Carbon Pricing: The Price is Wrong

Gar W. Lipow, Guest Blogger

For U.S. climate activists to succeed, they must demand serious government spending on energy efficiency and renewables—spending comparable to the current war budget. Calling for hundreds of billions in annual green public investment has potential for the popular appeal needed to build a powerful grassroots climate movement. That investment would be the best policy as well. Massive clean energy spending would not only provide jobs and economic growth on a grand scale. It is the most effective way to reduce greenhouse gas pollution.

It is widely, though not universally, acknowledged that solving the climate crisis will require public investment and subsidies, efficiency regulations and clean energy requirements, plus a price on greenhouse gas emissions. (The idea behind a carbon price: polluters pay per unit of greenhouse gas pollution released.) But, in practice, policy advocates tend to fetishize the carbon price and drop other requirements. For example, James Hansen, perhaps the world’s leading climate scientists says “If we would put this price on carbon it would favor renewables, and it would favor energy efficiency, and it would favor nuclear power—it would favor anything that is carbon-free… ”[i] Charles Komanoff and James Handley of the Carbon Tax center describe a carbon tax as the “sine qua non of effective climate policy”.[ii] Mainstream environmentalism tends to favor cap-and-trade over carbon fees, which indirectly results in a price on carbon. Between carbon tax and cap-and-trade advocates, most climate change opponents prioritize carbon pricing. Few join Komanoff in referring to such pricing as the “sine qua non” of carbon policy. In policy discussions, however, most environmental economists start with cap-and-trade or a carbon fee, and many never discuss anything else.

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No Respite, Five Years after Lehman

Martin Khor

From the editors: This piece by Triple Crisis blogger Martin Khor appeared last week at Third World Network.

This week marks five-year anniversary of the collapse of Lehman Brothers that was the immediate trigger for the United States and global financial crisis.

Lehman was the tip of the iceberg. Below the surface were many contributory elements.

They include financial deregulation, the conversion of finance from serving the real economy to a beast that thrived on speculation, creaming layers off the productive sectors and unsuspecting consumers through new manipulative instruments.

The U.S. subprime housing mortgage crisis was the boil that burst—where massive loans were given to homeowners who could not pay, the loans were securitised and sold to unsuspecting investors, the derivatives magnified the proportions of the crisis, while the bankers made billions selling very risky “financial products” as very credit-worthy investments.

Many collapsed or collapsing banks in the U.S. and Europe had to be rescued in bailouts totaling trillions of dollars.

The crisis also exposed the deep deficiencies of the global financial system. Globalisation of finance meant a crisis in one part could be quickly transmitted to other parts of the system.

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The Emerging Left in the "Emerging" World: More Threads

Editors’ note:  This is the third part (of four) of “The Emerging Left in the ‘Emerging’ World,” by Triple Crisis founding contributor Jayati Ghosh, originally delivered in 2012 as part of the Ralph Miliband Lecture Series at the London School of Economics. We posted the introduction two weeks ago (here), and the second part last week (here). In this week’s post, Ghosh discusses five more “common threads” of the emerging left: private property, “rights,” class and identity, gender, and the environment. We will post the conclusion to the lecture next week.

On Private Property

Earlier models of socialism, such as Soviet style “state socialism”, did away with private property in the means of production, only recognizing private rights over personal belongings. The new leftist thinking is more ambivalent about private property—disliking it when it is seen as monopolizing or highly concentrated (for example in the form of multinational corporations) but otherwise not just accepting of it, but even (as in the case of small producers) actively encouraging it. Increasingly, left movements and governments have recognized the value of other kinds of property rights as well, particularly communal property associated with traditional indigenous communities. Again, this runs strongly counter to earlier centralizing and “modernizing” models of socialism, which derided these communities and their communal property forms as premodern relics that had to be done away with.
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The Emerging Left in the “Emerging” World: More Threads

Editors’ note:  This is the third part (of four) of “The Emerging Left in the ‘Emerging’ World,” by Triple Crisis founding contributor Jayati Ghosh, originally delivered in 2012 as part of the Ralph Miliband Lecture Series at the London School of Economics. We posted the introduction two weeks ago (here), and the second part last week (here). In this week’s post, Ghosh discusses five more “common threads” of the emerging left: private property, “rights,” class and identity, gender, and the environment. We will post the conclusion to the lecture next week.

On Private Property

Earlier models of socialism, such as Soviet style “state socialism”, did away with private property in the means of production, only recognizing private rights over personal belongings. The new leftist thinking is more ambivalent about private property—disliking it when it is seen as monopolizing or highly concentrated (for example in the form of multinational corporations) but otherwise not just accepting of it, but even (as in the case of small producers) actively encouraging it. Increasingly, left movements and governments have recognized the value of other kinds of property rights as well, particularly communal property associated with traditional indigenous communities. Again, this runs strongly counter to earlier centralizing and “modernizing” models of socialism, which derided these communities and their communal property forms as premodern relics that had to be done away with.
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China’s Ultimate Debt Holders—Not the Borrowers

Sara Hsu, Guest Blogger

In China, things are not looking pretty. Debt is high among corporations and local, provincial, and state governments—up to more than 25 trillion RMB among governments in 2012 and 60 trillion RMB among corporations in 2012. Some say debt is also high among households, but let’s face it: households still have a hell of a time borrowing from banks. Their debt load comprised close to 10 trillion RMB in 2012, and most of their income is put into savings as a cushion against adverse conditions.

Much of the debt that has gone to governments and corporations has been extended through loans, “entrusted loans,” or “trust loans.” Entrusted loans are loans from one party to another that use a bank as an intermediary, while trust loans are loans from trusts to one or multiple parties. Both of these types of loans can be securitized and sold off to bank customers, which they have been, in spades, as wealth management products.

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How to Put a Stop to Sweatshop Abuse

John Miller, Guest Blogger

The April 24 collapse of the Rana Plaza building, just outside of Dhaka, Bangladesh’s capital city, killed over 1,100 garment workers toiling in the country’s growing export sector.

The horrors of the Rana Plaza disaster, the worst ever in the garment industry, sent shockwaves across the globe. In the United States, the largest single destination for clothes made in Bangladesh, newspaper editors called on retailers whose wares are made in the country’s export factories to sign the legally binding fire-and-safety accord already negotiated by mostly European major retailers. Even some of the business press chimed in. The editors of Bloomberg Businessweek admonished global brand-name retailers that safe factories are “not only right but also smart.”

The business press, however, also turned their pages over to sweatshop defenders, contrarians who refuse to let the catastrophic loss of life in Bangladesh’s export factories shake their faith in neoliberal globalization. Tim Worstall, a fellow at London’s free-market Adam Smith Institute, told Forbes readers that “Bangladesh simply cannot afford rich world safety and working standards.” Economist Benjamin Powell, meanwhile, took the argument that sweatshops “improve the lives of their workers and boost growth” out for a spin on the Forbes op-ed pages.

For sweatshop apologists like Worstall and Powell, yet more export-led growth is the key to improving working and safety conditions in Bangladesh. “Economic development, rather than legal mandates,” Powell argues, “drives safety improvements.” Along the same lines, Worstall claims that rapid economic growth and increasing wealth are what improved working conditions in the United States a century ago and that those same forces, if given a chance, will do the same in Bangladesh.
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The Emerging Left in the "Emerging" World: Seven Common Threads

Jayati Ghosh

Editors’ note:  This is the second part (of four) of “The Emerging Left in the ‘Emerging’ World,” by Triple Crisis founding contributor Jayati Ghosh, originally delivered in 2012 as part of the Ralph Miliband Lecture Series at the London School of Economics. We posted the introduction last week (here).  In this second part of the lecture, Ghosh presents the first two of “seven common threads” shared by the emerging left: democracy and scale.

What I call “the emerging Left” shares seven common threads that appear in otherwise very distinct political formations and in very different socioeconomic contexts. These are not always “new ideas”—in fact they are more often than not old ideas that appear new because of the changing context and the collective failure of memory, even within the left itself. Still, these seven threads—new attitudes toward democracy, scale and centralization, private property, the discourse of rights, class and other identities, women and gender, and the environment—all represent breaks from 20th century socialist orthodoxy.

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The Emerging Left in the “Emerging” World: Seven Common Threads

Jayati Ghosh

Editors’ note:  This is the second part (of four) of “The Emerging Left in the ‘Emerging’ World,” by Triple Crisis founding contributor Jayati Ghosh, originally delivered in 2012 as part of the Ralph Miliband Lecture Series at the London School of Economics. We posted the introduction last week (here).  In this second part of the lecture, Ghosh presents the first two of “seven common threads” shared by the emerging left: democracy and scale.

What I call “the emerging Left” shares seven common threads that appear in otherwise very distinct political formations and in very different socioeconomic contexts. These are not always “new ideas”—in fact they are more often than not old ideas that appear new because of the changing context and the collective failure of memory, even within the left itself. Still, these seven threads—new attitudes toward democracy, scale and centralization, private property, the discourse of rights, class and other identities, women and gender, and the environment—all represent breaks from 20th century socialist orthodoxy.

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In China, Change—and Uncertainty—Are in the Air

Sara Hsu, Guest Blogger

Concerns over China’s economy are all over the news—stories like “Feeling the Heat from China Slowdown,” “China’s Economic Hard Landing,” and “China’s Slowdown Digs a Hole for US Industrials” are now everywhere. One of the most pressing questions is, will China face a massive slowdown in economic growth? Here, we explain why this is such a concern and consider what possibilities exist for continued growth.

First, a primer on growth and the way it is tabulated. Growth simply refers to the change in GDP, usually from one year to the next. GDP is calculated any of three different ways—the income approach (how much individuals and entities earn in a period), the expenditure approach (how much is spent in a period), or the production approach (how much value is added during the production process). If we focus on a single approach—say, the expenditure approach—we can look at the individual components to determine how China can improve its GDP—and therefore growth—outlook.

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The G20 St. Petersburg Summit: Bubbles, Casinos, and Inactivity

Sameer Dossani, Guest Blogger

While much of the media coverage around the G20 leaders summit has been about the failure of international diplomacy in Syria, the formal agenda was around one issue: growth. Growth through jobs, growth through transparency, and growth through effective regulation—these were the three themes the Russian government prioritized for this year’s summit.

One could perhaps argue that the obsession with growth is appropriate. The US economy—the source of the largest financial crisis since the Great Depression—is again growing, but when compared with previous economic recoveries the pace of growth has been extremely sluggish. Economists estimate that at current rates of growth and job creation, the US will not achieve anything close to full employment before 2022. Most G8 economies—especially in Europe—are in worse shape and even China and India are seeing growth expectations slow down.

But focusing on growth is a bit like treating strep throat with asprin. You may alleviate some of the symptoms, but you’re not treating the source of the problem.

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