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181. Proposals for Reducing the Size and Cost of Running Government

Author:
Kojo Asante and David Asante Darko
Publication Date:
01-2023
Content Type:
Policy Brief
Institution:
Ghana Center for Democratic Development
Abstract:
Every other sector of the economy has had to incur substantive inconvenience or financial loss in efforts to return the sovereign debts to sustainable levels. Every other sector of the economy, except government itself. Against this backdrop, this paper reiterates some of the measures that have been proposed to reduce government spending and examines them in more detail. We delve into how the ministerial team might be reduced in size and thereby optimized to cut down government expenditure.
Topic:
Government, Budget, Finance, and Economy
Political Geography:
Africa and Ghana

182. Indonesia’s ASEAN Chairmanship: Challenges for Strengthening Democracy Agenda in ASEAN

Author:
Lidya C. Sinaga
Publication Date:
03-2023
Content Type:
Commentary and Analysis
Institution:
East Asia Institute (EAI)
Abstract:
Lidya Christin Sinaga analyzes the internal and external challenges that Indonesia, as the Chair of ASEAN, faces in promoting the principles of democracy in the organization`s agenda. Sinaga claims that the recent cases of Indonesia`s democratic regression have damaged the credibility of its sincerity in spreading democracy in Southeast Asia. On the other end, the ASEAN member states’ growing emphasis on economic performance as their source of legitimacy complicates the regional organization`s commitment to democratic values. Given that the ASEAN has limited influence on its member states’ respective political 시스템s, whether Indonesia can successfully implement democratic agenda this year depends on the extent of the members’ willingness to engage in meaningful political communication. Finally, Sinaga argues that bolstering commitment to democracy within the ASEAN can only be successful when every member states recognize that democratic principles are critical for regional prosperity.
Topic:
Democracy, Economy, ASEAN, and Regional Politics
Political Geography:
Indonesia and Southeast Asia

183. General Equilibrium Analysis of Cost-Effectiveness and Distributional Impacts of China’s Nationwide CO2 Emissions Trading System

Author:
Xianling Long, Da Zhang, Lawrence Goulder, and Chenfei Qu
Publication Date:
03-2023
Content Type:
Special Report
Institution:
Asia Society
Abstract:
China introduced the world's largest emissions trading system in 2021 which is intended to help cost-effectively achieve its pledges of reaching a peak in CO2 emissions before 2030 and carbon neutrality before 2060. The system is a tradable performance standard (TPS) with a bottom-up intensity-based emissions cap, unlike a top-down absolute cap approach commonly used globally. General Equilibrium Analysis of Cost-Effectiveness and Distributional Impacts of China’s Nationwide CO2 Emissions Trading System developed and applied a multi-sector, multi-period general equilibrium model to assess the emissions, energy mix, and economic impacts of a series of options for the future development of this policy. These included cap-setting, benchmark design, auction design, and sectoral expansion, with valuable insights provided on the potential future evolution of this policy.
Topic:
Climate Change, Economy, Trade, and Carbon Emissions
Political Geography:
China and Asia

184. Countering Economic Coercion: Tools and Strategies for Collective Action

Author:
Wendy Cutler and Haeyoon Kim
Publication Date:
03-2023
Content Type:
Special Report
Institution:
Asia Society
Abstract:
conomic coercion has become one of the most pressing and growing challenges on the international scene today, which has raised concerns about the potential damage to global economic growth, the rules-based trading system, and international security and stability. Compounding this issue is the difficulty faced by governments worldwide, particularly small and mid-sized nations, in effectively responding to such measures. In light of this challenge, Asia Society Policy Institute (ASPI) hosted an online discussion “Countering Economic Coercion: Tools and Strategies for Collective Action,” on February 28th moderated by Wendy Cutler, ASPI Vice President; and featuring Victor Cha, Senior Vice President for Asia and Korea Chair at the Center for Strategic and International Studies; Melanie Hart, Senior Advisor for China and the Indo-Pacific in the Office of the Under Secretary of State for Economic Growth, Energy, and the Environment; Ryuichi Funatsu, Director for Economic Security Policy Division at the Ministry of Foreign Affairs of Japan; and Mariko Togashi, Research Fellow for Japanese Security and Defense Policy at the International Institute for Strategic Studies.
Topic:
Economy, Economic Growth, Trade, and Coercion
Political Geography:
Asia

185. Getting Indonesia to Net Zero

Author:
Asia Society Policy Institute
Publication Date:
03-2023
Content Type:
Special Report
Institution:
Asia Society
Abstract:
As one of the world’s fastest growing economies, Indonesia has committed to using its sustainable transition to drive green and inclusive growth. Recent steps taken by President Joko Widodo in the lead-up to Indonesia hosting the G20 summit in November 2022 underscore the country’s ambition to mitigate its emissions – including releasing a plan to achieve net zero emissions by 2060 or sooner, endorsing the Global Coal to Clean Power Transition Statement at COP26, and enhancing Indonesia’s Nationally Determined Contribution ahead of COP27. The Getting Indonesia to Net Zero report from the High-level Policy Commission on Getting Asia to Net Zero explores how Indonesia can further accelerate its transition to a resilient, net zero emissions economy while benefitting its people and its place in the world. The report is based on new modeling commissioned from Cambridge Econometrics that shows the opportunities and trade-offs associated with different pathways for Indonesia to meet its current and more ambitious emissions reduction targets. As the report’s analysis illustrates, implementing Indonesia’s current net zero strategy could boost Indonesia’s mid-term GDP by as much as 5% by 2032, create up to two million new jobs by 2039, and ultimately improve Indonesia’s trade balance by $48 billion. Moreover, by aiming for net zero emissions by 2050 instead of 2060 while prioritizing low-cost renewable energy sources like solar and wind, Indonesia could reduce its net zero investment needs by $3.8 trillion and peak its carbon emissions as early as 2027. In this latter scenario, the adverse impact of the net zero transition on household spending could also be cut by half. The report also outlines a roadmap for how Indonesia could realize these and other benefits by prioritizing climate policies that concurrently address development challenges, reforming the energy market structure to favor solar and wind, and leveraging green industries to advance a just transition.
Topic:
Climate Change, Economy, Carbon Emissions, and Net Zero
Political Geography:
Indonesia and Southeast Asia

186. The Transition From an Intensity to an Absolute Emissions Cap in China’s National Emissions Trading System

Author:
Duan Maosheng
Publication Date:
03-2023
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
The unique characteristics of China's economic development and electricity marketization have resulted in the implementation of a bottom-up intensity-based emissions cap in China’s national emissions trading system (ETS) in its early stages. However, the efficacy of the bottom-up cap-setting approach remains controversial, particularly with regard to achieving emission reduction goals and cost-effectiveness. In response to China's "dual carbon" targets and updated Nationally Determined Contributions (NDC), China’s national ETS shall gradually shift towards a real cap-and-trade system, with a transition period when a hybrid system, which has an absolute control cap beside the intensity cap, is implemented. The Transition from an Intensity to an Absolute Emissions Cap in China’s National Emissions Trading System examines the cap-setting approaches used in ETSs in China, the underlying reasons for choosing intensity caps in China, and major issues related to the transition from an intensity cap to an absolute cap in China’s national ETS.
Topic:
Climate Change, Economy, Trade, and Carbon Emissions
Political Geography:
China and Asia

187. Strengthening Regional Supply Chain Resiliency Through the Indo-Pacific Economic Framework (IPEF)

Author:
Han-Koo Yeo and Wendy Cutler
Publication Date:
05-2023
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
In recent years, supply chain disruptions have become commonplace, resulting in governments and businesses rethinking long-held strategies, such as “cost and efficiency,” “just-in-time,” and “offshoring.” Facing shortages of products ranging from personal protective equipment (PPE) to automotive semiconductors, governments have had to mobilize quickly to deal with crises, often cobbling together a series of temporary and ad hoc measures. However, it has become clear that no country can prevent or cope with these disruptions alone. A collective approach, especially among like-minded countries, can greatly enhance supply chain resiliency and security. The Indo-Pacific Economic Framework (IPEF)1 is one of the most promising international economic negotiations for addressing supply chain issues. Launched by the Biden administration in May 2022, IPEF is a blueprint for U.S. economic engagement in the region with 14 partners representing 40% of global GDP. Of its four pillars, the Supply Chain Pillar has attracted considerable attention. In many ways, this area is a clean slate, paving the way for creative thinking on rules and cooperation mechanisms to minimize disruptions. IPEF negotiators are making meaningful progress on their supply chain work, with early harvest agreements possibly being announced in late May this year, around the time of the APEC Ministers Responsible for Trade (MRT) meeting in Detroit, Michigan. With this in mind, we recommend a series of proposals to strengthen and expand the work of IPEF, both on a sector-wide basis and on critical minerals and materials, which could serve as a pilot for work in other sectors. We recommend important elements that should be included in an “early warning system” and “crisis response mechanism” to make these tools as robust and impactful as possible. We also suggest that IPEF members agree to World Trade Organization plus rules to deter the imposition of export restrictions and facilitate customs processing and essential cross-border movement of products and people during times of supply chain shortage. Finally, we underscore the benefits of supply chain connectivity and co-investment opportunities that can be generated through work in this pillar, especially for the developing country members of IPEF. Regarding critical minerals and materials, we offer several recommendations to cooperate on supply chain mapping, as well as streamlining and harmonizing regulations and standards. Furthermore, we suggest developing a “swap system” to be drawn from the financial “currency swap” mechanisms as a collective response that encourages countries to share their stockpiles during times of severe supply crises. Finally, we propose that Washington negotiate critical minerals and materials agreements similar to the one recently signed with Japan to make other IPEF members eligible for electric vehicle tax credits under the Inflation Reduction Act. Our recommended policy proposals will take time to implement and could be taken up in phases. For 2023, we propose focusing on sector-wide outcomes and starting work on critical minerals and materials, which could continue into 2024. Next year would also be an opportune time to build on the cooperation mechanisms to make them more beneficial and relevant. It may also be worthwhile to consider a market access component to this effort. The IPEF Supply Chain Pillar provides a promising opportunity for the United States and its regional partners to set a new course in reshaping more resilient and secure supply chain networks.
Topic:
Economy, Resilience, COVID-19, and Supply Chains
Political Geography:
Indo-Pacific

188. Economic and Environmental Impacts of China’s New Nationwide CO2 Emissions Trading System

Author:
Lawrence Goulder, Xianling Long, Chenfei Qu, and Da Zhang
Publication Date:
05-2023
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
China’s National Emissions Trading System (ETS) has already become the world’s largest ETS and is expected to contribute substantially toward meeting China’s pledge to peak its carbon emissions before 2030 and achieve carbon neutrality before 2060. The new system is based on a tradable performance standard (TPS), a rate-based system under which each covered facility receives from the government in each compliance period a certain number of emissions allowances based on its output and the government’s assigned “benchmark” ratio of emissions per unit of output. Economic and Environmental Impacts of China’s New Nationwide CO2 Emissions Trading System describes the results from a multi-sector multi-period general equilibrium model designed to assess the potential economic, energy mix, and emissions impacts of different future policy options under China’s National ETS over the period 2020–2035, by sector and province and in the aggregate
Topic:
Environment, Economy, Trade, and Carbon Emissions
Political Geography:
China and Asia

189. Chinese foreign policy in 2023: Stepping back from the brink

Author:
Thomas Eder
Publication Date:
01-2023
Content Type:
Special Report
Institution:
Austrian Institute for International Affairs (OIIP)
Abstract:
When it comes to Chinese foreign policy in 2023, decision-makers in Austria and Europe have to most importantly consider three partly interrelated and highly topical questions that are and should be preoccupying China researchers. Will China escalate its support for Russia during the war in Ukraine? Will China invade Taiwan? How will China’s protest movement and exit from Zero-COVID impact foreign policy? Further trends in China research will address the need to employ digital methods due to a lack of access for fieldwork (COVID or political restrictions) (BCCN 2022), the importance of protests more broadly (labour issues or Hong Kong democracy) (Wei and Chan 2022; Cheng et al 2022), and the fragility of a centralized system around Xi Jinping with no succession plan as Xi enters his third term as president in March 2023 (Tsang and Cheung 2021). Following Russia’s full invasion of Ukraine, Beijing has supported Moscow in the informational and diplomatic domain, but has remained self-interested in the economic domain, and has not shifted from previous policies in the military domain (Chestnut Greitens 2022, 751). China needs Russia as a partner in mounting a (normative) challenge to US power and the liberal international order (Johnston 2022, 1307), gaining influence in multilateral institutions (Wang and Sampson 2022, 374), and preserving the Communist Party regime (Pavel, Kirchberger and Sinjen 2022, 295). The Chinese leadership would like to see a Russian victory, and dreads a defeatinduced regime collapse in Moscow (Lo 2022). Beijing has condemned the West for provoking the war and for imposing sanctions. In the UN, China abstained or voted for Russia. At the same time, since the beginning of the war, bilateral trade has grown significantly. Yet, Chinese companies and banks have partly withdrawn or broken off ties with Russian counterparts to steer clear of secondary sanctions. Moreover, while joint military exercises continue, there is no clear evidence for arms or equipment deliveries.
Topic:
Foreign Policy, Geopolitics, Economy, and COVID-19
Political Geography:
China and Asia

190. Green Hydrogen Industrial Value Chains: Geopolitical and Market Implications

Author:
Nicola De Blasio and Laima Eicke
Publication Date:
02-2023
Content Type:
Policy Brief
Institution:
Belfer Center for Science and International Affairs, Harvard University
Abstract:
The global transition to a low-carbon economy and adopting the needed clean energy technologies at scale will significantly impact existing value chains1 and transform production-to-consumption lifecycles. Regulatory and business models will need to rapidly evolve to manage the resulting substantial cost challenges and dramatic shifts in stakeholder interactions while continuing to create value. Green hydrogen2 is likely to play a pivotal role in a carbon-free future, as its adoption will enable the decarbonization of energy-intensive industrial processes whose emissions are hard to abate through simple electrification—such as steel and cement production. However, to take advantage of the economic opportunities created by its adoption at scale, countries will need to rethink the roles they could play in a new energy landscape and define strategic industrial policies accordingly. Our research3 shows how successful industrial policies must reflect a country’s potential value chain positioning in future green hydrogen markets and elucidates macro geopolitical trends that could reshape international relations as countries compete for industrial leadership, market shares, and opportunities for job creation.
Topic:
Markets, Economy, Carbon Emissions, Value Chains, Hydrogen, and Green Economy
Political Geography:
Global Focus