As the European Parliament election approaches, Europe is abuzz with speculation over who will lead the main European Union institutions for the next fi ve years. Among the positions up for grabs are those currently held by European Commission President Jean-Claude Juncker; European Council President Donald Tusk; Federica Mogherini, the EU High Representative for Foreign Aff airs and Security Policy; and European Central Bank President Mario Draghi. Personnel issues are hardly trivial. In politics, personality matters, and it has often played a pivotal role in determining the EU’s trajectory. Still, the leadership name game should not be the main focus.

Far more important is the debate over the EU’s 2019-2024 strategic agenda. After an informal summit in Sibiu, Romania, earlier this month, European leaders will return to this issue in earnest later in June. And for all of the attention paid to the EU’s institutions, it is EU heads of state who will craft the bloc’s agenda. In other words, member-state governments, operating through the European Council, will be the actors to watch after the election results are in. When the European Economic Community, the precursor to the EU, was established in 1957, its primary objective was to secure the peace between France and Germany, starting with a customs union for industrial goods (for the Germans) and a common agricultural policy (for the French). This arrangement anchored the European agenda for decades.

Then, when the Soviet Union and its empire collapsed, countries that had been trapped behind the Iron Curtain wanted to “return to Europe.” In the years since, the EU has undergone a massive expansion to include them. Its goal has been twofold: to aid the newer member states in their post-communist economic and political development, and to maintain continental peace and stability by bringing Central and Eastern Europe into the fold of EU institutions. The immediate post-Cold War period was a time of self-confi dence and optimism for the EU. Gradually, its strategic mission expanded beyond merely keeping the peace, to projecting the European model of shared sovereignty and integration abroad. The EU model, it was said, would lead to more stable governance for the entire world. Over the past decade, however, the EU’s eff ort to project its model outward has collapsed. Following the 2008 fi nancial crash, the euro crisis, and recurrent migration imbroglios, the EU has turned inward. At the same time, the EU’s immediate neighbourhood has transformed from a circle of potential friends and partners into a ring of fi re. Now, rather than trying to export stability, Europe’s strategic priority is to protect itself from the wider world. In trying to breathe new life into the EU after years of inward-looking crisis management, French President Emmanuel Macron has pushed for “a Europe that protects.” Following Macron’s call to arms, published by Project Syndicate this March, the EU leadership in Brussels has taken up that mantra and bundled various initiatives under the theme of protecting Europe in an age of global tumult. Such protection is undoubtedly necessary. Migration pressures, the constant threat of terrorism, and escalating economic disputes all demand a stronger policy response.

And while addressing some of these issues has proved controversial and diffi cult, the larger protection agenda is being carried out. Yet, looking ahead, it is clear that the current measures won’t be enough. The EU fi nds itself in a world dominated by great-power rivalries, Chinese assertiveness, and revisionist Russian belligerence. Worse, in confronting these threats, it can no longer count on the United States as an unconditional friend and ally. The EU now must choose between securing its own place on the global stage and becoming a playground for other powers. This is a strategic decision of the fi rst order – all other policy choices will follow from it. If Europe ignores or checks out of the dramas roiling the world from Amritsar in India to Agadir in Morocco, it will fail to ensure peace in its neighbourhood and betray its promise to its citizens to protect them from external danger. For the EU to uphold its original mission – peace and stability at home – it must become a global player.

The choice, then, is clear. Europe’s strategic mission in the coming years must be to secure its position on the world stage, and all matters of policy and personnel should be settled in a way that advances that objective. Obviously, a strong European Council president, working closely with a strong high representative, will be essential. Both will need to mobilise the resources and talents of all EU member states to prevent the EU’s constituent parts from being pulled in diff erent directions by global forces. If the EU’s member states embrace this mission, Europe will be positioned to act as a global player for years to come. Otherwise, they – and the EU as a whole – will fi nd themselves on a merry-go-round over which they have no control. – Project Syndicate zCarl Bildt is a former prime minister and foreign minister of Sweden.

Italian Deputy Premier Matteo Salvini vowed to change European Union rules in order to push through his promise of a 15% flat tax for everyone, as his top aide turned against Prime Minister Giuseppe Conte.

Salvini and his rightist League kicked off the week by opening fire on several fronts ahead of the European Parliament vote May 26, as tensions within the populist government escalated over immigration and other issues.

Salvini pledged at a pan-European rally of 12 nationalist parties in his hometown Milan on Saturday to push through the flat tax, a measure likely to raise concerns both in Brussels and among investors on how the government will draft the 2020 budget against the backdrop of a sluggish economy.

“The only way to create jobs is to reduce taxes, so we need to change some European rules and some limits imposed by Brussels,” Salvini told La7 television on Monday.

Changing deficit and debt caps would mean altering EU treaties, which in turn requires unanimity between member states and possibly referendums in some countries. Salvini has nonetheless continued to call those limits into question.

The deputy premier stayed on topic throughout the day on Monday, saying in a video interview on Facebook that tax cuts should initially be financed with a higher deficit, and that rules imposed by Europe are flawed.

Now, Giancarlo Giorgetti, who’s also cabinet secretary, is adding fuel to the fire, voicing long-running frustration among League lieutenants about Five Star, which picked Conte a year ago.

“Conte is no longer impartial,” Giorgetti told newspaper La Stampa. The premier tries to act as a mediator between the League and Five Star but “when the clash becomes tough and he has to take a side, he goes for the stand of those who put him forward,” Giorgetti said. “The situation cannot last for ever.”

Questioning the premier’s neutrality “is not a serious allegation, it’s a very serious one,” Conte said later Monday in comments to reporters. The premier also acknowledged that clashes between the two parties in the coalition are becoming increasingly heated.

Conte, a former law professor, was plucked from obscurity by Salvini and fellow Deputy Premier Luigi Di Maio of Five Star last year. While never a Five Star member himself, Conte was loosely affiliated with the movement in the past and Di Maio once named him as a possible candidate to head the Public Administration Ministry.

Salvini backed Giorgetti’s remarks. “If everyone keeps their word and keeps their promises, we keep going for five years,” Salvini said in the La7 interview. “The problem is the ‘no’s’ on autonomy, the flat tax, unblocking construction projects.”

Unprecedented Tensions

Both Salvini and Di Maio have repeatedly insisted the government won’t collapse despite unprecedented tensions before the European elections. The partners have squabbled about everything from security and immigration to more powers for regions in the League’s northern stronghold.

Senior officials in both the League and Five Star have said the infighting is mainly due to the election campaign, although uncertainty remains on the coalition’s future.

The impact of the Trump administration’s threats to choke Huawei reverberated across the global supply chain on Monday, hitting some of the biggest component-makers. Alphabet Inc.’s Google cut off the supply of hardware and some software services to Huawei, a person familiar with the matter said.

Salvini, who’s also interior minister and has insisted Italian ports remain closed to humanitarian ships carrying rescued migrants, protested on La7 Sunday night as he watched migrants disembark at a Sicilian port.

“Someone must have given the order,” Salvini said, as Five Star officials insisted no minister of that party had granted access to the ports. “That person has to account for his action.”

Salvini said he’ll propose giving his ministry powers over migrant vessels in territorial waters at a cabinet meeting he said will take place later Monday. Conte’s office said no time has been set for the meeting.

— With assistance by Nikos Chrysoloras, Dan Liefgreen, and Marco Bertacche

Delays in tackling cli- mate change could cost companies about $1.2tn worldwide during the next 15 years, according to the UN. That’s the preliminary anal- ysis of a UN Environment Fi- nance Initiative project that brought together 20 global fund managers to measure the impact of climate change on 30,000 of the largest listed companies. The group has cre- ated a guide for investors to as- sess how their holdings would respond to different levels of global warming and policy making. “Investors have a central role to play in moving the world to a low-carbon future,” said Mau- rice Tulloch, chief executive of- fi cer of Aviva Plc, one of the par- ticipants in the project. “This collaboration shows how we can all take better decisions, for our customers and for the environ- ment.” Extreme weather events, including fl oods, tropical cy- clones, and extreme hot and cold days are already hitting business operations. Should governments install tougher policy in the push for cleaner technology, emis- sion-intensive companies will increasingly struggle to com- pete. As well as Aviva, the investor group included companies such as Manulife Asset Management, M&G Prudential Ltd and DNB Asset Management AS. The work was guided by advisory and modelling fi rms Carbon Delta AG and Vivid Economics Ltd. Investors are playing an in- creased role to protect fi nancial stability against climate change. The research work will enable them to better understand cli- mate-related risks and oppor- tunities, in line with the recom- mendations of the Task Force on Climate-related Financial Dis- closures, a part of the Financial Stability Board global regulator, the UN said. The task force is chaired by Michael Bloomberg, the majority owner of Bloomb- erg LP. To cut investor risks, govern- ments probably need to put in place consistently rising car- bon taxes or markets that will spur a shift to cleaner technol- ogy, Christopher Hope, a policy modelling expert at the Univer- sity of Cambridge, told funds managers gathered in London on Friday.

HOUSTON (Reuters) – Hungarian Foreign Minister Peter Szijjarto said on Wednesday his country would again turn to Russia for natural gas supplies if Exxon Mobil Corp has not decided by September whether to invest in a massive Black Sea offshore project.

Romania’s Black Sea reserves pose a potential challenge to Russian Gazprom’s dominant role supplying Central and Eastern Europe, according to consultancy Deloitte. Tapping those fields could diversify the region’s gas supplies and bring the Romanian government revenue of $26 billion by 2040.

“Exxon Mobil can be the game changer in the energy supply of Europe. But they should finally make their final investment decision,” Szijjarto told Reuters during an interview in Houston where he was opening a consulate office.

“If they don’t make that decision until September, I will have to make another long-term agreement with the Russians.”

Exxon and Austrian energy group OMV’s Romanian subsidiary, OMV Petrom SA, have put on hold a decision on tapping the natural gas field pending legal framework revisions. The field has been estimated to hold 1.5 trillion to 3 trillion cubic feet (42 billion to 84 billion cubic meters) of natural gas.

Exxon is weighing several factors while deciding whether to invest in the Neptun Deep project in Romania, spokeswoman Julie King said on Wednesday.

A decision would require “competitive and stable fiscal terms, a liberalized Romanian gas market that enables free trade, and sufficient interconnectivity with neighboring free and liquid markets, in each case, for the duration of our concession agreement,” King said.

Hungary’s landlocked location in Central Europe puts it at a disadvantage in getting access to needed imports of natural gas, which is used by 85 percent of the households in the country, Szijjarto said.

“The question of whether we will be able to diversify gas resources depends on four allies of ours: Croatia, Romania, the United States and Austria,” he said. “It’s a strange situation where we are encouraged by our friends and allies to diversify, but basically it’s up to them.”

Development of a liquified natural gas (LNG) terminal on the Croatian island of Krk, would help it diversify from the current, east-to-west logistics system established during the Cold War when the Soviet Union dominated Eastern and Central Europe, Szijjarto said.

Climate change is the world’s most urgent problem, and in the United States, the left, at least, is taking it seriously.
Earlier this year, Representative Alexandria Ocasio-Cortez of New York and Senator Edward Markey of Massachusetts, both Democrats, introduced a Green New Deal (GND) resolution, which offers a blueprint for decarbonising the US economy. But while a growing number of Democratic presidential contenders have endorsed their proposal, centrist Democrats and Republicans continue to cling to a different climate-policy approach.
The key centrist proposal, in keeping with the prevailing neoliberal dispensation, is a carbon tax. The idea is simple: if you tax fossil fuels where they enter the economy – be it at a wellhead, mine, or port – you can fully capture the social cost of pollution. In economic parlance, this is known as a Pigovian tax, because it is meant to correct an undesirable outcome in the market, or what the British economist Arthur Pigou defined as a negative externality – in this case, the greenhouse-gas emissions that are responsible for global warming.
As a response to climate change, a carbon tax is immensely popular among economists from across the political spectrum, and it does have an important role to play. But it is far from sufficient. Rapidly decarbonising the economy in a way that is economically equitable and politically feasible will require a comprehensive package on the order of the GND. That means combining some market-based policies with large-scale private- and public-sector investments and carefully crafted environmental regulations.
Even in this case, including a standard carbon tax involves certain risks. Just ask French President Emmanuel Macron, whose country has been roiled by months of demonstrations that were initially launched in response to a new tax on diesel fuel. The lesson from the weekly “yellow vests” protests is clear: unless environmental policies account for today’s high levels of inequality, voters will reject them.
Nonetheless, as progressives push for more green investment, they will look to the carbon tax as a source of revenue. After all, depending on the size, it could raise almost a trillion dollars per year. But rather than a straightforward levy, they should consider implementing a carbon dividend, whereby carbon would be taxed, but the proceeds would be returned to the people in equal shares. Yes, this would preclude one option for funding the GND; but it would ensure that the transition to a carbon-free economy remains on track, by protecting the incomes of low- and middle-class households.
A common objection to a carbon dividend is that it would defeat the original purpose of a carbon price, which is to encourage people to reduce emissions. But this isn’t true. To see why, suppose you are a low-income American, currently spending $75 per month on gas. Assuming that your driving behaviour does not change, a carbon tax of $230 per ton – the level needed just to put us on a path toward limiting global warming to 2.5? C above pre-industrial levels – would raise your monthly fuel expenditure by $59, to $134, or 79%. In this case, you unquestionably will feel poorer. This is what economists call an “income effect.”
Now imagine that a carbon dividend is in place: you would receive a monthly payment of $187, more than offsetting the price increase, and leaving you feeling richer. But wouldn’t this also leave you with a greater incentive to use gasoline? Economic theory suggests not.
Just because the price of gas increases does not mean that everything else in the economy will follow suit. Rather, goods and services that produce a lot of carbon dioxide emissions will become relatively more expensive than those that do not. Hence, you would have a choice between using the dividend to drive more and using it to increase your consumption of other things, from dinners with friends to new running shoes. Those social gatherings and shoes are your incentive to use less carbon. This is what economists call the “substitution effect.”
In this way, a carbon dividend would gradually nudge people, large businesses, and the government away from carbon-intensive consumption and toward activities and investments that reduce their emissions. Equally important, a carbon dividend would protect the poor. A straightforward carbon tax is inherently regressive, because it imposes the same cost on the poor as it does on the rich. But a carbon dividend inverts this effect, because every dollar that is returned will be worth more to a low-income household than it will be to a wealthy one.
Moreover, it is the rich who fly all over the world, heat and cool enormous homes, and drive inefficient sports cars. Because they lead far more carbon-intensive lifestyles than everyone else, they would contribute far more per capita to the carbon dividend. More to the point, they would pay in much more than they get back, while the poorest 60% of Americans would get back more than they put in.
In short, a carbon dividend would distribute money from predominantly wealthy high polluters to predominantly low- and middle-income low polluters, all while reducing CO2 emissions. On its own, it would represent a smart step in the right direction – one that wouldn’t invite a “yellow vest” reaction. But don’t let anyone tell you it’s a silver bullet. When it comes to climate change, there isn’t one. – Project Syndicate

* Mark Paul is an assistant professor of economics at New College of Florida and a fellow at the Roosevelt Institute. Anthony Underwood is an assistant professor of economics at Dickinson College.

https://www.gulf-times.com/story/631897/A-carbon-dividend-is-better-than-carbon-tax

ATHENS, Greece: Steps to define maritime borders between Lebanon and Israel would help stability throughout the East Mediterranean region, a leading energy expert told a key industry conference in Athens on Monday.

“In the past, borders were defined by wars; nowadays, with the UN and UNCLOS [or United Nations Convention on the Law of the Sea], all Maritime differences can be resolved peacefully,” Roudi Baroudi, a 40-year industry veteran, told the Athens Energy Forum. “With modern science and advanced imagery, new technologies give us unprecedented opportunities to reach our goals for Maritime Boundaries with a diplomatic/legal approach.” Baroudi pointed out also that the Mediterranean countries have 95 Actual Maritime Boundaries out of which 31 only Treaties and 64 are unresolved.

Baroudi, who serves as CEO of Energy and Environment Holding, an independent consultancy based in Doha, spoke on the opening day of the two-day Athens Energy Forum (AEF) at the Grand Hyatt Athens hotel.

“With a multi-disciplinary approach – a mixture of law and science – we can get to fair and just Maritime partitioning without going to war,” he told the audience.  “If we review the region’s current offshore oil and gas concession blocks, we quickly determine how these blocks are impacting certain un-demarcated Maritime Boundaries, and this is where the best law and the best science can give all countries a fair share.”

Speaking on the sidelines of the event, Baroudi said a diplomatic resolution of the Lebanese-Israeli maritime dispute and other maritime borders disputes between Cyprus, Turkey and Greece would have positive impacts across the region.

“This would send all the right signals to everyone with a stake in the East Med, from governments and their peoples to major energy companies and other investors,” he said.

“It would demonstrate by example – even more than last year’s landmark five-nation Caspian Sea deal – that even the most intractable disputes can be sidestepped if the principals are willing to be reasonable.”

Baroudi has advised companies and governments on several continents about how to approach energy issues, and has helped to formulate policy for key agencies of the European Union and the United Nations. He said any form understanding, direct or not, that allows both Lebanon and Israel to focus on developing their resources would confer significant benefits on the entire region.

“Even for countries not currently on the verge of becoming energy producers, the removal of a key source of friction between Israel and Lebanon would cast regional security in a more positive light, lowering the risk profiles of all business, trade, and investment activities,” he added. “And this is not to mention all the advantages that the Lebanon and Israel would gain from new revenues. Israel would make its own choices, of course, but Lebanon would have much more capacity to address pressing national objectives in terms of debt retirement, deficit reduction, health and education spending, and infrastructure development. Best of all, all of these measures would help alleviate poverty, another major source of local and regional instability.”

By all accounts, Baroudi’s remarks were delivered in the right room. As in previous years, the AEF attracted numerous executives and other key decision-makers from the private and public sectors like, including Greek Energy Minister George Stathakis.

“Of course it’s important to keep reminding the Lebanese and Israeli governments that if they want to exploit their respective energy resources to the fullest, the surest way forward is some kind of peaceful one. It may not even matter what route they take, just so long as they avoid armed conflict and the all the costs that would come with it,” he said on the sidelines of the forum. “But we also need to make sure that other players in the region realize that this matters for them as well: after all, if even an informal understanding on offshore resources can be reached between two of the world’s most mutually hostile neighbors, it would demonstrate that other rivalries also can be partially overcome for mutual benefit.”

This, Baroudi argued, would “bolster regional stability by encouraging other sets of Mediterranean neighbors – especially Cyprus and Turkey – to commit to peaceful means of dispute resolution”.

ENQUÊTE – Le gouvernement souhaite doubler le nombre d’éoliennes sur le territoire dans les cinq prochaines années. Mais la contestation s’intensifie et réunit des opposants de tous bords.

Après les McDonald’s et les champs d’OGM, la prochaine cible des écologistes ou des zadistes sera-t-elle l’éolien? En juin, un feu criminel détruisait une éolienne et en endommageait une autre à Marsanne, dans la Drôme. L’attaque a été revendiquée mi-juin par un site libertaire précisant «s’attaquer aux dominations». Du bourgeois au militant mélenchoniste en passant par l’anarchiste, le pêcheur et le châtelain, l’opposition à l’éolien est «de plus en plus composite», affirme Fabien Bouglé, porte-parole du collectif d’opposants Touche pas à nos îles! en guerre contre le projet de parc éolien au large de l’île de Noirmoutier, en Vendée.

Certes, cette opposition a historiquement débuté chez des pronucléaires situés bien à droite, «mais ça change», souligne cet élu versaillais, spécialiste du marché de l’art, qui témoigne avoir assisté à une lecture sur le sujet dans une «librairie anar de gauche» à Paris, et qui prophétise «une grande révolte populaire anti-éoliennes». D’autant que semble s’opérer une mutation: la contestation, jusque-là cantonnée aux citoyens et aux associations anti-éoliennes, trouve désormais des voix et des relais dans le monde politique pour porter le combat.

Ainsi Xavier Bertrand, ancien ministre du Travail et actuel président de la région des Hauts-de-France, qui a lancé fin juin un observatoire de l’éolien afin de mieux contrôler l’expansion des parcs dans sa région, qui «défigure complètement les paysages» et «coûte les yeux de la tête». Ou encore ces dix députés, tant de la majorité que de l’opposition, qui ont signé une tribune, «Stop aux nouvelles éoliennes!», dans nos éditions du 20 juin dernier.

Projet «antidémocratique»?

La France constitue aujourd’hui le quatrième parc d’Europe derrière l’Allemagne, l’Espagne et la Grande-Bretagne. Sa proportion d’électricité éolienne représente moins de 5 % de sa consommation mais, d’ici à 2023, les éoliennes terrestres devraient doubler, passant de 7300 à quelque 15.000. «C’est le deuxième gisement de vent d’Europe et la deuxième façade maritime. Le potentiel est considérable», selon Pauline Le Bertre, déléguée générale de France Énergie éolienne (FEE).

On compte 70 % de recours contre les permis de construire devant les tribunaux administratifs, contre 50 % il y a cinq ans

Si l’Allemagne a depuis longtemps compris «la nécessité impérative d’avoir une transition énergétique, en France, de nombreuses associations jouent sur les angoisses des gens, propageant des idées reçues». Le degré d’opposition à l’éolien serait, selon elle, unique en Europe, lié à notre historique avec le nucléaire.

De fait, malgré le discours politique français très volontariste sur le sujet, malgré les sondages favorables à l’éolien menés auprès des Français, l’installation des éoliennes suscite de plus en plus d’opposition. On compte 70 % de recours contre les permis de construire devant les tribunaux administratifs, contre 50 % il y a cinq ans. Une perte de temps pour les promoteurs: la mise en route d’un parc est désormais d’environ neuf ans, contre quatre pour l’Allemagne.

Pour accélérer le processus, le gouvernement a décidé de supprimer le premier degré de juridiction, le tribunal administratif, pour passer directement à la cour administrative d’appel. Un projet de décret est actuellement en consultation devant le Conseil d’État. Cela se pratique déjà pour les projets éoliens en mer, les multiplexes de cinéma et les supermarchés. Un projet «antidémocratique» pour Fabien Bouglé, et qui, ces derniers mois, mobilise et durcit plus encore le front anti-éolien.

Biodiversité

Les associations d’opposants s’offusquent aussi d’un décret paru le 11 juillet qui permet de moderniser les parcs existants sans reprendre de zéro toutes les études d’impact. Que reprochent ces opposants à l’éolien? Sa laideur, sa proximité avec des habitations et des monuments historiques, ses nuisances sonores, ses lumières «aveuglantes», des installations entachées de multiples prises illégales d’intérêt de la part des élus. Les arguments sont multiples. Et parfois écoutés.

Des éoliennes ne seront ainsi pas installées en arrière-plan du paysage du Mont-Saint-Michel, pas plus que du côté du pont du Gard. Pauline Le Bertre, elle, indique qu’en France «les restrictions d’installation sont les plus élevées d’Europe. On multiplie les études d’impact liées à la biodiversité, le patrimoine, les habitations.» À l’entendre, une éolienne implantée à 500 mètres d’une habitation, le minimum réglementaire, «fait un bruit semblable à celui d’un frigidaire». Elle vante la compétitivité du mégawatt éolien, 64 euros contre 110 pour le nucléaire dernière génération. Inversement, Karine Poujol, à la tête de l’association Gardez les caps, considère que les 64 éoliennes prévues en baie de Saint-Brieucprovoqueront la mort de la biodiversité sous-marine, alors même que la zone est protégée Natura 2000. Elle anticipe un bruit «semblable à celui d’un décollage d’avion».

Loïk Le Floch-Prigent, ancien PDG d’Elf Aquitaine, défend les coquilles Saint-Jacques du cap Fréhel, qui pourraient être «très affectées» par ces installations fixées par 42 mètres de fonds. L’ancien industriel se défend de jouer pour le camp des pronucléaires, lui qui a «toujours défendu le fait qu’il fallait diversifier», rapporte-t-il au Figaro. Il met en doute cette politique qui «pénalise notre compétitivité en augmentant nos importations de matériel: 95 % des investissements de l’éolien viennent d’Allemagne, du Danemark, d’Inde ou de Chine, tandis que deux tiers des exploitants viennent d’ailleurs». Ce printemps, la Cour des comptes affirmait que «le tissu industriel français a peu profité du développement des énergies renouvelables». Malgré des moyens considérables, qui se sont élevés en 2016 à 5,3 milliards d’euros. La prévision de dépense publique en 2023, elle, est de 7,5 milliards d’euros.

Talks in the port city of Aktau should help ease tensions in a militarised region where the legal limbo has scuppered lucrative projects and strained relations among nations along the Caspian’s 7,000-kilometre (4,350-mile) shoreline.

The Kremlin said the convention keeps most of the sea in shared use but divides up the seabed and underground resources.

It does not allow military bases from any other countries to be sited on the Caspian.

‘Once a frontier oil province’

Sunday’s summit is the fifth of its kind since 2002 but there have been more than 50 lower-level meetings since the Soviet breakup spawned four new countries on the shores of the Caspian.

The deal will settle a long-lasting dispute on whether the Caspian is a sea or a lake—which means it falls under different international laws.

The draft agreement, briefly made public on a Russian government portal in June, refers to the Caspian as a sea but the provisions give it “a special legal status”, Russian deputy foreign minister Grigory Karasin told Kommersant daily.

It is the Caspian’s vast hydrocarbon reserves—estimated at around 50 billion barrels of oil and just under 300 trillion cubic feet (8.4 trillion cubic metres) of natural gas in proved and probable reserves—that have made a deal both vital and complex to achieve.

“Disputes arose when the Caspian was a frontier oil province,” said John Roberts, a non-resident senior fellow at Atlantic Council’s Eurasia Center, while it is “now well established, with major fields approaching peak… production.”

‘Expand cooperation’

Any deal will “expand the field for multilateral cooperation” between the five states, said Ilham Shaban, who heads the Caspian Barrel thinktank.

But some are likely to view it as more of a breakthrough than others.

Energy-rich but isolated Turkmenistan is particularly excited and President Gurganguly Berdymukahmedov has called for annual Caspian Sea Day celebrations from Sunday onwards.

Turkmenistan could benefit from a concession allowing the construction of underwater pipelines, which were previously blocked by the other states.

Nevertheless, analysts caution that Turkmenistan’s long-held plan to send gas through a trans-Caspian pipeline to markets in Europe via Azerbaijan is not necessarily closer to becoming reality.

The plan was previously opposed by Russia and Iran, which could still attempt to block the pipeline—valued at up to $5 billion—on environmental grounds.

“A deal in Aktau is not a legal prerequisite for the construction of the Trans-Caspian Pipeline,” said Kate Mallinson, Associate Fellow for the Russia and Eurasia Programme at Chatham House.

“Neither will a major transport corridor to export Turkmen gas to Europe emerge overnight.”

Kudos and caviar

As previous exclusive arbiters of Caspian agreements, Russia and Iran could be seen as the new deal’s biggest losers.

But while Moscow has ceded ground on underwater pipelines “it gains political kudos for breaking a log-jam,” enhancing its image as diplomatic dealmaker, said Roberts of the Eurasia Center.

Russia will welcome the clause barring third countries from having military bases on the Caspian, underscoring its military dominance there, said Shaban of Caspian Barrel.

Iran gets the smallest share of the Caspian spoils under the new deal, but could take advantage of new legal clarity to engage in joint hydrocarbons ventures with Azerbaijan.

In the past Tehran has resorted to hostile naval manoeuvres to defend its claims to contested territory.

Beyond military and economic questions, the agreement also offers hope for the Caspian’s ecological diversity.

Reportedly depleted stocks of the beluga sturgeon, whose eggs are prized globally as caviar, may now grow thanks to “a clear common regime for the waters of the Central Caspian,” Roberts said.

The deal could result “not only in stricter quotas for sturgeon fishing, but in stricter enforcement of these quotas,” he added.