Today's article in the Times disucsses the podcast.
Globalisation must make fewer malcontents
From the orginal piece:
Globalisation has been a double-edged sword. To those able and willing to seize the opportunities and manage globalisation on their own terms, it has provided the basis of unprecedented growth. China and India, two countries with, together, 2.4 billion people, have for more than a quarter century been growing at historically unprecedented rates with hundreds of millions of people moving out of poverty. They have taken advantage of globalisation of knowledge and globalisation of markets.
Included in the transcript is some excellent "globalisation" material on how globlisation can be made to work.
For this blog however, I just draw out his comments on "Global Warming":
I spend some time in the book talking about global warming. Global warming is, of course, our most important global environmental challenge. The reason I do is because it illustrates the problems of global governance, the difficulties of the international community getting together to solve the collective problems that face us. I argue in the book that one of the essential problems is that economic globalisation has out-paced political globalisation. Economic globalisation means that the countries of the world have become more integrated. As they become more integrated, they become more inter-dependent. As they become more inter-dependent, there is greater need for acting together, for collective action. But we have not developed either the institutions or the mindsets that enable us to act together collectively, effectively, democratically.
This is becoming of critical importance as we face the problem of global warming. Even if we solve the world’s economic problems; if our environment continues to deteriorate, if the dangers that the scientific community has pointed out are realised, it may be for little or naught. In the book, I outline what can be done. The United States claims that it cannot afford to do anything about global warming, to cut the emissions of greenhouse gasses that have contributed so much to global warming. But that is not the case. There are countries – in Europe, Japan, all around the world - with emission levels that are but a fraction of those of the United States per dollar of GDP and they live just as well.
The issue is not whether the United States can afford it. The issue is that not paying attention to this important, what economists call, externality imposes costs on others which the United States doesn’t pay. And that gives American producers a competitive advantage over other producers. That is an unfair advantage.
The WTO was created to ensure that there was a level playing field, and being able to produce with high levels of greenhouse gas emissions is effectively a hidden subsidy. What I try to argue is that this kind of subsidy should no longer be allowed and explain how, within the WTO framework, there are actually provisions suggesting that this is not allowed. The United States imposed tariffs against shrimp that were caught in nets that resulted in the killing of turtles that were an endangered species. When Thailand objected, it eventually went to the appellate body of the WTO and they sustained the United States’ position. The United States’ position was that environmental issues trump these other trade issues and that it was unfair to allow Thailand to continue to catch shrimp with these turtle-unfriendly nets.
But, if it is permissible to impose a trade restriction – trade sanctions in effect – to protect an endangered species of turtle, surely it is permissible to use trade sanctions to save our planet. In the book I lay out a variety of other reforms that would go a long way to addressing the problems of global warming.
The book Stiglitz refers to is: