Monthly Archives: February 2009

Signs good and bad

China’s Com­merce Min­is­ter pub­lish­es and Op-Ed in the Wall Street Jour­nal that promis­es Chi­na will abide by the G20 (Wash­ing­ton, Novem­ber 2008) under­tak­ing on pro­tec­tion­ism and con­tin­ue to pro­mote import con­sump­tion.

Pas­cal Lamy sug­gests that the G20 pledge needs to be extend­ed when the heads of gov­ern­ment meet again in Lon­don in April: “Their com­mit­ments last Novem­ber to reject pro­tec­tion­ism and push for the Doha round con­clu­sion were use­ful. We will need at least as much this time…”. That’s a diplo­mat­ic under­state­ment.

But in Latin Amer­i­ca, Brazil and Argenti­na are involved in a

Effect of a market ‘fix’…

Con­trary to the spin, emis­sions-trad­ing dis­cour­ages con­ser­va­tion:

But the fact is once emis­sions trad­ing comes in, every tonne of emis­sions saved by house­holds sim­ply frees up an extra per­mit that will allow big pol­luters to increase their emis­sions. This is because emis­sions trad­ing relies on a fixed num­ber of pol­lu­tion per­mits being in cir­cu­la­tion at any point in time. While most peo­ple under­stand that emis­sions trad­ing cre­ates a cap above which emis­sions can’t rise, it also cre­ates a floor below which emis­sions can’t fall.” Extract from The Aus­tralian

Trade policy in the Pacific

Image of Pacific trip

I’ll be away from home-base in Mel­bourne for the next cou­ple of weeks, work­ing on the design of a trade ‘capac­i­ty build­ing’ pro­gram for non-gov­ern­ment orga­ni­za­tions (busi­ness and non-busi­ness, unions, uni­ver­si­ties) and indi­vid­u­als in Pacif­ic Islands.

A long way to trav­el and dozens of peo­ple to meet and con­sult. Post­ing will be… light.

Next round of trade protection (Part II)

In this ear­li­er post, I looked at three of the ‘old stand­bys’ that are like­ly to pro­vide gov­ern­ments with all the ‘wig­gle-room’ they need to increase pro­tec­tion while remain­ing nom­i­nal­ly com­pli­ant with their WTO oblig­a­tions.

This time, two more oldies but good­ies that are still more like­ly, in my view, to fig­ure in the com­ing round of trade pro­tec­tion. These two threat­en high lev­els of ‘tai­lor-made’ pro­tec­tion for firms that are strug­gling through the reces­sion, but they do so at the cost of low­er lev­els of demand at home (so much for ‘stim­u­lus’!), increased pres­sure on com­peti­tors in oth­er coun­tries and a fur­ther cut in world trade vol­umes. Bad for almost every­one.

At the end of this post I start to look at some defens­es against the com­ing round of pro­tec­tion.

Case for due diligence in public policy

This is a great, if hor­ri­fy­ing, read. Bruce McCul­loch and Ross McK­itrick have com­piled a case-book of unsup­port­ed claims in sci­ence and pub­lic-pol­i­cy research that com­ple­ments Gary Banks’ rec­om­men­da­tions on evi­dence-based pub­lic pol­i­cy.

Empir­i­cal research in aca­d­e­m­ic jour­nals is often cit­ed as the basis for pub­lic pol­i­cy deci­sions, in part because peo­ple think that the jour­nals have checked the accu­ra­cy of the research. Yet such work is rarely sub­ject­ed to inde­pen­dent checks for accu­ra­cy dur­ing the peer review process, and the data and com­pu­ta­tion­al meth­ods are so sel­dom dis­closed that post-pub­li­ca­tion ver­i­fi­ca­tion is equal­ly rare. This study argues that researchers and jour­nals have allowed habits of secre­cy to per­sist that severe­ly inhib­it inde­pen­dent repli­ca­tion. ” Extract from Check the Num­bers: The Case for Due Dili­gence in Pol­i­cy For­ma­tion

McCul­loch and McK­itrick have col­lab­o­rat­ed on many projects to check the empir­i­cal basis for eco­nom­ic and sci­en­tif­ic research. In this paper—to which Ian Cas­tles drew my atten­tion—they present a pow­er­ful case for tak­ing a skep­ti­cal, empir­i­cal approach to claims in jour­nals that appear to sup­port a con­ve­nient prej­u­dice (dog­ma, belief, impres­sion) or chal­lenge com­mon-sense.

Among a dozen-or-so accounts of lazy, men­da­cious research they include an extra­or­di­nary sto­ry of the “Boston Fed Study” that con­tributed to the reg­u­la­to­ry fail­ures under­ly­ing the ‘sub-prime’ finan­cial mar­kets col­lapse in the Unit­ed States.

The next round of trade protection

Change in employment compared to earlier recessionsChange in employment compared to earlier recessions

Will there be one? You bet! The only ques­tions are: how soon and how big?

With employ­ment num­bers in both indus­tri­al­ized and indus­tri­al­iz­ing coun­tries falling, world mar­kets seiz­ing up as a con­se­quence of the cred­it squeeze, icons of glob­al­iza­tion like Dubai bleed­ing debt (and emi­grants) and gov­ern­ments rush­ing out ‘stim­u­lus’ pack­ages to prop up domes­tic demand, the scene is set for some un-neigh­bor­ly action at every inter­na­tion­al bor­der. Nev­er mind that some of these “neg­a­tives” are like­ly to be part of the cre­ative destruc­tion that brings new ideas, new mar­ket entrants and, even­tu­al­ly, new growth.

Because this is

Climate ‘tipping’ points fall down

If you’re alarmed by claims—sometimes from offi­cial sources—about CO2 from thaw­ing per­mafrost or cat­a­clysms caused by a slow­ing or rever­sal of the “Merid­ion­al Over­turn­ing Cir­cu­la­tion”, then relax!

It looks like nei­ther one nor the oth­er of these exot­ic risks stands up to sci­en­tif­ic scruti­ny.