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Leaders
The Economist November 6th 2021
Heavily polluting fi rms or assets will often fi nd new owners. If you can brush off the stigma, it can be profi table to hold assets that can legally generate untaxed externalities—in this case pol lution. As shareholders urge oil majors to clean up, the oilfi elds they sell are being bought by privateequity fi rms and hedge funds, away from the public eye. Pledges alone do not alter the fact that fi rms have little reason to invest trillions in green tech nologies that still have mediocre riskadjusted returns. What should be done? Finetuning can help. Measurement should be improved. The eu is rolling out mandatory carbon re porting for businesses; America is considering it. Some ac counting bodies want to standardise how climate measures are disclosed. Asset owners, such as pension funds, should hold on to their investments in polluting fi rms and use them to help
bring about change. Institutional investors also need to build up their venturecapital arms to fi nance new technologies, such as green cement (see Science & technology section). Pledges like gfanz are good as far as they go, but the world needs a widespread price on carbon if fi nance is to work won ders. That would target all fi rms, not just those controlled by some institutional investors. The urge to avoid the tax would su percharge eff orts to count emissions. Firms and governments would have an incentive to grapple with questions of who is pol luting and who should pay. Crucially, a carbon price would align the profi t incentive with the goal of reducing greenhouse gases. The job of the fi nancial system would then be to amplify the sig nal sent by the price of carbon. That combination would be a po werful engine for changing how economies work. n
Abiy’s abyss
Act now to avert carnage in Ethiopia As rebels march on the capital, ethnic persecution accelerates
T
he name of Ethiopia’s capital, Addis Ababa (New Flower), belies its frequent violent changes of government in recent decades. The Emperor Haile Selassie was overthrown and later strangled. Mengistu Haile Mariam, a Marxist despot, shot his way to power, imposed a “red terror” and was later ousted by a rebel coalition led by Tigrayans. Now history is rhyming. Once more the federal government is fi ghting rebels from Ti gray. Once more it has deliberately blocked food and medicine from entering this northern region, where 400,000 people are now starving and millions are at risk. Once more the Tigrayan People’s Liberation Front (tplf) is marching on Addis Ababa. In a rapid off ensive it has captured towns straddling the roads north of the capital. An allied band, which claims to represent the Oro mos, Ethiopia’s largest ethnic group, threatens to cut roads lead ing to the city from the south. It says it, too, is marching on Addis Ababa (see Middle East & Africa section). The last time Addis Ababa fell, in 1991, a bloodbath was somehow averted. Peace talks were held in London. The dictator fl ed abroad. What fi ghting there was in the capital lasted on ly a few hours. This time, however, it is far from clear that the civil war will end so quietly. The authorities in Addis Ababa have called on its 5m residents to organise themselves in blocks and defend the city. Abiy Ahmed, Ethiopia’s prime minis ter, shows no sign of agreeing to talks. On November 3rd, at a cer emony marking the start of the war a year ago, Abiy told army of fi cers that “Ethiopia will defeat all her enemies with the blood and bones of her children and live for ever in glory.” He has de clared a state of emergency, giving his forces sweeping powers to detain anyone suspected of “terrorist” ties. The police and army are interpreting this as an order to round up all ethnic Tigrayans in the capital. Within hours of the proclamation, Tigrayans were grabbed and shoved in warehouses or old factories. Even doctors and nurses were dragged out of hospitals if they were Tigrayan. Worse is possible. For months Abiy has used dehumanising language for his foes, calling the tplf a “cancer” and a “weed” that must be trampled. His offi ce insists that he means only the armed group, not all Tigrayans. But some of his followers may
make no such distinction. In other parts of Ethiopia both sides have committed war crimes, some of them ethnically targeted. Now Abiy is urging all citizens to “expose” the agent who “stays in our midst and works for our enemy”. In a post on Facebook that the socialmedia company has since removed for violating its policies against inciting violence, he urged people to take up “whatever weapon” to “bury the terrorist tplf”. Ethiopia is a fragile federation of more than 80 ethnic groups. If widespread ethnic killings were to start, it could break up. Western governments are trying to prevent Africa’s second mostpopulous country from going the way of Yugoslavia. Jef frey Feltman, America’s senior diplomat for the Horn of Africa, is understood to be heading to Addis Ababa to meet Abiy. He may fi nd the conversation diffi cult. Foreigners who have spoken with Abiy in recent months describe him exuding a messianic zeal. “He can’t understand why the West is not supporting him in fi ghting the forces of dark ness,” says one diplomat, adding that Abiy con stantly changed the subject from ending the confl ict to “his mission to deliver Ethiopians from the darkness and into the light”. Abiy has not so far been swayed by sanc tions, such as the eu cutting aid or America sus pending Ethiopia’s preferential access to its market. The tplf, which believes its forces are on the brink of victory, has also made little eff ort to talk. Diplomats believe it may be holding back from an immediate attack on the capital so as to give Abiy a chance to give up and escape. No one knows whether catastrophe can be averted. But out side powers should try, with a determined mix of pressure and persuasion. The African Union should suspend Ethiopia’s mem bership until it lifts its embargo on aid entering Tigray, while al so making clear that it would not recognise a tplf government that seized power by force. The un Security Council should im pose an arms embargo, and try to coax both sides to negotiate. Russia and China, which have resisted applying much pressure, should know that they have more to lose than gain from a chao tic breakup of Ethiopia. The fate of a country of 115m people hangs in the balance. The world should not abandon it. n
