Thursday10 October 2019 ★ FINANCIAL TIMES 9

Opinion

T

he first photographs of our

planet from the moon made

it look as finite and delicate

as a glass ball. The images

are credited in some quar-

ters for the battery of environmental

laws that passed the US Congress after

1969. Another theory behind the shift in
      consciousness cites a spate of earthlier
      events in the same year: an oil spill near
      Santa Barbara, a river fire in Ohio.
      Whatever the emotional prodding for
      the green reforms, we can at least be
      sure of their formal enacter. It wasRich-
      ard Nixon who founded the Environ-
      mental Protection Agency. It was Nixon
      who signed the Ocean Dumping Act and
      the Endangered Species Act. Elected as
      a populist, he authorised a tremendous
      growth in federal power. And he did it

for a cause that even then (the era of

Greenpeace’s founding and the first

Earth Day) had liberal connotations.

This was incongruous enough half a

century ago. It is unthinkable now. On

the face of it, populists and environmen-

talists are the two least reconcilable

movements in world politics. One

defines itself against transnational gov-

ernance and the other counts on it to

abate climate change. One electrifies

the middle-aged and older while the

other mobilises the young. The crossfire

between US president Donald Trump

and Greta Thunberg on Twitter

last month captured the acrimony in

miniature.

Such is the surface tension that we

miss what unites the two sides. At the

core of both movements is a mistrust of

capitalism. For the populist, it under-

mines nationhood. For the green, it

imperils all life. Their lines of approach

are different, but both converge on a

position that is recognisably Malthu-

sian. Populists assume that immigrants

leave less of the (presumably fixed)

national wealth for native-born citizens.

The greenest greens equate economic

and even demographic growth with the

depletion of the planet. There is a meas-

ure of hokum in each claim. But it is

compatible hokum. Given time, the

intellectual overlap might be the stuff of

a political coalition.

We are said to have lived through a

realignment in recent years, from left

versus right to former UK prime minis-

ter Tony Blair’s glib but yet-to-be-

bettered “open versus closed”. The sort-

ing process is incomplete, though. Like

citizens of a hastily partitioned country,

there are people stranded on the wrong

side of the new line.

Corporate Republicans wallow theirs

qualms about Mr Trump’s tariffs for the

sake of tax cuts. The Grand Old Party is

still a union of the most pro-market peo-

ple in America and the most nostalgic

authoritarians. This is not — if Ms Thun-

berg will excuse the phrase — sustaina-

ble. Time is likely to bring about a more

coherent delineation, between those

who are at ease with modernity and

those who would like to unwind it some.

If so, populists and environmentalists

could find themselves on the same side.

In France, some of thegilets jaunes,

who once howled at fuel taxes, are

marching with greens. In Britain, there

is a fad for agricultural autarky among

your dig-for-victory kind of Brexiter.

It is natural to see thisromantic con-

servatism as an Old World thing. But it

has been a part of American thought

since Thomas Jefferson envisioned an

agrarian republic. Woodrow Wilson, no

less than Nixon, paired backward social

views with an environmental con-

science. The diaries of George Kennan,

the great diplomat, and a conservative if

not a Republican, teem with grumbles

about minorities and modern women —

but also about the motor car and the

despoliation of nature. To equate Amer-

ican conservatism with the free market

is to fall foul of recency bias. The move-

ment predates Ronald Reagan.

“There is more to life than economic

growth.” What stands out about this

line, beyond its smarminess, is that it

could come from a traditionalist as eas-

ily as from a young green. Because these

tribes are so outwardly different, their

collaboration seems fanciful. But then

electoral coalitions are often jarring.

Segregationist Southerners helped to

vote through the New Deal. The GOP

has long reconciled rich capitalists and

workers who hate trade.

If anything, an alliance of greens and

populists would be more coherent, at

least in substance, and perhaps even in

style. Both spit the word “liberal” (or

“neoliberal”) as slander. Both have what

we might delicately call an extra-parlia-

mentary wing.

No one is suggesting eyeball-to-eye-

ball teamwork here. Mr Trump rallies

and Extinction Rebellion marches will

never blend. But each side can vote

against the market without having

much to do with the other. What they

lack in fellow-feeling they can make up

for in decisive numbers.

[email protected]

Their lines of approach

are different, but both

converge on a position that

is recognisably Malthusian

The coming alliance of populists and greens

through their own or franchised stations

could even charge more per litre for

sports utility vehicles or older cars.

They could instantly identify fuel effi-

ciency levels by scanning licence plates.

This would be provocative, but it

would have two advantages. One would

be to help companies meet carbon

intensity ambitions by ensuring that

their products are used efficiently. Their

customers would gain greater benefits

from each barrel of oil they produced

than would their rivals’ customers.

It could also improve their image.

Those who see no difference between

Shell and BP would notice being charged

more for SUVs by one of them. Such

tough love on behalf of the environment

might even resonate among Extinction

Rebellion sympathisers.

It would probably frighten the direc-

tors of the oil majors to take such a pub-

lic stand, rather than burnishing their

images by sponsoring theatres. But they

need their own rebellion.

[email protected]

the critics. Extinction Rebellion protest-

ersbroke windows t Shell’s headquar-a

ters in April for “destroying the life sup-

port system for all of the natural world”.

Very few people distinguish between

one energy major and another.

It is time to show them. This will

require faster changes in energy mix

than any major has yet envisaged: none

is changing its portfolio enough to com-

ply with the net zero emissions by the

2050 target, let alone Extinction Rebel-

lion’s2025 demand, according to the

Transition Pathway Initiative, backed

by asset managers includingRobeco.

Energy companies could also choose

better customers. They have so far

avoided it. “We can’t refuse to fill up

old cars or planes for holidaymakers,”

says one executive. But discriminating

among clients and rejecting riskier ones

is standard practice in banking and

healthcare; why not adopt the same

attitude to users of energy?

RationingeasyJet might be a step too

far, but how about not making fuel for

private jets? Companies that sell petrol

oil company in the world, and your

products will still cause harm.

The next step is to evolve from being

an oil company to an energy group. This

often involves natural gas and — more

pertinently for protesters and investors

who worry about exposure to fossil fuels

— alternative energy. Total is apropo-

nent of biofuels nda Shell is diversifying

into electrical power.

Both companies have ambitions to

reduce the overall carbon intensity of

their output by changing their energy

mix. Shellhopes to halve ts measure ofi

intensity, including its customers’ emis-

sions, by 2050 and thus to help progress

towards theParis climate accord targets

for curbing global warming.

But this will not be enough to mollify

craft, having condemned companies for

making the oil that powers them. People

still take out loans although banks are

disliked, and smokers keep on puffing.

That would be a risky strategy. US

pharmaceutical companies that pro-

duced opioid painkillers also had a

receptive market and did not regard it

as their role to limit how those drugs

were used. The opioid epidemic has

come back tohaunt the members of the

Sackler family who controlPurdue

Pharma nd find their money turneda

away by art galleries and museums.

Bolder action is needed and Mr

Looney may be less resistant to it than

his predecessorBob Dudley, whose

greatest environmental challenge at BP

was theDeepwater Horizon disaster ni

2010. I would bet that Mr Looney fol-
      lows the path ofRoyal Dutch Shell nda
      Total n taking account of greenhousei
      gases emitted by its customers, rather
      than merely its own operations.
      Most oil majors still focus on their
      own operations in calculating their con-
      tributions to climate change, emphasis-
      ing how they are cutting methane emis-
      sions from rigs or making drilling more
      efficient.Equinor s using onshore elec-i
      tricity to power its newJohan Sverdrup
      field ff the coast of Norway, and esti-o
      mates that it will save25m tonnes fo
      carbon dioxide emissions.
      This is an inadequate measure.Shell
      estimates hat 85 per cent of emissionst
      are from customers using fossil fuels,
      rather than in production. You can be
      the most operationally responsible

B

ig companies are rarely pop-

ular butBernard Looney ash

becomeBP’s next chief exec-

utive t a particularly touchya

moment. The Royal Shake-

speare Company haswithdrawn from

a sponsorship deal ithw BP, citing the

alienation of young theatregoers, and

protesters have dubbed its head office in

London a “crime scene”.

As Extinction Rebellion activists

mounted protests against climate

change this week, oil companies are as

reviled as banks and tobacco compa-

nies. “Your dirty oil will kill us all,” an

actress read during its event against oil

majors including BP andEni n July.i

Greta Thunberg, the 16-year-old envi-

ronmental activist, istipped to win het

Nobel Peace Prize this week.

Given that the world will rely on fossil

fuels for decades, even with the most

stringent government policies to reduce

energy use, oil companies face their own

climate emergency. How can they retain

social legitimacy when young Europe-

ans protest against them?

They could just carry on, secure in the

knowledge that even some activists will

keep driving cars and travelling on air-

Big Oil should

rebel against

its customers

Even with government

policies to limit energy

se, companies face theiru

own climate emergency

BUSINESS

John

Gapper

I

f anyone still doubts that the global

trade system is facing a make-or-

break moment, the responses by

the EU, Canada and Japan to US

president Donald Trump’s “Amer-

ica First” policies should settle the mat-

ter. Paradoxically, the champions of

rules-based international trade are

undermining the system in their

attempts to save it.

In response to the US’s imposition of

tariffs on steel and aluminium imports

in the name of national security, the EU

and Canada have challenged the meas-

ures at theWorld Trade Organization.

But instead of waiting for a ruling, they

retaliated immediately. The EU argues

that there is no national security ration-

ale for the US steel and aluminium tar-

iffs, and that American actions consti-

tute a de facto “safeguard measure” —

which would make the EU’s “rebalanc-

ing duties” consistent with WTO rules.

Not surprisingly, the US disagrees and

has opposed the EU’s countermeasures.

Regardless of the legal merits of the EU’s

case, the fact that the bloc is short-

circuiting the process means it is help-

ing Mr Trump to undermine the WTO.

Another example of friendly fire is the

EU’s and Canada’s attempts to deal with

the looming crisis of the WTOappellate

body —the highest instance of dispute

resolution. Because the US has blocked

appointments, the appellate body will

not be able to hear new appeals after

December 10 2019.

As a workaround, the EU and Canada

adopted an interim appeal arbitration

arrangement in July. The EU also laid

the groundwork to enter into similar

arrangements with other countries.

While such agreements are based on

WTO rules and even though the EU and

Canada remain committed to restoring

the appellate body, the interim mecha-

nism could undermine the impetus for

reform. If the parallel system persists in

the long term, it could lead to a fragmen-

tation of the global trade dispute settle-

ment system.

Thepartial US-Japan trade deal

signed in September is the latest case of

a champion of global trade being willing

to skirt WTO rules in order to reduce

tensions with the US. Although it covers

market access for certain agricultural

and industrial goods, as well as digital

trade,such a narrow deal is potentially

inconsistent with WTO rules stipulating

that an agreement should cover “sub-

stantially all the trade” between the two

parties. Both sides have left the door

open to further negotiations for a more

comprehensive agreement, which could

address the concerns. But for now, Japan

has pursued a partial deal with the US in

order to get Mr Trump to withdraw the

threat of car tariffs.

If even the champions of the global

trade system are stretching the rules in

order to save it, perhaps that system is

beyond saving? I think not, but what is

needed is a path that allows the support-

ers of the rules-based international

trade system to continue to defend it,

while simultaneously ensuring that US

violations of the rules do not lead to its

unravelling.

In engaging with the Trump adminis-

tration, the focus should be on issues of

shared concern. The US, EU and Japan

are already taking steps —inside and

outside the WTO —to work jointly on

dealing with China’s state-owned enter-

prises and industrial subsidies, as well

as technology-transfer practices. This

group could be extended to include Can-

ada, Australia and Singapore.

Supporters of the global trade system

should focus collectively on newissues

such as digital trade. This should be

done without losing sight of some of the

unresolved tensions of the past, espe-

cially around agriculture.

Finally, thesecountries should con-

tinue to promote trade with the rest of

the world. If done right, and in compli-

ance with WTO rules, this could be a

stepping stone towards a reinvigorated

multilateral trade system. Following

this path wouldstrengthen, rather than

undermine, the foundations of that sys-

tem,with the WTO at its heart.

The writer is a research fellow at Chatham

House

Stretching the

rules will

not save

global trade

Japan has pursued a partial

deal with the US in order

to get Trump to withdraw

the threat of car tariffs

A

ll over Africa, in its clogged

cities and fast-changing

towns and villages, build-

ings are painted inTecno

blue and billboards offer

the allure of the Tecno brand. From the

Grand Marché in Mali’s capital,

Bamako, to the business hub of Nairobi

in Kenya, where entire 20-storey towers

are slathered in the Tecno logo, aspira-

tional Africans are being bombarded.

What is Tecno, you may ask, if you

are not a frequent traveller to the

continent? Tecno is an Africa-specific

brand created by Transsion, a Shen-

zhen-based handset manufacturer.

Last week, the company, founded in

2006, listed on the Star Market, Shang-

hai’s Nasdaq wannabe, closing up more

than 60 per cent on its first day for a

market capitalisation of around $6.5bn.

The story holds lessons about Africa

and its increasingly dynamic interac-

tion with the world. Transsion, which

last year sold more than 100m handsets,

has proved you can make money in

Africa if you work out what people want

and what they can afford.

From 2008, Transsion specifically

targetedthe continent, skipping the

crowded Chinese market to concentrate

on a new frontier where thepopulation

is set to double over the next 30 years.

Starting with basic “feature” phones,

Transsion developed its technological

offering to cater for African tastes,

gleaning intelligence from research cen-

tres established in Nigeria and Kenya.

Many Transsion phones have slots for

multiple SIM cards so customers can

make cheap provider-to-provider calls

and bypass lapses in coverage. Battery

life has been extended, vital for users in

places where electricity may be inter-

mittent. Handsets are adapted to lan-

guages including Amharic and Swahili.

As Transsion sells more smartphones,

which now make up more than a third of

its offering, it puts its effort on the

mid-tier market, keeping the cost to

around $100 for most handsets.

Unusually, it also offers aftersales serv-

ice. Transsion, whose sales in Africa

zoomed past those of Samsung in 2017,

saw an opportunity where others did

not. While the west still too often treats

the continent as a charity case, many

Chinese companies see a business

opportunity.

True, most people in Africa are poor.

InKenya, a relatively prosperous econ-

omy, gross domestic product per capita

is still a lowly $3,000, even in purchas-

ing parity terms. Yet the continent’s

population is growing faster than any

other on earth and — in its more success-

ful economies — income per head is

doubling every decade or so.

Chinese companies are getting in on

the ground. In 2018, Tecno became the

fifth most admired brand in Africa,

according toBrand Africa, squeezed

in between Coca-Cola and Puma, with

Apple sixth. Itel and Infinix, its other

two brands, make 17th and 26th place.

While most companies move into

Africa as an afterthought, Transsion has

done things in reverse, using Africa to

innovate and to test the robustness of its

offering. It is now selling phones in India

and Latin America.

Transsion is also testing Africa as a

manufacturing centre, something that

could become more feasible as the Afri-

can Continental Free Trade Area comes

into effect. It has opened two manufac-

turing facilities in Ethiopia, which is

pursuing an Asia-style industrial policy,

in addition to factories in China, India

and Bangladesh.

Together with Huawei and ZTE, Chi-

nese equipment makers that have wired

up the continent virtually single-hand-

edly, Transsion has helped lead the Afri-

can telecoms revolution. The hardware

installed, China’s software developers

are also coming. Alibaba has road-

tested its Alipay system in South Africa

and WeChat has a partnership with

Kenya’s M-Pesa mobile money offering.

To be fair to western companies,

some, including Vodafone, Orange and

Facebook, whose WhatsApp messenger

service is ubiquitous, have also seen the

potential of the African consumer.

And if China has been more commer-

cially savvy, western governments have

bankrolled humanitarian schemes that

Beijing would never consider. There is

no ChinesePepfar, the US President’s

Emergency Plan for Aids Relief. And it

was the CDC Group, part of Britain’s aid

effort, that funded the M-Pesa

money-transfer system on which much

of the continent’secommerce cosys-e

tem is built.

That ecosystem is extraordinarily

inventive. Start-ups are offering serv-

ices from off-grid power to farming

advice, and fromcut-price medicines ot

haulage trucks ordered up Uber-style.

Jack Ma, the founder of Alibaba, has also

turned his attention to Africa’s poten-

tial, launching a $1mNetpreneur rize.p

When most people think of China in

Africa they think of mining and con-

struction. But things are moving on. It is

no longer the highways where the main

action is taking place. It is the super-

highways.

[email protected]

In 2018, mobile phone

manufacturer Tecno

became the continent’s

ifth most admired brandf

China corners Africa’s ecommerce market

Marianne

Schneider-Petsinger

AFRICA

David

Pilling

AMERICA

Janan

Ganesh

Efi Chalikopoulou

OCTOBER 10 2019 Section:Features Time: 9/10/2019- 17:48 User:alistair.hayes Page Name:COMMENT USA, Part,Page,Edition:USA, 9, 1