14 Leaders The Economist November 6th 2021
Heavily polluting firms or assets will often find new owners.
If you can brush off the stigma, it can be profitable to hold assets
that can legally generate untaxed externalities—in this case pol
lution. As shareholders urge oil majors to clean up, the oilfields
they sell are being bought by privateequity firms and hedge
funds, away from the public eye. Pledges alone do not alter the
fact that firms 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 euis 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 firms and use them to helpbring about change. Institutional investors also need to build up
their venturecapital arms to finance 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 finance is to work won
ders. That would target all firms, not just those controlled by
some institutional investors. The urge to avoid the tax would su
percharge efforts 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 profit incentive with the goal of reducing greenhouse gases.
The job of the financial system would then be to amplify the sig
nal sent by the price of carbon. That combinationwould be a po
werful engine for changing how economies work.nT
he name of Ethiopia’s capital,AddisAbaba(NewFlower),
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 fighting 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 offensive 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 fled abroad.
What fighting 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
ficers 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 tplfa “cancer” and a “weed”
that must be trampled. His office insists that he means only the
armed group, not all Tigrayans. But some of his followers maymakenosuchdistinction.Inother 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
find the conversation difficult. 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 fighting the forces of dark
ness,” says one diplomat, adding that Abiy con
stantly changed the subject from ending the
conflict 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 eucutting 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 effort 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 tplfgovernment
that seized power by force. The unSecurity 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 115mpeople
hangs in the balance. The world should not abandonit. nAs rebels march on the capital, ethnic persecution acceleratesAct now to avert carnage in Ethiopia
Abiy’s abyss