The deal should lead to better protection for tropical forests

Agreement was reached after a U-turn from the US, which had wanted firmer commitments from developing countries.

Earlier, the EU and US agreed that industrialised countries would not set firm emissions targets at this stage.

The "Bali roadmap" initiates a two-year process of negotiations designed to agree a new set of emissions targets to replace those in the Kyoto Protocol.

"I think we have come a long way here," said Paula Dobriansky, head of the US delegation.

"In this, the United States is very committed to this effort and just wants to really ensure we all act together."

Dramatic scenes

The US acceptance came just minutes after it had signalled it would reject the compromise, a statement that drew boos from delegates in the conference hall.

This is a real breakthrough, a real opportunity for the international community to successfully fight climate change Rachmat Witoelar, Indonesian Environment Minister Bali deal: Reaction in quotes

They had complained that language on reducing their emissions was too strong, and would commit them to measures that could retard their economic development.

They also wanted the West to pledge more action on transferring clean technology to developing societies.

Observers spoke of emotional scenes in the conference hall - the UN's top climate official Yvo de Boer in tears after being accused by China of procedural irregularities, and cheers and hugs when the US indicated its acceptance.

"This is a real breakthrough, a real opportunity for the international community to successfully fight climate change," said Indonesian Environment Minister Rachmat Witoelar, who served as conference president.

"Parties have recognised the urgency of action on climate change and have now provided the political response to what scientists have been telling us is needed."

Talks have been intense, and the meeting has run more than a day beyond its scheduled close, with several night-time sessions.

On the road

The document coming out of the meeting, the "Bali roadmap", contains text on emissions cuts, the transfer of clean technology to developing countries, halting deforestation and helping poorer nations protect their economies and societies against impacts of climate change such as rising sea levels and falling crop yields.

The roadmap sets the parameters and aims for a further set of negotiations to be finalised by the 2009 UN climate conference, to be held in Denmark.

The US was the principal focus of opposition from activists

This will include firm emissions targets for industrialised countries to replace those in the Kyoto Protocol which expire in 2012, some softer form of targets or ambitions for major developing countries, and mechanisms for leveraging funds from carbon trading to protect forests and fund adaptation projects.

The EU came to the talks demanding that industrialised nations commit to cuts of 25-40% by 2020, a bid that was implacably opposed by a bloc containing the US, Canada and Japan.

This dispute was resolved with a text that did not mention specific emissions targets but did acknowledge that "deep cuts in global emissions will be required to achieve the ultimate objective".

Environmental groups and some delegates have criticised the draft as being weak and a missed opportunity.

France's Deputy Ecology Minister Nathalie Kosciusko-Morizet acknowledged the deal amounted to far less than the EU had wanted.

But, she told the AFP news agency: "The public can understand that we brought the United States into the negotiations.

"It's a framework that is quite weak but which still moves forward."

Tree line

Earlier, consensus was reached on the principle of rewarding poorer countries to protect their forests.

This is widely acknowledged as the cheapest single way of curbing climate change, and brings benefits in other environmental areas such as biodiversity and fresh water conservation.

Delegates agreed on a framework that could allow richer nations and companies to earn "carbon credits" by paying for forest protection in developing countries.

"We need to find a new mechanism that values standing forests," said Andrew Mitchell, executive director of the Global Canopy Programme, an alliance of research institutions.

"Ultimately, if this does its job, [deforestation] goes down to nothing."

Mr Mitchell said the only feasible source of sufficient funds was a global carbon market.

But many economists believe mandatory emissions targets are needed to create a meaningful global market.

Supermarkets around Rotterdam, for instance, already face shortage of organic food, says the midia in headlines as this is a very popular item nowadays in this part of Europe.

Quoting the national retail board CBL, the Volkskrant (People's Journal) reports today that Dutch supermarkets will be forced to import increasing amounts of organic food unless domestic production is expanded.
 
'We would rather not import organic food because bringing it from across the globe is not environment-friendly and is more expensive,' the CBL's Marc Jansen told the paper.
 

At the same time however, some 60% of Dutch production of organic food is exported abroad, mainly to Denmark, Germany and Britain.

The CBL announced on Tuesday that it expects organic food sales to rise 15% this year to a record €530m. While volumes are increasing, the shortage of some products is also helping to push up prices.

Supermarkets want sales of organic food to grow twice as fast as the food sector as a whole, the CBL says. Organic food currently accounts for some 2% of supermarket sales with eggs, vegetables, fruit and meat accounting for 63% of the total.

'The average family now eats organic food for the equivalent of one week a year,' Jansen told the Volkskrant.

Despite growing demand from consumers, organic farming still only accounts for 2.4% of the total, despite government targets to boost this.

The government target is for 10% of farmland to be devoted to organic production by 2010. It also wants organic products to account for 5% of all spending on food.  

(With © www.DutchNews.nl reporters).

Cyclists in Denpasar, Indonesia, campaign on Sunday for a reduction of greenhouse gas emissions.

A key goal of the two-week conference, which opened with delegates from nearly 190 countries in attendance, will be to draw a skeptical United States into an agreement to cut emissions of carbon dioxide and other so-called greenhouse gases.

While the U.S. delegation declared it would not be a "roadblock" to a new agreement, Washington remains opposed to steps many other countries support, such as mandatory emissions cuts by rich nations and a target for limiting the rise in global temperatures.

The American position suffered a blow Monday when the new Australian prime minister signed papers to ratify the Kyoto Protocol climate pact. The move leaves the U.S. -- the world's top emitter of greenhouse gases -- as the sole industrial country outside Kyoto. (With reports by CNN).

December, during United Nations sponsored talks in Jacarta on the global warming issue,

clear measures to reduce national greenhouse gases emissions, caused mainly by destruction

of Amazonian forest.

Lula's reluctance to adopt these goals looks like his colleague's in United States against

imposing ecological overcosts to American big business (George W. Bush did not sign the

Kyoto protocol and is now paying a high electoral price for that wrong decision, as

Republicans from California told him recently).

As it became clear  with the annoucing yesterday that the Exectuvie branch of federal

governament in Brasilia has decided not to face the problem of CO2 emissions immediatly, as

oposition and environmentalists are asking for, and instead is creating another two-dozens

members interministerial committee... to present a proposal in six months.

This is the way not to do what should be done to solve national - or, in this case,

internacional - problems  in Brasilia: when the best thing (for your political group) is

doing nothing, you create a committee or something to play down media excitments and let

time take care of the rest.

That's pretty different from what Congress has done in Brazil about the same issue, showing

 that national society is deeply divided by green issues - which is natural as the economy

is still heavly dependent on cattle-raising, soy and now sugarcane plantations for ethanol

production.

For the time being Brasilia is very badly positioned in the green issue since the country

is ranked as world number fourth in the carbon emissions.

Exactly one day before UN panel scientists annouced in Europe that it is our responsability

the climate warming stuff, Brazilian House of Representative received a comprehensive

package of legislative proposals aimed to reduce CO2 emissions by 5% in a five years.

The so-called green package did not receive support from Lula's PT or other political 

supporters and last week people at the House just sent us an email showing the main

proposition has already gone a few steps although is not ready yet to be voted.

Was Lula's administration serious about the global warming challenge he would not create

any committee or the like but, instead, would have given support for green initiatives

already on the legislative track in Brasilia.
 
Critics of the president say Lula is only trying to divert attention from the growing

pressure from civil society and European governaments to set up goals to reduce environment

devastation in central and speciallynorthern Brazil, where Amazonian ecossystem is.

When United Nations scientists confirmed last February that mankind was responsabile for

the global warming  Brazilian government did not act right away as Europe did, setting

clear objetives to be accomplished in the next decades.

Instead of adopting measures to curbe forest burning, to stop ilegal occupation and enforce

the environment law (which, by the way, his government inherited from former president

Fernando Henrique Cardoso'minister of Enviroment Protection, Jose Sarney Filho, now leader

of the fast-growing leftist Green Party, the only political force in Congress that went up

from 1 or 2 representatives by the end of last century to 5 elected in 2002 and 14 elected

last year.

Should Lula listen to his friends at Green Party (he still has got a few), no committee

would ever be created - it is just a matter of good sense.
 
Or of no sense at all, as we have seen up to now in Brasilia.

Calheiros was judged by his pairs under the charge of corruption and he received 40 votes of supporters, against 35 votes for impeachment and six senators that haven´t voted.

These six votes may have came from the 12 senators of Partido dos Trabalhadores-PT (Workers Party). showing the participation of president Lula da Silva´s party in this process.

Public opinion favors Calheiros resigning.

 He´s under fire in other three charges, all of them related to corruption (business with contractors and so on).  The scandal became public his affair with a young journalist (they have a child 4 years ago), whose pension he was paying with money comming from Mendes Junior S/A, a large engineering and road construction company.

The political crisis in Brazil goes on.

The story is about the trend in short terms for basic  interest rates reduction in Brazilian economy - Lula didn´t showed any interest in stopping his own plans with a bit of basic economics.

-People is willing, mister, to invest in Brazil, you know? Alcohol, yeaj, ethanol and all that.

Inflation acceleration:

-Oh no, forget it , if what you want is to keep on making money on me, man, forget about it...

-?

Stock markets in Sao Paulo closed today in good shape, following this other story wiring all over, about the very true futurology by the  Federal Reserve´s decision already taken: to reduce basic interest rates by some 0,25 pp next Thursday (18).

Lula wants to keep on going. His plans before global finance crisis are to be taken seriously, about  promoting domestic economic growth in order to answer the main national problem here - create jobs for millions.

Next Tuesday (18) there will be another meeting at Brazilian Central Banco´s committee on monetary policy, probably to annouce a cutting by 0,25 pp instead of 0,5 pp on basic interest rates.

Here, like there.

Diference is that United States faces the challenge of recesion next year and Brazil is on the good part of the curve, with his alcohol driven  million of cars and now the ethanol run - basides strong economic fundamentals that could help to atract direct investments.

But in order to atract foreing capital that Brazil needs the "invest grade" by JP Morgan - so get it, just with low interest rates.

Before the US mortgage market crisis started last month, there was a perception that Central Bank´s Monetary Policy Committe (Copom) would cut basic rates by half a point, keeping the trend to reduce interest rates in order to estimulate economic growth (and get the so-called investment grade).

Besides the external crisis centered on the US mortage market, Compom looke also to internal aspects of the recent figures - they found out GNP is running at 6% a year at this moment, although the expectation for this year was around 5%.

There are price pressures in the internal front, comming specially from food, as well as the whole uncertainity outside.

Tonight decision shows, as former Finance Minister Antonio Palocci just told us, that there´s a perception of the external turbulence and its risks but up to now the perspetives for Brazilian economy are as good as the economic fundamentals.

Market observers say taht could be the last cut in Brazil´s basic rates, which annual percent in present 11,25%.

Dolar went up by the end of business day, but not that much, closign at US$ 1,00 = R$ 1,97.

Sao Paulo stock exchange closed follwing the downward trend observed in New York and closed with a loss of 1,5% after five consecutive days above the line.

The senator is still married to Veronica Calheiros.

As a distinguished member of the strong PMDB (Party of the Brazilian Democratic Movement), who defeated the military rule in 1985 and now is allied to president Luis Inacio Lula da Silva´s Workers PArty (PT).

Lula tried to save his friend and may still have success in doing so tru the majority Government coalition has in Senate.

But the charges were so evident and the scandal lasted so long that Lula told people to let it go and try to solve the crisis as soon as possible because he - and the country - needs Senate being full opeational.

Senate has been paralized for the last quarter by Renan´s struggle to keep his job anyway.

It looks he won´t succeed and will have the same fate of former president Fernando Collor, also from Alagoas state, who resigned and lost his political rights for eight years under charges of corruption.

Last year Collor was elected senator after the 8-year period of punishment, but his role now is so ofuscated by his past that he decided to take a 4-months vacation, starting last week.

The main reason: not to be obliged to vote in Renan´s impeachment next week.

On the economic front, it´s expected for tonight the Central Bank announce about the basic interest rate, which the market wants to be cutted by 0,25 percent points.

Sao Paulo and Rio stock markets are on red now, following Dow Jones after bad news in US house financing market.

Dollar is woth R$ 1,94 which means everything is normal in Brazil at this moment.

We are divided: most os our economists were betting on a hardstop on rates falling curves planned before.

Even they stop it tomorrow, decidion is annouced, it would be simply a break to breath and unerstand better what the hell is going on in Uncle´s Sam banks...

Central BC committe was working for many months to give a help to economic growth, in order to make sure Brazil´s GDP would keep on a sustained goodwill path starting from something more than 5% in 2007, 6% in 2087 (municipal elections in Oct 5th), 6,5% 2009 and the magic 7% exactly in presidential elections year!

Now, no-payers in the States are shaking things around the overfinacerized global capitalism.
There is an spectre rounding not only Europe like in 19th century but the wole blogal village now.

Woukd there be a recession in the States, following the present credit crisis in the mortgage system spreading sub-porimes roten papers around banks all over.

Is there gonna be a world recession?

We don´t think so, but you better take your precautions... like not believing anibody, not even the economist next door.

Or next blog.

I say there won´t be a recession, but an adjustment all over the globalized economies.

It´s ridiculous to expect that a people like the Americans, modern Romans leading manking to the stars, has won all the batlles against all the socioeconomic engeneering challenges, to begin with American Revolution and going over The Great Depression and...

Well, I know very well the Amnericans, my son is one of them. I´ve been covering Insternational Monetary Fund (IM) annual meetings for over two decades.

As a Finance minsiter´s press officer during the Real Plan implantion and consolidation, I got insede the monster - it´s nice the building from inside, the general-manager rooms, the women around... well-dressed female PhDs

I used to jave a fried there, who´s retired now, that introduced me to the  IMF building at 19th street undergrounds - it´s sort of mindblowing, my friends from Berkeley would say.

At a time, around the end of 1998, I even accepted to participate of the Brazilian small delegation headed by Finance Minister Pedro Malan - well, I thought I still was a Marxist, but I also had to help the nation overcome the foreing crisis and we´ve got to save the new and stable Real...

After IMF agreement in 1998 we decidend to leave the Executive. In early 199 we quited Government, toghether with Gustavo Franco, replaced by Henrique Meirelles at Banco Central (where companheiro Lula kept him up to now).

Read all that, then you already know what I think about tomorrow´s annouce by Brazilian Central Bank´s monetary policy committe - don´t you?

All my friends on the economic midia sage believe the  basic interest rates (selic rates) will b cutted by 0,25% only (modifying the downward trend followed in the last  months to get advantage of good fundamentals.

Market operators expected a cut by 0.5% before the mortgange crisis in the US.

May I tell you my game?

They won´t do anything but stay where they are: watching tv to see what´s going on around with the US and European banks, the credit and, last but not least, inflation expctations outside and specially inside Brazil.

Finance Minister Guido Mantega said we´re going tru some consumer pressure on prices. "I don´t see any major inflation pressures, but consumer is high at this moment, whic is good", he saida few hours ago.

To good unerderstanders, half a word is enough.

I´d keep basic rates where they are,  for two more weeks or so  -  and then see what happens,  wait to see what goes on with inflation and economic growth at home.