China’s cities suffer from extremely high levels of air pollution, and Chinese consumers spend more than $US100 million on anti-smog products per year. Using recent internet sales data, this column explores how investing in such self-protection products varies for consumers with different income brackets. The urban poor are shown to be less likely to engage in this health-improving strategy. This suggests that cross-sectional income comparisons understate lifetime inequality.
Matthew E. Kahn, Cong Sun, Siqi Zheng, Wednesday, July 8, 2015
Áureo de Paula, John Lynham, Timothy Halliday, Monday, June 22, 2015
For policy to target air pollution optimally, a thorough understanding of its harms is required. However, disentangling the health effects of specific pollutants has proved challenging, as multiple chemicals tend to co-occur in industrial pollution. This column exploits volcanic emissions in Hawaii to examine the health impact of a specific pollutant – airborne particulates. Short-term exposure to particulate pollution is found to increase pulmonary-related hospitalisations and expenditures, particularly among very young children.
Carlo Carraro, Saturday, February 7, 2015
China and the US have recently agreed to reduce their greenhouse gas emissions. This column asks what quantifiable impact the new targets will have, whether they are any better than previous approaches, and if so, whether they are enough to avoid dangerous climate change. While insufficient for keeping temperature increase below the 2°C limit, the US and China’s bilateral commitments are a step in the right direction, and form the basis for a stronger international agreement in Paris later this year.
Jean-Marie Grether, Nicole A. Mathys, Caspar Sauter, Saturday, January 31, 2015
Spatial inequalities in territorial-based greenhouse emissions matter in terms of regulation, both at the international and subnational levels. This column decomposes these inequalities worldwide for the two major greenhouse gases over the period 1970–2008. Within-country inequalities are larger, and rising, while between-country inequalities are smaller and falling. Moreover, social tensions arising from the discrepancy between the distribution of emissions and the distribution of damages appear to be larger within than between countries, and larger for carbon dioxide than for methane.
Jean Pisani-Ferry, Friday, November 7, 2014
A triple-dip recession in the Eurozone is now a distinct possibility. This column argues that additional monetary stimulus is unlikely to be effective, that the scope for further fiscal stimulus is limited, and that some structural reforms may actually hurt growth in the short run by adding to disinflationary pressures in a liquidity trap. The author advocates using tax incentives and tighter regulations to encourage firms to replace environmentally inefficient capital.
Jeffrey Frankel, Tuesday, September 9, 2014
Subsidies for food and energy are economically inefficient, but can often be politically popular. This column discusses the efforts by new leaders in Egypt, Indonesia, and India to cut unaffordable subsidies. Cutting subsidies now may even be the politically savvy choice if the alternative is shortages and an even more painful rise in the retail price in future. Ironically, it is India’s new Prime Minister Modi – elected with a large electoral mandate and much hype about market reforms – who is already shrinking from the challenge.
Mark Hoekstra, Steve Puller, Jeremy West, Wednesday, September 3, 2014
‘Cash for Clunkers’ was billed as a stimulus programme that would boost sales to the ailing US auto industry in 2009. This column shows that the design of the programme actually caused it to reduce revenues to the industry it was designed to help. The authors estimate that the entire increase in sales during the programme would have happened anyway in the following eight months. Moreover, since more fuel-efficient cars tend to be less expensive, the fuel economy requirement of the programme incentivised households to buy cheaper cars.
Rick van der Ploeg, Aart de Zeeuw, Thursday, July 31, 2014
Many ecological systems feature ‘tipping points’ at which small changes can have sudden, dramatic, and irreversible effects, and scientists worry that greenhouse gas emissions could trigger climate catastrophes. This column argues that this renders the marginal cost-benefit analysis usually employed in integrated assessment models inadequate. When potential tipping points are taken into account, the social cost of carbon more than triples – largely because carbon emissions increase the risk of catastrophe.
Pascal Lamy, Ian Goldin, Friday, March 28, 2014
Excessive short-termism is always a problem for policy, but the Global Crisis has brought it sharply into focus. This column introduces a report that discusses how a shift to longer-term solutions is necessary and possible. A key message is that businesses as well as governments need to take a longer-term view. The report identifies ways to overcome the current impasse in key economic, climate, trade, security, and other negotiations.
Mathilde Mathieu, Thomas Spencer, Oliver Sartor, Saturday, March 22, 2014
The US unconventional energy boom has reversed the decline of domestic production, lowered oil and gas imports, reduced gas prices, and created political space for tougher regulations on coal-fired power plants. This column argues that it is not a panacea, however. Even if current estimates prove accurate, the long-run benefits to the US economy will be relatively small. Improving energy efficiency and promoting low-carbon technologies will be just as important as before – especially for the EU, given its more limited known reserves of unconventional oil and gas.
Derek Kellenberg, Arik Levinson, Saturday, March 1, 2014
Economic theory predicts that international environmental agreements will fail due to free-rider problems, and previous empirical work suggests that such agreements do not in fact reduce emissions. This column presents evidence that the Basel Convention and Ban on trade in hazardous waste has also been ineffective. The authors find no evidence that Annex-7 countries that ratified the Ban slowed their exports to non-Annex-7 countries as the agreement requires.
Jeffrey Frankel, Thursday, February 27, 2014
Market-based mechanisms such as cap-and-trade can tackle externality problems more efficiently than command-and-control regulations. However, politicians in the US and Europe have retreated from cap-and-trade in recent years. This column draws a parallel between Republicans’ abandonment of market-based environmental regulation and their recent disavowal of mandatory health insurance. The author argues that in practice, the alternative to market-based regulation is not an absence of regulation, but rather the return of inefficient mandates and subsidies.
Enrica De Cian, Samuel Carrara, Massimo Tavoni, Sunday, December 22, 2013
After the Fukushima incident in 2011, many countries decided to shrink their nuclear power programmes. This article presents recent research on the optimal role of nuclear power in reducing carbon emissions. Phasing out nuclear power would be costly, since it is currently the cheapest low-carbon alternative to fossil fuels. However, these costs would be largely offset by the implicit subsidy to R&D in renewables, which suffers from innovation externalities. Still, carbon pricing and explicit R&D subsidies would be a more efficient way of determining the future of nuclear power.
Jean-Marie Grether, Nicole A. Mathys, Jaime de Melo, Thursday, December 23, 2010
Environmentalists have long feared that globalisation will harm the environment by allowing heavily polluting industries to migrate to countries with lax environmental standards. This column presents new evidence from several industries across many countries for all the major pollutants. It suggests that lax policy has only had a small effect on the pollution content of trade.
David Anthoff, Richard S J Tol, Monday, November 29, 2010
An international agreement on tackling climate change is still a long way off. One barrier often cited is that sovereign states will fail to cooperate and among the challenges is how countries would measure the impact of climate change on others. This column presents new insights in this area.
Hans-Werner Sinn, Friday, September 17, 2010
No one likes sitting in a traffic jam, but what can be done about them? This column says the time has come for general road tolls on all roads across all of Europe.
Matthew E. Kahn, Saturday, September 11, 2010
Most scientists agree that climate change is underway or at least on the horizon. This column introduces the author's book 'Climatopolis: How Our Cities will Thrive in Our Hotter Future.' It outlines an optimism and an irony: Urban economic growth may have caused climate change, but through the free market, it will also help us to adapt to it.
Gareth Edwards-Jones, Paul Brenton, Michael F Jensen, Sunday, September 5, 2010
Is offsetting your carbon footprint always a good thing? This column questions the criteria used to label carbon footprints, arguing they can disadvantage developing countries. It suggests a variety of ways to overcome that problem.
Simon Dietz, Antony Millner, Geoffrey Heal, Wednesday, September 1, 2010
The answers to “How much should people sacrifice today for the benefit of those living several decades from now?” vary widely. This column suggests that people’s distaste for uncertainty – ambiguity aversion – favours immediate, rapid cuts in greenhouse gas emissions.
M. Ataman Aksoy, Francis Ng, Friday, July 30, 2010
This column sketches the changing face of global agricultural trade over the last 20 years. It finds that developing countries have not been able to increase their export shares in agriculture in line with their manufacture shares. What little increase there has been is largely the result of expanding exports to other developing countries.