Ethics and Credibility at the American Economics Association

Gerald Epstein

In a few weeks, Economists will gather in Denver at the annual meeting of the American Economics Association (AEA) in a ritualized search for truth, jobs, fame and even romance. Economists have never been held in the highest regard but, recently, they have come under increased scrutiny and some scorn for their failure to predict the financial crisis or to shape an adequate response to the worst economic crisis since the Great Depression.

Still, Economists can take heart. There is something fairly simple they can do at their annual meeting to enhance the credibility and status of the economics profession: adopt a code of ethics to reduce economists’ conflicts of interest. Indeed, I am among some economists who are proposing that the AEA do just that.

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Spotlight Cancun: Climate Defeats Come from Washington, not Cancun

Frank Ackerman

Triple Crisis blogger Frank Ackerman published the a short post-mortem on the climate negotiations on Grist:

What should we learn from the dual disappointment of Copenhagen and Cancun? The climate policy war isn’t over, but those who are fighting to cut global emissions haven’t won the last few rounds. The decisive defeat in this latest battle, however, did not occur at an international conference. Rather, it took place in Washington, D.C. …

…read the rest of the post on Grist

Capital Controls to Deter Hot Money Can Help the World Economy

Stephany Griffith-Jones and Kevin P. Gallagher

The following letter from Triple Crisis bloggers Griffith-Jones and Gallagher, drawing on their earlier Guardian article, appeared in the Financial Times today.

Sir, In your December 14 article “Capital inflows to Turkey spur plan to cut interest rates”, you point out that the Turkish central bank is considering cutting interest rates even though its economy is growing very fast, which would rather suggest the need to raise interest rates. This is the dilemma facing many emerging economies – and even poorer countries such as Uganda.

With low interest rates in the industrialised world, nations such as Turkey could get swamped with hot money via the carry trade in the event that they raise rates to cool their economies.

The influx of hot money may accentuate the very problem the nation is trying to alleviate by raising rates.

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The Emerging Financial Architecture: A New Take on Decoupling

Ilene Grabel

Think back to the good old days just before the world financial system exploded.  Remember all the talk then of “decoupling”?  What advocates of the decoupling thesis had in mind was very simple:  the world economy had changed in such a way that the growth trajectory (and business cycles) of developing countries had separated from the economic fortunes of the U.S. The strong performance of rapidly growing developing countries, not least the BRICs (Brazil, Russia, India and China), was seen as evidence that substantial parts of the global economy had broken free of the U.S. iceberg and were now floating in distinct economic currents.  Decoupling advocates cited much evidence to support their claims—most importantly, they focused on the fact that export and GDP growth in large developing countries was smartly outpacing that of the U.S.

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Stop Free Pollution: Going Beyond Cap and Trade

James K. Boyce

Some of the best things in life are free. Unfortunately, so are some of the worst.

When polluters dump poisons into our air and water, they do it for free. This means they have no incentive to curb emissions. It also means that our air and water effectively belong to them, not to those who breathe the air and drink the water.

Regulation

Environmental regulations limit what polluters can lawfully discharge into our air and water. The damage control they provide is of great value. The U.S. Environmental Protection Agency estimates that from 1970 to 1990 alone the Clean Air Act saved more than three million lives. Critics can argue about whether the regulations should be tighter or lighter, but no sensible person would advocate jettisoning them altogether.

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Spotlight Cancún: Cancún Success – Compared to What?

Tom Athanasiou, Guest Blogger
Another in a series from the Triple Crisis Blog and the Real Climate Economics Blog on the Cancún Climate Summit.

Cancun was not a surprise.   Nor was it a failure.  This much is easy to say.

But was it a success?  This is a more difficult question.  I used to have an irritating friend.  Every time you made a strong, implausibly simple claim – something like “Cancun was a success” – he would reply “Compared to what?”  It was a pedantic device, but it worked well enough.  It made you think, which, I suppose, is why it was irritating.

Compared to what the science demands, Cancun was obviously a failure.  The Climate Tracker crew made that clear in an evaluation filed before most people even got home – if the pledges in the Cancun Agreements are delivered upon, but only just barely, the result would be at least 3.2C of warming, and possibly far more – the CO2 concentration of the atmosphere would be about 650 ppm in 2100.

Why then wasn’t Cancun a failure?  Because, just maybe, it will put us onto a better road.

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Spotlight Cancún: The Road to Rio

Kelly Sims Gallagher, Guest Blogger
Another in a series from the Triple Crisis Blog and the Real Climate Economics Blog on the Cancún Climate Summit. This piece was previously posted by the Center for International Environment and Resource Policy (CIERP).

What to make of the new Cancun Agreements?  Those lauding the agreement seem to be relieved there was any agreement at all. UN Executive Secretary Christiana Figueres declared, “Faith in the multilateral climate process has been restored.” But, the agreement itself does little except make more concrete many of the provisions already agreed to in last year’s Copenhagen Accord by enshrining these agreements in a formal decision of the Conference of Parties.  In fact, the multilateral process seems hardly improved, and most of the difficult decisions were deferred to the future.

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Spotlight Cancún: Strange outcome of Cancún conference

Martin Khor
Another in a series from the Triple Crisis Blog and the Real Climate Economics Blog on the Cancún Climate Summit. This piece was previously posted by Third World Network.

The United Nations’ Cancun climate conference which adopted a text early on Dec 11 had a strange outcome.

It was acclaimed by many for reviving the spirit of multilateralism in the climate change system, because another collapse after the disastrous failure of the Copenhagen talks a year ago would have knocked another hole into the reputation in the UN Climate Convention.

Most delegations congratulated one another for agreeing to a document in Cancun. But this Cancun text has also been accused of falling far short, or even going backwards, in controlling the Greenhouse Gas emissions that cause climate change.

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Spotlight Cancún: Why Do U.S. States Emissions Vary So Widely?

Elizabeth A. Stanton, Guest Blogger
Another in a series from the Triple Crisis Blog and the Real Climate Economics Blog on the Cancún Climate Summit. The following is based on a recent E3 Network paper, “Why Do U.S. States Emissions Vary So Widely?” by Elizabeth A. Stanton, Frank Ackerman, and Kristen A. Sheeran.

Much of the U.S. resistance to ambitious global efforts to reduce carbon dioxide emissions reflects a fear common amongst Americans that high emissions are necessary to maintain high standards of living. While the examples of Belgium, Demark, Germany, Ireland, Japan, and the United Kingdom – countries where emissions per capita are roughly one-half of the U.S. average – demonstrate that lower per capita emissions are consistent with high living standards, many Americans remain unconvinced that the same standard of living can be produced with varying emissions levels. This is true despite the fact that some of the best evidence for this can be found within the U.S.: individual states vary only modestly in average incomes, but have widely differing per capita emissions.

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Spotlight Cancún: At Cancún, an elephant fills up the Moon and yet remains elusive

Ricardo Meléndez-Ortiz, Guest Blogger
Another in a series from the Triple Crisis Blog and the Real Climate Economics Blog on the Cancún Climate Summit.

In the wee hours of Saturday morning, a result was trumpeted in the great hall of the Moon (the official venue of UNFCCC COP16 talks in Cancún, Mexico), as crowds congratulated President Calderon, themselves, and one another. The outcome surpassed widely held low expectations, which were masterfully weather-beaten throughout the year by the frank Yvo de Boer and other opinion-makers à la suite. The tortuous consensus (minus Bolivia’s erratic stand), speaks of a blueprint for the long-term, and a continuation of sorts of the Kyoto Protocol.

From a quick reading of the advanced unedited versions of the main documents just agreed upon, and paraphrasing on-site reports by Ana Kleymeyer, other ICTSD colleagues, and Charlotte Streak of Climate Focus, Cancún sets 1.5 degrees as a global goal, and provides measuring, reporting and verification (MRV) for mitigation actions by all countries, including developing ones, with China’s agreement. It also agrees to a timeframe for a global and differentiated “peak” for emissions by 2011’s COP 17 in Durban, South Africa.

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