Sustainable development is failing but there are alternatives to capitalism | Guardian Sustainable Business | The Guardian

Sustainable development is failing but there are alternatives to capitalism | Guardian Sustainable Business | The Guardian

Don't know what sort of jobs to create for young people? Here are some ideas | Richard Watson | Comment is free | guardian.co.uk

http://www.guardian.co.uk/commentisfree/2013/jul/02/young-people-jobs-future-ideas#start-of-comments

The Potential Role of a Carbon Tax in U.S. Fiscal Reform

Executive Summary This paper examines fiscal reform options in the United States with an intertemporal computable general equilibrium model of the world economy called G-Cubed. Six policy scenarios explore two overarching issues: (1) the effects of a carbon tax under alternative assumptions about the use of the resulting revenue, and (2) the effects of alternative measures that could be used to reduce the budget deficit. We examine a simple excise tax on the carbon content of fossil fuels in the U.S. energy sector starting immediately at $15 per metric ton of carbon dioxide (CO2) and rising at 4 percent above inflation each year through 2050. We investigate policies that allow the revenue from the illustrative carbon tax to reduce the long run federal budget deficit or the marginal tax rates on labor and capital income. We also compare the carbon tax to other means of reducing the deficit by the same amount. We find that the carbon tax will raise considerable revenue: $80 billion at the outset, rising to $170 billion in 2030 and $310 billion by 2050. It also significantly reduces U.S. CO2 emissions by an amount that is largely independent of the use of the revenue. By 2050, annual CO2 emissions fall by 2.5 billion metric tons (BMT), or 34 percent, relative to baseline, and cumulative emissions fall by 40 BMT through 2050. See full Article.

Green Domestic Product?

One of the recurrent themes at the United Nations’ spectacularly unsuccessful Rio+20 summit in June was the need to change how we measure wealth. Many argue that we must abandon our “obsession” with Gross Domestic Product and develop a new “green” accounting standard to replace it. In fact, doing so could be a serious mistake. GDP is really just an account of the market value of all goods and services. This sounds like a good indicator of wealth, but, as is frequently pointed out, it includes things that do not make us richer and leaves out things that do. For example, if people are not compensated for the harm done by pollution, its adverse effects will not be included in GDP. If we pay to clean up pollution, this increases GDP, but no wealth has been created. Likewise, there is economic value produced when wastewater is naturally cleaned by wetlands, but no transaction has occurred, so it is not counted in GDP. See full Article.

Is economic growth incompatible with sustainable development?

It is easier to point out the problems than find a systemic solution, but it is vital that we are able to articulate a better future

In the next few days I am taking part in a debate with the minister of state for energy and climate change, Charles Hendry, on the subject of whether economic growth is incompatible with sustainable development.

See full Article.

Poor Economics

A Radical Rethinking of the Way to Fight Global Poverty

The most significant increase in understanding in development economics in recent years has come from the growth of randomized control trials (RCTs) to learn about the behavior of individuals in poor countries. The intellectual entrepreneurs and founders of RCTs, Abhijit Banerjee and Esther Duflo, have synthesized a large number of results and proceeded to draw inferences for policies designed to lift the poor out of poverty in this eminently readable and important book.

As their name implies, RCTs study the responses of various groups of individuals or firms, controlling for other characteristics that influence behavior, when confronted with a new set of circumstances.

See full Review.

Economics, Ecology, and Ethics

Rationale

Over the last two decades, ecological economics has emerged as a vital new arena for interdisciplinary research, building the conceptual foundations for a new paradigm of economics and development. While the field struggles to gain acceptance within the narrow and traditional schools of economic thought, the tumultuous recent reality of the national and global economy has demonstrated the need for fresh thinking on the essential connections among ecology, ethics, and economics. As new fields and interdisciplinary approaches emerge, history remains an essential tool to understand the evolution of ideas. This project will examine the history of modern economics through the lens of ecological science, economic history, and environmental ethics.

See full Details.

Countries with the worst Misery Index

The stars are as follows:

1. Venezuela
   
2. South Africa
   
3. Vietman
   
4. Spain
   
5. Egypt
   
6. Lithuania
   
7. India
   
8. Greece
   
9. Oman
   
10. Pakistan
    
11. Turkey
    
12. Jordan
    
13. Latvia
    
14. Ireland
    
15. Argentina

See full Article.

Econbrowser: Measuring systemic financial risk

On a recent visit to UCSD, NYU Professor and Nobel Laureate Rob Engle called my attention to the NYU Stern Volatility Laboratory, a great resource that anyone can use to get some very interesting real-time analysis. Here I'd like to describe some of the features available for assessing the systemic risk posed by financial institutions.

The first step that Engle and colleagues propose is to calculate what they call the Marginal Expected Shortfall (MES) associated with a given financial institution. This is an estimate, based on recent dynamic variances and correlations of observed stock prices, of how much the stock valuation of a given institution would be expected to fall today if the overall market were to decline by more than 2%. This is essentially a time-varying tail-event beta, details of whose estimation can be found here.

See full Article.

Introduction to climate economics: Why even strong climate action has such a low total cost

In its definitive 2007 synthesis report of the scientific literature, the Intergovernmental Panel on Climate Change (IPCC) concluded:

In 2050, global average macro-economic costs for mitigation towards stabilisation between 710 and 445ppm CO2-eq are between a 1% gain and 5.5% decrease of global GDP. This corresponds to slowing average annual global GDP growth by less than 0.12 percentage points.

So global GDP drops by under 0.12% per year — about one tenth of a penny on the dollar — even in the 445 ppm CO2-eq case (through 2050, see Table SPM.7). And this is for stabilization at 445 ppm CO2-eq, which is stabilization at 350 ppm CO2 (see Table SPM.6).

And that has a very good chance of averting the incalculable cost of catastrophic global warming impacts to the next 50 generations, which means the cost of action is far, far less than the cost of inaction.

See full Article.

Meeting today’s financial challenges

The business and financial landscape is being transformed by a number of global events and trends, which are creating many challenges in the financial and accounting environment.
Five challenges in today’s transformed financial landscape

We have identified five key challenges that have emerged for management, boards and audit committees in the financial and accounting environment:

1. Corporate governance, new rules and higher expectations
* Corporate governance reform is at the top of investor, regulator and board agendas. Organizations face the prospect of new governance rules and higher expectations.
* Boards and audit committees will need to take an increasingly broader view of enterprise and external risks, and ask tough questions of management to fully understand the controls in place and any proposed changes to managing the key risks that could impact the organization’s overall performance.

See full Report.

Understanding the forces transforming our world

Change has always been a constant in the business world. Yet in recent years it has hit us with an unprecedented speed and intensity. The forces shaping our world today are immense, complex, surprising and challenging.

More than ever, our prosperity — as organizations, societies and individuals — depends on the extent to which we can adapt to these forces and deploy them to our advantage.

In the current economic climate, we may be tempted to focus our attention only on immediate, fast-changing events, but we cannot afford to ignore longer-term trends if we want to be positioned for market leadership in the future.

See full Article, in pdf format.

Economic growth no longer possible for rich countries, says new research

As economists and politicians anticipate the publication of official figures for UK economic growth and the World Economic Forum gathers at Davos, new research from independent think-tank nef, warns that we should be wary of celebrating rising GDP.

The report, Growth Isn’t Possible: Why rich nations need a new economic direction, published today, Monday 25 January 2010, presents evidence that endless economic growth isn’t possible when faced with the threat of climate change and other critical environmental boundaries.

In a unique analysis, the authors assessed a combination of the leading models for climate change and energy use in the global economy. They then asked whether global economic growth could be maintained, while retaining a good likelihood of limiting global temperature rise to 2 °C, the agreed political objective of the European Union and considered the maximum rise to which humanity could adapt without serious difficulty. They found that this would require unprecedented and probably impossible reductions in the carbon intensity of a growing economy. None of the models or variations looked at could square the circle of global economic growth with climate safety. Their analysis shows that:

See full Report.

Global Interdependence: Are the U.S and Other Markets 'Sowing the Seeds' for the Next Crisis?

Despite renewed GDP growth and other positive signs, the U.S. isn't out of the woods, says Wharton finance professor Franklin Allen. In fact, the country could be heading into a "double dip" scenario that tips it back into a recession. That depends on how a number of factors play out in the coming months -- or even years -- not only in the U.S., but also around the world. Global interest rate policies, property markets and public deficits will all demand attention, Allen notes in a recent interview with Knowledge@Wharton.

The following is an edited transcript of the conversation.

Knowledge@Wharton: Lots of experts seem to think that the U.S. recession ended a few months ago or sometime recently. What do you think about that?

Franklin Allen: They are probably right and it did. The question is whether we are going to have a double dip [with the U.S. going] back into recession.

See full Article.

Climate change: the biggest threat to economic recovery

Angel Gurría, Secretary-General of the OECD, and James P. Leape, Director General of WWF International

After a year of pain and pessimism, we are starting to see signs of an economic recovery. Green shoots are sprouting. Governments' bold economic and financial actions of over the past year are beginning to take effect.

But we are not out of the woods yet. We now need to make sure that recovery is sustained, and for that bold action on climate change will be needed. As world leaders prepare for the UN climate change talks in Copenhagen this December, one of their top priorities must be to move their economies towards a low-carbon future.

Business as usual is not an option if the economic recovery is to be sustained. If we carry on increasing greenhouse gas emissions, the resulting climate change will lead to massive upheavals: floods and droughts, more violent storms, more intense heat waves, escalating conflicts over food and water and resources.

See full Article.

Economic Downturn an Opportunity for CCOs

A Chief Compliance Officer’s Opportunity to Capitalize on the Current Economic Downturn

The recession can fuel a rise in fraud and other crimes committed by employees, but it can also act as a catalyst for strengthening the systems in place for detecting and deterring corporate malfeasance. According to The Network’s Quarterly Corporate Fraud Index, the number of fraudulent-related incident reports across all industries nearly doubled to 21% in the first quarter of 2009 from 10.9% in the first quarter of 2006.

While it appears that the level of identified acts of fraud has risen, it is difficult to discern if there actually has been an increase in fraudulent acts. It may be that the level of fraud has remained consistent but more acts are being identified due to the rise in reporting activity. During times of economic stress, companies experience tightened budgets and a reduction in employees, resulting in high tension and low morale. As an employee’s level of apprehension toward the security of their own job increases, they are more apt to report incidents of unethical workplace activity that further threaten the stability of their organization.

But as with many situations of adversity, an opportunity presents itself. For a Chief Compliance Officer (CCO), this is an ideal circumstance to strengthen their company’s ethics and compliance programs.

But as with many situations of adversity, an opportunity presents itself. For a Chief Compliance Officer (CCO), this is an ideal circumstance to strengthen their company’s ethics and compliance programs.

See full Article.

The crisis—one year on: McKinsey Global Economic Conditions Survey results

The crisis—one year on: McKinsey Global Economic Conditions Survey results, September 2009
A year after the global economic system nearly collapsed, many companies are finally finding ways to increase profits under the new conditions. But almost as many expect profits to continue falling, and executives also indicate that their broader financial hopes remain fragile. Many expect more government involvement in economies and industries over the long term.

* Page 1: Introduction
* Page 2: The path to now
o Exhibit 1: Economic outlook
* Page 3: Anxious hope for the future
o Exhibit 2: Why executives expect what they do
* Page 4: Corporate priorities one year on
o Exhibit 3: Profit, hiring, and demand outlook
o Exhibit 4: What matters most
* Page 5: The world in five years
o Exhibit 5: Whither globalization
o Exhibit 6: Long-term changes to industries

See full Press Release.

Income concentration - Top heavy

A quarter of America's total income is earned by the top 1%

AMERICA is the wealthiest country in the world and its rich keep earning more. In 2007, the latest year for which data are available, the top 1% increased their share of the country's income to 23.5%, according to analysis of tax returns by a pair of economists, Emmanuel Saez and Thomas Piketty.

See full Article.

Your Career, Our Economy: Stakes Are High When Finance Professionals Let Ethics Slide

Bernie Madoff. AIG. Allen Stanford. When Marianne Jennings talks to her undergraduate students about business ethics these days, those are the subjects they want to talk about.

Not surprisingly, Jennings says, the students often take a somewhat black-and-white view of things: Madoff was a crook; Stanford was a swindler; those execs at AIG were reckless, irresponsible, and had absolutely no right to take those big bonuses -- not after the carnage they caused. Blame it on the executives, the students say. It's the guys in the executive suite who can't be trusted.

Not so fast, says Jennings.

See full Article.

Global Economic Governance: Europe's Hard Choice

Expert's Comment - 28 September 2009
Paola Subacchi, Research Director, International Economics

It was feared to signal a loss of momentum, but the G20 Summit in Pittsburgh started with a bang and ended up covering a huge amount of ground.

Earlier than expected President Obama revealed his preferences for the future outlook of global economic governance. He put on the table two of the issues which had been looming for some time. The first is the recognition of the G20 as the permanent forum for international cooperation and the second the reform of the IMF board.

These two issues are implicitly related, as they both recognize that the balance of power needs to be tilted towards the new rising powers. Streamlining the G process - something which President Obama had hinted at during this year's G8 in Italy - and shifting responsibilities from the G8 to the G20 would imply a dilution of influence for some of the G8 countries, in particular Italy and Canada, and to some extent Japan at the regional level.

See full Article.