Papers on: Agricultural trade, Carbon Taxes, and one just for fun

Apologies for my lack of posts recently: I simply haven’t been doing the reading to have anything to say.

For today, I have a few links.

Timothy A Wise, via the Working Group on Development & Environment in the Americas, has released a discussion paper titled: The Limited Promise of Agricultural Trade Liberalization.

He argues that even using the numbers generated in studies cited by proponents of global agricultural trade liberalisation, the benefits are minor, and mostly accumulate in rich countries, and to the largest and wealthiest farmers. This is persuasive for me for the short and medium-terms, but an important part of his argument is also the assumption that commodity prices will keep falling relative to prices of other items in the long-term, and I wonder if this will continue to be true as environmental constraints increasingly come to bear (e.g. water supply, top-soil erosion) and input costs rise (e.g. cost of artificial fertilisers and operating machinery increasing with peak oil).

The bottom line, regardless, is that agricultural trade liberalisation would be no economic panacea – which, since economic benefits are the largest argument for such liberalisation, and since there are significant global costs in food-security, social justice, and environmental impacts – makes the case for such liberalisation pretty shaky.

Joseph E. Aldy, Eduardo Ley, and Ian W.H. Parry offer A Tax-Based Approach to Slowing Global Climate Change. This discussion paper, via Resources for the Future compares a Carbon-Tax to a Cap & Trade system, and the authors conclude that:

A strong case can be made for taxes on uncertainty, fiscal, and distributional grounds, though this critically hinges on policy specifics and how revenues are used.

And that:

In principle, revenue-neutral CO2 taxes appear to have a number of advantages over cap-and-trade systems, but the devil lies in the details of the implementation. At the domestic level, an appropriately designed cap-and-trade system—with allowance auctions and smart
revenue recycling as well as mechanisms to contain costs, such as a safety valve or banking and borrowing—could mimic many of the benefits of a CO2 tax. Even so, at the international level, a CO2 tax might be more effective at promoting broad country participation, especially among developing countries with limited institutions for implementing a new permit-trading system.

Note the “appropriately designed” qualifier: it’s not clear to me that cap & trade systems that have been implemented have in fact been “appropriately designed”. (1) & (2)

Finally, just for fun: proof you can, with appropriate (?) assumptions, do a formal econometric analysis of anything. James Heckman, with tongue firmly in cheek, analyses The Effect of Prayer on God’s Attitude
Toward Mankind
in an Forschungsinstitut zur Zukunft der Arbeit/Institute for the Study of Labor discussion paper.
He concludes that:

A little prayer does no good and may make things worse. Much prayer helps a lot.


Leave a comment

Filed under Barry, climate change, economic analysis, social justice

Comments are closed.