Climate and Development

Kazakhstan is known as the homeland of Sasha Baron Cohen’s fictional character Borat, and many people are unaware it is a real place. But it is a vast and sparsely populated country, a million square miles (2.7m square kilometers), nearly twice the size of Alaska or seven times as big as California, with only 17m people. It is the largest landlocked country in the world. Since the break-up of the Soviet Union Kazakhstan has done far better economically than most of the other former Soviet republics. Average annual growth of 7.4% since 2000 has lifted per capita GDP from a little over $1,200 to nearly $14,000. This performance owes more to the discovery and development of huge onshore and offshore petroleum deposits in the Caspian region than to fundamental reforms, but Kazakhstan has made some important improvements to its investment climate, to the point where it now ranks 76th out of 189 countries in the World Bank’s annual Doing Business report and 50th in the World Economic Forum’s competitiveness index.

The so-called “middle income trap” is a widely observed pattern, which sees poor countries advancing rapidly to middle income status and then failing to graduate to the ranks of upper-income countries.  A few countries have made this leap in spectacular fashion. Singapore, a small, poor country with fairly dim prospects when it was kicked out of the Malaysian Federation in 1965, is now richer in per capita terms than the United States and Canada. Hong Kong beats out Japan and Italy. South Korea, which in 1960 had lower per capita income than Ghana, is now 20 times richer than Ghana and also wealthier than Saudi Arabia. Taiwan has a higher per capita GDP than Greece and Portugal.

But many other countries, having reached middle-income status, see growth rates decline so that the threshold between upper-middle and high income remains tantalizingly out of reach. Malaysia, Thailand, Brazil, China, Bulgaria, Romania, Mexico, Colombia, and Peru – along with Kazakhstan – may all be at risk of languishing in the middle-income ranks. [click to continue…]

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Sometimes I wake up in the middle of the night thinking about the strangest things. I should be like Dagwood and go down to the kitchen to make myself a sandwich, but instead I fire up my computer and start Googling. It’s less fattening, I guess.

I awoke last night wondering whether, in the wake of the Federal Government takeover of GM and Chrysler, the Feds were favoring their new subsidiaries when it came to buying government cars. Instead of returning to my vivid dream of being stranded on a desert island with a bevy of Singapore Airlines stewardesses, I decided to look it up. I couldn’t find any conclusive evidence one way or another, but I did learn a few interesting things.

One provision of last year’s Recovery Act (aka the “stimulus package”) was the Energy-Efficient Federal Motor Vehicle Fleet Procurement program, mandating the purchase of thousands of fuel-efficient cars from American car companies. I know, I missed it too the first time I read through the 1,400 page law. According to Edward Niedermeyer, writing on a blog called “The Truth About Cars,” a Freedom of Information Act inquiry to the General Services Administration revealed that as of June 2009 a total of 17,205 cars were purchased under the plan, of which 7,924 came from Ford, 6,348 from GM, and 2,933 from Chrysler. So there’s no indication the Feds bought more from government-owned GM and Chrysler than their relative market shares and/or production volumes would suggest. [click to continue…]

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The Economist has just launched a new online debate on the proposition that “creating green jobs is a sensible aspiration for governments.” Van Jones, President Obama’s former special adviser on green jobs, argues in favor; Andrew P. Morriss, a Professor of Law and Business at the University of Illinois law school, presents the counter-argument. The real debate over green jobs programs is whether they really create new jobs or simply divert jobs from existing industries to new ones, and whether the social and economic benefits of creating these jobs outweigh the cost. Here is my contribution to the debate: [click to continue…]

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My friend Lumumba Stanislaus-Kaw Di-Aping made a splash at the recent Copenhagen Climate Conference, likening its final communiqué, which committed signatories (non-bindingly) to a 2.0-degree Celsius maximum rise in average global temperatures over preindustrial levels, to the Holocaust.   Lumumba, Sudan’s Ambassador to the United Nations and the spokesman for the G-77 group of developing countries, said that a two-degree rise in average global temperatures would mean a three-degree-plus rise for Africa and that nothing short of a maximum increase of 1.5 degrees and a 60% reduction in carbon emissions by 2050 could be accepted. He also called the U.S. commitment to try to increase spending on climate change mitigation to $100 billion annually by 2020 a “negotiating ploy” and said that $400 billion to $500 billion a year, starting now, was a more appropriate figure. [click to continue…]

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The science fiction canon is full of stories about a dystopian future in which computers and robots, motivated by their prime directive not to harm or allow to be harmed any person and disconcerted by humans’ propensity to drink , smoke, drive too fast, build nuclear weapons, fight wars, and eat trans fats, take over the world. These things never turn out well, and often the only solution is to send Arnold Schwarzenegger back in time to sort things out.

Yesterday’s announcement by the U.S. Environmental Protection Agency (EPA), acting under direction from President Obama, announced that it had classified carbon dioxide and several other greenhouse gases as hazardous substances, which gives it the power to regulate them without the need for enabling legislation. By most estimates 70% of our economy involves emission of CO2, although if you count breathing by human beings and other animals, the ruling could, theoretically, cover something close to 100% of all human activity. You need not be a global warming denier or believe that President Obama is a crypto-communist to find this troubling. [click to continue…]

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