major powers may be an overly optimistic outlook but it does not mean to say it is not important.

Having said this, a US built facility in the Cambodia’s largest port was reported to have been demolished to make way for Chinese funded expansion plans. A symbolic gesture that highlights Beijing’s expanding influence.

The embrace of China may serve as a jab at the European Union, who rescinded Canbodia’s duty-free access to the European Market back in August of this year on human rights grounds. Likewise, China may have seen this as an opportunity to further extend their influence at the expense of the EU, who have been (along with the UK and US) struggling to combat China’s aggressive investments and growing influence across the globe. A political and economic success for China in this regard.

The UK Integrated Security and Defence Review: What can we expect?

Over the past few months, the UK Government has been conducting an Integrated Security and Defence Review, said to be the largest since the end of the Cold War. At its core, its aim is to modernise the armed forces. It comes at somewhat of a defining moment for the UK with the main components of its foreign policy shifting. Brexit means an end to EU membership and the ‘special relationship’ with the United States is under pressure. The review essentially aims to set out national security interests and the subsequent plans for promoting and defending them.

The reasons for a review like this are twofold; to evaluate Britain’s place in the world and to assess the capabilities of military hardware in dealing with and adapting to, emerging threats. There are challenges in the face of the review, political mandates often hinder real change and the ever-present budget issues are especially problematic now. Concerns have been raised over how future budgets will be affected as a result of economic pressures.

In an attempt to meet the drastically changing face of modern warfare, technology, automated warfare, cyber, space and Artificial Intelligence capabilities are at the forefront of this review. Reports that the Challenger II tanks are to be axed have been heavily refuted, but cuts are likely. Head of the Army, General Sir Mark Carlton Smith has stated the diminishing role of heavy armour in modern warfare.  This is an unprecedented shift in military thinking, the importance and significance of which should not be underestimated. Personnel could also be taking a considerable hit, reducing troops by 20,000 is a possibility. Of course we will not know the full extent of the plan until the review is over later this year.

It is easy to think that a reduction in military hardware mentioned above would diminish the power, influence and international role of the UK. However this should not be the case, it is about adapting and shifting focus elsewhere onto capabilities that can combat emerging threats. Tanks and traditional soldiers play no role in cyber or information warfare. Cuts are necessary in order to injected the saved money into new capabilities.

Despite inevitable cuts to traditional military hardware, the UK’s international role is still fairly secure. It still has a nuclear deterrent and is a permanent member of the UN Security Council. Critics can rightly or wrongly make comments about firepower, but that does not take away from the leading diplomatic role the UK plays internationally. Its military capabilities do need to match its place on the international stage however.

That being said, Brexit and the economic downturn caused by the pandemic is putting a real strain on the UK’s ability to meet its 2% of GDP defence budget. This puts further pressure on its relationship with the US, who have quite rightly been stricter on NATO members spending 2% of GDP on their military budget. NATO and the UK are also struggling to address China and its strategic investments in Europe and the Middle East. As well as modernising the military, a focus on trade and prosperity to increase the UKs soft power is as important as ever.

Yet again, the Government have an unenviable task, with an outcome that could define the UK’s trajectory on the international stage for decades to come.

Intra-Afghan Peace talks: What issues will they face?

On Saturday 12th September 2020, the Afghan Government and Taliban sat down in Qatar for the formal intra-Afghan peace talks. It is being hailed as a momentous breakthrough in reaching a peace settlement in Afghanistan. A stable political future for Afghanistan, effective law enforcement and social inequality, namely women’s rights will be on the agenda.

Prior to this, a US-Taliban security agreement was reached in February of this year committing the Taliban to Intra-Afghan negotiations. To allow these talks to happen, the US accepted the Taliban’s request for all American troops to withdraw from the country, bringing an end to its longest war.

Despite both sides agreeing to formal negotiations, the complications persisted. The biggest of which was a prisoner exchange. There was to be an exchange of 5,000 Taliban prisoners for 1,000 members of the Afghan forces in a 10-day window. This took 6 months. The negotiations reportedly went down to the minute the plane took off with the final few prisoners, which included persuading them to get haircuts to look presentable.

So far it is clear that the Taliban want power. One senior negotiator claimed that the Afghan government was a ‘sinking ship’ and a coalition would result in the downfall of the Taliban too. He stated that it was ‘the Taliban’s turn’ to take control. They are trying to prove they have the capacity to be a legitimate global player, ‘we will prove that as the Taliban was a hard enemy, in the future we will be a solid and trustworthy partner’. Claims that those in the West and many in Afghanistan I am sure, will find hard to believe. Other negotiators have agreed that the group should be given a share of the power, some ministries to run and the integration of Taliban into the national security forces. This compromise is promising sign and does seem to be a realistic option to bring stability. However, negotiators on the same side supporting different goals does not instil a great sense of confidence.

Whilst these talks are of huge significance, a lot still stands in the way off a meaningful outcome. Perhaps the most obvious is the inherent differences between the two sides. The Afghan Government and Taliban will have to address their fundamental differences on ideology, power-sharing, justice and integration of the Taliban into national security forces. The Taliban must also be willing to compromise on its desire to recreate the Islamic Emirate for them to show they are participating seriously.

The Taliban are accurate in their assessment of the weakness of the Afghan Government. There was dispute over the outcome of the 2019 election and divisions over the acceptance of the US-Taliban agreement. Fractures within the Afghan government weaken its ability to form a unified front in negotiations. Corruption is rife and their lack of ability to exert control over much of the country is worrying. Warlords, powerful officials and politicians representing larger minority ethnic groups could challenge the Government on agreements made with the Taliban.

Issues also lie within the Taliban. The large number of cells and web-like structure of the group was a reason for their success in the war but may well be their downfall in peace talks. Different factions of the group will need to be acknowledged or accommodated in negotiations, adding to the complexity. Some have already refused to acknowledge the agreement between the Taliban and the US, whilst others may try to strengthen ties with IS. Further splintering will only hinder efforts.

The most worrying prediction is that the Taliban could prolong negotiations to keep favour with the US until it withdraws its troops, allowing the group to attempt to overthrow the Government. The current escalation in violence highlights the organisations apparent lack of ability to control its members. This being said, the chief negotiator, Mawlawi Abdul Hakim Haqqani is reported to carry significant influence that may be able to keep even the most distant cells united.

There is hope yet for a successful outcome to these peace talks. However, it is important to remain cautious, many challenges still stand in the way of peace.

Exploring an effective framework for Counter-Terrorism

The 19th anniversary of 9/11 has just gone by and the enquiry into the Manchester Arena bombing having started not too long ago. I feel it an apt time to revisit my undergraduate dissertation; ‘Is there a model of best practice in Counter-Terrorism’. I found myself drawn to this topic at university due to the apparent lack of research to find a solution, outside of a kinetic approach, to stopping terrorist attacks, predominantly in western states.

The research found that there is a three-pronged approach, Prevention, Rehabilitation and Aftercare. This model was developed by assessing literature on counter-terrorism measures of countries all over the world.

The Prevention aspect offers few surprises, tackling the causes of radicalisation and catching the signs early. The UK is seen as somewhat of a leader in this area, using the community as its driving force. Schools, families and local community leaders are used to tackle radical narratives and identify those at risk or showing signs of radicalisation. Educational institutions also aim to educate students across all age groups in such a way to protect them from radicalisation. The creation of a web of surveillance across the community can help to identify those at risk. This doesn’t come without its drawbacks, often it is the environment that people are in that leads to radicalisation, be that family members, peers or religious leadership figures.

The rehabilitation side I found of most interest. Vocational learning forms a significant part of global rehabilitation schemes. Research found that often the cause of radicalisation was a disenfranchisement with society. Radical groups benefit from this; providing members with a purpose, a common goal and a society they could feel a part of. Often bonding over a common ‘enemy’. The aim of rehabilitation is to tie the individual into civil society, give them a purpose, skills to get a job and so on. Leisure activities have been proven to be useful too and are used as part of the Pakistani, Sri Lankan and Saudi Arabian rehabilitation schemes. Sport can be beneficial in providing a sense of community and social interaction, that in many cases was lacking. The inclusion of seemingly insignificant aspects of society, such as sport, have been shown to make a considerable difference in the reintegration process. Rather than the traditional judicial response of punishment, offering opportunity through rehabilitation has found better results.

Aftercare measures are vital in any effective penal system. With the risks so high, tracking inmates convicted of terrorism charges after release is vital, yet not always done. I found there was no evidence in CONTEST (the UK’s current counter-terrorism strategy) of a robust aftercare system. This was disappointing to see as the work being done in prevention and rehabilitation will be let down by a lack of aftercare. No doubt opportunities have and will be missed as a result.

The example of Abdallah al-Ajmi is clear evidence of the need for a robust framework in counter-terrorism, detention is not the sole answer. He was a detainee released from Guantanamo Bay and repatriated to Kuwait in 2005, who subsequently carried out a fatal suicide bombing in Iraq in 2008. The US’ efforts in Guantanamo Bay have been heavily criticised for not following a model similar to that I explained above. It is widely thought by commentators that had Abdallah al-Ajmi received effective rehabilitation, reintegration assistance and been monitored after release, this attack could well have been avoided. This is by no means an isolated case; countless times you hear that a terror suspect was ‘known to intelligence services’. It just shows how important it is for a framework to continue working beyond the initial detention.

This is an incredibly complex issue and I of course don’t claim to hold the answers, but it is interesting nonetheless to explore what has worked for others and compare.

Joe Smerke