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381. Reconciling Climate Change and Trade Policy

Author:
Arvind Subramanian, Aaditya Mattoo, Dominique van der Mensbrugghe, and Jianwu He
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
There is growing clamor in industrial countries for additional border taxes on imports from countries with lower carbon prices. A key factor affecting the impact of these taxes is whether they are based on the carbon content of imports or the carbon content in domestic production. Our quantitative estimates suggest that the former action when applied to all merchandise imports would address competitiveness and environmental concerns in high income countries but with serious consequences for trading partners. For example, China's manufacturing exports would decline by one-fifth and those of all low- and middle-income countries by 8 percent; the corresponding declines in real income would be 3.7 percent and 2.4 percent. In contrast, border tax adjustment based on the carbon content in domestic production, especially if applied to both imports and exports, would broadly address the competitiveness concerns of producers in high income countries without seriously damaging developing-country trade. Therefore, as part of a comprehensive agreement on climate change, new WTO rules could be negotiated that would prohibit the extreme form of action while possibly allowing trade actions based on domestic carbon content as a safety valve.
Topic:
Climate Change, Environment, International Trade and Finance, and Treaties and Agreements
Political Geography:
China

382. Can Global De-Carbonization Inhibit Developing-Country Industrialization?

Author:
Arvind Subramanian, Aaditya Mattoo, Dominique van der Mensbrugghe, and Jianwu He
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Most economic analyses of climate change have focused on the aggregate impact on countries of mitigation actions. We depart first in disaggregating the impact by sector, focusing particularly on manufacturing output and exports because of the potential growth consequences. Second, we decompose the impact of an agreement on emissions reductions into three components: the change in the price of carbon due to each country's emission cuts per se; the further change in this price due to emissions tradability; and the changes due to any international transfers (private and public). Manufacturing output and exports in low carbon intensity countries such as Brazil are not adversely affected. In contrast, in high carbon intensity countries, such as China and India, even a modest agreement depresses manufacturing output by 6-7 percent and manufacturing exports by 9-11 percent. The increase in the carbon price induced by emissions tradability hurts manufacturing output most while the Dutch disease effects of transfers hurt exports most. If the growth costs of these structural changes are judged to be substantial, the current policy consensus, which favors emissions tradability (on efficiency grounds) supplemented with financial transfers (on equity grounds), needs re-consideration.
Topic:
Climate Change, Development, and Economics
Political Geography:
China, India, and Brazil

383. Energy Needs and Efficiency, Not Emissions: Re-framing the Climate Change Narrative

Author:
Nancy Birdsall and Arvind Subramanian
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The basic narrative on climate change between the rich and poor worlds has been problematic. The focus on emissions has made industrial countries inadequately sensitive to the unmet energy needs in developing countries. And it has led developing countries to adopt the rhetoric of recrimination and focus on the legacy of historical emissions by industrial countries. The ensuing blame game has led to the current gridlock. As a way out, we suggest some simple principles for determining equitable distribution of emission cuts between developed and developing countries to meet global targets. These principles emphasize basic energy needs and the equality of access to energy opportunities rather than emissions, taking account of development levels, as well as energy efficiency in creating such opportunities. To apply these principles, we develop a new data set to distinguish between energy needs and emissions-intensity for major developing and developed-country emitters and quantify the relationship between these variables and changes in income (or development). This quantification allows us to project emissions levels in 2050. Our main finding is that meeting global emissions targets equitably requires very large, probably revolutionary, improvements in the carbon intensity of production and consumption, much larger than seen historically. We conclude that a new shared narrative that places equality of energy opportunities at the forefront would naturally shift the focus of international cooperation from allocating emissions “rights” or reductions and blame to maximizing efforts to achieving technology gains and rapidly transferring them worldwide. Abandoning the setting of emissions targets for developing counries and creating instead a framework where all countries contribute to maximizing technology creation and diffusion is what Copenhagen should be about.
Topic:
Climate Change, Energy Policy, Environment, and Treaties and Agreements

384. Africa's Private Sector: What's Wrong with the Business Environment and What to Do About It

Author:
Vijaya Ramachandran, Manju Kedia Shah, and Alan Gelb
Publication Date:
03-2009
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
Why has the private sector failed to thrive in much of sub-Saharan Africa? Drawing on a unique set of enterprise surveys, we identify inadequate infrastructure (especially unreliable electricity and poor quality roads) and burdensome regulations as the biggest obstacles to doing business. We find as well that the private sector in many countries is dominated by ethnic minorities, which inhibits competition and lowers demand for a better business environment. Solutions include investing in infrastructure, providing risk guarantees, and reforming regulations to lower the cost of doing business, as well as increasing access to education for would-be entrepreneurs.
Topic:
Development, Economics, Emerging Markets, Globalization, and International Trade and Finance
Political Geography:
Africa

385. Going Beyond Gender as Usual: Why and How Global HIV/AIDS Donors Can Do More for Women and Girls

Author:
David Wendt, Nandini Oomman, and Christina Droggitis
Publication Date:
08-2009
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
Few people doubt that gender inequality influences the spread of HIV/AIDS. Yet public health efforts tend to focus on changing individual behavior rather than addressing structural factors—social, economic, physical and political—that influence the spread and effects of HIV and AIDS.
Topic:
Gender Issues, Health, and Social Stratification

386. Commitment to Development Index 2009

Publication Date:
10-2009
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
The Commitment to Development Index (CDI) ranks 22 of the world's richest countries on their dedication to policies that benefit the five billion people living in poorer nations. Moving beyond standard comparisons of foreign aid volumes, the CDI quantifies a range of rich-country policies that affect poor people in developing countries: Quantity and quality of foreign aid Openness to developing-country exports Policies that encourage investment Migration policies Environmental policies Security policies Support for creation and dissemination of new technologies Scores on each component are scaled so that an average score in 2008, the reference year, equals 5.0. A country's final score is the average of those for each component. The CDI adjusts for size in order to compare how well countries are living up to their potential to help.
Topic:
Development, International Cooperation, Poverty, Third World, International Affairs, and Foreign Aid

387. Performance Incentives for Global Health: Potential and Pitfalls

Author:
Rena Eichler and Ruth Levine
Publication Date:
05-2009
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
Global health donors, like national governments, have traditionally paid for inputs such as doctors' salaries or medical equipment in the hope that they would lead to better health. Performance incentives offered to health workers, facility managers, or patients turn the equation on its head: they start with the performance targets and let those most directly affected decide how to achieve them. Funders pay (in money or in kind) when health providers or patients reach specified goals. Evidence shows that such incentives can work in a variety of settings. But making them effective requires careful planning, implementation, and monitoring and evaluation.
Topic:
Health, Humanitarian Aid, Third World, and Foreign Aid

388. Growing Pains in Latin America: An Economic Growth Framework as Applied to Brazil, Costa Rica, Colombia, Mexico, and Peru

Author:
Liliana Rojas-Suarez
Publication Date:
09-2009
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
Before the global economic crisis began in 2008, all countries in Latin America, long known as the world's most economically and financially volatile region, had experienced five consecutive years of economic growth, a feat that had not been achieved since the 1970s. Yet despite this growth, Latin America's incomeper-capita gap relative to high-income countries and other emerging-market economies widened, and poverty remained stubbornly high. Latin America, in short, suffered from growing pains even when things were going reasonably well.
Topic:
Economics and Emerging Markets
Political Geography:
Brazil, Colombia, Latin America, Mexico, Costa Rica, and Peru

389. Income Per Natural: Measuring Development for People rather than Places - Working Paper 143

Author:
Michael Clemens and Lant Pritchett
Publication Date:
03-2008
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
It is easy to learn the average income of a resident of El Salvador or Albania. But there is no systematic source of information on the average income of a Salvadoran or Albanian. We create a first estimate a new statistic: income per natural—the mean annual income of persons born in a given country, regardless of where that person now resides. If income per capita has any interpretation as a welfare measure, exclusive focus on the nationally resident population can lead to substantial errors of the income of the natural population for countries where emigration is an important path to greater welfare. The estimates differ substantially from traditional measures of GDP or GNI per resident, and not just for a handful of tiny countries. Almost 43 million people live in a group of countries whose income per natural collectively is 50% higher than GDP per resident. For 1.1 billion people the difference exceeds 10%. We also show that poverty estimates are very different for national residents and naturals; for example, 26 percent of Haitian naturals who are not poor by the two-dollar-a-day standard live in the United States. These estimates are simply descriptive statistics and do not depend on any assumptions about how much of observed income differences across naturals is selection and how much is a pure location effect. Our conservative, if rough, estimate is that three quarters of this difference represents the effect of international migration on income per natural. This means that departing one's country of birth is today one of the most important sources of poverty reduction for a large portion of the developing world. If economic development is defined as rising human well being, then a residence-neutral measure of well-being emphasizes that crossing international borders is not an alternative to economic development, it is economic development.
Topic:
Demographics, Development, Economics, Migration, Poverty, and Population
Political Geography:
United States and Albania

390. Prevention Failure: The Ballooning Entitlement Burden of U.S. Global AIDS Treatment Spending and What to Do About It - Working Paper 144

Author:
Mead Over
Publication Date:
05-2008
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
U.S. global AIDS spending is helping to prolong the lives of more than a million people and is widely seen as a foreign policy and humanitarian success. Yet this success contains the seeds of a future crisis. Life-long treatment costs are increasing as those on treatment live longer, and the number of new HIV infections continues to outpace the number of people receiving treatment. Escalating treatment costs coupled with neglected prevention measures threaten to squeeze out U.S. spending on other global health needs, even to the point of consuming half of the entire U.S. foreign assistance budget by 2016.
Topic:
Foreign Policy and Humanitarian Aid
Political Geography:
Africa and United States