This half-day strategic workshop, organized by Chatham House and E3G, brought together key climate experts, policymakers and influential actors, especially in Europe, for a focused and facilitated discussion on the roles, risks and potentials of negative emissions technologies (NETs). 

An interactive scenario exercise will be conducted, drawing on a climate simulation tool developed by Climate Interactive, to consider the potential roles and risks of different NETs deployments to meet the Paris Agreement targets and to consider the international co-operation required to manage the pathway to net-zero emissions. Participants will explore the political opportunities, discuss different scenarios and risks and identify areas of interventions and collective action.

The meeting is part of a series of events being held at Chatham House as part of London Climate Action Week (LCAW).

One year ago, during the last annual Conference of Parties (COP) held in Katowice, the Polish government launched a Solidarity and Just Transition Declaration, signed by 56 governments including the UK, making the case for why the green transition must be just.

Three years earlier in 2015, the landmark Paris Agreement also included provisions for a just transition where it stated that the decarbonization process should be ‘Taking into account the imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities’. In practice, however, the concept of a just transition has not yet been implemented and has not been sufficiently considered by governments or corporations around the world.

The social unrest that has erupted in Chile’s capital Santiago over the past month, which has forced the Chilean government to ask to move this year’s COP to Madrid, is a case in point. This discontent clearly shows that climate action cannot be separated from social justice concerns. There has not been a real commitment by governments to ensure a just transition based on social dialogue from the local to the national level. This was seen in France with the gilets jaunes protests in November 2018 – one month after President Emmanuel Macron ended the so-called ‘fortune tax’ and instead introduced taxes on diesel fuel as part of an effort to transition to green energy – and the current situation in Chile has some striking parallels. 

Sustainability transitions are a complex web of political choices and investment decisions which affect countries and societies in many different ways. Questions of social justice are everywhere, but in most cases, poorly understood by decision-makers. For example, although poverty has been reduced significantly over the last decade, Chile has one of the worst rates of inequality in Latin America and the highest Gini index in the OECD. The decisions taken in 2017 to power Metro de Santiago with solar photovoltaics and wind energy are commendable from a climate perspective, however, it led to students and young people protesting against rises in subway fares in October 2019.

They were joined by Chileans who are frustrated with rising living costs and by workers and trade unions struggling with low wages. As reported by the Chilean Human Rights Commission (INDH), so far more than 4,200 people have been arrested and more than 1,300 injured and hospitalized.

Climate negotiations beyond technicalities

This time there is also another important dimension to the protests: social unrest as a reaction to worsening inequality has the potential to derail multilateral cooperation on climate change and other global issues. Since tackling climate change is a race against the clock, the world faces the challenge of addressing both urgency and equity. The world cannot afford delays and needs to move fast but decision-makers need to take time for deliberation and civic participation to avoid rapid and ill-conceived transitions which eventually meet public resistance.

Many technical experts and negotiators, who often unintentionally divorce climate policy and technical discussions about emission reductions from social justice concerns, have been caught by surprise by the cancellation of the negotiations. For this year’s COP, one important focus of the official negotiations are the so-called 'Article 6 Rules' – the accounting mechanisms and modalities for a new form of international interaction on carbon markets and off-setting to ensure carbon markets can support countries in enhancing the ambitions of their stated climate action, known as Nationally Determined Contributions (NDCs). 

What is becoming much more obvious now is that just transitions are at least equally important for achieving NDCs and other long-term mitigation strategies.

In order to meet the 1.5 degree target, stated by the Intergovernmental Panel on Climate Change (IPCC), the world will have to invest an average of around $3 trillion a year over the next three decades in transforming its energy supply systems. But how can we ensure that these investments benefit low-income communities? Will they further increase everyday living costs? The climate finance related discussions focussing on commercially-oriented investments for low-carbon energy systems in most cases only consider the aspect of affordability, but not the other important principles of alternative ‘just’ energy finance, such as good governance, due process, intra-generational equity, spatial equity and financial resilience. Investments to support just transitions need to ensure investments, not only for large energy infrastructure, but also in the jobs, skills and work vital to both adaptation and mitigation.

Just transitions for a circular economy

The just transition concept is also the entry point to broader discussions about inclusive economic transformations, questioning the dominant paradigm of consumerism and ending the wasteful use of critical resources. The current linear economic model of take-make-throw away – in Chile epitomized by the linear extractive model of the mining sector that has contributed to widening inequality – the linear extractive model is not only destructive on the natural environment but also destructive for social cohesion.

In Chile, the commodity boom in copper production – the country accounts for about 30 per cent of the world’s output – and more recently lithium – which is used in batteries for mobile phones, laptops and electric cars – have generated enormous prosperity in Chile. But the wealth has been unequally distributed and has not been used to lay the foundation for raising the overall level of incomes.

A socially embedded and inclusive circular economy can, therefore, be a way forward from the current situation the Latin American country finds itself in. The circular economy was intended to feature prominently during the 25th COP and Chile’s policies – from the Ministry of Environment and Chile's Production Development Corporation (CORFO) – have played an important role in supporting the development of a circular economy, launching in 2018, the first public circular economy programme in Latin America. 

The government’s support for start-up companies and entrepreneurs to develop inclusive circular economy business models is the right approach to addressing the issues of waste, employment, services for low-income communities and local economic development. These are solutions that need to be scaled up having the potential to reduce Chile’s economic reliance on the dominant extractive model.

As a global community, it is necessary to address the environmental and social objectives equally as not addressing social objectives will become an obstacle in achieving climate mitigation and solving other environmental issues. 

The Chilean protests are a wake-up call and present an opportunity for the global climate change community – which includes governments – to ensure just transitions are implemented in practice.

One-quarter of humanity faces a looming water crisis, including the prospect of running out of water, which may seem inconceivable when 70 per cent of the Earth’s surface is water. Nevertheless up to 80 per cent of available surface and groundwater is being used every year and water demand globally is projected to increase by 55 per cent by 2050. Why is the world facing a crisis of water scarcity and what is driving the increasing demand for water?

The first reason that is causing water stress around the world is the growing human population at the same time as the water supply has remained the same. Given that there are almost one billion more inhabitants on Earth every 15-20 years, this has led to a progressive deficit in the global water supply. 

The second reason is due to the uneven concentration of the global population. There is not a clear link between the presence of the population in some regions and the presence of water, in other words, water is not where we want it to be every time.

For example, there is, what we call, a ‘triangle of thirst’ from southern Spain, to Pakistan, to the Horn of Africa and back again. In this triangle, you have around two billion people in a very water-scarce region.

Comparatively, if you go to Russia or Canada, they have more water than they need in terms of the size of their population. So this is another crucial reason we are facing a crisis of water scarcity in some regions of the world – but not everywhere. 

Climate [change] will be the fruit on the cake. Currently we have global population growth and then later we will have climate change affecting water availability. But at this very moment, however, the problem for water suppliers and for political leaders is the demographic crisis we are facing – not the climate.

Water use has grown at more than twice the rate of the human population over the last century in part due to industries, such as agriculture, which account for 70 per cent of global freshwater use.

Given that food production will need to grow by up to 70 per cent by 2035 to feed the growing human population, how do we balance the use of water with the need to provide food?

There are some solutions. The first is that we need to improve water efficiency in the agricultural sector. We need to have all around the world, but mostly in developing countries, a better capacity to increase the water efficiency of agriculture without increasing the use of industrial chemical products and to move, step-by-step, to an economical system of organic farming. It will take time – it will not be done in one or even five years but more likely over a generation – but it is the best way.   

Secondly, which could be a faster solution, is that we have to reduce all kind of food waste which represents around 30-40 per cent of all agricultural production. Agriculture is a large sector involving the growing of crops but also livestock. There’s not only waste in terms of consumption but also during the production line, for example, during the transportation of food products. So there is this, sort of, waste cycle which is very important to consider. If you are able to reduce the water waste during the production line by 30-40 per cent, then you use less water, obviously.

The third solution is to be able to, step-by-step, change our consumption patterns. Use less meat, all kinds of agricultural products which need a lot of water etc. I think we will be obliged to do this over the next couple of decades, and we will probably have low animal protein diets in the future, which will mean we have to think of different ways to be able to provide food to the increasing global population.

There are other industries that are water-intensive that also need to be looked at in terms of their water waste such as the clothing and automobile industries. One piece of paper, for example, takes about 100 litres of water to produce while one litre of milk takes about 1,000 litres of water. Another example is that one cup of coffee takes 150 litres of water – just one cup of coffee – that’s because there is not only the water you are drinking but the water needed to prepare the coffee beans and the water used in the materials that make the coffee cup and so on.

So everything consumes water and that’s why humans will be obliged to consume less water over the coming years. 

More than one in three people globally do not have access to safe drinking water and more than 4 billion people lack adequate sanitation. How can waste water be more efficiently used and do you think global goals to provide everyone with safe and clean drinking water are still realistic?

In French, we use a phrase, parent pauvre, which means poor relative. Most of the decisions concerning access to water are not acceptable in the long term. That’s why we at the World Water Council are pushing for the financing of water and sanitation goals [concurrently].

For example, if you have a programme for a city to increase access to water for its citizens, they also need a sanitation programme. If we don’t do that, the mismatch that currently exists between water and sanitation will remain. 

There’s also another important solution which political leaders will be obliged to invest more in which is having more water coming from water reuse. If you produce water from water reuse processes then it means that it will likely have undergone sanitation treatment already which is a win-win solution [for providing safe and clean drinking water].

It’s all moving slowly but I’m optimistic concerning the increasing consciousness of people regarding water pollution – for example the pollution of our rivers, seas and oceans – and I think we will move faster in the sanitation area than in the water access area over the next decade.

Personally, I do not think that global goals to provide everyone with safe and clean drinking water [are the best solution]. I am more in favour of national and local commitments rather than global commitments. National and local efforts are stronger then [the rhetoric] around global goals where there is no authority to oversee the progress they are making. Only the population of a country or of a city can see if their leaders have done their job regarding providing access to safe and clean water.

With the depletion of global water supplies, how can governments avoid the politicization of water, as seen in cases such as the Nile River Basin and across the Middle East, to avoid conflicts over water?

This is a complicated issue because politicians will always do politics so it will always be difficult to avoid attempts to politicize situations. But the key is dialogue, dialogue and dialogue. That is the only way to solve water conflicts as well as better management of water because, in some regions, some of these conflicts are arising from the mismanagement of water supplies – not because of water scarcity. 

If you look at Egypt and the US, people are consuming around 800 litres [of water] per day whereas in Europe people are consuming around 200 litres per day. But why is [water consumption] in Egypt, rather than Europe, the same as in the US? Because they have considerable water losses in industries such as agriculture.

In addition, in the main cities like Cairo, there is not an adequate range of water networks, so, if in the future those living in Cairo are able to consume less water, they will need less water coming from the Nile River which will make politicization of water by politicians less likely. 

In the future, social unrest from water shortages is likely, however, I do not think it will ever lead to wars. 

Countries across the Middle East have invested in modern techniques, such as desalination plants, as an answer to water scarcity, but this can have a negative impact, notably on marine life. In contrast, some of the more ancient techniques, like rainwater harvesting, are being repurposed in cities around the world today. What is your view on these practices and what other solutions are available?

There are a lot of solutions and desalination is among them. Currently probably 100 countries in the world are using, or preparing to use, desalination as a solution so it surely is an important solution. But at the same time, reused water is developing fast and is a much cheaper option than desalination. 

Nevertheless, the price of desalination has been decreasing over the past 20 years and is now less than $1 a cubic metre, whereas 15 years ago, it was $10 a cubic metre.

Some of the negative impacts of desalination exist when you are separating the water from the salt, which can lead to disasters, for example, what has happened in the Persian Gulf. When Kuwait, Saudi Arabia, Bahrain and Qatar first used desalination treatments, the temperature of the sea was around 30°C, whereas today, it can be up to 40°C. This increasing sea temperature as a result of the desalination plants has contributed to changes in biodiversity. For example, we are seeing fish disappearing and even the growing population of giant jellyfish – which some desalination plants in Saudi Arabia are dealing with by using shredders which is another type of disaster.

Furthermore, in some regions, we need to keep in mind that desalination is not only along the coast but it’s also in the middle of the land too. For example, in the Sahara region, like in Algeria or Morocco, the water coming from the ground is salted so you need to have desalination plants inland and not on the coast. But where they keep the salt inland, that salt mixes with the rain and enters the ground, thereby destroying some of the biodiversity there too. So it must be used prudently. 

Rainwater harvesting is a technique from centuries ago and I am a great supporter of it as a solution to water scarcity in India, particularly in Rajasthan, and I think it could also be part of the solutions in some places across Africa.

That’s why I believe there needs to be an exchange of solutions because something which is successful here could be successful somewhere else. In this way, we need to be able to show a Senegalese farmer a solution which has been implemented elsewhere, such as in India, and show him this can work for you too – it’s sort of like when the Japanese built the Toyota by looking at the British Land Rover.

With billions of people threatened by the global water crisis, increased water stress could lead to more ‘Day Zeroes’, a term used in 2018 as Cape Town in South Africa came dangerously close to running out of water. In your view, what will happen if the world doesn’t adequately address the global crisis of water scarcity?

The increasing absence of water would mean not only the migration of humans to more water-abundant regions but also the absence of socioeconomic growth of any kind in some places because water scarcity will pose a risk to businesses who will be forced to move to new areas – from small businesses like a hairdresser to factories that are unable to produce any goods or provide any services. So not tackling the water crisis means not being able to tackle our own capacity to prosper by not protecting the environment we depend on.

In Cape Town, there was a lack of rain in the city which contributed to the water crisis there but there was also a lack of water management. They knew they could have a lack of rain, and when you have a lack of rain, you have the obligation to prepare a reservoir of water for the year to the next year and so on but that did not happen.

There is a French poem from Jean de La Fontaine about a grasshopper and an ant. The grasshopper just spends his time in the summer enjoying life but the ant keeps working hard throughout the summer to save all of his supplies for the winter. In this way, we need to be like the ant, preparing water supplies for today and for tomorrow.

In the case of Cape Town, there was also another element, which was that the water supplies were being used by the central government as a tool to isolate the regional governor there who was part of the opposition. So the lack of water management was almost used as a political tool as we discussed earlier.

Some say that the water scarcity we are seeing is because of climate change. Yes it is but there is also a lack of water management by humans. If you look at the people living throughout the centuries all the way to antiquity, you see that people around the world prepared reservoirs of water to keep water from the winter to the summer, from the one year to the next, whereas today, we are seeing bad water management. So, in this way, I believe climate change should not be the scapegoat of human error.

A ground-breaking research project from Chatham House, supported by The Power of Nutrition, is exploring the business case for tackling undernutrition, micronutrient deficiencies and overnutrition. Companies across all sectors hold huge, transformative power to save countless lives and transform their own financial prospects. To act, they need more compelling evidence of the potential for targeted investments and strategies to promote better nutrition and create healthier, more productive workforces and consumers.

At this workshop, Chatham House will engage business decision-makers in a scenario exercise that explores different nutrition futures and their commercial prospects in each before examining what different strategies business can pursue to maximize future profitability through investments in nutrition.

Attendance at this event is by invitation only.

Climate change and energy transition are re-shaping the extractive sectors, and the opportunities and risks they present for governments, companies and civil society. As the central governance standard in the extractives sector, the EITI has a critical role in supporting transparency in producer countries.

This workshop will bring together experts from the energy and extractives sectors, governance and transparency, and climate risk and financial disclosure initiatives to discuss the role of governance and transparency through the transition. It will consider the appropriate role for the EITI and potential entry points for policy and practice, and the potential for coordination with related transparency and disclosure initiatives. 

Please note attendance is by invitation only.

To identify and promote collaborative opportunities for an inclusive and sustainable circular economy transition at the international level, a clearer understanding and discussions of the potential winners and losers of such a transition is needed. In short, a ‘win-win-win’ vision for the environment, people and the economy, needs to be built and credible pathways to achieving this vision.

This research workshop, organized by Chatham House and UNIDO, will build on previous and ongoing research by Chatham House, and others, to drive forward an inclusive circular economy agenda and promote a just transition from linear to circular economic models. Chatham House, in collaboration with partners, aims to provide a strong evidence base of the opportunities and trade-offs in this transition from linear to circular models by robustly analysing the political economies in key regions in the developing world and engaging with leading stakeholders from governments, international organizations, civil society and the business community.

Latin America is an important geographical region for the circular economy especially in view of the circular bioeconomy and the agenda around inclusiveness. Several countries are beginning to embrace the circular economy concept and related policies. This workshop will bring together circular economy leaders from policy, business and civil society across Latin American countries to identify and discuss challenges, large-scale positive sum opportunities, investment needs, existing alliances and the potential to scale up circular economy practices. The second day of the workshop includes site visits to various circular economy projects in Uruguay.

Attendance at this event is by invitation only. 

Summary

• Agricultural subsidies, a mainstay of government policy, have a large part in shaping production and consumption patterns, with potentially significant effects as regards poverty, food security, nutrition, and other sustainability concerns such as climate change, land use practices and biodiversity.
• There are multiple types of direct and indirect support provided by governments to various actors in the agricultural sector; and in terms of political economy, there are complex dynamics underpinning the policies that sustain these subsidies.
• Overall, subsidies targeting producers have the most significant effect on production, and the greater trade-distorting effect. These subsidies promote domestic production and discourage imports, leading to overproduction that is largely disposed of on the international market, with the help of export subsidies. This can tend to intensify negative environmental agricultural practices, such as cultivating marginal land, unsustainable types of intensification, or incentivizing excessive pesticide and fertilizer use.
• On the other hand, producer subsidies that are not tied to output of a specific commodity (i.e. delinked) have far fewer distorting impacts and could help to deliver sustainable outcomes. For example, this type of subsidies can require crop diversification or be linked to conservation of permanent grassland.
• Subsidies that enable transfers to consumers, for example through food stamp programmes, also serve to delink production from consumption, can foster healthier diets, can play an important role in delivering food accessibility and security among low-income groups, and can represent one of the less trade-distorting subsidies.
• If subsidies are to be reformed to help promote healthier diets and encourage more sustainable production, it is essential to understand not only the type and amount of support that key countries provide, but also the domestic dynamics that can shape such policies.
• While price support, input subsidies or investment aids remain the central pillars of programmes in large developing countries such as Brazil, China or India, other economies – notably including the EU and Japan – focus on direct payments, support for general services and set-aside schemes, as well as significant border protection. The US, for its part, has tended to focus on subsidized insurance schemes and food programmes for poorer consumers.
• If subsidies are to deliver policy objectives, their design and implementation should delink production from consumption. For example, consumer subsidies designed to deliver nutrition and food security, or payments for environmental services to enable more environmentally friendly production systems, could prove to be the most effective, least trade-distorting means of achieving more sustainable and equitable agricultural production.
• The political economy of food means that the removal of subsidies is often highly sensitive, and tends to be met with significant resistance. However, reform that delinks support from production through a gradual transition process could ultimately prove successful in delivering effective subsidy schemes.
• Effective subsidy schemes must by design be truly result- and performance-based, supported by robust and objective indicators. At the same time, engaging multiple actors along key commodity value chains – including leading importing and exporting countries, traders and transporters – could lead to the development of international, commodity-specific arrangements that are able to deliver effective nutrition and sustainability goals.

The seventh annual meeting of the New Petroleum Producers Discussion Group brings together people from the group's member countries. The meeting includes an international discussion, a national seminar and a range of policy-relevant courses which have been specially tailored to the priorities of the group. This year’s international discussion focused on ‘Building Capacity and Institutions’.

The New Petroleum Producers Discussion Group was first established in 2012 and provides a unique forum which brings together governments from over 30 new and prospective oil and gas producers to share their ideas and experiences. The group is jointly coordinated by Chatham House, the Commonwealth Secretariat, and the Natural Resource Governance Institute (NRGI).

This event was hosted by the Ministry of Energy of Uganda.

The assassination of General Qassem Soleimani has created much speculation about the possible impact on oil markets and – although any impact will very much depend upon what happens next in terms of political and military responses – theoretically the potential exists for Iran to seriously destabilize oil markets, raising oil prices.

Arguably, it would be in Iran’s interest to do so. It would certainly hurt Trump’s possibility of a second term if higher prices were to last for some time as the 2020 presidential election gets underway. And it would also help shore up Iran’s failing economy. 

The assassination did initially cause oil prices to rise by a few dollars before quickly falling back, and the missile attacks by Iran produced a similar response. However, direct action by Iran to raise prices – for example by trying to close the Strait of Hormuz – is unlikely.

Around one-fifth of the world's oil supplies passes through the Strait of Hormuz, a narrow choke point between Iran and the Arabian Peninsula. Closing it would invite serious military action by the Americans and many of its allies who, so far, have been rather lukewarm over Trump’s actions. It would also possibly limit Iran’s own oil exports.

Similarly, overt attacks on American allies in the region such as Saudi Arabia and the UAE would probably invite too heavy a reaction, although this is uncertain given the lack of response after the alleged Iranian attacks on Abqaiq and Khurais in mid-September.

Indirect action by Iran to affect oil supplies is much more likely as they have many options by using their proxies to affect others’ oil production. This is especially true for Iraq, which is now an important source of global oil supply as Iraqi exports in 2019 averaged 3.53 million barrels per day (Mb/d), a significant amount.

Iraq’s future production has already been damaged as international oil companies are withdrawing staff for safety reasons, anticipating potential attacks by both Iraqi and Iranian sources. It is now very unlikely that the crucial ‘common seawater supply project’ being run by Exxon – essential for expanding production capacity – will go ahead in the near future.

However, one important consequence of the assassination that has attracted little attention is that it has almost fully restored the role of geopolitics into the determination of oil prices. Up to 2014, geopolitics played a key role in determining oil prices in the paper markets where perceptions and expectations ruled.

Prices determined in these markets – NYMEX in New York, ICE in London and other lesser futures markets throughout the world – then influence wet barrel markets where real barrels of oil are traded. 

In 2014, the world was so oversupplied with real oil barrels that the oil price collapsed – the price of Brent crude fell from $110.72 on 23 May to $46.44 eight months later. Thereafter, little if any attention was given to geopolitical events, and geopolitics became marginalized in the determination of crude oil prices.

This began to change in 2019. The market remained physically over-supplied but events in the Gulf began to attract attention. In June, there were a series of attacks on oil tankers close to the Gulf, followed by attacks on Saudi Arabia’s Abqaiq processing facility and the Khurais oil field in September.

The Americans claimed these attacks were launched by Iran, but no convincing evidence for the claim was provided. Both attacks produced an initial price response but it was surprisingly limited and short-lived. However, it did suggest that geopolitics might be creeping back into influencing oil prices.

This became ever more noticeable in the third and fourth quarters as rumours regarding the trade talks between China and US clearly began to affect price – talks going well meant higher oil demand, and prices rose; talks going badly meant lower oil demand, and prices fell.

Meanwhile, the oil market showed signs of tightening towards the end of 2019. Although there was much cheating on the OPEC+ agreement that was trying to restrain production and protect prices, the OPEC meeting last December saw both Iraq and Nigeria agreeing to restrain production. 

US stock levels also began to fall in December and the futures markets began to price in a tightening market towards the end of 2020. Significantly, the tighter the market appears, the greater attention is paid to the level of spare producing capacity.

Just before the attack on Abqaiq, the International Energy Agency (IEA) estimated there was 3.5 Mb/d spare capacity in OPEC which, historically, is quite comfortable. However, 2.5 of this was estimated to be in Saudi Arabia, so how much of this spare capacity still existed after the Abqaiq attack?

The Saudis claimed the Abqaiq capacity was quickly restored but technical experts greeted this with considerable skepticism, not least because the Abqaiq equipment was highly specialized. If spare capacity is tight, this makes the oil price vulnerable to geopolitical scares and rumours, real or imagined. 

Although the assassination of General Soleimani has exacerbated the sensitivity of oil markets to geopolitical events, this becomes irrelevant if a serious shooting war starts in the region. Saudi Arabia, the UAE and Iraq’s oil infrastructure remains highly vulnerable to attack either directly by Iran or one of its many proxies, suggesting oil prices will become increasingly volatile but, at the same time, benefit from a rising geopolitical premium.

Read all our analysis on the Coronavirus Response

The coronavirus outbreak comes at a difficult time for China’s ruling party. A tumultuous 2019 saw the country fighting an economic slowdown coupled with an increasingly hostile international environment. As authorities take assertive steps to contain the virus, the emergency has - at least temporarily - disrupted global trade and supply chains, depressed asset prices and forced multinational businesses to make consequential decisions with limited information. 

Against this backdrop, panellists reflect on the country’s nascent economic transition from 2020 onward. What has been China’s progress towards a sustainable innovation-led economy so far? To what extent is the ruling party addressing growing concerns over job losses, wealth inequality and a lack of social mobility? And how are foreign investors responding to these developments in China?

Summary

• Many social and political issues have so far been neglected in planning for the circular economy transition. This paper aims to redress this by considering how ‘just transition’ and social equity may be achieved through policy and practice.
• The prevailing economic model is linear, in that resources are extracted, transformed into products, used, and finally discarded. In contrast, the circular economy recognizes that natural resources are finite, and aims to keep the materials in products in circulation for as long as possible: reusing, repairing, remanufacturing, sharing and recycling. While the concept of the circular economy is largely focused on developing new technologies and businesses to enable keeping materials in circulation, it also includes the notions of ‘designing out’ waste, substituting renewable materials for non-renewable ones, and restoring natural systems.
• The UN 2030 Agenda demonstrates that environmental, social and economic sustainability objectives cannot be separated. As the links between the environmental issues of climate change, overconsumption of resources and waste generation, and social issues of inequality and the future of work become increasingly obvious, the urgency to connect environmental with social justice is gaining in significance. The language of ‘just transition’ – a transition that ensures environmental sustainability, decent work, social inclusion and poverty eradication – has started to penetrate debates and research on sustainability policy, particularly in the contexts of climate change and low-carbon energy transition.
• A just transition framework for the circular economy can identify opportunities that reduce waste and stimulate product innovation, while at the same time contributing positively to sustainable human development. And a just transition is needed to reduce inequalities within and between countries, and to ensure that the commitment of the UN Sustainable Development Goals to leave no one behind is fulfilled.
• It is important to identify the likely impacts on employment as a result of digitalization and industrial restructuring. Combining circular economy policies with social protection measures will be important in order to ensure that the burden of efforts to promote circularity will not fall on the poor through worsening working conditions and health impacts, reduced livelihoods, or job losses. Identifying potential winners and losers through participatory ‘roadmapping’ can help shape effective cooperation mechanisms and partnerships nationally and internationally.
• Many low- and middle-income countries that rely heavily on ‘linear’ sectors such as mining, manufacturing of non-repairable fast-moving consumer goods, textiles and agriculture, and the export of these commodities to higher-income countries, are likely to be negatively affected by the shift to circularity. These countries will need support from the international community through targeted assistance programmes if international trade in established commodities and manufactures declines in the medium to long term. 
• International cooperation to create effective and fair governance mechanisms, and policy coordination at regional, national and local levels will play an important role in shaping a just transition. Multilateral technical assistance programmes will need to be designed and implemented, in particular to support low- and middle-income countries.
• Governments, international development finance institutions and banks are among the bodies beginning to establish circular economy investment funds and programmes. Just transition principles are yet to be applied to many of these new finance mechanisms, and will need to be integrated into development finance to support the circular economy transition.
• New international cooperation programmes, and a global mechanism to mobilize dedicated support funds for countries in need, will be critical to successful implementation across global value chains. Transparent and accountable institutions will also be important in ensuring that just transition funds reach those affected as intended.

The world is currently witnessing how vulnerable existing production and consumption systems are, with the current global health crisis harshly exposing the magnitude of the risks associated with the global economy in its current form, grounded, as it is, in a linear system that uses a ‘take–make–throw away’ approach.

These ‘linear risks’ associated with the existing global supply chain system are extremely high for national economies overly dependent on natural resource extraction and exports of commodities like minerals and metals. Equally vulnerable are countries with large manufacturing sectors of ready-made garments and non-repairable consumer goods for western markets. Furthermore, workers and communities working in these sectors are vulnerable to these changes as a result of disruptive technologies and reduced demand.

In a recently published Chatham House research paper, ‘Promoting a Just Transition to an Inclusive Circular Economy’, we highlight why a circular economy approach presents the world with a solution to old and new global risks – from marine plastic pollution to climate change and resource scarcity.

Taking the long view

So far, action to transition to a circular economy has been slow compared to the current crisis which has mobilized rapid global action. For proponents of transitioning to a circular economy, this requires taking the long view. The pandemic has shown us that global emergencies can fast-forward processes that otherwise might take years, even decades, to play out or reverse achievements which have taken years to accomplish.

In this vein, there are three striking points of convergence between the COVID-19 pandemic and the need to transition to an inclusive circular economy.

Firstly, the current crisis is a stark reminder that the circular economy is not only necessary to ensure long-term resource security but also short-term supplies of important materials. In many cities across the US, the UK and Europe, councils have suspended recycling to focus on essential waste collection services. The UK Recycling Association, for example, has warned about carboard shortages due to disrupted recycling operations with possible shortages for food and medicine packaging on the horizon.

Similarly, in China, most recycling sites were shut during the country’s lockdown presenting implications for global recycling markets with additional concerns that there will be a fibre shortage across Europe and possibly around the world.

Furthermore, worldwide COVID-19 lockdowns are resulting in a resurgence in the use of single-use packaging creating a new wave of plastic waste especially from food deliveries – already seen in China – with illegal waste fly-tipping dramatically increasing in the UK since the lockdown.

In this vein, concerns over the current global health crisis is reversing previous positive trends where many cities had established recycling schemes and companies and consumers had switched to reusable alternatives.

Secondly, the need to improve the working conditions of the people working in the informal circular economy, such as waste pickers and recyclers, is imperative. Many waste materials and recyclables that are being handled and collected may be contaminated as a result of being mixed with medical waste.

Now, more than ever, key workers in waste management, collection and recycling require personal protective equipment and social protection to ensure their safety as well as the continuation of essential waste collection so as not to increase the potential for new risks associated with additional infectious diseases.

In India, almost 450 million workers including construction workers, street vendors and landless agricultural labourers, work in the informal sector. In the current climate, the poorest who are unable to work pose a great risk to the Indian economy which could find itself having to shut down.

Moreover, many informal workers live in make-shift settlements areas such as Asia’s largest slum, Dharavi in Mumbai, where health authorities are now facing serious challenges to contain the spread of the disease. Lack of access to handwashing and sanitation facilities, however, further increase these risks but circular, decentralized solutions could make important contributions to sustainable sanitation, health and improved community resilience.

Thirdly, it is anticipated that in the long term several global supply chains will be radically changed as a result of transformed demand patterns and the increase in circular practices such as urban mining for the recovery and recycling of metals or the reuse and recycling of textile fibres and localized additive manufacturing (e.g. 3D printing).

Many of these supply chains and trade flows have now been already severely disrupted due to the COVID-19 pandemic. For example, the global garment industry has been particularly hard-hit due to the closure of outlets amid falling demand for apparel.

It is important to note, workers at the bottom of these garment supply chains are among the most vulnerable and most affected by the crisis as global fashion brands, for example, have been cancelling orders – in the order of $6 billion in the case of Bangladesh alone. Only after intense negotiations are some brands assuming financial responsibility in the form of compensation wage funds to help suppliers in Myanmar, Cambodia and Bangladesh to pay workers during the ongoing crisis.

In addition, the current pandemic is damaging demand for raw materials thereby affecting mining countries. Demand for Africa’s commodities in China, for example, has declined significantly, with the impact on African economies expected to be serious, with 15 per cent of the world’s copper and 20 per cent of the world’s zinc mines currently going offline. 

A further threat is expected to come from falling commodity prices as a result of the curtailment of manufacturing activity in China particularly for crude oil, copper, iron ore and other industrial commodities which, in these cases, will have direct impacts on the Australian and Canadian mining sectors.

This is all being compounded by an associated decline in consumer demand worldwide. For example, many South African mining companies – leading producers of metals and minerals – have started closing their mining operations following the government’s announcement of a lockdown in order to prevent the transmission of the virus among miners who often work in confined spaces and in close proximity with one another. As workers are laid off due to COVID-19, there are indications that the mining industry will see fast-tracking towards automated mining operations. 

All of these linear risks that have been exposed through the COVID-19 pandemic reinforce the need for a just transition to a circular economy. But while the reduction in the consumption of resources is necessary to achieve sustainability, the social impacts on low- and middle- income countries and their workers requires international support mechanisms.

In addition, the current situation also highlights the need to find a new approach to globalized retail chains and a balance between local and global trade based on international cooperation across global value chains rather than implementation of trade protectionist measures.

In this vein, all of the recovery plans from the global COVID-19 pandemic need to be aligned with the principles of an inclusive circular economy in order to ensure both short-term and long-term resilience and preparedness for future challenges and disruptions.  

Historically, Iraq lay claim to one of the most abundant water supplies in the Middle East. But the flow of the Tigris and Euphrates rivers has reduced by up to 40% since the 1970s, due in part to the actions of neighbouring countries, in particular Turkey, upstream.

Rising temperatures and reduced rainfall due to climate change are also negatively impacting Iraq’s water reserves. Evaporation from dams and reservoirs is estimated to lose the country up to 8 billion cubic metres of water every year.

A threat to peace and stability

Shortages have dried up previously fertile land, increasing poverty in agricultural areas. Shortages have also served to fuel conflict: communities faced with successive droughts and government inertia proved to be easy targets for ISIS recruiters, who lured farmers into joining them by offering money and food to feed their families. Economic hardship for those whose livelihoods relied upon river water has also driven rural to urban migration, putting significant strain on already over-populated towns and cities, exacerbating housing, job and electricity shortages, and widening the gap between haves and have-nots.

But scarcity isn’t the most crucial element of Iraq’s water crisis – contamination is. Decades of local government mismanagement, corrupt practices and a lack of regulation of dumping (it is estimated up to 70% of Iraq’s industrial waste is dumped directly into water) has left approximately three in every five citizens without a reliable source of potable water.

In 2018, 118,000 residents of Basra province were hospitalised with symptoms brought on by drinking contaminated water, which not only put a spotlight on the inadequacies of a crumbling healthcare system but sparked mass protests and a subsequent violent crackdown.

The water crisis is also undermining the stability of the country’s federal governance model, by occasionally sparking disputes between Baghdad and the Kurdistan Regional Government, as well as between governorates in the south.

The crisis is both a symptom and a cause of poor governance. Iraq is stuck in a cycle whereby government inaction causes shortages and contamination, which result in economic losses, reduced food supply, increased prices and widespread poor health. This in turn leads to increasing levels of poverty, higher demand on services and civil unrest, increasing the pressure on a weak, dysfunctional system of government.

What can be done?

The first priority should be modernising existing water-management infrastructure - a relic of a time when the problem was an excess rather than a shortage of water (the last time Iraq’s flood defences were required was 1968). Bureaucratic hurdles, widespread corruption and an endless cycle of other crises taking precedent prevent good initiatives from being implemented or scaled up.

Diversifying energy sources to improve provision is crucial. Baghdad has a sewage treatment plant that originally ran on its own electricity source, but this capacity was destroyed in 1991 and was never replaced. The city continues to suffer from dangerous levels of water pollution because the electricity supply from the grid is insufficient to power the plant. Solar energy has great potential in sun-drenched Iraq to bridge the gaping hole in energy provision, but successive governments have chosen to focus on fossil fuels rather than promoting investment to grow the renewables sector.

Heightened tension with upstream Turkey could turn water into another cause of regional conflict. But, if approached differently, collaboration between Iraq and its neighbour could foster regional harmony.

Turkey’s elevated geography and cooler climate mean its water reserves suffer 75% less evaporation than Iraq’s. Given that Turkey’s top energy priority is the diversification of its supply of imported hydrocarbons, a win-win deal could see Turkey exchange access to its water-management infrastructure for delivery of reduced cost energy supplies from Iraq.

German-French cooperation on coal and steel in the 1950s and the evolution of economic integration that followed might provide a model for how bilateral cooperation over one issue could result in cooperation with other regional players (in this case Iran and Syria) on a range of other issues. This kind of model would need to consider the future of energy, whereby oil and gas would be replaced by solar-power exports.

These solutions have been open to policymakers for years and yet they have taken little tangible action. While there are leaders and bureaucrats with the will to act, effective action is invariably blocked by a complex and opaque political system replete with vested interests in maintaining power and wealth via a weak state and limited services from central government.

Breaking the cycle

To break this cycle, Iraq needs a group of professional and able actors outside of government to work with willing elements of the state bureaucracy as a taskforce to pressure for action and accountability. Publishing the recommendations from a hitherto withheld report produced in the aftermath of Basra’s 2018 heath crisis would be a great start.

In time, this taskforce could champion the prioritisation of water on the national agenda, the implementation of infrastructure upgrades, and hold more productive conversations with neighbour states.

With such a high degree of state fragmentation and dysfunction in Iraq, looking to the central government to provide leadership will not yield results. Engagement with a coalition of non-state actors can begin to address the water crisis and also open a dialogue around new models of governance for other critical issues. This might even be a starting point for rewriting the tattered social contract in Iraq.

This piece is based on insights and discussion at a roundtable event, Conflict and the Water Crisis in Iraq, held at Chatham House on March 9 as part of the Iraq Initiative.

With the Asian Development Bank estimating that the COVID-19 outbreak’s global cost could reach $4.1 trillion and the OECD warning that the shock caused by the pandemic is already greater than the financial crisis of 2007, the global economic impact of the health emergency is not only vast but also unpredictable. The disruption to a number of industries and sectors including, but not limited to, the airline and energy industries, could result in long-term damage to global trade flows, supply and demand. But does the pandemic also present an opportunity to build sustainable economies that can cope with such threats?

This panel will explore the ways in which the coronavirus outbreak has highlighted vulnerabilities in global systems and what this might mean for a transition towards a sustainable economy. How do we explain the failure of businesses and governments to prepare for systemic shocks and the lack of resilience in global structures and models? How should governments prepare to reshape policy, business practices and societal behaviour to better tackle climate change while addressing the current emergency? And might the emergency offer opportunities to kick start a sustainable path towards a greener future?

This event is part of a fortnightly series of 'Business in Focus' webinars reflecting on the impact of COVID-19 on areas of particular professional interest for our corporate members and giving circles.

Not a corporate member? Find out more.

The pressure of the coronavirus pandemic is adding to a widely held misconception that trade in food products is bad for the environment due to the associated ‘food miles’ – the carbon footprint of agricultural products transported over long distances.

This concept, developed by large retailers a decade ago, is often invoked as a rationale for restricting trade and choosing locally-produced food over imports. Consuming local food may seem sensible at first glance as it reduces the carbon footprint of goods and generates local employment. 

However, this assumption ignores the emissions produced during the production, processing or storage stages which often dwarf transport emissions. Other avenues to address the climate change impact of trade are more promising.

Demystifying food emissions

In the US, for example, food items travel more than 8,000 km on average before reaching the consumer. Yet transport only accounts for 11 per cent of total emissions with 83 per cent – mostly nitrous oxide (N2O) and methane (CH4) emissions – occurring at the production stage.

US Department of Agriculture data on energy use in the American food system echoes this finding, showing that processing, packaging, and selling of food represent ten times the energy used to transport food.

In practice, it may be preferable from an environmental perspective to consume lamb, onion or dairy products transported by sea because the lower emissions generated at the production stage offset those resulting from transport. Similarly, growing tomatoes under heated greenhouses in Sweden is often more emissions-intensive than importing open-grown ones from Southern Europe.

Seasonality also matters. British apples placed in storage for ten months leads to twice the level of emissions as that of South American apples sea-freighted to the UK. And the type of transport is also important as, overall, maritime transport generates 25 to 250 times less emissions than trucks, and air freight generates on average five times more emissions than road transport.

Therefore, air-freighted Kenyan beans have a much larger carbon footprint than those produced in the UK, but crossing Europe by truck to import Italian wine might generate more emissions than transatlantic shipments.

Finally, one should take into account the last leg of transport. A consumer driving more than 10 km to purchase 1 kg of fresh produce will generate proportionately more greenhouse gas (GHG) emissions than air-freighting 1 kg of produce from Kenya.

Shifting consumption towards local foods may reduce GHG emissions in sectors with relatively low emissions intensities but, when non-carbon dioxide emissions are taken into account, this is more often the exception than the rule.

Under these circumstances, preventing trade is an inefficient and expensive way of reducing GHG emissions. Bureau et al. for example, calculate that a global tariff maintaining the volume of trade at current levels until 2030 may reduce global carbon dioxide emissions by 3.5 per cent. However, this would be roughly seven times less than the full implementation of the Paris Agreement and cost equivalent to the current GDP of Brazil or 1.8 per cent of world GDP.

By preventing an efficient use of resources, such restrictions would also undermine the role of trade in offsetting possible climate-induced production shortfalls in some parts of the world and allowing people to access food when they can’t produce it themselves.

Reducing the climate footprint of trade

This is not to say that nothing should be done to tackle transport emissions. The OECD estimates that international trade-related freight accounted for over 5 per cent of total global fuel emissions with shipping representing roughly half of it, trucks 40 per cent, air 6 per cent and rail 2 per cent. With the projected tripling of freight transport by 2050, emissions from shipping are expected to rise between 50 and 250 per cent.

Furthermore, because of their international nature, these emissions are not covered by the Paris Agreement. Instead the two UN agencies regulating these sectors – the International Civil Aviation Organization and the International Maritime Organization – are responsible for reducing these emissions and, so far, significant progress has proven elusive.

Regional or bilateral free trade agreements to further stimulate trade could address this problem by exploiting comparative advantages. Impact assessments of those agreements often point towards increases in GHG emissions due to a boost in trade flows. In the future, such agreements could incorporate – or develop in parallel – initiatives to ensure carbon neutrality by connecting carbon markets among contracting parties or by taxing international maritime and air transport emissions.

Such initiatives could be combined with providing additional preferences in the form of enhanced market access to low-carbon food and healthier food. The EU, as one of the chief proponents of bilateral and regional trade agreements and a leader in promoting a transition to a low-carbon economy could champion such an approach.

This article is part of a series from the Chatham House Global Trade Policy Forum, designed to promote research and policy recommendations on the future of global trade. It is adapted from the research paper, Delivering Sustainable Food and Land Use Systems: The Role of International Trade, authored by Christophe Bellmann, Bernice Lee and Jonathan Hepburn.

The Lancet Commission on Palliative Care and Pain Relief estimated that in 2015, 61 million people experienced serious health-related suffering (SHS) that could have been ameliorated by palliative care. A large proportion of this burden – more than 80 per cent – fell on low- and middle-income countries (LMICs) despite an essential package of palliative care and pain relief services being cost-effective and affordable. As the director general of the World Health Organization (WHO) argues, there cannot be UHC without palliative care and thus, closing this coverage gap should be a top priority for the global UHC movement.

The Centre on Global Health Security at Chatham House, building on the momentum of the Lancet Commission, is hosting a roundtable focused on the global unmet need for palliative care and effective pain relief. The primary purpose of this roundtable is to convene leading experts, palliative care service users and advocates with key figures from the UHC movement and global health to highlight the importance of prioritizing this vital part of the continuum of care in UHC reform processes. The roundtable will serve as a scholarly discourse in translating the recommendations of the Lancet Commission into concrete actions, focusing on the political and economic dimensions.

The Review on Antimicrobial Resistance, chaired by Jim O’Neill, was commissioned by former UK prime minister, David Cameron, in July 2014. Supported by the UK government and the Wellcome Trust, the final report of the review was published in May 2016 and has had a global impact in terms of motivating political leaders and decision-makers to take more seriously the threat posed by antimicrobial resistance.

Yet there is now a perception that the political momentum to address the issue is waning and needs to be reinvigorated.

In a further report produced by Chatham House, the progress of the recommendations of the review is assessed and the key ways to move forward are identified.

Panellists at this event, where highlights of the report are presented, provide their assessment of the progress so far and discuss priorities for future action.

The report was funded by Wellcome.

• The 2016 Review on Antimicrobial Resistance has had a global impact: as an advocacy tool, in raising the profile of antimicrobial resistance (AMR) on the international agenda, and in helping to stimulate a number of new initiatives, in particular relating to the funding of early-stage research.
• However, there has been very little progress on the review’s central and most expensive recommendations for transforming research and development incentives for antibiotics, vaccines and diagnostics.
• There have been significant advances in reducing antibiotic use in agriculture, particularly in high-income countries, but there is a long way to go in low- and middle-income countries (LMICs).
• There has been greater investment in awareness raising but questions remain about its impact and effectiveness in changing behaviour.
• Proposals to restrict over-the-counter sales of antibiotics, as recommended by the Review, have foundered in the face of poor living conditions and access to healthcare in LMICs.
• A major reason for the use of antibiotics in LMICs is the prevalence of unhygienic conditions in the community and in healthcare facilities, which contribute to infection and limit the impact of messages about awareness and infection prevention and control.
• Providing quality healthcare to all and moving towards universal health coverage in LMICs will be crucial in addressing the problems of both adequate access to antibiotics and in restricting over-the-counter sales.
• A greater emphasis on investments in water, sanitation and housing will be central to reducing reliance on antibiotics in LMICs in the longer term. This agenda should inform the operations of governments and funding agencies such as the International Monetary Fund (IMF) and the World Bank.
• Investments have been made in improving surveillance of antibiotic use and resistance, particularly for humans, but more effort is required to create surveillance systems that provide data sufficiently accurate to influence policy and action. This applies also to antibiotics and resistant genes circulating in the environment.
• The emerging innovations in the global governance of AMR need to lead to action rather than more words.

At the United Nations general assembly in September, all countries, including South Africa, reaffirmed their commitment to achieving universal health coverage by 2030. This is achieved when everybody accesses the health services they need without suffering financial hardship.

As governments outlined their universal health coverage plans, it was noticeable that some had made much faster progress than others, with some middle-income countries outperforming wealthier nations. For example, whereas Thailand, Ecuador and Georgia (with national incomes similar to South Africa) are covering their entire populations, in the United States, 30 million people still lack health insurance and expensive health bills are the biggest cause of personal bankruptcy.

The key factor in financing universal health coverage is, therefore, not so much the level of financing but rather how the health sector is financed. You cannot cover everyone through private financing (including insurance) because the poor will be left behind. Instead, the state must step in to force wealthy and healthy members of society to subsidise services for the sick and the poor.

Switching to a predominantly publicly financed health system is, therefore, a prerequisite for achieving universal health coverage.

The National Health Insurance (NHI) Bill, recently presented to parliament, is President Cyril Ramaphosa’s strategy to make this essential transition. In essence, it proposes creating a health-financing system in which people pay contributions (mostly through taxes) according to their ability to pay and then receive health services according to their health needs.

Surprisingly, these reforms have been dubbed 'controversial' by some commentators in the South African media, even though this is the standard route to universal health coverage as exhibited by countries across Europe, Asia, Australasia, Canada and much of Latin America.

In criticising the NHI other stakeholders (often with a vested interest in preserving the status quo) have said that the government’s universal health coverage strategy is unaffordable because it will require higher levels of public financing for health.

Evidence from across the world shows that this is patently false. South Africa already spends more than 8% of its national income on its health sector, which is very high for its income level. Turkey, for example (a good health performer and slightly richer than South Africa), spends 4.3% of its GDP and Thailand (a global universal health coverage leader) spends only 3.7%. Thailand shows what can be accomplished, because it launched its celebrated universal health coverage reforms in 2002 when its GDP per capita was only $1 900 — less than a third of South Africa’s today.

In fact, Thailand’s prime minister famously ignored advice from the World Bank that it could not afford publicly financed, universal health coverage in the aftermath of the Asian financial crisis when it extended universal, tax-financed healthcare to the entire population. When these reforms proved a great success, a subsequent president of the World Bank, Dr Jim Kim, congratulated the Thai government for ignoring its previous advice.

Similarly the United Kingdom, Japan and Norway all launched successful universal health coverage reforms at times of great economic difficulty at the end of World War II. These should be salutary lessons for those saying that South Africa can’t afford the NHI. If anything, because universal health reforms generate economic growth (with returns 10 times the public investment), now is exactly the time to launch the NHI.

So there is enough overall funding in the South African health sector to take a giant step towards universal health coverage. The problem is that the current system is grossly inefficient and inequitable because more than half of these funds are spent through private insurance schemes that cover only 16% of the population — and often don’t cover even this population effectively.

Were the bulk of these resources to be channelled through an efficient public financing system, evidence from around the world shows that the health sector would achieve better health outcomes, at lower cost. Health and income inequalities would fall, too.

It’s true that in the long term, the government will have to increase public financing through reducing unfair subsidies to private health insurance and increasing taxes. But what the defenders of the current system don’t acknowledge is that, at the same time, private voluntary financing will fall, rapidly. Most families will no longer feel the need to purchase expensive private insurance when they benefit from the public system. It’s this fact that is generating so much opposition to the NHI from the private insurance lobby.

This is the situation with the National Health Service in the UK and health systems across Europe, where only a small minority choose to purchase additional private insurance. Among major economies, only the United States continues to exhibit high levels of private, voluntary financing.

As a consequence, it now spends an eye-watering 18% of its GDP on health and has some of the worst health indicators in the Organisation for Economic Co-operation and Development, including rising levels of maternal mortality. If South Africa doesn’t socialise health financing this is where its health system will end up — a long way from universal health coverage.

What countries celebrating their universal health coverage successes at the UN have shown is that it is cheaper to publicly finance health than leave it to the free market. This is because governments are more efficient and fairer purchasers of health services than individuals and employers. As Dr Gro Harlem Brundtland, the former director general of the World Health Organization, said in New York: 'If there is one lesson the world has learnt, it is that you can only reach UHC [universal health coverage] through public financing.'

This is a step South Africa must take — it can’t afford not to.

This article was originally published by the Mail & Guardian.