Today the OECD Secretariat published a proposal to advance international negotiations to ensure large and highly profitable Multinational Enterprises, including digital companies, pay tax wherever they have significant consumer-facing activities and generate their profits.
The new OECD proposal brings together common elements of three competing proposals from member countries, and is based on the work of the OECD/G20 Inclusive Framework on BEPS, which groups 134 countries and jurisdictions on an equal footing, for multilateral negotiation of international tax rules, making them fit for purpose for the global economy of the 21st Century.
The proposal, which is now open to a public consultation process, would re-allocate some profits and corresponding taxing rights to countries and jurisdictions where MNEs have their markets. It would ensure that MNEs conducting significant business in places where they do not have a physical presence, be taxed in such jurisdictions, through the creation of new rules stating (1) where tax should be paid (“nexus” rules) and (2) on what portion of profits they should be taxed (“profit allocation” rules).
“We’re making real progress to address the tax challenges arising from digitalisation of the economy, and to continue advancing toward a consensus-based solution to overhaul the rules-based international tax system by 2020,” said OECD Secretary-General Angel Gurría. “This plan brings together common elements of existing competing proposals, involving over 130 countries, with input from governments, business, civil society, academia and the general public. It brings us closer to our ultimate goal: ensuring all MNEs pay their fair share.”
”Failure to reach agreement by 2020 would greatly increase the risk that countries will act unilaterally, with negative consequences on an already fragile global economy. We must not allow that to happen,” Mr Gurría said.
The Inclusive Framework’s tax work on the digitalisation of the economy is part of wider efforts to restore stability and certainty in the international tax system, address possible overlaps with existing rules and mitigate the risks of double taxation. Beyond the specific elements on reallocating taxing rights, a second pillar of the work aims to resolve remaining BEPS issues, ensuring a minimum corporate income tax on MNE profits. This will be discussed in a public consultation foreseen to take place in December 2019.
As fuel prices rise, companies look to energy efficient solutions
With fossil fuel prices reaching record highs, companies around the world are focusing on energy efficiency to save money and reduce the emissions driving the climate crisis.
Research shows that a safe future below 1.5°C requires the world to cut 30 gigatonnes greenhouse gas emissions (CO2) annually by 2030. Carbon emissions need to be cut by building smart cities and managing land and resources more efficiently. Transport and buildings are among the largest contributors.
– a United Nations Environment Programme (UNEP)-led global effort supporting developing countries to move their markets to energy-efficient appliances and equipment.
“This improvement in energy efficiency will also reduce electricity bills for companies and support the scale-up of renewable energy,” he added.
Improving energy efficiency
Energy efficiency can take many forms, with U4E focusing on lighting, refrigeration, air conditioning, distribution transformers and electric motors.
LED lamps, for example, are not only more efficient than conventional lamps, but they also last 20 times longer. Research shows that by switching to LED lighting in 156 developing countries, over 110 terawatt-hours (TWh) could be saved by 2030, nearly the same as the current electricity consumption of the Netherlands.
Similarly, by increasing efficiency in distribution transformers, which adjust voltage and current and are placed between the power plant and the consumer, 60 TWh could be saved by 2040, or the same as the current consumption of the Czech Republic.
“Half of the near-term reductions in emissions in the energy sector can be achieved through energy efficiency, for example, by using more energy-efficient appliances and lighting and more efficient motors,” said Miriam Hinostroza, Head of the Global Climate Action Unit, at UNEP’s Energy and Climate Branch.
Cost effective solutions
Companies have found that energy efficiency is a double win, it’s good for their bottom line but it’s also good for the environment. Hitachi Energy, a global technology leader that is advancing a sustainable energy future for all, has been working with U4E to improve the efficiency of distribution transformers in developing regions like Africa.
These transformers are a key product in the power value chain, with electricity typically passing through five of them between the power plant and the consumer.
U4E research shows that a transition across the African continent to the most energy-efficient transformers could save 5.7 TWh a year, worth around US$ 400m by 2040.
This transition would also reduce CO2 emissions by 4.7 million tonnes a year. The transformers also have the added benefit of being more stable, reducing outages and increasing energy security.
“Transformers are critical for enabling an efficient and safe flow of electricity, operating continuously around the clock,” said Bruno Melles, Head of the Transformer Business at Hitachi Energy.
“Energy efficiency brings energy savings and reduces environmental impact, but also means more efficient use of existing infrastructure, which is in line with Hitachi Energy’s Sustainability 2030 strategic plan, which includes the target to achieve carbon-neutrality in our own operations.”
“In developing countries, energy efficiency also contributes to increasing the availability and access to electrical energy, contributing to key UN Sustainable Development Goals,” added Melles.
It is not just in Africa where U4E is helping to drive change. In Türkiye, U4E has been working in the industrial sector to help improve efficiency in motor-drive systems. Around 46 per cent of net electricity consumption in Türkiye comes from the industrial sector, and about 70 per cent of this comes from electric motor-drive systems, many of which are inefficient.
UNEP, through U4E, has been providing technical assistance to the Promoting Energy-Efficient Motors in Small and Medium Sized Enterprises in Türkiye (TEVMOT) project.
“The TEVMOT project was conceived to tap into this huge potential for energy savings through the transition to higher efficiency motors and to tackle the challenge of achieving these savings in an industrial sector,” said Özge Renklidağ, a Project Manager with UNDP.
“More than 90 per cent of the enterprises are small and medium-size enterprises, which have traditionally had difficulties in obtaining access to finance for energy-efficient products.”
The project, which started in 2017, and has been extended until the end of 2023, will contribute to Türkiye’s intended Nationally Determined Contribution commitment to reduce its greenhouse gas emissions by 21 per cent from the business-as-usual level by 2030.
“Through projects such as these, increased energy efficiency has been shown to offer real contributions in reducing greenhouse gas emissions,” said Blake, “U4E is working across the world to ensure that sustainable, cost-effective solutions are offered.”
WFP: First Ukrainian humanitarian grain shipment leaves for Horn of Africa
The first vessel transporting Ukrainian wheat grain to support humanitarian operations run by the World Food Programme (WFP) has left the port of Yuzhny, also known as Pivdennyi, the UN agency reported on Tuesday.
This is the first shipment of humanitarian food assistance under the Black Sea Grain Initiative signed by Ukraine, Russia, Türkiye and the UN in July.
Feeding the world’s hungry
It marks another important milestone in efforts to get much-needed Ukrainian grain out of the war-torn country and back into global markets, to reach people worst affected by the global food crisis.
“Getting the Black Sea Ports open is the single most important thing we can do right now to help the world’s hungry,” said WFP Executive Director David Beasley.
“It will take more than grain ships out of Ukraine to stop world hunger, but with Ukrainian grain back on global markets we have a chance to stop this global food crisis from spiraling even further.”
WFP will use the wheat grain shipment to scale-up its efforts in southern and south-eastern Ethiopia, supporting more than 1.5 million people affected by drought.
Globally, a record 345 million people in more than 80 countries are currently facing acute food insecurity, while up to 50 million people in 45 countries are at risk of being pushed into famine without humanitarian support.
The current hunger crisis is being driven by several factors including conflict, climate impacts, and the COVID-19 pandemic.
The war in Ukraine is another catalyst as the country is a major grain exporter. Ukraine was exporting up to six million tonnes of grain a month prior to the start of the conflict in February, but volumes now are at an average of one million tonnes per month.
More action needed
WFP said that with commercial and humanitarian maritime traffic now resuming in and out of Ukraine’s Black Sea Port, some global supply disruptions will ease, which will bring relief to countries facing the worst of the global food crisis.
Crucially, Ukraine will also be able to empty its grain storage silos ahead of the summer season harvest, the agency added.
However, despite these developments, the unprecedented food crisis continues.
WFP stressed the need for immediate action that brings together the humanitarian community, governments, and the private sector to save lives and invest in long term solutions, warning that “failure will see people around the world slip into devastating famines with destabilizing impacts felt by us all.”
More Global Approach Needed to Control Monkeypox
With increasing numbers of monkeypox virus among 1.3 billion people, African health experts have expressed worriness over lack of appropriate vaccines to contain the outbreak in Africa. That however in mid-August, the acting director of the Africa Centers for Disease Control and Prevention, Ahmed Ogwell, said there two partners “largely multilateral institutions and non-African governments” have shown some interest in helping out with manufacturing of vaccines without offering detailed information.
“Let us get vaccines onto the continent,” Ogwell, said in a weekly media briefing pointing to another instance of 1.3 billion people on the continent without access to a vaccine, as it has been with the Covid-19 pandemic. Africa remains the only part of the world with no doses of the vaccine, according to the Africa Centers for Disease Control and Prevention.
More monkeypox deaths have been reported on the African continent this year than anywhere in the world. Since May, nearly 90 countries have reported more than 31,000 cases. At least 2,947 monkeypox cases have been reported in 11 African countries this year, including 104 deaths, but most of the cases reported are suspect ones because the African continent also lacks enough diagnostic resources for thorough testing, the Africa CDC director Ogwell said.
The lack of vaccine doses and shortage of diagnostics is an echo of the challenges that Africa’s 54 countries faced for months during the Covid-19 pandemic as richer countries elsewhere raced to secure supplies. Given the continuous spread of the monkeypox virus especially in central and west African regions, raises the question of exploring the accesibility of vaccine supply. It relates closely plans to provide educational materials and educating the public about the virus spread, the risk of contracting it (means of transmission) – there has to be a stark acknowledgment of a preventive approach.
Although the current explosion of cases has occurred in men, experts say there is no biological reason the virus will remain largely within the community of men who have sex with men. “We certainly know it’s going to spread to family members and to other non-male partners that people have,” said Dr. Jay Varma, director of the Cornell Center for Pandemic Prevention and Response. The real question, he said, is whether it spreads as efficiently in those groups as it does among close sexual networks of men who have sex with men.
The World Health Organization classified the escalating outbreak of the once-rare monkeypox disease as an international emergency in July. Outside of Africa, 98% of cases are among men who have sex with men. With a limited global supply of vaccines, authorities are racing to stop monkeypox before it becomes entrenched. WHO has, however, warned against supply discrimination.
Early August, Wendy Orent, the author of “Plague: The Mysterious Past and Terrifying Future of the World’s Most Dangerous Disease” and “Ticked: The Battle Over Lyme Disease in the South” wrote in Los Angeles Times Op-Ed: Monkeypox is not the next Covid. But it’s spreading from the same failures.
The expert explained that monkeypox a well-studied disease: In the past, it has been concentrated primarily in rural West or Central Africa and transmitted from a bush animal to a person, who then would spread it to limited family members in close contact. During the 2003 outbreak in the U.S., people caught it directly from pet prairie dogs that got infected by small mammals imported from West Africa. None of the U.S. cases that year spread to another person.
In contrast, the recent outbreak is spreading more widely person-to-person. But if governments take the right steps and help block transmission by giving key resources to those most at risk – currently gay and queer men – monkeypox can be contained. The global alarm sounded on this virus should be a warning to intervene now while the disease is manageable and take steps to limit future outbreaks, two goals well within reach.
Monkeypox was first detected among monkeys kept in a Denmark laboratory in 1958. Only in 1970 did doctors record a human case, indicating that monkeypox could also infect people. The disease, which closely resembles smallpox, wasn’t distinguished as a separate infection until smallpox was nearly eliminated. Smallpox vaccination campaigns kept both diseases at bay until 1980, when the World Health Organization declared smallpox eradicated and vaccination campaigns ended.
Smallpox spread only through humans, with no animal population keeping it alive. It evolved over millennia to become a true human specialist, effective at transmission and overcoming immunity. Centuries of an arms race in Africa, Asia and Europe allowed the smallpox virus to fine-tune its attacks on the human immune system. When it burst into the previously unexposed populations of the Western hemisphere via European invaders, the sharpened teeth of smallpox met no resistance. Some scholars estimate that 90% of native Americans died of it.
That monkeypox is spreading rapidly is undeniable. While monkeypox isn’t at this point a truly sexually transmitted disease like gonorrhea or syphilis, sexual contact has driven this outbreak. Monkeypox spreads through intimate physical contact, including direct contact with monkeypox pustules loaded with virus. People may not realize that their malaise is monkeypox in its early phase. Although anyone touching an infected person or their sheets, clothing and towels could theoretically catch monkeypox, the highest risk remains in concentrated networks of friends, companions and lovers.
The scandal of monkeypox is that this worldwide outbreak has happened at all. An epidemic has persisted in Nigeria since 2017. A more deadly strain has caused thousands of suspected cases and likely killed hundreds in the Democratic Republic of Congo (DRC). We have for years had the capacity to vaccinate those most at risk via two doses of Jynneos, the safer, updated version of the old smallpox vaccine. But we haven’t done so, and now the virus has reached the Western world. Now millions of doses have been ordered for the U.S. alone – and none yet for Africa.
Why do we in the West only pay attention when a disease outbreak directly threatens us? That’s the real outrage, the real question. The only answer is a more global approach to health, a recognition that when disease breaks out in one part of the world, it often will – as Covid and now monkeypox have shown us – affect us all.
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