From:       acosbey@iisd.ca
    Subject:     New IISD postings on trade and climate change
Date:       October 14, 2008

Earlier this year, following on last December’s Trade Ministerial meeting on the margins of COP-13, IISD collaborated with the Government of Denmark, the German Marshall Fund and the International Centre for Trade and Sustainable Development to convene a major seminar on trade and climate change in Copenhagen. The results have now been revised, edited and synthesized, and are available on IISDnet at http://www.iisd.org/trade/crosscutting.

The overall synthesis document can be found here: Trade and Climate Change: Issues in Perspective. The event’s summary remarks are also available.

The event’s six background papers are also on line, and constitute excellent brief surveys of the key issues in each of the six areas covered:

• Liberalization of Trade in Environmental Goods for Climate Change Mitigation: The Sustainable Development Context
• Border Carbon Adjustment
• Embodied Carbon in Traded Goods
• Climate Change, Technology Transfer and Intellectual Property Rights
• Clean Energy Investment
• Standards, Labelling and Certification

Support for this event came from the William and Flora Hewlett Foundation, the Government of Denmark and the German Marshall Fund.

As always, we welcome your feedback or comments on any of these documents, or on the issues they cover.

Yours sincerely,

Aaron Cosbey

Aaron Cosbey
Associate and Senior Advisor, Trade and Investment
Associate, Climate Change and Energy
International Institute for Sustainable Development

Local Address:
Box 850, 2670A Iron Colt Ave.
Rossland, British Columbia  V0G 1Y0  CANADA
E-mail: acosbey@iisd.ca
+1 (250) 362-2275

IISD Main Office (Winnipeg, Canada):
Tel: +1 (204) 958-7700; Fax: +1 (204) 958-7710
www.iisd.org

nbsp;http://www.grist.org

Compare the Candidates

• John McCain [R]
• Barack Obama [D]
• Ralph Nader [I]
• Cynthia McKinney [Gr]
• Bob Barr [L]

Grist debate coverage - looking for green issues:

• First presidential debate: Green issues largely sidelined
• Vice presidential debate: Candidates spar on energy and climate issues
• Second presidential debate: Obama and McCain asked directly about climate change
• Second presidential debate: Enviros cheer talk about climate and energy, but want more details
• Second presidential debate: A chat with Ingrid Jackson, whose question about climate change put candidates on the spot

Check out what the candidates’ advisers have to say about climate and energy:

• McCain adviser Douglas Holtz-Eakin
• Obama adviser Jason Grumet
• Obama adviser Heather Zichal

——————–

http://gristmill.grist.org/story/2008/10/6/131525/753?source=weekly


Send the Prez-elect to Poland!
New campaign calls on McCain or Obama to attend climate talks in December

The winner of the U.S. presidential race needs to dive right into international climate talks, writes Bill McKibben in Grist — there’s no time to waste. The next big climate meeting will go down in Poland in December — after the U.S. election, but before Inauguration Day. It’s a perfect occasion for a President-elect McCain or Obama to show the world that the U.S. will now get serious about tackling the climate crisis. 350.org and Grist are teaming up on a campaign to let people all across the planet issue invitations to the president-elect to attend the Poland climate talks. Send an invite! It’s easy. And find out where the presidential candidates stand on climate change by checking out Grist’s comparison chart and reading interviews with McCain adviser Douglas Holtz-Eakin and Obama adviser Heather Zichal.

new in Gristmill: Send the Prez-elect to Poland!

———————-

Green Campaigner
Committed environmentalist Stéphane Dion faces uphill fight in Canadian election

When Canadians go to the polls today, they’ll have an opportunity to choose a committed environmentalist, Stéphane Dion, as prime minister. But according to the polls, they’re not likely to. Dion’s Liberal Party is trailing the Conservatives, headed by current Prime Minister Stephen Harper, by some 13 points. Doug Struck reports on Dion’s environmental record and how it’s playing in the national election.

new in Grist: Green Campaigner

———————

How to Talk to a Climate Skeptic:   http://gristmill.grist.org/skeptics

News

Paul Krugman Wins Economics Nobel.
Monday 13 October 2008, by Catherine Rampell, The New York Times

http://economix.blogs.nytimes.com/2008/10/13/paul-krugman-wins-economics-nobel/?em

Paul Krugman, a professor at Princeton University and an Op-Ed columnist for The New York Times, was awarded the Nobel Memorial Prize in Economic Sciences on Monday.

“It’s been an extremely weird day, but weird in a positive way,” Mr. Krugman said in an interview on his way to a Washington meeting for the Group of Thirty, an international body from the public and private sectors that discusses international economics. He said he was mostly “preoccupied with the hassles” of trying to make all his scheduled meetings today and answer a constantly-ringing cell phone.

Mr. Krugman received the award for his work on international trade and economic geography. In particular, the prize committee lauded his work for “having shown the effects of economies of scale on trade patterns and on the location of economic activity.” He has developed models that explain observed patterns of trade between countries, as well as what goods are produced where and why. Traditional trade theory assumes that countries are different and will exchange different kinds of goods with each other; Mr. Krugman’s theories have explained why worldwide trade is dominated by a few countries that are similar to each other, and why some countries might import the same kinds of goods that it exports.

“There was something very beautiful about the old existing trade theory, and its ability to capture the world in a surprisingly simple conceptual framework,” Mr. Krugman said. “And then I realized that some of the new insights coming through in industrial organization could be applied to international trade.”

Mr. Krugman wrote his dissertation, however, on international finance, and credits his late MIT professor Rudiger Dornbusch for pushing him to study international trade.

“I went to visit him one snowy day in early 1978 and described to him what I’d been thinking about,” Mr. Krugman said. “He turned to me and said, ‘You’ve got to write about that.’”

   Mr. Krugman has been an Op-Ed columnist at the New York Times since 1999. A collection of his recent columns can be found here.

“For economists, this is a validation but not news. We know what each other have been up to,” Mr. Krugman said. “For readers of the column, maybe they will read a little more carefully when I’m being economistic, or maybe have a little more tolerance when I’m being boring.”

He said that he does not expect his critics to let him off any easier because of his new accolade, though.

  “I think we’ve learned this when we see Joe Stiglitz writing,” Mr. Krugman said, referring to the winner of the economics Nobel in 2001. “I haven’t noticed him getting an easy time. People just say, ‘Sure, he’s a great Nobel laureate and he’s very smart, but he still doesn’t know what he’s talking about in this situation.’ I’m sure I’ll get the same thing.”

In 1991 Mr. Krugman received the John Bates Clark medal, a prize given every two years to “that economist under forty who is adjudged to have made a significant contribution to economic knowledge.”

  Mr. Krugman follows a number of Clark medal recipients who have gone on to win a Nobel, including Mr. Stiglitz.

“To be absolutely, totally honest I thought this day might come someday, but I was absolutely convinced it wasn’t going to be this day,” Mr. Krugman said. “I know people who live their lives waiting for this call, and it’s not good for the soul. So I put it out of my mind and stopped thinking about it.”

He said he didn’t actually know which day the winner’s name would be released until a colleague told him last week.

Mr. Krugman continues to teach at Princeton. This semester Mr. Krugman is teaching a small graduate-level course on international monetary policy and theory, covering such timely subjects as international liquidity crises. In recent years he has also taught courses on the welfare state and international trade, as well as all-freshman seminars on various economic topics.

Monday’s award is the last of the six prizes and is not one of the original Nobels, but was created in 1968 by the Swedish central bank in Alfred Nobel’s memory. Mr. Krugman was the only winner of the award, which includes a prize of about $1.4 million.

==========

The Most Recent Op-Ed New York Times Article

Op-Ed Columnist
Gordon Brown Does Good.

By PAUL KRUGMAN
Published: October 12, 2008
Has Gordon Brown, the British prime minister, saved the world financial system?

O.K., the question is premature — we still don’t know the exact shape of the planned financial rescues in Europe or for that matter the United States, let alone whether they’ll really work. What we do know, however, is that Mr. Brown and Alistair Darling, the chancellor of the Exchequer (equivalent to our Treasury secretary), have defined the character of the worldwide rescue effort, with other wealthy nations playing catch-up.

This is an unexpected turn of events. The British government is, after all, very much a junior partner when it comes to world economic affairs. It’s true that London is one of the world’s great financial centers, but the British economy is far smaller than the U.S. economy, and the Bank of England doesn’t have anything like the influence either of the Federal Reserve or of the European Central Bank. So you don’t expect to see Britain playing a leadership role.

But the Brown government has shown itself willing to think clearly about the financial crisis, and act quickly on its conclusions. And this combination of clarity and decisiveness hasn’t been matched by any other Western government, least of all our own.

What is the nature of the crisis? The details can be insanely complex, but the basics are fairly simple. The bursting of the housing bubble has led to large losses for anyone who bought assets backed by mortgage payments; these losses have left many financial institutions with too much debt and too little capital to provide the credit the economy needs; troubled financial institutions have tried to meet their debts and increase their capital by selling assets, but this has driven asset prices down, reducing their capital even further.

What can be done to stem the crisis? Aid to homeowners, though desirable, can’t prevent large losses on bad loans, and in any case will take effect too slowly to help in the current panic. The natural thing to do, then — and the solution adopted in many previous financial crises — is to deal with the problem of inadequate financial capital by having governments provide financial institutions with more capital in return for a share of ownership.

This sort of temporary part-nationalization, which is often referred to as an “equity injection,” is the crisis solution advocated by many economists — and sources told The Times that it was also the solution privately favored by Ben Bernanke, the Federal Reserve chairman.

But when Henry Paulson, the U.S. Treasury secretary, announced his plan for a $700 billion financial bailout, he rejected this obvious path, saying, “That’s what you do when you have failure.” Instead, he called for government purchases of toxic mortgage-backed securities, based on the theory that … actually, it never was clear what his theory was.

Meanwhile, the British government went straight to the heart of the problem — and moved to address it with stunning speed. On Wednesday, Mr. Brown’s officials announced a plan for major equity injections into British banks, backed up by guarantees on bank debt that should get lending among banks, a crucial part of the financial mechanism, running again. And the first major commitment of funds will come on Monday — five days after the plan’s announcement.

At a special European summit meeting on Sunday, the major economies of continental Europe in effect declared themselves ready to follow Britain’s lead, injecting hundreds of billions of dollars into banks while guaranteeing their debts. And whaddya know, Mr. Paulson — after arguably wasting several precious weeks — has also reversed course, and now plans to buy equity stakes rather than bad mortgage securities (although he still seems to be moving with painful slowness).

As I said, we still don’t know whether these moves will work. But policy is, finally, being driven by a clear view of what needs to be done. Which raises the question, why did that clear view have to come from London rather than Washington?

It’s hard to avoid the sense that Mr. Paulson’s initial response was distorted by ideology. Remember, he works for an administration whose philosophy of government can be summed up as “private good, public bad,” which must have made it hard to face up to the need for partial government ownership of the financial sector.

I also wonder how much the Femafication of government under President Bush contributed to Mr. Paulson’s fumble. All across the executive branch, knowledgeable professionals have been driven out; there may not have been anyone left at Treasury with the stature and background to tell Mr. Paulson that he wasn’t making sense.

Luckily for the world economy, however, Gordon Brown and his officials are making sense. And they may have shown us the way through this crisis.

——————–

Further material on the announcement followed by a larger article by Catherine Rampell, an economics writer for the NYT.

 http://www.nytimes.com/2008/10/14/busine…

 http://topics.nytimes.com/top/opinion/ed…

 http://nobelprize.org/nobel_prizes/econo…

Krugman Wins Economics Nobel

By CATHERINE RAMPELL
Published: October 13, 2008
Paul Krugman, a professor at Princeton University and an Op-Ed page columnist for The New York Times, was awarded the Nobel Memorial Prize in Economic Sciences on Monday.

Nobel Prize Announcement  nobelprize.org) Nobel Prize Explanatory Paper (pdf)

The prize committee lauded Mr. Krugman for “having shown the effects of economies of scale on trade patterns and on the location of economic activity.”

Mr. Krugman, 55, is probably more widely known as a perpetual thorn in George Bush’s side from his perch as an Op-Ed page columnist for nearly a decade. His columns have won him both strong supporters and ardent critics. The Nobel, however, was awarded for academic — and less political — research that he conducted primarily before he began regularly writing for The Times.

He has developed models that explain observed patterns of trade between countries, as well as what goods are produced where and why. Traditional trade theory assumes that countries are different and will exchange only the different kinds of goods that they are comparatively better at producing; this model, however, was not reflected in flow of goods and services Mr. Krugman saw in the world around him. He set out to explain why worldwide trade was dominated by a few countries that were similar to each other, and why a country might import the same kinds of goods that it exported.

In his model, companies sell similar goods, with slight variations. The companies get more efficient at producing their goods as they sell more. Consumers like variety, so they pick and choose goods from among these producers in different countries. He developed this work further to explain what effect transport costs, which obstruct trade, should have on migration patterns. He helped explain under what conditions trade would lead to concentration or decentralization of populations.

Mr. Krugman’s models have been praised for their simplicity and practicality — features economists are often criticized for ignoring.

“Krugman’s trade models became the standard in the economics profession both because they fit the world a bit better and because they were masterpieces of mathematical modeling,” said Edward L. Glaeser, a professor at Harvard University who also studies economic geography. “His models’ combination of realism, elegance and tractability meant that they could provide the underpinnings for thousands of subsequent papers on trade, economic growth, political economy and especially economic geography.”

Mr. Krugman has been writing his Op-Ed page columns for The Times since 1999. In recent years, in his column and a related blog on nytimes.com, he has frequently and unrelentingly criticized Bush administration policies.

While he has earned a loyal fan base, a number of economists have attacked Mr. Krugman for politicizing his work.

“Much of his popular work is disgraceful,” said Daniel Klein, a professor of economics at George Mason University who earlier this year wrote a comprehensive review of Mr. Krugman’s body of Times columns. “He totally omits all these major issues where the economics conclusion goes against the feel-good Democratic Party ethos, which I think he’s really tended to pander to especially since writing for The New York Times.” {This is just another case of a George Mason U. Prof. who out of his own ideological view that the earth is still flat - sees in progress the enemy of his own existence. We have other GMU Profs in mind - bet you this guy does not believe in global warming either - but these are the prople that had this White House’ ear}
In an interview on Monday, Mr. Krugman said he did not expect his award to have much effect on how colleagues and his popular readership — whether they be fans or foes — regard him.

“For economists, this is a validation but not news. We know what each other have been up to,” Mr. Krugman said. “For readers of the column, maybe they will read a little more carefully when I’m being economistic, or maybe have a little more tolerance when I’m being boring.”

He also said that he did not expect his critics to let him off any more easily because of his new accolade.

“I think we’ve learned this when we see Joe Stiglitz writing,” Mr. Krugman said, referring to the winner of the economics Nobel in 2001. “I haven’t noticed him getting an easy time. People just say, ‘Sure, he’s a great Nobel laureate and he’s very smart, but he still doesn’t know what he’s talking about in this situation.’ I’m sure I’ll get the same thing.”

In 1991 Mr. Krugman received the John Bates Clark medal, a prize given every two years to “that economist under 40 who is adjudged to have made a significant contribution to economic knowledge.” He follows several Clark medal recipients who have gone on to win a Nobel, including Mr. Stiglitz. Given his body of work and his Clark medal, Mr. Krugman said, he had been tentatively expecting to one day join the ranks of Nobel laureates.

“To be absolutely, totally honest I thought this day might come someday, but I was absolutely convinced it wasn’t going to be this day,” Mr. Krugman said. “I know people who live their lives waiting for this call, and it’s not good for the soul. So I put it out of my mind and stopped thinking about it.”

Mr. Krugman continues to teach at Princeton. This semester he is teaching a small graduate-level course on international monetary policy and theory, covering such timely subjects as international liquidity crises. While Monday’s award was officially given for Mr. Krugman’s work on international trade theory, his dissertation, as well as some of his more recent academic work, was on international finance and monetary theory.

“I like to call myself an economics ambulance chaser,” Mr. Krugman said. “This one’s especially convenient,” he said, referring to the current financial crisis. Monday’s award, the last of the six prizes, is not one of the original Nobels. It was created in 1968 by the Swedish central bank in Alfred Nobel’s memory. Mr. Krugman was the sole winner of the award this year, which includes a prize of about $1.4 million.

Still, his collaborators and mentors in his international trade research — some of whom were considered competing candidates for the prize — extended their praise throughout the day on Monday.

“He’s my best student,” said Jagdish Bhagwati, an economics professor at Columbia University who, despite opposition from fellow academics, helped Mr. Krugman publish one of the seminal papers for which he received his Nobel. “Lots of people are saying to me, ‘Why didn’t you get it?’ Given the fact that I didn’t get it, this is the next best thing.”

—————-

Bush critic wins economics Nobel.

{ This Title Sounds As If Bush Gets The Second Negative Nobel in a Row! }

By Anna Ringstrom, The Independent of London.
Tuesday, October 14, 2008.

US economist Paul Krugman, a fierce critic of the Bush administration for policies that he argues led to the current financial crisis, won the 2008 Nobel prize for economics yesterday.

The Nobel committee said the award was for Krugman’s work that helps explain why some countries dominate international trade, starting with research published nearly 30 years ago.

While the research for which he won the prize was not obviously partisan, Krugman is best known as the author of columns and a blog called “The Conscience of a Liberal” for the New York Times. He has long been tipped as a likely winner.

A professor at Princeton University, the 55-year-old Krugman argues that President George W. Bush’s zeal for deregulation and loose fiscal policies helped spark the current banking meltdown.

He said news of the prize took him by surprise. “I took the call stark naked as I was about to step into the shower,” he told a news conference at Princeton on Monday afternoon.

Speaking by telephone to a news conference earlier, Krugman offered a snap analysis on the turbulent times.

“We are now witnessing a crisis that is as severe as the crisis that hit Asia in the 90s. This crisis bears some resemblance to the Great Depression.”

Praising world leaders’ efforts to staunch the financial bleeding, particularly in Europe, he added: “I’m slightly less terrified today than I was on Friday.”

World policy makers met at the weekend, after a black week on financial markets, to agree on radical measures to rescue banks, revive liquidity and avert a global recession.

It was the second year in a row that a major Nobel prize was awarded to an American known for his strong criticism of Bush - last year’s peace prize went to former U.S. Vice President Al Gore for his work on climate change.

Asked at the Princeton news conference if he saw a trend of Nobels going to people who were anti-Bush, Krugman said “A lot of intellectuals are anti-Bush.”

The prize committee dismissed any suggestion its choice was influenced by the current crisis or political considerations.

“I don’t think the committee has ever taken a political stance,” committee secretary Peter Englund told Reuters. “The real, dramatic crisis is an event of the last month or so, which is in practice after the committee took its decision.”

Krugman’s latest column in the New York Times, published on Monday, praised Britain for thinking clearly and acting quickly to address the crisis, unlike the United States. He mused: Did British leader Gordon Brown just save world markets?

Britain unveiled a plan last week to bolster ailing banks, and on Monday it waded in with 37 billion pounds ($64 billion) of capital, a move that could make the state the banks’ main owner.

Readers of Krugman’s blog posted hundreds of comments congratulating him as an accessible voice of common sense.

“Sometimes it feels as though you are the only sane person in America,” said a writer who identified himself as Martin Gruner Larsen.

Krugman said he was encouraged by recent steps to address the crisis and said it was vital there should be a combination of capital injection and guarantees for banks.

Commenting on policy proposals from the two U.S. presidential candidates, he said: “It would be kind of nice if we did have a sophisticated government, but that may change.”

Asked about accountability for the crisis, Krugman said the financial system had outgrown the regulatory system.

“There is a lot of grotesque greed under this crisis but greed isn’t illegal,” he said.

The Royal Swedish Academy of Sciences said the prestigious 10 million crown ($1.4 million) award recognized Krugman’s formulation of a new theory that addresses what drives worldwide urbanization.

“He has thereby integrated the previously disparate research fields of international trade and economic geography,” the committee said. “Krugman’s approach is based on the premise that many goods and services can be produced more cheaply in a long series, a concept generally known as economies of scale.”

Krugman’s theory clarifies why trade is dominated by countries that not only have similar conditions but also trade in similar products.

Virtue or Vice : When faced with one of the most ambitious environmental policies in history, Canadians will probably choose the latter.
by The New Republic, Stephen Marche, Post Date Tuesday, October 07, 2008.

The luxury of Canadian elections is that they don’t matter too much. We are embroiled  in only one unpopular foreign war, our financial institutions are not yet shattering under  the weight of mass greed, our health care system isn’t on the brink of collapse, and none  of our hockey moms will be given the launch codes for a nuclear armory. But the  upcoming election, called for October 14th of this year, has put one of the boldest and  most important policy initiatives in global politics on the table: the Liberal Party’s “green  shift.” The policy would make carbon taxation the principal source of government  revenue. And though Stéphane Dion, the Liberal party leader, claims the new tax would  be revenue neutral–involving deep cuts to corporate and personal income tax–the shift  would completely restructure the Canadian economy around its environmental policy. Al  Gore could ask for no more.


What makes such a profound change possible is that the Liberals would only need a minority government to make it a reality–the Greens and the New Democrats, the parties to its left, have even more radical environmental policies on their platforms. Dion’s opponent on the right, however, is the current Prime Minister and leader of the Conservative Party, Stephen Harper, whose most important environment policy initiative so far has been to propose reducing the tax on diesel. Elizabeth May, the leader of the Greens, has called his ideas proactively destructive: “It’s not a climate change plan; it’s a climate disaster plan.” The Prime Minister’s environmental troglodytism can in part be attributed to the fact that he’s from Alberta, Canada’s answer to Texas, which has been booming during the recent rise in oil prices due to huge resources in its tar sands and its proximity to insatiable American markets. He also clearly believes that, in the end, Canadians will choose doing nothing over fundamentally altering their way of life.

But environmentalism is chic in Canada–with lush wilderness close by even major cities–and it frequently ranks as the most important political issue in surveys. In a recent study by Canada Post, our mail service up here, 75 percent of Canadians “consider environmental conservation and preservation as a matter of personal importance.” Unfortunately, Canada also has wide spaces between towns which require a great deal of carbon-based energy to cross. The huge resources in the Albertan tar sands–somewhere between 1.7 and 2.5 trillion barrels of oil, much greater than Saudi Arabia–require immense amounts of heat and water to refine. So despite our desire for virtue, we actually live dirty. The central question of the election is whether our virtue or our dirtiness will triumph.

Harper thinks it’s good politics to bet on dirtiness, largely because he sees Dion for what he is: a huge liability to his party. Dion may be an interesting and bold political thinker, but he is a terrible politician, only barely fluent in English–a deficiency he attributes to a hearing disorder–and despised in French Canada for his history of aggressive anti-nationalism.

There are other, deeper problems with selling the Green Shift. The basic idea is excellent, possibly even necessary to our survival: a way to lower our national carbon footprint significantly without altering the peculiarly Canadian amalgam of capitalism and socialism which is cherished by an overwhelming majority of Canadians. “Our plan is as powerful as it simple,” reads the Green Shift manifesto. “We will cut taxes on those things we all want more of … and we will shift those taxes to things we all want less of.” The document goes on to promise that, within four years, a middle class family (earning $60,000 a year with two kids) will pay $1,300 dollars less in taxes. But such figures are beyond useless–empty projections within campaign promises. Nobody knows what, exactly, would happen if instead of taxing income we started taxing carbon emissions; predicting the future behavior of 34 million people to a completely different way of life is impossible. The specifics are wooly exactly because no one has ever attempted such a thing before. And given the current economic crisis, a dive into fiscal uncertainty may have less appeal that it might otherwise.

No doubt the larger question of the environment will continue to be a major division within Canadian politics; it may even replace the bitter Constitutional struggles of the 1980s and ’90s as the Big Issue. Dion, however, has probably miscalculated how much of their cherished security and stability Canadians are willing to sacrifice for even their loftiest hopes and ideals.

And even if he hasn’t miscalculated, a plan as complicated and transformational as the Green Shift may just need a better a salesman. Over the course of the campaign, Dion has become a byword for poor political organization.

The Liberals were caught so much by surprise when the election was called that the only campaign plane they could find was a 30 year old Boeing 737, the aeronautical equivalent of a gas-guzzling old Dodge, while the Conservatives managed to snag an Airbus 319, much cleaner and more modern.

To make matters worse, on their first trip from Quebec to Ontario, one of the generators on the Liberal aircraft failed, and they had to make an emergency landing in Montreal. The symbolism couldn’t have been more painfully obvious–a group of environmental idealists sitting in the dark, on the tarmac, powerless.

Stephen Marche is a culture columnist for Esquire, and the author, most recently, of Shining at the Bottom of the Sea.

========

Back carbon tax, leading economists tell politicians: More than 230 experts and academic economists say policy is best way to fight climate change.

Joanne Laucius, The Ottawa Citizen, Tuesday, October 07, 2008.
More than 230 academic economists have signed an open letter to the leaders of the federal political parties, urging them to acknowledge that putting a price on carbon is “the best approach” to combatting climate change.

In a rare show of agreement, the economists say public policy needs to protect the environment “because in the absence of policy, individuals generally don’t take the environmental consequences of their actions into account, and the result is ‘market failure’ and excessive levels of pollution for all of us.”

The signatories include the godfather of Canadian economics, Richard Lipsey, whose name is familiar to generations of university economics students as lead author of the classic text Economics, now in its 13th edition.

The economists say their purpose is not to support any political platform, but to ground discussion on accepted economic principles.
Prices have to increase to provide incentives to change behaviour, said Nancy Olewiler, an environmental economist at Simon Fraser University who was one of the originators of the letter, along with Ross Finnie of the University of Ottawa and David Green of the University of British Columbia.
“We just wanted to clear the air about these issues,” said Ms. Olewiler, who has been analysing various carbon-pricing scenarios for more than a decade. “It’s supply and demand. We have been teaching this since Adam Smith.”
The three originators of the letter came up with the idea about three weeks ago, then e-mailed a draft to other economics professors last Wednesday.
By Friday, they had about 200 signatures, with more trickling in over the weekend. That’s an astonishing number for academics not typically inclined to act collectively and quickly on policy issues, Mr. Finnie said.
Pricing carbon allows every business and family to decide for itself how it values the things that generate carbon, the letter says. Each can consider the options and everyone has the incentive to change, but does it in a way that’s best for them.
“This is how to get the most bang for the buck,” said Mr. Lipsey, who calls global warming the most important problem of the century. “I think the whole thing should be revenue neutral. You cut other taxes. Low carbon users end up paying less.”
The economists argue that pricing encourages innovation because users of carbon-intensive goods will demand alternatives. Regulation is the most expensive way to meet the goal because users don’t have a choice, the letter says.

In a well-designed carbon-tax strategy, increases would be introduced gradually and announced ahead of time, providing consumers with some certainty and allowing them to make decisions based on what they know is coming.

A “cap and trade system” is another price alternative, although a more complicated one. It works like a quota system, allowing carbon users to buy and sell carbon allowances.

Mr. Finnie said the signatories don’t support one party over another.

“You can say that the Liberals have a carbon tax. Is it a good carbon tax? That’s a whole other question,” he said. “This is not about influencing the election, it’s about clarifying debate.”

To understand our problem with this posting - please look also at our posting of today: “Eye on the UN” …

==============

The Columbia University Earth Institute, the UNFCCC. and the otherwise honorable IISD present on Yom Kippur:

“The Kyoto Mechanisms: Key to combating climate change?”
The International Institute for Sustainable Development and The Earth Institute at Columbia University invite Climate-L readers to attend an important high-level discussion between Yvo de Boer and Jeffery Sachs on the role of the Kyoto Mechanisms in combating climate change in New York, Thursday, October 9, 2008 from 9:30 to 11:30 a.m.
Seating is limited and will be reserved on a first come first served basis. If you would like to attend this event, please register online at www.earth.columbia.edu If you are unable to attend, the discussion will be webcast at http://www.earth.columbia.edu/articles/v….

Jeffrey Sachs, Director of the Earth Institute at Columbia University and Yvo de Boer, Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC) will discuss whether a carbon market or carbon taxes are the best way to cut greenhouse gas emissions—a critical question for governments working to establish a framework to address climate change amid a global financial crisis and market uncertainty.

IISD Climate Change and Energy Director John Drexhage is the moderator of the event, designed to focus attention on a critical core element of the global climate change negotiations in the lead up to Copenhagen in December 2009.

Other discussants are Geneva-based International Emissions Trading Association President and CEO Henry Derwent and Columbia University Ewing-Worzel Professor of Geophysics Klaus S. Lackner.

Date:                           Thursday, October 9, 2008
Time:                           9:30 to 11:30 a.m. EST
Location:                    555 Alfred Lerner Hall, Columbia University‎
2920 Broadway, New York, NY (between 114th and 115th Streets)
Map:                           http://www.columbia.edu/about_columbia/m…

Seating is limited. Register online at www.earth.columbia.edu

This event will be webcast at http://www.earth.columbia.edu/articles/v….

Links to the webcast will also be available at www.iisd.org and www.unfccc.int

From:       global.ft.com@ftmail.ft.com
Subject:     Complete coverage of the global financial crisis
Date:             September 25, 2008

In depth on the global financial crisis
Monitor the very latest developments with FT.com’s full coverage of one of the most radical reshapings of the global banking sector, as governments and the private sector battle to
shore up the financial system.

In depth: Global financial crisis

……………………………………..

Expert insights and analysis
For news, comment, video and blogs offering insight into what has happened, why, and
what it may mean for the future of the global financial system:

• Economists’ Forum - expert commentators debate the issues
• Martin Wolf - Paulson’s plan was not a true solution to the crisis
• John Authers - Short View video on shorting ban
• Clive Crook - The wrong kind of bail-out?
• Gillian Tett - The era of leverage is over
• John Gapper - My Wall Street prediction comes true, up to a point
• John Kay - We let down diligent folk at the Halifax
• John Plender - Reserve judgement on the dollar

FT.com blogs overview

……………………………………..

Special interactive features
In depth interactive features offer an added dimension to FT.com’s news and analysis.

Regulating short selling
 Money market funds
How money market funds work and a look at the implications of the recent problems
for the wider market.

In The Light Of The Bush / Paulsen Demand For Full Reins To The Secretary of the Treasury In The Matter of Over 1.5 Trillion Dollars - What will be the role of Next US President? If Obama and McCain Accept the Proposed Set Of Rules They Might Just As Well Go Hunting Moose In Alaska Instead of Fighting for the Right To Become The White House Christmas Tree.  We hope That Sarah Palin Was Able To Negotiate With Mr. Karzai to Get Some Afghan Hounds To Accompany Them.

We got the following e-mail from the Obama people:

Pincas –

The era of greed and irresponsibility on Wall Street and in Washington has created a financial crisis as profound as any we have faced since the Great Depression.

Congress and the President are debating a bailout of our financial institutions with a price tag of $700 billion or more in taxpayer dollars. We cannot underestimate our responsibility in taking such an enormous step.

Whatever shape our recovery plan takes, it must be guided by core principles of fairness, balance, and responsibility to one another.

They Suggest - Please show your support for an economic recovery plan based on the following:

• No Golden Parachutes — Taxpayer dollars should not be used to reward the irresponsible Wall Street executives who helmed this disaster.
• Main Street, Not Just Wall Street – Any bailout plan must include a payback strategy for taxpayers who are footing the bill and aid to innocent homeowners who are facing foreclosure.
• Bipartisan Oversight — The staggering amount of taxpayer money involved demands a bipartisan board to ensure accountability and oversight.

Show your support and encourage your friends and family to join you.

The failed economic policies and the same corrupt culture that led us into this mess will not help get us out of it. We need to get to work immediately on reforming the broken government — and the broken politics — that allowed this crisis to happen in the first place.

And we have to understand that a recovery package is just the beginning. We have a plan that will guarantee our long-term prosperity — including tax cuts for 95 percent of families, an economic stimulus package that creates millions of new jobs and leads us towards energy independence, and health care that is affordable to every American.

It won’t be easy. The kind of change we’re looking for never is.

But if we work together and stand by these principles, we can get through this crisis and emerge a stronger nation.

Thank you,

Barack

—————

Our difficulty with the above is that the moment Obama accepts the proposed recovery plan - he loses the Presidency even if he wins the election. This because of the simple fact that it takes all the air out of his lungs - that is all the money that he could have used to change the system.

What the Bushites do now is to perpetuate the present situation and make sure that nothing will change for many years to come - or ever. Ah! and you must buy this in a rush, right this week - because Congress must go home to campaign for their reelection - so they will