Search

Begin New Search Political Geography United States Content Type Working Paper Publication Year within 25 Years

101. Downsizing Defense in Development: Unpacking DOD’s Development Assistance

Author:
Sarah Rose
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The US Department of Defense (DOD) is not a development agency, but it does manage millions of dollars of development assistance. In the early 2000s, DOD took on a significantly expanded development role, prompting a number of concerns and creating a lingering perception of intensive US military involvement in development activities. In fact, lessons learned from this era drove a reconceptualization of the Pentagon’s role in development. Today, the military controls only a tiny portion of US development funds, most of which go toward health (mainly PEPFAR) and disaster relief activities. This paper provides a brief landscape analysis of DOD’s recent development aid-funded efforts, breaking down its engagement into six key thematic areas. It concludes with five considerations related to DOD’s role in development assistance: (1) DOD has comparative advantages that make it an important actor in US development policy; (2) civilian-military coordination is hard but critical for development policy coherence; (3) adequate resourcing of civilian agencies is critical for effective civilian-military division of labor; (4) increasing the flexibility of civilian agencies’ staffing, programming, and funding could complement the military’s rapid response capabilities; and (5) incomplete transparency and limited focus on results reduces accountability around DOD’s aid investments.
Topic:
Defense Policy, Development, Military Strategy, Bureaucracy, and Civil-Military Relations
Political Geography:
United States and North America

102. Developing a More Inclusive US Trade Policy at Home and Abroad

Author:
Kimberly Ann Elliott
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
American policymakers have failed to adequately respond to concerns about globalization’s effects and the resulting backlash has taken an ugly turn in recent years. While globalization is only one of many factors contributing to economic dislocation, sluggish wage growth and inequality in the United States, foreigners, and developing countries in particular, are frequently the target of those who are frustrated at being left behind. Yet few realize that US trade policy effectively discriminates against poorer countries. In addition, provisions in trade agreements that tilt the playing field in favor of business interests over those of American consumers and workers also often undermine development priorities in partner countries. American policymakers should rethink the substance and process of trade policy and negotiations to spread the benefits more broadly, at home and abroad.
Topic:
Globalization, International Trade and Finance, Inequality, and Domestic Policy
Political Geography:
United States and North America

103. Beyond Connectivity: How California Libraries Can Leverage Bandwidth to Advance Community Goals

Author:
John Horrigan
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Aspen Institute
Abstract:
Written by John Horrigan, this report unveils a set of opportunities and recommendations for strengthening local innovation and resetting community expectations, using public libraries and their gigabit-plus broadband capacity as a fulcrum. With a focus on California Public libraries, the report suggests how library broadband can be used to address statewide goals for universal pre-kindergarten, youth learning and engagement, and civic participation especially with regards to the 2020 Census and elections.
Topic:
Education, Infrastructure, Internet, Community, and Libraries
Political Geography:
United States, California, and North America

104. The Global Impact of Brexit Uncertainty

Author:
Tarek A. Hassan, Laurence van Lent, Stephan Hollander, and Ahmed Tahoun
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Using tools from computational linguistics, we construct new measures of the impact of Brexit on listed firms in the United States and around the world: the share of discussions in quarterly earnings conference calls on costs, benefits, and risks associated with the UK’s intention to leave the EU. Using this approach, we identify which firms expect to gain or lose from Brexit and which are most affected by Brexit uncertainty. We then estimate the effects of these different kinds of Brexit exposure on firm-level outcomes. We find that concerns about Brexit-related uncertainty extend far beyond British or even European firms. US and international firms most exposed to Brexit uncertainty have lost a substantial fraction of their market value and have reduced hiring and investment. In addition to Brexit uncertainty (the second moment), we find that international firms overwhelmingly expect negative direct effects of Brexit (the first moment), should it come to pass. Most prominently, firms expect difficulties resulting from regulatory divergence, reduced labor mobility, trade access, and the costs of adjusting their operations post-Brexit. Consistent with the predictions of canonical theory, this negative sentiment is recognized and priced in stock markets but has not yet had significant effects on firm actions.
Topic:
Economics, Political Economy, Regional Cooperation, Brexit, Global Political Economy, and Economic Policy
Political Geography:
Britain, United States, United Kingdom, Europe, and European Union

105. The Political Economy of Europe since 1945: A Kaleckian perspective

Author:
Joseph Halevi
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper analyzes the early stages of the formation of the Common Market. The period covered runs from the end of WW2 to 1959, which is the year in which the European Payments Union ceased to operate. The essay begins by highlighting the differences between the prewar political economy of Europe and the new dimensions and institutions brought in by the United States after 1945. It focuses on the marginalization of Britain and on the relaunching of French great power ambitions and how the latter determined, in a very problematical way, the European complexion of France. Because of France’s imperial aspirations, France, not West Germany, emerged as the politically crisis prone country of Europe acting as a factor of instability thereby jeopardizing the process of European integration, Among the large European nations, Germany and Italy appear, for opposite economic reasons, as the countries most focused on furthering integration. Germany expressed the strongest form of neomercantilism while Italy the weakest.
Topic:
Economics, Political Economy, Global Political Economy, World War II, and Common Market
Political Geography:
United States, Europe, Germany, and Global Focus

106. Synthetic MMT: Old Line Keynesianism with an Expansionary Twist

Author:
Lance Taylor
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Expansionary macroeconomic policy with a strong redistributive component is an attractive proposition, most recently launched on the basis of Modern Monetary Theory or MMT. The Theory is a synthesis of familiar ideas, newly relevant but scarcely path-breaking. Its basics – Chartalist or fiat money, functional finance, and models based on consistent national accounting – come straight from Maynard Keynes, Abba Lerner, and Wynne Godley. Functional finance is the heart of fiscalist Keynesianism built upon automatic stabilizers for the business cycle. MMT’s job guarantee proposal is one more stabilizer which could be a modest helpful supplement to the system which exists. National accounting comparisons of a possible MMT package with the 2008 crash and the Trump tax cut are presented with emphasis on autonomous shifts in demand. The package could have problems with debt sustainability and external balance. Inflation is unlikely if wage repression in the USA is not reversed. But strong wage increases are presumably a goal of MMT.
Topic:
Economics, Monetary Policy, Finance, Economic Theory, Macroeconomics, and Money
Political Geography:
United States

107. Big Tech Acquisitions and the Potential Competition Doctrine: The Case of Facebook

Author:
Catherine Ruetschli and Mark Glick
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The Big Tech companies, including Google, Facebook, Amazon, Microsoft and Apple, have individually and collectively engaged in an unprecedented number of acquisitions.When a dominant firm purchases a start-up that could be a future entrant and thereby increase competitive rivalry, it raises a potential competition issue. Unfortunately, the antitrust law of potential competition mergers is ill-equipped to address tech mergers. We contend that the Chicago School’s assumptions and policy prescriptions hobbled antitrust law and policy on potential competition mergers. We illustrate this problem with the example of Facebook. Facebook has engaged in 90 completed acquisitions in its short history (documented in the Appendix to this paper). Many antitrust commentators have focused on the Instagram and WhatsApp acquisitions as cases of mergers that have reduced potential competition. We show the impotence of the potential competition doctrine applied to these two acquisitions. We suggest that the remedy for Chicago School damage to the potential competition doctrine is a return to an empirically tractable structural approach to potential competition mergers.
Topic:
Economics, Science and Technology, Communications, Law, Digital Economy, Macroeconomics, Monopoly, and Antitrust Law
Political Geography:
United States

108. American Gothic: How Chicago Economics Distorts “Consumer Welfare” in Antitrust

Author:
Mark Glick
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Since the publication of Robert Bork’s The Antitrust Paradox, lawyers, judges, and many economists have defended “Consumer welfare” (CW) as a standard for decisions about antitrust goals and enforcement priorities. This paper argues that the CW is actually an empty concept and is an inappropriate goal for antitrust. Welfare economists concede that there is no credible measurable link between price and output and human well-being. This means that the concept of CW does not legitimate limited antitrust enforcement, nor does it justify the exclusion of other antitrust goals that require more active enforcement practices. This paper contends that antitrust policy is not welfare based at all, and that if it were, antitrust policy and enforcement would differ significantly from the Chicago School vision. Without the fiction that economists can establish that in the short run lower price and higher output measurably increases welfare more than other goals, recent defenses of the CW standard resolve down to arguments based on unsupported assumptions.
Topic:
Economics, Law, Legal Theory, Economic Theory, Macroeconomics, Antitrust Law, and Microeconomics
Political Geography:
United States

109. Firm-Level Political Risk: Measurement and Effects

Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
We validate our measure by showing it correctly identifies calls containing extensive conversations on risks that are political in nature, that it varies intuitively over time and across sectors, and that it correlates with the firm’s actions and stock market volatility in a manner that is highly indicative of political risk. Firms exposed to political risk retrench hiring and investment and actively lobby and donate to politicians. These results continue to hold after controlling for news about the mean (as opposed to the variance) of political shocks. Interestingly, the vast majority of the variation in our measure is at the firm level rather than at the aggregate or sector level, in the sense that it is neither captured by the interaction of sector and time fixed effects, nor by heterogeneous exposure of individual firms to aggregate political risk. The dispersion of this firm-level political risk increases significantly at times with high aggregate political risk. Decomposing our measure of political risk by topic, we find that firms that devote more time to discussing risks associated with a given political topic tend to increase lobbying on that topic, but not on other topics, in the following quarter.
Topic:
Economics, Economy, Business, and Risk
Political Geography:
United States

110. Expansionary Austerity and Reverse Causality: A Critique of the Conventional Approach

Author:
Christian Breuer
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
In this paper we methodologically review and criticize a broad literature of empirical work on the effects of fiscal policy (the ‘conventional approach’). Beyond previous critiques of this approach, we show that the cyclical adjustment strategy as used in this literature entails erroneous assumptions that necessarily produce flawed results in support of expansionary austerity. Specifically, the cyclically-adjusted primary balance (CAPB) strategy this literature employs fails to correct for cyclical effects in the expenditure- GDP-ratio, so that the estimates of the results of expansionary fiscal consolidation are affected by reverse causality, i.e. increasing GDP causally decreases expenditure-GDP- ratios, rather than vice versa. We provide suggestions on how to fix this incomplete cyclical adjustment problem with a new approach. After replicating two famous articles of the conventional literature and controlling for this bias, the expansionary effects of fiscal adjustments disappear or turn into their opposite
Topic:
Economics, Macroeconomics, and Fiscal Policy
Political Geography:
United States

111. Macroeconomic Management Meets the New Economy

Author:
Commission on Global Economic Transformation
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Finance and the macroeconomy, both policy and industry practices as well as academic research, have evolved substantially in recent years. While the old questions of business cycles, macroeconomic management, financial regulation, and social protection are still being debated, we are now confronted with new developments in the economy, characterized by digital technology, new modes of production and business models, and changing employment relations. Macroeconomics and finance need urgent rethinking as the global economy transforms. Our gathering on March 5, 2019 brought together economists, policymakers, financial regulators, and industry practitioners from around the world. We heard diverse perspectives on multilateralism, pension and labor market reform, international trade, and risks in the world economy, and we grappled with issues on stagnant wages, public debt, fiscal and monetary policy, and banking reforms. Our discussion was by no means exhaustive or conclusive, but we attempted to harness the group’s collective wisdom to address some of the most prominent questions of our day. This document is intended to inform our commissioners as they develop CGET’s final report and to share our timely conversation with policymakers and the general public. Fomenting multidisciplinary, critical discourse is one of the most important responsibilities of this initiative, and we sincerely thank the staff at the Institute for New Economic Thinking (INET), our dedicated Commissioners, and our outside experts for helping us to promote this dialogue.
Topic:
Economics, Industrial Policy, Regulation, Digital Economy, Economic Theory, and Macroeconomics
Political Geography:
United States and Global Focus

112. Demand-determined potential output: a revision and update of Okun’s original method

Author:
Claudia Fontanari, Antonella Palumbo, and Chiara Salvatori
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper challenges the mainstream view of potential output, and enquires into the supposed effects of Great Recession on potential growth. We identify in the demand-led growth perspective a more promising theoretical framework both to define the notion and to gauge the long-term effects of a demand slow down. Based on the poor reliability of standard estimates of potential output, we also propose an alternative calculation. This is based on an update of Arthur M. Okun’s original method for estimating potential output, which, differently from the estimation methods currently in use, does not rely on the notion of NAIRU, thus being immune to its theoretical and empirical shortcomings. Our calculation, based on a re-estimation of Okun’s Law on US quarterly data, shows both how far an economy generally operates from its production possibilities, and how much potential growth is affected by the actual growth of demand over time. These wide margins for expansion of actual and potential output growth imply that a determined policy of demand expansion would create, given time, the very capacity that justifies it.
Topic:
Economics, Global Recession, Economic Growth, Macroeconomics, and Demand
Political Geography:
United States and Global Focus

113. Technological Disruption in the Global Economy

Author:
Commission on Global Economic Transformation
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Technology has become the most powerful disruptive force in our economy. It bears on the future of work, competition, market power, and national security, and it binds the other major areas of our commission’s investigation: macroeconomics and finance, globalization, and climate change. In essence, technological progress propels global economic transformation. Our gathering on February 6, 2019 brought economists together with leading voices from academia, labor, private industry, and the nonprofit/NGO sector. We heard from industry leaders with deep roots and history in the Silicon Valley technology revolution, academics who have also spent time in the policy arena, and from individuals who are already considering new models and approaches to digital rights and the future of work. Our discussion was by no means exhaustive or conclusive, but we attempted to harness the group’s collective wisdom to address some of the most vexing questions of our day. This document is intended to inform our commissioners as they develop CGET’s final report and to share our timely conversation with policymakers and the general public. Fomenting multidisciplinary, critical discourse is one of the most important responsibilities of this initiative, and we sincerely thank the staff at the Institute for New Economic Thinking (INET), our dedicated commissioners, and our outside thought leaders for helping us to promote this dialogue.
Topic:
Economics, Science and Technology, Global Markets, Digital Economy, Global Political Economy, and Macroeconomics
Political Geography:
United States and Global Focus

114. Economic Consequences of the U.S. Convict Labor System

Author:
Michael Poyker
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
I study the economic externalities of convict labor on local labor markets and firms. Using newly collected panel data on U.S. prisons and convict-labor camps from 1886 to 1940, I calculate each county’s exposure to prisons. I exploit quasi-random variation in county’s exposure to capacities of pre-convict-labor prisons as an instrument. I find that competition from cheap prison-made goods led to higher unemployment, lower labor-force participation, and reduced wages (particularly for women) in counties that housed competing manufacturing industries. The introduction of convict labor accounts for 0.5 percentage-point slower annual growth in manufacturing wages during 1880– 1900. At the same time, affected industries had to innovate away from the competition and thus had higher patenting rates. I also document that technological changes in affected industries were capital-biased.
Topic:
Economics, Political Economy, Labor Issues, Capitalism, Domestic Politics, Macroeconomics, Mass Incarceration, and Manufacturing
Political Geography:
United States

115. The Knightian Uncertainty Hypothesis: Unforeseeable Change and Muth’s Consistency Constraint in Modeling Aggregate Outcomes

Author:
Roman Frydman, Søren Johansen, Anders Rahbek, and Morten Tabor
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper introduces the Knightian Uncertainty Hypothesis (KUH), a new approach to macroeconomics and finance theory. KUH rests on a novel mathematical framework that characterizes both measurable and Knightian uncertainty about economic outcomes. Relying on this framework and John Muth’s pathbreaking hypothesis, KUH represents participants’ forecasts to be consistent with both uncertainties. KUH thus enables models of aggregate outcomes that 1) are premised on market participants’ rationality, and 2) yet accord a role to both fundamental and psychological (and other non-fundamental) factors in driving outcomes. The paper also suggests how a KUH model’s quantitative predictions can be confronted with time-series data.
Topic:
Economics, Markets, Economic Theory, Macroeconomics, and Mathematics
Political Geography:
United States

116. The Contributions of Socioeconomic and Opioid Supply Factors to Geographic Variation in U.S. Drug Mortality Rates

Author:
Shannon Monnat
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Over the past two decades deaths from opioids and other drugs have grown to be a major U.S. population health problem, but the magnitude of the crisis varies across the U.S., and explanations for widespread geographic variation in the severity of the drug crisis are limited. An emerging debate is whether geographic differences in drug mortality rates are driven mostly by opioid supply factors or socioeconomic distress. To explore this topic, I examined relationships between county-level non-Hispanic white drug mortality rates for 2000-02 and 2014-16 and several socioeconomic and opioid supply measures across the urban-rural continuum and within different rural labor markets. Net of county demographic composition, average non-Hispanic white drug mortality rates are highest and increased the most in large metro counties. In 2014-16, the most rural counties had an average of 6.2 fewer deaths per 100,000 population than large metro counties. Economic distress, family distress, persistent population loss, and opioid supply factors (exposure to prescription opioids and fentanyl) are all associated with significantly higher drug mortality rates. However, the magnitude of associations varies across the urban-rural continuum and across different types of rural labor markets. In rural counties, economic distress appears to be a stronger predictor than opioid supply measures of drug mortality rates, but in urban counties, opioid supply factors are more strongly associated with drug mortality rates than is economic distress. Ultimately, the highest drug mortality rates are disproportionately concentrated in economically distressed mining and service sector dependent counties with high exposure to prescription opioids and fentanyl.
Topic:
Economics, Health, Inequality, Macroeconomics, and Drugs
Political Geography:
United States

117. Estimates of the Natural Rate of Interest and the Stance of Monetary Policies: A Critical Assessment

Author:
Enrico Sergio Levrero
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
After briefly mentioning the determinants of the natural rate of interest in the New Keynesian models, the paper discusses the different notions of it that we find in these models and the problems encountered when the natural rate is estimated. It states that these problems are not only related to the difficulties in distinguishing the kind and persistency of economic shocks, but pertain to theory, namely to model specification and the alleged independence of the average or normal interest rate from monetary policy. Following Keynes’s suggestion regarding the monetary nature of interest rates, some final remarks will thus be advanced on their effects on prices and income distribution as well as on the objectives and stance of monetary policies.
Topic:
Economics, Monetary Policy, Income Inequality, Macroeconomics, and Keynes
Political Geography:
United States and Global Focus

118. Finance in Economic Growth: Eating the Family Cow

Author:
Peter Temin
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
It is hard to fit finance into the measurement of national product and of economic growth, and similar problems bedevil efforts to include other intangible investments as well. I describe how our current accounts deal with these problems, and I argue that existing NIPA data fail to describe the future path of growth in our new economy because they lack output data on financial, human and social capital investments. They fail to show that the United States is consuming its capital stock now and will suffer later, rather like killing the family cow to have a steak dinner.
Topic:
Economics, Finance, Economic Growth, and Macroeconomics
Political Geography:
United States

119. Cross-Border E-Commerce: WTO discussions and multi-stakeholder roles – stocktaking and practical ways forward

Author:
Michael Kende1 and Nivedita Sen
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
E-commerce has long been recognized as a driver of growth of the digital economy, with the potential to promote economic development. The benefits come from lower transaction costs online, increased efficiency, and access to new markets. The smallest of vendors can join online marketplaces to increase their sales, while larger companies can use the Internet to join global value chains (GVCs), and the largest e-commerce providers are now among the most valuable companies in the world.
Topic:
Development, Economics, Science and Technology, World Trade Organization, Digital Economy, Economic Growth, and Free Trade
Political Geography:
United States, Europe, Switzerland, and Global Focus

120. Tax Audits as Scarecrows: Evidence from a Large-Scale Field Experiment

Author:
Ricardo Perez Truglia, Matias Giaccobasso, Guillermo Cruces, Rodrigo Ceni, and Marcelo Bergolo
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
The canonical model of Allingham and Sandmo (1972) predicts that firms evade taxes by optimally trading off between the costs and benefits of evasion. However, there is no direct evidence that firms react to audits in this way. We conducted a large-scale field experiment in collaboration with Uruguay’s tax authority to address this question. We sent letters to 20,440 small- and medium-sized firms that collectively paid more than 200 million dollars in taxes per year. Our letters provided exogenous yet nondeceptive signals about key inputs for their evasion decisions, such as audit probabilities and penalty rates. We measured the effect of these signals on their subsequent perceptions about the auditing process, based on survey data, as well as on the actual taxes paid, based on administrative data. We find that providing information about audits had a significant effect on tax compliance but in a manner that was inconsistent with Allingham and Sandmo (1972). Our findings are consistent with an alternative model, risk-as-feelings, in which messages about audits generate fear and induce probability neglect. According to this model, audits may deter tax evasion in the same way that scarecrows frighten off birds.
Topic:
Economics, Global Political Economy, Tax Systems, Economic Policy, and Macroeconomics
Political Geography:
United States, Argentina, and Global Focus

121. Oh Mother: The Neglected Impact of School Disruptions

Author:
David Jaume and Alexander Willén
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
Temporary school closures (TSC) represent a major challenge to policymakers across the globe due to their potential impact on instructional time and student achievement. A neglected but equally important question relates to how such closures affect the labor market behavior of parents. This paper provides novel evidence on the effect of temporary school closures on parental labor market behavior, exploiting the prevalence of primary school teacher strikes across time and provinces in Argentina. We find clear evidence that temporary school closures negatively impact the labor market participation of mothers, in particular lower-skilled mothers less attached to the labor force and mothers in dual-income households who face a lower opportunity cost of dropping out of the labor force. This effect translates into a statistically significant and economically meaningful reduction in labor earnings: the average mother whose child is exposed to ten days of TSCs suffers a decline in monthly labor earnings equivalent to 2.92% of the mean. While we do not find any effects among fathers in general, fathers with lower predicted earnings than their spouses also experience negative labor market effects. This suggests that the parental response to TSCs depend, at least in part, on the relative income of each parent. A back-of-the-envelope calculation suggest that the aggregate impact of TSCs on annual parental earnings is more than $113 million, and that the average mother would be willing to forego 1.6 months of labor earnings in order to ensure that there are no TSCs while her child is in primary school.
Topic:
Economics, Education, Markets, Political Economy, and Labor Issues
Political Geography:
United States

122. Exploring the Rationale for Decentralization in Iraq and its Constraints

Author:
Ali Al-Mawlawi
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Arab Reform Initiative (ARI)
Abstract:
The decentralization agenda emerged in Iraq after 2003 as an imperative to create an internal balance of power that would mitigate against the rise of another authoritarian regime. By exploring the political motivations and calculations of elites, this paper sheds light on why devolution of powers to sub-national entities failed to bring about meaningful change to the daily lives of ordinary Iraqis. While administrative authorities have been largely devolved, fiscal decentralization lags due to resistance from concerned central authorities, leaving sub-national actors with limited capacity to exercise their newly afforded powers.
Topic:
Authoritarianism, State Formation, State Building, and Decentralization
Political Geography:
United States, Iraq, Middle East, and Baghdad

123. Lebanon: Anger in Palestinian Refugee Camps Gives Rise to a New Mobilization for Dignity

Author:
Marie kortam
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Arab Reform Initiative (ARI)
Abstract:
Those who visited Palestinian camps in Lebanon last month could not have missed a new upsurge in the popular mobilization on Palestinian streets. Their enthusiasm can be sensed in the spirits of the youth, their chants, and round-the-clock occupation of public spaces. This upsurge in mobilization was not only the result of the Lebanese Labour Minister’s implementation of his plan1 to combat businesses employing foreign labour without a permit – after giving them one month to regularize their situation.2 It was also the outcome of an accumulated sense of frustration, injustice, humiliation, indignation, deprivation and finally, anger that crystallized in these latest rounds of collective political action. The question then remains: why have Palestinians in Lebanon reached a breaking point at this stage, and why did the movement take this shape? There is no doubt that this anger accumulated gradually. First, it arose from the political-security arrangement for Palestinians in Lebanon, along with the historical absence of a socio-political contract with the Lebanese state. Second, it is the outcome of the deprivation, oppression, racism, and discrimination against Palestinian refugees in Lebanon, which was finally exacerbated by international resolutions hostile to the Palestinian cause, threatening the refugee cause and the right of return. Moreover, the economic situation of Palestinian refugees has deteriorated and was further compounded after the USA cut off its funding for the United Nations Relief and Works Agency for Palestine Refugees (UNRWA). However, alone these factors are not enough to fully explain this mobilization. These latest developments are also the product of a degree of practical awareness among the Palestinian youth and their discourse which explains their involvement in a movement demanding civil rights and an arrangement in which Palestinians are an agent of change against injustice. This movement is also proof of the existence of a new paradigm of the oppressed, who no longer identifies with the oppressors and becomes dependent on them, but instead seeks to break free from their oppression, and in so doing, spontaneously and effectively imposes a new social formula and project. This paper discusses the emergence of this popular mobilization and its transformation into a social movement, the challenges it has faced, and how its actors built a common framework for action to address their status as oppressed. It relies on field interviews – formal and informal – with actors and politicians, participatory observation, the analysis of organized groups, and contributions via WhatsApp and Facebook. The paper focuses on the movement in Ain al-Hilweh camp as one of the largest Palestinian refugee camps in Lebanon, with its political and security context that distinguishes it from other camps.
Topic:
United Nations, Diaspora, Social Movement, Refugees, Social Media, and Repression
Political Geography:
United States, Middle East, Israel, Palestine, and Lebanon

124. No Data in the Void: Values and Distributional Conflicts in Empirical Policy Research and Artificial Intelligence

Author:
Maximilian Kasy
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Economics for Inclusive Prosperity (EfIP)
Abstract:
Decision making based on data - whether by policymakers drawing on empirical research, or by algorithms using machine learning - is becoming ever more widespread. Any time such decisions are made, we need to carefully think about the goals we want to achieve, and the policies we might possibly use to achieve them. Data cannot absolve us of this responsibility. They do not allow us to avoid value judgements, and do not relieve us from taking sides in distributional conflicts. This essay introduces a general framework to clarify this point, and then discusses a series of settings in which the choice of objectives (goals) has far-reaching and maybe unexpected implications.
Topic:
Economics, Science and Technology, Labor Policies, Economic Policy, and Artificial Intelligence
Political Geography:
United States

125. The Rising Tide of Change in Iraq: An Assessment of the 2018 and 2019 Protests

Author:
Hashim Al-Rikabi
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
Arab Reform Initiative (ARI)
Abstract:
The stability and legitimacy of the post-2003 Iraqi state are undermined by the provision of poor basic services, soaring unemployment, and political paralysis. This has driven ordinary citizens towards waves of protests that peaked in August 2018 and re-surged again in October 2019, demonstrating that without addressing the underlying causes behind these protests, much larger and more aggressive protest waves may shock the system, again and again, threatening its existence. The initial phase of the 2019 protests was similar to the first period of 2018 protests (April - June) in terms of their small scale, their focus on specific issues such as unemployment, and their largely peaceful nature. But quickly, within a few weeks, the 2019 protests escalated with protesters blocking key economic facilities and attacking government buildings and political parties’ headquarters. This escalation mirrored the trajectory of the 2018 which also intensified over time, but what is striking is the speed with which the 2019 intensified and moved from socio-economic focused demands to demands for fundamental political reforms, including new elections. While the involvement of political actors was evident in efforts by politicians, such as Muqtada Al-Sadr, to try to ride the wave of protests as well as the crackdown on protests by armed elements of certain political parties, the 2019 mobilization has also shown the emergence of a new generation of protesters and the rising role of new social actors, such as professional groups. The increasing frequency of protests since 2018 and their widening and deepening scope suggest that the post-2003 Iraqi governance model, with its stalemate between the different political actors, needs a fundamental new formulation that is able to renew trust in a reformed political system. The stalemate could either develop into genuine reforms to address the ills of the post-2003 political and economic system, away from ethno-sectarian politics, or descend into violence.
Topic:
Imperialism, Social Movement, Protests, and State Building
Political Geography:
United States, Iraq, Middle East, and Baghdad

126. The Syrian State: A Two-Headed Monster is Emerging

Author:
Bassma Kodmani
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Arab Reform Initiative (ARI)
Abstract:
The Collapse of the Syrian state is largely a reality. Both Russia and Iran, Assad’s allies, know he is not the guarantor of the continuity of the state any more but continue to hold on to him to sign off on projects that consolidate their control. This paper argues that instead of a failed state, a two-headed system has emerged, with Iran and Russia each pushing for their own vision of the country.
Topic:
Imperialism, Fragile/Failed State, Authoritarianism, Military Intervention, and Repression
Political Geography:
Russia, United States, Iran, Middle East, Syria, and Damascus

127. Defending Europe: scenario-based capability requirements for NATO’s European members

Author:
Ben Barry, Douglas Barrie, Lucie béraud-Sudreau, Henry Boyd, Nick Childs, and Bastain Giegerich
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
International Institute for Strategic Studies
Abstract:
The study applies scenario analysis – with scenarios set in the early 2020s – to generate force requirements, and assesses the ability of NATO’s European member states to meet these requirements based on data from the IISS Military Balance Plus online database. The cost of closing the identified capability shortfalls through equipment acquisition has been estimated. The objective of the study is to enable informed policy dialogue both in Europe and in a transatlantic setting. The study explicitly does not intend to predict future conflicts nor the intentions of any of the actors involved. Neither does it wish to prescribe a certain path of action to be pursued by European NATO governments. The first scenario examined deals with the protection of the global sea lines of communication (SLOCs). In this scenario, the United States has withdrawn from NATO and has also abandoned its role of providing global maritime presence and protection, not just for its own national interest but also as an international public good. It thus falls to European countries to achieve and sustain a stable maritime-security environment in European waters and beyond, to enable the free flow of international maritime trade, and to protect global maritime infrastructure. The IISS assesses that European NATO members would have to invest between US$94 billion and US$110bn to fill the capability gaps generated by this scenario. The second scenario deals with the defence of European NATO territory against a state-level military attack. In this scenario, tensions between Russia and NATO members Lithuania and Poland escalate into war after the US has left NATO. This war results in the Russian occupation of Lithuania and some Polish territory seized by Russia. Invoking Article V, the European members of NATO direct the Supreme Allied Commander Europe (SACEUR) to plan Operation Eastern Shield to reassure Estonia, Latvia and Poland, and other front-line NATO member states, by deterring further Russian aggression. European NATO also prepares and assembles forces for Operation Eastern Storm, a military operation to restore Polish and Lithuanian government control over their territories.
Topic:
NATO, Military Strategy, Maritime, and Free Trade
Political Geography:
Russia, United States, and Europe

128. China Global Security Tracker, No.5

Author:
Helena Legarda
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
International Institute for Strategic Studies
Abstract:
Presenting China as a 'responsible power' – Beijing releases first major defense white paper in four years
Topic:
Security, Defense Policy, Science and Technology, and Military Spending
Political Geography:
United States, Japan, China, Europe, Canada, Taiwan, France, and North America

129. Advancing UK maritime aviation in the Queen Elizabeth-class era

Author:
Nick Childs
Publication Date:
09-2019
Content Type:
Working Paper
Institution:
International Institute for Strategic Studies
Abstract:
The United Kingdom is on the cusp of regenerating what is a transformational capability. The first of the UK’s new-generation aircraft carriers, HMS Queen Elizabeth, has been at sea on trials for two years, and is working up towards its first operational deployment in 2021. The second ship, HMS Prince of Wales, is scheduled to be accepted into service before the end of the year. The F-35B Lightning II has achieved initial land-based operating capability and the Lightning Force has carried out its first overseas deployment, Lightning Dawn. Maritime aviation in the round has undergone a significant transformation, and there has been a substantial increased focus on collaboration and partnering with industry as well as developing stronger links with critical allies. To underscore the significance of the undertaking, then secretary of state for defence Penny Mordaunt announced on 15 May 2019 that the UK planned to produce a National Aircraft Carrier Policy to lay down a blueprint for how the new carrier era would help deliver the UK’s global objectives. In addition, on 4 June, then prime minister Theresa May announced that the UK would earmark the Queen Elizabeth-class carriers to form part of NATO’s significant new Readiness Initiative. These developments have prompted thought and discussion on the extent to which the carrier programme will enable and actually drive the transformation of UK joint-force capabilities, and are posing questions about the demands such a programme will place on UK defence and industry. This paper considers both the opportunities and challenges that the carrier era presents in a number of key areas
Topic:
Defense Policy, Diplomacy, National Security, Military Strategy, and Maritime
Political Geography:
United States, United Kingdom, Europe, and London

130. European security in crisis: what to expect if the US withdraws from NATO

Author:
Lianna Fix, Bastain Giegerich, and Theresa Kirch
Publication Date:
09-2019
Content Type:
Working Paper
Institution:
International Institute for Strategic Studies
Abstract:
Recent developments in transatlantic relations have reignited the debate about the need for Europeans to assume greater responsibility for their own security. Yet, efforts by European leaders to substantiate the general commitment to 'take their fate into their own hands' are so far lacking sufficient progress. Against this backdrop, the Körber Policy Game brought together a high-level group of senior experts and government officials from France, Germany, Poland, the UK and the US to address a fictional scenario that involves a US withdrawal from NATO, followed by multiple crises in Europe. How will Europeans organise their security and defence if the US withdraws from NATO? To what extent will future European security be based on mutual solidarity, ad-hoc coalitions or a bilateralisation of relations with the US? Which interests would the respective European governments regard as vital and non-negotiable? What role would the US play in European security after the withdrawal? The Körber Policy Game is based on the idea of projecting current foreign and security policy trends into a future scenario – seeking to develop a deeper understanding of the interests and priorities of different actors as well as possible policy options. The starting point is a short to medium-term scenario. Participants are part of country teams and assume the role of advisers to their respective governments.
Topic:
NATO, Regional Cooperation, Military Strategy, and European Union
Political Geography:
United States, Europe, North Atlantic, North America, and Brussels

131. China and instability in developing countries

Author:
Nicholas Crawford
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
International Institute for Strategic Studies
Abstract:
China has become the largest lender to developing countries, and a major investor there too. As a result, it has a major stake in many countries facing political and economic instability. Western policymakers involved in responding to instability and crises overseas need to understand how China navigates these situations. China’s approach is similar in some respects to that of Western states, but there are also important differences. China’s policy towards countries facing political and economic instability is driven by four main concerns: It seeks to strengthen and maintain its partnerships with those countries to ensure they remain open to and supportive of the Chinese government and its businesses. China is determined to protect its financial interests, businesses and citizens from the harms that result from instability. It is concerned to see its loans repaid, its investments secure, its workers safe and its supply chains undisrupted. It wants to maintain its narrative of non-interference. Any intervention in the politics or policies of its partner states must be seen as being at the invitation of their governments (although China may pressure its partners for consent). China wants to increase its influence in the world, independently and distinctively. It is increasingly proactive in its response to instability in partner countries. Some responses seek to address the instability directly; other responses are intended to protect Chinese interests in spite of the instability. This paper analyses the political economy of China’s responses to instability, identifies the types of responses China undertakes, and assesses these responses.
Topic:
Human Rights, International Cooperation, Developing World, Political stability, and Trade
Political Geography:
Africa, United States, China, Europe, Beijing, and Asia

132. India, The United States, Australia and the Difficult Birth of Bangladesh

Author:
Ric Smith
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Australian Institute of International Affairs
Abstract:
Ric Smith has masterfully woven archival material, memories of his own time as a foreign service officer, and conversations with other officers of the then Department of Foreign Affairs to recount the crisis in East Pakistan in 1971 and the difficult birth of Bangladesh. Smith highlights the Cold War incongruities of the crisis, including the Soviet Union’s support for democratic India’s position during the crisis, while the United States supported the military regime in Pakistan. The episode also stands as an example of Canberra diverging from Washington on an issue that was garnering political and media attention in Australia. Australia was able to pursue a policy toward the region that was independent from the United States, accepting early that East Pakistan was “finished” and that there was a need to address an unfolding humanitarian crisis. Smith’s book imparts important lessons about diplomacy for Australia: It is not only possible for Australia’s politicians and diplomats to take independent positions on major international problems, but they are sometimes respected by their allies when they do so.
Topic:
Cold War, Human Rights, Democracy, Geopolitics, and Military Intervention
Political Geography:
Pakistan, United States, Europe, India, Asia, Soviet Union, and Australia

133. A Russian View of the U.S. INF Withdrawal

Author:
Victor Esin
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Center for International and Security Studies at Maryland (CISSM)
Abstract:
The stabilizing role of the INF Treaty is still relevant. Its importance has even increased against the background of the sharp deterioration of relations between Russia and the West in recent years due to the well-known events in Ukraine, aggravated by mutual sanctions and NATO’s military build-up near Russian borders. Preserving the INF Treaty, which has now become the subject of controversy and mutual non-compliance accusations between Russia and the United States, is therefore doubly important.
Topic:
Diplomacy, Nuclear Weapons, Military Strategy, Nonproliferation, and Deterrence
Political Geography:
Russia, United States, and Europe

134. North Korea’s Shift to Diplomacy in 2018: A Result of U.S. Pressure or North Korean Security Calculus?

Author:
Naoko Aoki
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Center for International and Security Studies at Maryland (CISSM)
Abstract:
After conducting a record number of missile and nuclear tests in 2016 and 2017, North Korea dramatically changed its policy approach and embarked on a diplomatic initiative in 2018. It announced a self-imposed halt on missile and nuclear tests and held summit meetings with the United States, China, and South Korea from spring of that year. Why did North Korea shift its policy approach? This paper evaluates four alternative explanations. The first is that the change was driven by North Korea’s security calculus. In other words, North Korea planned to achieve its security goals first before turning to diplomacy and successfully followed through with this plan. The second is that U.S. military threats forced North Korea to change its course. The third is that U.S.-led sanctions caused North Korea to shift its policy by increasing economic pain on the country. The fourth is that diplomatic initiatives by South Korea and others prompted North Korea to change its position. This paper examines the actions and statements of the United States, North Korea, China, South Korea, and Russia leading up to and during this period to assess these four explanations. It concludes that military threats and economic pain did not dissuade North Korea from obtaining what it considered an adequate level of nuclear deterrence against the United States and that North Korea turned to diplomacy only after achieving its security goals. External pressure may have encouraged North Korea to speed up its efforts to develop the capacity to strike the United States with a nuclear-armed missile, the opposite of its intended effect. Diplomatic and economic pressure may have compelled Kim Jong Un to declare that North Korea had achieved its “state nuclear force” before conducting all the nuclear and ballistic missile tests needed to be fully confident that it could hit targets in the continental United States. These findings suggest that if a pressure campaign against North Korea is to achieve its intended impact, the United States has to more carefully consider how pressure would interact with North Korean policy priorities. Pressure should be applied only to pursue specific achievable goals and should be frequently assessed for its impact.
Topic:
Diplomacy, Nuclear Weapons, Military Strategy, Nonproliferation, and Deterrence
Political Geography:
United States, Japan, China, Asia, South Korea, and North Korea

135. China on Arms Control, Nonproliferation, and Strategic Stability

Author:
Nancy Gallagher
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Center for International and Security Studies at Maryland (CISSM)
Abstract:
China and the United States view each other as potential adversaries with mixed motives and divergent value systems, yet both can benefit from cooperation to reduce the risk of war, avert arms races, and prevent proliferation or terrorist access to weapons of mass destruction. The two countries have more common interests, fewer ideological differences, and greater economic interdependence than the United States and the Soviet Union had during the Cold War. In principle, arms control broadly defined, i.e., cooperation to reduce the likelihood of war, the level of destruction should war occur, the cost of military preparations, and the role of threats and use of force in international relations, could be at least as important in this century as it was in the last. In practice, though, China’s rise as a strategic power has not been matched by a corresponding increase in the kinds of cooperative agreements that helped keep the costs and risks of superpower competition from spiraling out of control. Why not? This paper argues that because China’s strategy rests on different assumptions about security and nuclear deterrence than U.S. strategy does, its ideas about arms control are different, too. China has historically put more value on broad declarations of intent, behavioral rules, and self-control, while the United States has prioritized specific quantitative limits on capabilities, detailed verification and compliance mechanisms, and operational transparency. When progress has occurred, it has not been because China finally matched the United States in some military capability, or because Chinese officials and experts “learned” to think about arms control like their American counterparts do. Rather, it has happened when Chinese leaders believed that the United States and other countries with nuclear weapons were moving toward its ideas about security cooperation--hopes that have repeatedly been disappointed. Understanding Chinese attitudes toward security cooperation has gained added importance under the Trump administration for two reasons. Trump’s national security strategy depicts China and Russia as equally capable antagonists facing the United States in a “new era of great power competition,” so the feasibility and desirability of mutually beneficial cooperation with China have become more urgent questions. The costs and risks of coercive competition will keep growing until both sides accept that they outweigh whatever benefits might accrue from trying to maximize power and freedom of action in a tightly interconnected world.
Topic:
Diplomacy, Nuclear Weapons, Military Strategy, and Nonproliferation
Political Geography:
United States, China, Taiwan, and Asia

136. Do as I Say, and as I Do: 
Chinese Leadership in Nuclear Security

Author:
Sara Z. Kutchesfahani
Publication Date:
09-2019
Content Type:
Working Paper
Institution:
Center for International and Security Studies at Maryland (CISSM)
Abstract:
This paper analyzes China’s words and actions regarding the Nuclear Security Summits to better understand what Chinese leadership on nuclear security could look like in the future. It finds that China accomplished the many things it said it would do during the summit process. The paper also explores how China’s policy and actions in other nuclear arenas could be paired with Chinese nuclear security policy to form a coherent agenda for nuclear risk reduction writ large. Consequently, the paper addresses how China doing as it says and does – per nuclear security – may be used as a way in which to inform its future nuclear security roles and responsibilities. In particular, it assesses China’s opportunities to assume a leadership role within this crucial international security issue area, especially at a time where U.S. leadership has waned.
Topic:
Security, Diplomacy, Military Strategy, and Nuclear Power
Political Geography:
United States, China, Beijing, and Asia

137. Reconstructing Iraq: Where Do We Stand

Author:
Dlawer Ala'Aldeen
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Middle East Research Institute (MERI)
Abstract:
This month last year, the Kuwaiti government hosted a ‘Conference for the Reconstruction of Iraq’. It was attended by the United Nations Secretary General, António Guterres, along with dozens of foreign ministers and large numbers of other government and business representatives. The timing was perfect for Iraq. The country had recently announced the military defeat of the Islamic State (IS) and was enjoying an unprecedented level of optimism and all-round international good will. Until then, Iraq had for a number of years been suffering from a severe economic crisis, precipitated largely by decades of poor management of state resources, never-ending wars and crises, and the drop in oil prices. Hence, the country needed help and, luckily for the Iraqis, its neighbours were willing to help because failure to address reconstruction needs would add to the country’s fragility and chronic instability.
Topic:
United Nations, Military Strategy, Reconstruction, and Islamic State
Political Geography:
United States, Iraq, Middle East, Baghdad, and Kurdistan

138. Iran-US tension and the Ghost of War

Author:
Dlawer Ala'Aldeen
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Middle East Research Institute (MERI)
Abstract:
The latest tension between Iran and the United States has created an unhealthy debate among local actors in Iraq and the wider Middle East, reflecting minimal insight into Washington or Tehran’s policy environment. This in itself can be extremely detrimental to their own national agenda as well as the overall dynamics. The question here is: where is this US-Iran escalation leading and what policy would be best for the local players in Iraq (and elsewhere) to pursue?
Topic:
Diplomacy, Imperialism, Regional Cooperation, and Military Strategy
Political Geography:
United States, Iraq, Iran, Middle East, Tehran, Washington, and D.C.

139. International Support for State-building in Iraq

Author:
Middle East Research Institute
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Middle East Research Institute (MERI)
Abstract:
In his introduction, panel chairman Farhad Alaaldin explained that Iraq is in a state of crisis. The current socio-political situation, as reflected by demonstrations and protests across the various governorates, is both complicated and complex. He explained that this panel, featuring central players from the international community, would examine the contours of this crisis and solicit external perspectives.
Topic:
Social Movement, Political stability, Protests, and State Building
Political Geography:
United States, Iraq, Middle East, and Baghdad

140. The Real Solution: Regional Response Rather than Border Closures, Mass Incarceration, and Refugee Returns Share

Author:
Eleanor Acer
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Human Rights First
Abstract:
The Trump Administration has purposefully mismanaged the refugee and humanitarian challenges pushing people to flee political repression, human rights abuses, economic deprivation, and climate displacement in Honduras, Guatemala, and El Salvador. Trump Administration policies have actually made things worse, cutting programs countering displacement, turning a blind eye to human rights abuses, encouraging crossings between official ports of entry, and punishing people seeking U.S. protection through punitive and traumatizing family separations and detention. These harmful policies have aggravated humanitarian challenges—deliberately provoking disorder, chaos, and confusion. Congress must take swift action to push real solutions, and over the longer term the next administration will need to ensure these solutions are enduring. Congress should champion a new initiative to strengthen protection across the region. This initiative must truly tackle the rights abuses and deprivations pushing people to flee, greatly enhance the capacity of Mexico and other countries to provide asylum and host refugees, and set a strong example at home by upholding America’s own refugee protection commitments. Upholding human rights commitments is not only the right thing to do, it is also in the U.S. national interest. These commitments have saved millions of lives and encourage countries around the world—including front-line countries that host the vast majority of the world’s refugees—to continue hosting refugees. The heroic work of many Americans—working and volunteering with faith-based shelters, community groups, legal representation, and other organizations—should be supported. They are, and always have been, an essential part of the solution. The measures outlined below would restore order to the region and the U.S. border while upholding the United States’ legal and humanitarian commitments. Key steps include: 1. Address the actual causes of displacement in Honduras, Guatemala, and El Salvador. The United States should increase support for effective programs that counter violence, strengthen justice systems, spur economic opportunities, and safeguard communities from climate displacement, so that people do not need to flee in search of safety or survival. In addition, U.S. diplomats must press the leaders of these countries to safeguard rights, support anti-corruption efforts, and address abuses from security forces. 2. Strongly support increased asylum and refugee-hosting capacity in Mexico and other Latin American countries, so that these countries—which are already hosting growing numbers—have the ability to continue accepting refugees. Asylum filings in Mexico, for example, have increased by over 700 percent since 2014. The United States should sharply increase support for the UN Refugee Agency (UNHCR) to increase regional capacity, to develop strong asylum and refugee protection systems, and to better integrate refugees in Mexico and the region. U.S. diplomacy, law enforcement cooperation, and rule of law assistance should be leveraged to reduce violence against refugees and migrants in Mexico. In addition, the United States should launch a regional resettlement effort, providing some refugees with routes to safety in the United States as well as other countries, and relaunch the Central American Minors (CAM) program to allow some children with family in the United States to come to our country safely. 3. Combat smuggling in the region while safeguarding access to protection. U.S. agencies must ensure anti-smuggling and anti-trafficking efforts do not block escape from dangerous countries and include measures to safeguard human rights and access to asylum. By strengthening asylum, resettlement, and work visas in the region, more refugees and migrants will have alternate routes to protection. 4. Manage U.S. asylum arrivals effectively through a genuine humanitarian response that upholds U.S. law and provides order, including: Restore timely and orderly asylum processing at ports of entry and ensure humane conditions at all Department of Homeland Security (DHS) facilities; End the Remain in Mexico scheme and “metering” policies that push people to cross between ports of entry and put the lives of asylum seekers at risk as they wait in danger in Mexico; Support and fund NGOs and shelters in the United States—including faith-based groups that have been effectively partnering with DHS in U.S. cities along the border—to address humanitarian needs, a typical and necessary move in managing refugee arrivals; and Launch a community-based case management program that supports appearance, as recommended by ICE’s own advisory group, rather than jailing asylum seekers for even longer. 5. Restore order through measures providing timely, fair, and effective U.S. adjudications, including: Increase, rather than “get rid of,” immigration judges and interpreters. In order to understand what is being said in their courtrooms and ensure due process, judges must be supported by interpreters. And, since a judge set on furthering a politicized agenda is worse than no judge at all, safeguards against politicized court hiring must be immediately restored. Additional measures to support judges include: increased recruitment of interpreters who speak indigenous dialects to assure accurate hearings and prevent continued adjournments, ensuring the time necessary to gather evidence to prove cases, and rejecting absurd schemes that would entrust protection determinations to border agents or rush cases through adjudications; Support a major legal representation initiative to ensure eligible refugees receive protection at the earliest stages of the process and institute universal legal orientation presentations (LOPs)—including for families released from DHS/Customs and Border Protection (CBP) custody—to explain appearance obligations, the legal system, and how to secure counsel; Enable more cases to be granted efficiently at the USCIS asylum office by providing initial decision-making authority to the asylum office in all asylum cases, changing policies and practices that have prompted asylum officers to refer, rather than grant, cases that meet the asylum criteria— unnecessarily adding them to the immigration court caseload—and assure the availability of an application process for “cancellation of removal” relief so these cases do not clog the asylum system; Make the immigration courts independent, as the American Bar Association recommends, to secure due process and judicial independence, ensuring that political appointees can no longer attempt to improperly influence the courts’ decisions in asylum and other cases; and Reverse Trump Administration efforts to prevent refugees from receiving asylum in the United States—including former Attorney General Sessions’ ruling attempting to deny protection to women who have fled domestic violence and families escaping from deadly gangs. The measures outlined above would restore order and bring about real and enduring solutions. As the president and top Trump Administration officials are doubling down on punitive policies and political rhetoric that fail to solve these challenges, Congress must demand effective strategies that are consistent with America’s ideals.
Topic:
Human Rights, Prisons/Penal Systems, and Border Control
Political Geography:
United States, Central America, North America, Honduras, Guatemala, and El Salvador

141. Protecting Refugees and Restoring Order: Real Solutions to the Humanitarian Crisis

Author:
Eleanor Acer
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Human Rights First
Abstract:
Families and children from Honduras, Guatemala, and El Salvador—fleeing human rights abuses, deadly violence, climate displacement and economic deprivations—continue to seek refuge in the United States and other countries. This is a regional humanitarian crisis—a manageable one that should be addressed using proven strategies, as are humanitarian challenges around the world. Yet instead of taking the steps necessary to address the crisis, the Trump Administration is making things worse, threatening cuts to effective programs that could reduce the problems forcing people to flee, sending refugees back to danger, canceling rather than expanding case management, and cutting orderly processing at ports of entry, increasing crossings between ports of entry. The Trump Administration’s actions appear designed to generate chaos. The regional crisis requires real solutions in several key areas: tackling the rights abuses and deprivations pushing people to flee, enhancing the capacity of Mexico and other countries to provide asylum and host refugees, and managing U.S. refugee protection requests in fair, effective and orderly ways—ways that uphold America’s refugee laws and treaty commitments. Most immediately, the United States must end the dysfunction at the border by launching a public-private humanitarian initiative and a long overdue case management system, which would keep asylum seekers informed and ensure they appear for their hearings. At the same time, the U.S. government should fix the asylum and immigration court adjudication systems to provide fair, non-politicized, and timely decisions. To effectively manage border and adjudication systems, the United States must upgrade to manage new realities, instead of pushing mass detention and other outdated, inadequate and ineffective responses that are also costly, cruel, and inhumane. As part of this strategy, the United States should launch a major initiative, with other countries, to expand regional protection so that Mexico and others, which are already hosting growing numbers, have the ability to continue accepting refugees. Critically, the United States and other donors should increase support for efforts to build the capacity of these countries to provide asylum, host, protect, and integrate refugees. In addition, the United States should work with other resettlement countries to launch a robust regional initiative that provides orderly routes to protection in the United States and other third countries. The United States must also advance a targeted strategy—leveraging both diplomacy and aid - to address the actual root causes of migration and displacement in the Northern Triangle. This should focus on programs that reduce violence, combat corruption, strengthen rule of law, decrease femicide and other gender-based harms, address gang violence, protect vulnerable populations, and promote sustainable economic development. By helping to build real protections for women, children, LGBTQ, indigenous, and other at-risk people in Honduras, Guatemala, and El Salvador, while expanding protection of refugees in Mexico and other countries, this strategy will ultimately reduce the numbers fleeing to the United States. The measures outlined below would restore order to the region and the U.S. border while upholding U.S. legal and humanitarian commitments. Congress—and over the longer term, the next administration—must push real solutions.
Topic:
Humanitarian Aid, Prisons/Penal Systems, Border Control, and Refugees
Political Geography:
United States, Central America, North America, Honduras, Guatemala, and El Salvador

142. Seventy years of NATO: Is the Alliance still needed?

Author:
Krševan Antun Dujmović
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Institute for Development and International Relations (IRMO)
Abstract:
This year the North Atlantic Treaty Origination (NATO) marks seventieth anniversary of its creation. Back in 1949, the founding nations gathered around the United States as the leader of Western liberal democracies, establishing NATO as a military and political alliance that was to serve as a barrier against the Soviet Union, ‘’’’ serve as a counterbalance to NATO and the era of the Cold War gained full sway, with clearly established division in Europe between the capitalist West and communist East, and with only a handful of European countries opting for neutrality. Thus, a bipolar system of world order was established, with defined territories and its export of communism throughout the continent. Just six years later, Moscow assembled the Warsaw Pact together with other Eastern European communist countries, excluding Yugoslavia. The Warsaw Pact was to and frontiers of the two global adversaries, and the Cold War pertained until the collapse of the USSR in 1991. From 1991 onwards, fifteen new independent states emerged from the disintegrated Soviet Union, with the newly founded Russian Federation as its legal successor and a permanent member of the United Nations Security Council. Subsequently the Warsaw Pact had collapsed, and Eastern European countries used a transition period that was to bring them closer to the West, ultimately to NATO and the European Union. The collapse of the Soviet Union was the single most important event in history after the World War II and the world entered into a new era. Back in early nineties, it seemed that Russia and the West have buried the tomahawk of war for an indefinite time, and many political theorists and politicians, in both NATO member states and in Russia, have stated that without its archrival NATO no longer had raison d’etre.
Topic:
Foreign Policy, NATO, International Cooperation, and Military Strategy
Political Geography:
United States, Europe, North Atlantic, and North America

143. Venezuela: First episode of the new Cold War?

Author:
Slobodan Pajovic
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Institute for Development and International Relations (IRMO)
Abstract:
Since the beginning of 2019, Venezuela has been in the focus of international politics because of its political and institutional crisis, together with its economic and social collapse generated in 2013, transformed into a regional and international crisis. The exit of some estimated three to four million emigrants mostly to neighboring countries of human rights and democratic values, the authoritarian regime of socialist orientation, the current American strategy of strengthening its political and strategic influence in Latin America, the presence of significant non- regional emerging global factors, as well as the cyclical changes of political parties in power in this part of the world. Accordingly, this crisis tests the hemispheric and global leadership of has additionally deepened the contexts of theUS, the influences of emerging global powers the regional crisis including also the security aspect. In short, the crisis can be described as oscillating between the issues of defense like China, Russia, India or Turkey, recently, and the potential of Latin American regionalism and political consensus.
Topic:
Imperialism, Migration, Regional Cooperation, and Financial Crisis
Political Geography:
United States, Latin America, Venezuela, and North America

144. Armenia’s Colourless Revolution

Author:
Jan Cingel
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Institute for Development and International Relations (IRMO)
Abstract:
Armenia is a landlocked country situated in the South Caucasus region. History of the region was shaped by the clash of three major empires: Ottoman, Persian and Russian trying to win control over it. The modern history of Armenia began in 1991, when the country seceded from the crumbling Soviet Union. Those were difficult years as the fledgling country was in ongoing war with its new post-USSR neighbour – Azerbaijan. The war was waged over “Nagorno- Karabakh”, a region that was mostly populated by ethnic Armenians, however was formally part of the Azerbaijan Soviet Socialist Republic within the USSR. In the international arena, Armenia joined the UN in 1991, the Russia-led defence pact called the Collective Security Treaty Organisation (CSTO) in 1994, and also in that year, NATO’s Partnership for Peace (PfP). Armenia became part of the EU’s Eastern Partnership (EaP) in 2009 and until September 2013 had been negotiating the EU’s Association Agreement (AA), which included a free trade agreement. Two months before the intended completion of negotiations, and after a visit of then President Serzh Sargsyan to Moscow, Armenia announced that it would cancel negotiations with the EU on the AA and that it was going to join the emerging Russia-led Eurasian Economic Union (EAEU) instead. Armenia joined the EAEU in 2014.
Topic:
NATO, Post Colonialism, United Nations, and Revolution
Political Geography:
Russia, United States, Europe, Soviet Union, Armenia, Azerbaijan, and Ottoman Empire

145. Volodymyr Zelensky’s Sweeping Victories: Is Ukraine’s Turn Toward the West Definite?

Author:
Krševan Antun Dujmović
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Institute for Development and International Relations (IRMO)
Abstract:
For more than half a decade Ukraine has been one of epicenters on the map of geopolitical crises in the world and consequently drawn a lot of international attention worldwide. Ever since it gained its independence form the crumbling Soviet Union in 1991, Ukraine was a of the country also changed. Ukraine has been dominated by Russia as the Russian Empire penetrated deep toward the Black Sea in the 17th century, and the position of inferiority towards Moscow was also the case in the USSR. The first upheaval dubbed the Orange Revolution sort of buffer zone between the West and East, between the United States and European allies on the one hand, and the Russian Federation on the other. With the change of political elites and their political preferences, the orientation in 2004, brought to power Viktor Yushchenko, who tried to conduct reforms and bring Ukraine closer to the West, but the effect of his Presidency were ephemeral. President Viktor Yanukovych turned Ukraine’s sight towards Russia again, but also kept the process of EU association alive before suddenly deciding not to sign the Association Agreement with the EU just days before the planned signing ceremony on 29th November 2013. This Yanukovych’s abrupt turn from EU in favor of stronger ties with Russia triggered the wave of massive public demonstrations which later become known as the Euromaidan and subsequently the Ukrainian revolution in February 2014. The Euromaidan Revolution toppled Yanukovych and the new pro-Western government was formed. Russia soon reacted to the change of tide in Ukraine by annexing the Crimean peninsula in March and soon the armed conflict between the pro- Western government in Kiev and Russia backed rebels in Donetsk and Luhansk Oblasts broke out. Ever since the spring of 2014, Ukraine has been engulfed in a brutal conflict in the east of the country that is hampering its efforts to reform and get closer to the EU. Nonetheless, Ukrainian leadership is under the new President Volodymir Zelensky is striving to forge stronger links with the West and the EU.
Topic:
Foreign Policy, Diplomacy, Military Strategy, European Union, and Geopolitics
Political Geography:
Russia, United States, Europe, Ukraine, Eastern Europe, and Crimea

146. Electric Vehicle Charging in China and the United States

Author:
David Sandlow and Anders Hove
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
At least 1.5 million electric vehicle (EV) chargers have now been installed in homes, businesses, parking garages, shopping centers and other locations around the world. The number of EV chargers is projected to grow rapidly as the electric vehicle stock grows in the years ahead. The EV charging industry is a highly dynamic sector with a wide range of approaches. The industry is emerging from infancy as electrification, mobility-as-a-service and vehicle autonomy interact to produce far-reaching changes in transportation. This report compares EV charging in the world’s two largest electric vehicle markets -- China and the United States – examining policies, technologies and business models. The report is based on more than 50 interviews with industry participants and a review of the Chinese- and English-language literature. Findings include: 1. The EV charging industries in China and the United States are developing largely independently of the other. There is little overlap among the key players in the EV charging industries in each country. 2. The policy frameworks with respect to EV charging in each country differ. The Chinese central government promotes the development of EV charging networks as a matter of national policy. It sets targets, provides funding and mandates standards. Many provincial and local governments also promote EV charging. The United States federal government plays a modest role in EV charging. Several state governments play active roles. 3. EV charging technologies in China and the US are broadly similar. In both countries, cords and plugs are the overwhelmingly dominant technology for charging electric vehicles. (Battery swapping and wireless charging have at most a minor presence.) China has one nationwide EV fast-charging standard, known as China GB/T. The US has three EV fast charging standards: CHAdeMO, SAE Combo and Tesla. 4. In both China and the United States, many types of businesses have begun to offer EV charging services, with a range of overlapping business models and approaches. A growing number of partnerships are emerging, involving independent charging companies, auto manufacturers, utilities, municipalities and others. The role of utility-owned public chargers is larger in China, especially along major long-distance driving corridors. The role of automaker EV charging networks is larger in the United States. 5. Stakeholders in each country could learn from the other. US policymakers could learn from the Chinese government’s multiyear planning with respect EV charging infrastructure, as well as China’s investment in data collection on EV charging. Chinese policymakers could learn from the United States with respect to siting of public EV chargers, as well as US demand response programs. Both countries could learn from the other with respect to EV business models. As the demand for EV charging grows in the years ahead, continued study of the similarities and differences between approaches in China and the United States can help policymakers, businesses and other stakeholders in both countries and around the world.
Topic:
Science and Technology, Infrastructure, Green Technology, and Electricity
Political Geography:
United States, China, Asia, and North America

147. Interactions between a Federal Carbon Tax and Other Climate Policies

Author:
Justin Gundlach, Ron Minsk, and Noah Kaufman
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Putting a price on carbon is a critical part of a low-cost strategy for reducing greenhouse gas (GHG) emissions, and a national carbon tax is a rare example of a climate change policy that has found bipartisan support in the United States. In 2018, legislation establishing a carbon tax was proposed by Democrats, Republicans, and bipartisan groups of US congressmen. However, while passing a carbon tax would certainly prove a significant step toward slashing emissions, simply adding a carbon tax to current policies is unlikely to achieve an emissions target at the lowest cost. Designing a carbon tax that contributes to achieving greenhouse gas reduction targets effectively and efficiently will require an examination of whether other new policies are also needed and whether existing policies can or should be changed or eliminated. With more proposals expected in 2019, such an examination is critical to ensuring both sufficient emissions reductions and an efficient set of policies that keep costs in check for taxpayers. As part of a broader carbon tax research program at the School of International and Public Affairs Center on Global Energy Policy at Columbia University, we have developed a framework for considering the interactions between a federal carbon tax and other policies that influence greenhouse gas emissions. Toward the goal of helping to design better policies, we identify policies and programs that are “complementary” to a carbon tax or “redundant.” A policy is defined as complementary if it: enables more cost-effective reductions of carbon dioxide emissions than a carbon tax would achieve on its own; or reduces GHG emissions and achieves a separate policy objective more cost-effectively than a federal carbon tax would on its own. Conversely, a policy is defined as redundant with a federal carbon tax if it leads to additional costs to society without achieving additional emissions reduction. In developing this framework, we recognize that real-world policies often do not fall cleanly into either category and that neither specifying the framework nor making the categorizations is an exact science. It is often difficult to identify a policy’s objective or evaluate its cost-effectiveness. In addition, the extent to which a policy complements a carbon tax depends on the nature of the carbon tax. Most obviously, with a lower carbon tax rate, fewer emission reductions would be achieved, and additional policies may be needed to make up the difference between the outcome and a science-based emissions reduction target. The results of the work, highlighted in the following table, indicate a relatively large number of policies can complement a carbon tax, such as those that support innovation in low-carbon technologies, tackle behavioral barriers to more efficient energy use, or improve public infrastructure and address barriers to reducing emissions unrelated to the price-related barriers addressed by a carbon tax. Conversely, the paper identifies regulations that force entities that pay the carbon tax to take specific actions to reduce their emissions, such as Environmental Protection Agency regulations of stationary sources of carbon dioxide emissions under section 111 of the Clean Air Act, as redundant with the carbon tax. The paper does not recommend which policies should be eliminated, changed, or added but intends to provide policy makers with information that will help them make these decisions.
Topic:
Climate Change, Science and Technology, Green Technology, and Carbon Tax
Political Geography:
United States

148. Transatlantic Sanctions Policy : From the 1982 Soviet Gas Pipeline Episode to Today

Author:
Richard Nephew
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Though many commentators have suggested that the Trump administration’s approach with respect to sanctions threats against Europe is “unprecedented,” the relative comity in US-European sanctions policymaking in recent years may be the aberration. The United States and Europe have often disagreed about whether, when, and how to impose sanctions against even common adversaries and in order to resolve mutually recognized problems. One of the most serious examples of this occurred in 1982 when the United States and its European allies broke sharply over the US decision to impose sanctions on the Soviet Union over the crackdown on the Solidarity Movement in Poland. The crisis that emerged tested the NATO Alliance, European governments, and the Reagan administration. This paper reviews the 1982 example and then sets some lessons from it against the current US-European relationship. It offers an assessment not only of the changing political, economic, and social factors that have contributed to greater compliance with US sanctions dictates on the part of Europe over the last few years, but also the relatively brittle nature of this cooperation. It underscores that, though the United States may be in a relatively predominant economic position at present, this situation may not and likely will not persist indefinitely. From this perspective, it concludes with three recommendations for how to modify current US sanctions practice in order to help manage partner concerns and avoid future crises. Adopting a process more akin to the Federal Register notice procedure for new sanctions programs. There is a yawning need for more consultation in advance of US sanctions decisions that could have major market moving and alliance shaking potential. It is not necessary, nor would it be prudent, to have a process that required public scrutiny of individual or entity asset freeze scenarios, but for other, more broad sanctions initiatives, it would help to avoid unintended consequences and ensure a more comprehensive debate. Exceptions could also be made to this rule in the event of a legitimate emergency. Establishing an independent commission to evaluate US sanctions policies and challenges. Congress should set up an independent, bipartisan commission to examine the issue of US sanctions policy now and for the next twenty-five years. Its assignment would be to evaluate how sanctions have been used in the recent past, the international operating environment for sanctions now, and the dimensions of the sanctions policy challenge in the future. Improving congressional oversight of the sanctions process. Congress should also require evaluation reports for individual sanctions regimes as a standard part of the executive branch’s use of the International Emergency Economic Powers Act (IEEPA). Of course, similar requirements ought to be considered a standard part of congressionally mandated sanctions as well.
Topic:
Foreign Policy, Sanctions, and Global Political Economy
Political Geography:
United States and Europe

149. The Risk of Fiscal Collapse in Coal-Reliant Communities

Author:
Adele Morris, Noah Kaufman, and Siddhi Doshi
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
If the United States undertakes actions to address the risks of climate change, the use of coal in the power sector will decline rapidly. This presents major risks to the 53,000 US workers employed by the industry and their communities. 26 US counties are classified as “coal-mining dependent,” meaning the coal industry is a major employer. In these areas, the industry is also an important contributor to local government finances through a complex system of property, severance, sales, and income taxes; royalties and lease bonuses for production on state and federal lands; and intergovernmental transfers. While climate-related risks to corporations have received scrutiny in recent years, local governments—including coal-reliant counties—have yet to grapple with the implications of climate policies for their financial conditions. Importantly, the risks from the financial decline of coal-reliant counties extend beyond their borders, as these counties also have significant outstanding debts to the US municipal bond market that they may struggle to repay. To be sure, national climate policy in the United States is uncertain. Experts have long recommended strong policy action to reduce emissions, and for years, policy makers have largely ignored their advice. Nevertheless, with growing support by the public and policy makers, meaningful climate policy in the United States may be on the horizon, and those dependent on coal should be looking ahead to manage their risks. This paper examines the implications of a carbon-constrained future on coal-dependent local governments in the United States. It considers the outlook for US coal production over the next decade under such conditions and explores the risk this will pose for county finances. The paper also considers the responsibilities of jurisdictions to disclose these risks, particularly when they issue bonds, and the actions leaders can take to mitigate the risks. In short, the paper finds the following: ● Coal production in the United States fell by one-third between 2007 and 2017. Projections of the US energy system show this decline continuing gradually under current policies. However, even a moderately stringent climate policy could create existential risks for the coal industry, with potential declines in production of around 75 percent in the 2020s. ● A careful look at three illustrative counties shows that coal-related revenue may fund a third or more of their budgets. The exposure is compounded because school districts and other special districts within the counties also receive coal-dependent revenue. The complex system of local revenue instruments and intergovernmental transfers plus a lack of sufficiently detailed budget data makes it difficult to parse out just how reliant jurisdictions are on the coal industry. ● Estimates of the direct linkages between the coal industry and county budgets will almost certainly understate the risks because lost economic activity and jobs will have ripple effects across the economy. Case studies show that the rapid decline of a dominant industry has led to downward spirals and eventual collapses of local governments’ fiscal conditions, including the inability to raise revenue, repay debt, and/ or provide basic public services. ● Coal-dependent communities have a variety of outstanding bonds, and the risk of collapse of the coal industry threatens their ability to repay them. Despite regulations requiring disclosures to reflect risks to the financial health of municipalities, our review of the outstanding bonds indicates that municipalities are at best uneven and at worst misleading (by omission) in their characterizations of climate-related risks. Ratings reports are not much better than official statements in describing the risks associated with the exposure of some local governments to the coal industry. ● Climate policies can be combined with investments in coal-dependent communities to support their financial health. A logical source of funding for such investments would be the revenues from a price on carbon dioxide emissions, a necessary element of any cost-effective strategy for addressing the risks of climate change. A small fraction of revenue from a federal carbon price in the United States could fund billions of dollars in annual investments in the economic development of coal-dependent communities and direct assistance to coal industry workers. ● In considering reforms, several questions emerge for stakeholders. These include whether regulators should develop additional requirements for the disclosure of risks from future climate policies; whether ratings agencies should increase attention to the risks to local governments of climate policies; and whether stakeholders in the municipal bond market, such as borrowers, insurers, and underwriters, are appropriately accounting for risks to the coal industry.
Topic:
Climate Change, Energy Policy, Coal, and Domestic Policy
Political Geography:
United States

150. PG&E: Market and Policy Perspectives on the First Climate Change Bankruptcy

Author:
John Macwilliams, Sarah Lamonaca, and James Kobus
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The Pacific Gas and Electric (PG&E) bankruptcy, which was caused by liabilities resulting from massive wildfires, has widely been called the first climate change bankruptcy. It will likely not be the last, as climate change exacerbates natural disasters, leading to more frequent and intense wildfires, storms, and flooding. Wildfires alone could become up to 900 percent more destructive in certain regions by midcentury, and utility assets will also be increasingly exposed to threats stemming from hurricanes, rising sea levels, and other climate-related events. These extreme weather events will increase costs to utility-sector stakeholders, including investor-owned utilities, state and local governments, ratepayers, and taxpayers. These risks could place financial stress on utility companies, drive up electricity rates, crowd out essential investment in renewable energy and grid upgrades, and disrupt service. In this paper, Columbia University’s Center on Global Energy Policy reviews and analyzes the PG&E bankruptcy, assesses how capital markets have reacted to the bankruptcy through the lens of valuations in the US utility sector, and discusses policy implications of California’s recent legislative response to wildfire risk. This paper examines market indicators to assess investor expectations of climate risk exposure and likely cost allocation. Neither debt nor equity markets suggest widespread concern about climate risk in the utility sector. In the absence of strong market signals to encourage climate risk mitigation, the authors find that policy frameworks are needed to ensure that companies make necessary preventative investments and to define how costs will be allocated among stakeholders. This paper also reviews a recently passed California bill aimed at achieving these objectives and the lessons and best practices it offers for other policy makers. In short, the paper finds the following: Market indicators suggest that the California wildfires and subsequent PG&E bankruptcy have not caused imminent concern about climate risks in the utility sector. Equity valuations for the sector remain strong, with a utility stock index trading at a higher-than-average premium to the market benchmark. In credit markets, regulated utilities in the United States have raised more than $50 billion of corporate debt in 2019 to date, and borrowing spreads are currently below historical averages. There are several reasons why markets may not reflect widespread climate risk to utilities, despite the scientific evidence around likely future damage. Investors may believe that cost increases from climate change will occur too far in the future to materially impact the present value of their investments. Even if investors believe that climate change risks are material to valuation, they may also believe that such risks will not be considered by other investors for some time. Investors may be viewing wildfires as a California-specific risk, though the regional skew of wildfires is likely to shift significantly in coming years. They may lack the information or modeling tools for assessing the likelihood and geographic dispersion of high-impact tail events, such as the wildfires that PG&E faced. Financial markets may also reflect the belief that the costs of climate change in the utility sector will fall predominantly on ratepayers, insurance companies, and/or taxpayers rather than investors, and therefore investors may not view themselves as materially exposed. California’s recent creation of a wildfire insurance fund with contributions from both ratepayers and companies provides important policy lessons for designing comprehensive frameworks to allocate climate damage costs. These include the strengthening of both regulatory and corporate climate resilience expertise, mandating preventative investment as a prerequisite for cost-recovery mechanisms, defining utility financial exposure for climate damage situations, and providing cash for utilities to provide essential services when facing large disasters. The policy also presents some potential pitfalls that may be instructive for other state policy makers. The legislation sets aside large reserves for future damage, a necessary measure, but one that will result in higher electric bills. The bill does not allow utilities to earn a return on safety-related spending, which broadly diminishes incentives for proactive climate mitigation investment. The potential insufficiency of the wildfire fund also creates uncertainty about future cost allocation. Finally, failing to reform the California legal framework that allows utilities to be held liable for damages they did not cause perpetuates risks for companies and ratepayers. If the first climate change bankruptcy is indicative of a new reality, it is not that utilities are going to go bankrupt overnight. Rather, climate disasters will increasingly add financial stress to utility-sector stakeholders, as costs accumulate from both acute events and damaging extreme weather impacts. Adapting the regulatory bargain for a climate-exposed future will require lawmakers, regulators, and shareholders to develop new approaches and new incentive structures to ensure an accountable, robust utility sector. Moreover, while climate change is already presenting real financial challenges to utilities, it will not be the only sector to face large climate-driven costs. Other corporate actors can look to the utility experience to better understand how policy makers, investors, and companies will respond to the growing financial threat from climate change.
Topic:
Climate Change, Economics, Gas, and Electricity
Political Geography:
United States and California