Massive Infrastructure Investment Plans

Heinrich Böll Foundation North America, Friends of the Earth, and Foundation Earth invite you to a briefing on Massive Infrastructure Investment Plans! The Acceleration of Worldwide Infrastructure Plans Will Impede Any Environmental Turn-Around! What is going on? What is the response? What is needed? How do you fit in?

Thursday, March 5, 2015 at 4:00 ‐ 5:30pm
Friends of the Earth
1100 15th Street NW, Suite 1100
Washington, DC 20005

Light refreshments will be served
 

To RSVP, please email HEldridge@FDNEarth.org  
 

Schedule:

4:10pm   Overview of the new global investment model & its likely ecological consequences and discussion

5:10pm   Action plan; research underway and research that needs to be commissioned

5:30pm   For those that can stay, conversation informally over wine & cheese 
 

Presenters:

Dr. Brent Blackwelder, President Emeritus, Friends of the Earth

Nancy Alexander, Director, Economic Governance, Heinrich Boll Foundation North America

Tom Kruse, Rockefeller Brothers Fund

Background:
Total global mega‐project spending is already assessed at USD 6‐9 trillion annually, or 8% of total global GDP, which denotes the biggest investment boom in human history. The justification for augmenting this boom is to boost global economic growth rates by 2.1% and create jobs.

The competition between and among traditional and emerging global powers for resources and markets is exerting downward pressure on norms, safeguards, and wages. Meanwhile, project preparation facilities are creating "pipelines of bankable projects" in each geographical region that rely heavily on fossil fuels and big dams.

While the UN is creating goals for humanity to be in alignment with the earth (Sustainable Development Goals (SDGs) and national targets in UNFCCC COP21 negotiations), the G20 and competing development finance institutions are setting processes in motion that could make a farce of these goals and targets.

The post‐WWII development model is now defunct. The new model of investment emphasizes the use of public‐private partnerships (PPPs), new project preparation facilities, new forms of investor risk protection, and financialization.

‐‐PPPs. In general, PPPs have been notorious failures ‐‐ particularly in the energy and water sectors (and especially with regard to affordability of and access to services) where new investment is focused. This is not deterring investors who scramble for control of extractive industries and new markets. Increasingly, official development assistance (ODA) ‐‐ sometimes through blending facilities ‐‐ is offsetting the risk of private investors engaging in PPPs. For some countries, State‐Owned Enterprises (SOEs), development and export‐import banks, among others, are investing directly, but even China is embracing PPPs as the modality "of choice."

‐‐New Project Preparation Facilities (PPFs) are shrinking project preparation from 7 to 3 years and standardizing processes (e.g., land acquisition, procurement). In some regions, transnational corporations are working with heads of state and regional institutions to identify new projects. Citizens and their elected officials are typically left out in the cold. For instance, transnational corporations opening new mines or expanding existing ones are calling for dedicated energy sources, while agribusinesses requiring irrigation are calling for dedicated water sources.

‐‐Investor Protection. The purpose of bilateral, multilateral and plurilateral trade and investment agreements is to provide strong protection of investor "rights." The Trade in Services Agreement (TISA) would cement such rights as pertaining to energy, environmental, agricultural, water, educational and other services. In addition, PPP contracts which are virtually never disclosed) include protections of investor rights (e.g., standstill clauses) as do the new G20 and OECD guidelines for countries wishing to attract investment, especially long‐term institutional investment.

‐‐Long‐term institutional investment and the "magic bullet". The G20, the UN Secretary General and the President of the World Bank have all expressed the desire to unlock access to some $84 trillion in long‐term institutional investment (e.g., pension funds, insurance funds, sovereign wealth funds). The World Bank's new partnership ‐‐ the Global Infrastructure Facility (GIF) ‐‐ is one entity tasked with the role of accomplishing this. Access to long‐term institutional investment is seen as the MAGIC BULLET to boost global growth and create jobs.

‐‐Financialization. To attract this investment, financial institutions are creating new "asset classes" of infrastructure
(economic and social infrastructure) for investors. This could lead to instability in the price of services that we see in commodity prices. It is also leading toward the possible absorption of excessive risks by states and citizens and
accumulation of excessive profits by private investors. This socialization of risk and privatization of gains could occur on an unimaginable scale, thus leading to exploding levels of already‐severe inequality, on the one hand, and sovereign debt, on the other.

The Challenge to Civil Society: Over the decades, civil society strategies have tended to focus on single institutions or single sectors (e.g., energy, water, health care, forestry, agriculture) or single mechanisms, such as safeguards, to protect the interests and legal rights of people and the earth. To some extent, we work in silos. What strategies could civil society employ to confront this effectively? What research/analysis is still needed?

Suggested Readings:
The writings of Bent Flyvbjerg of Oxford
Nora Rohde, "Carbon Intensity & Energy Infrastructure"
Nora Rohde, “Assembly Lines For Project Development: The Role of Infrastructure Project Preparation Facilities”
Nancy Alexander, "World Bank in the Vanguard of an Infrastructure Boom"