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  • Author: Jeremy de Beer
  • Publication Date: 01-2020
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The Canada-United States-Mexico Agreement (CUSMA) is the new high-water mark in international intellectual property (IP) law. CUSMA includes most of the Trans-Pacific Partnership provisions that were suspended in the Comprehensive and Progressive Trans-Pacific Partnership, except for a few pharmaceutical-related provisions amended after signing. Canada will be required to make meaningful changes to domestic IP laws, including copyright term extension, criminal penalties for tampering with digital rights management information, restoration of patent terms to compensate for administrative and regulatory delays, broader and longer protection for undisclosed testing data and other data, new civil and criminal remedies for the misappropriation of trade secrets, and additional powers for customs officials to seize and destroy IP-infringing goods.
  • Topic: International Trade and Finance, Regional Cooperation, Intellectual Property/Copyright, NAFTA, USMCA
  • Political Geography: United States, Canada, North America, Mexico
  • Author: Dieter Ernst
  • Publication Date: 03-2020
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: This special report assesses the challenges that China is facing in developing its artificial intelligence (AI) industry due to unprecedented US technology export restrictions. A central proposition is that China’s achievements in AI lack a robust foundation in leading-edge AI chips, and thus the country is vulnerable to externally imposed supply disruptions. The COVID-19 pandemic has further decoupled China from international trade and technology flows. Success in AI requires mastery of data, algorithms and computing power, which, in turn, is determined by the performance of AI chips. Increasing computing power that is cost-effective and energy-saving is the indispensable third component of this magic AI triangle. Research on China’s AI strategy has emphasized China’s huge data sets as a primary advantage. It was assumed that China could always purchase the necessary AI chips from global semiconductor industry leaders. Until recently, AI applications run by leading-edge major Chinese technology firms were powered by foreign chips, mostly designed by a small group of top US semiconductor firms. The outbreak of the technology war, however, is disrupting China’s access to advanced AI chips from the United States. Drawing on field research conducted in 2019, this report contributes to the literature by addressing China’s arguably most immediate and difficult AI challenges. The report highlights China’s challenge of competing in AI, and contrasts America’s and China’s different AI development trajectories. Capabilities and challenges are assessed, both for the large players (Huawei, Alibaba and Baidu) and for a small group of AI chip “unicorns.” The report concludes with implications for China’s future AI chip development.
  • Topic: Energy Policy, Science and Technology, Sanctions, Artificial Intelligence
  • Political Geography: United States, China, Asia, North America
  • Author: Dan Ciuriak, Maria Piashkina
  • Publication Date: 04-2020
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The rapid digital transformation occurring worldwide poses significant challenges for policy makers working within a governance framework that evolved over centuries. Domestic policy space needs to be redefined for the digital age, and the interface with international trade governance recalibrated. In this paper, Dan Ciuriak and Maria Ptashkina organize the issues facing policy makers under the broad pillars of “economic value capture,” “sovereignty” in public choice and “national security,” and outline a conceptual framework with which policy makers can start to think about a coherent integration of the many reform efforts now under way, considering how policies adopted in these areas can be reconciled with commitments under a multilateral framework adapted for the digital age.
  • Topic: International Trade and Finance, Reform, Digital Economy, Multilateralism, Digitization
  • Political Geography: United States, China, Europe, Asia, North America
  • Author: Susan Ariel Aaronson
  • Publication Date: 04-2020
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: From posting photos and videos to tracking physical activity, apps can do almost anything, but while they may seem like harmless fun, they may also pose a threat to personal data and national security. This paper compares the different responses of the United States, Canada and Germany to data risks posed by popular apps such as FaceApp, Facebook, Strava, TikTok and ToTok. These apps and many others store troves of personal data that can be hacked and misused, putting users (and the countries in which they live) at risk.
  • Topic: Security, Digital Economy, Social Media, Data
  • Political Geography: United States, Europe, Canada, Germany, North America
  • Author: Wada Haruko
  • Publication Date: 03-2020
  • Content Type: Working Paper
  • Institution: Centre for Non-Traditional Security Studies (NTS)
  • Abstract: The United States, Australia, Japan, India, France, the United Kingdom, Indonesia and ASEAN have adopted the term “Indo-Pacific” as a policy symbol of regional engagement. However, less attention has been given to the change in the geographical definition of the “Indo-Pacific”. This study examines how these countries have adjusted the geographical scope of “Indo-Pacific” to understand how they conceptualise the region. It finds that the inherent core area of the “Indo-Pacific” is from India to the Southeast Asian countries and the seas from the eastern Indian Ocean to the South China Sea, and that the “Indo-Pacific” has converged eastwards and diverged westwards through the geographical adjustment process. It also found that some of the geographical definitions have an additional function of conveying diplomatic messages. These findings will help us understand how the concept of “Indo- Pacific” as conceptualised by various countries develops.
  • Topic: Diplomacy, International Cooperation, Regional Cooperation, ASEAN
  • Political Geography: United States, Japan, United Kingdom, Asia, France, Australia, Indo-Pacific
  • Author: Malcolm Davis
  • Publication Date: 04-2020
  • Content Type: Working Paper
  • Institution: Centre for Non-Traditional Security Studies (NTS)
  • Abstract: This paper examines the key drivers shaping Australia’s role as a middle power in an era of intensifying US-China strategic competition. These drivers include the influence of strategic geography; its historical legacy in international affairs; the impact of its economic relationships with states in the Indo-Pacific region; the changing demands of defence policy, including the potential offered by rapid technological change; and, the impact of climate change, resource constraints and demographic factors. The paper considers three possible scenarios that will shape Australia’s middle power policy choices – a US-China strategic equilibrium; a “China crash” scenario that promotes a more nationalist and assertive Chinese foreign policy; and a third “major power conflict” scenario where competition extends into military conflict. The paper concludes that Australia cannot maintain a delicate balance between its strategic alliance with the US and trading relationship with China. It argues there is a need for Australia to adopt a deeper strategic alliance with the US while promoting closer ties with its partners in the Indo-Pacific and supporting the growth of a Free and Open Indo-Pacific region to counterbalance growing Chinese power. Australia needs to embrace an Indo-Pacific step up, and as a middle power, reduce the prospect of a Sino-centric regional order emerging.
  • Topic: Defense Policy, Nationalism, Military Strategy, Conflict
  • Political Geography: United States, China, Asia, Australia, Indo-Pacific
  • Author: Frank Umbach
  • Publication Date: 04-2020
  • Content Type: Working Paper
  • Institution: Centre for Non-Traditional Security Studies (NTS)
  • Abstract: When Beijing threatened to restrict China’s export of rare earths (widely used in numerous important civilian and military technologies) to the United States at the end of May 2019, the world was reminded of China’s rare earths export disruption in the autumn of 2010 amid a maritime territorial conflict between China and Japan. In the past few years, the worldwide attention cast on the future supply security of rare earths and other critical raw materials has increased in the United States, the European Union, Japan and other countries owing to the global expansion of “green technologies” (including renewable energy sources, electric vehicles and batteries, and smart grids) and digitalisation as well as equipment and devices embedded with artificial intelligence. In this paper, the term “critical raw materials” (CRMs) refers to raw materials critical to industries that are also import-dependent on them, and to new technologies which often have no viable substitutes and whose supply, besides being constrained by limited recycling rates and options, is also dominated by one or a few suppliers. CRMs include rare earth elements (REEs), which comprise 17 different elements (see Figure 4). The global race for the most advanced technologies dependent on CRMs has intensified the competition for access to as well as strategic control of REEs, lithium, cobalt, copper, nickel and other CRMs. This working paper analyses the global supply and demand balance of three CRMs (REEs, lithium and cobalt, the latter two being major raw materials for batteries) in the foreseeable future and whether ASEAN countries can play a role as producers and suppliers of CRMs. It also examines potential counterstrategies for mitigating and reducing the global demand for CRMs, such as substitution, reduced use of CRMs, and recycling and re-use.
  • Topic: Natural Resources, Digital Economy, Green Technology, Metals
  • Political Geography: United States, Japan, China, Asia
  • Author: Mieke Eoyang
  • Publication Date: 05-2020
  • Content Type: Working Paper
  • Institution: Third Way
  • Abstract: In 2020, candidates and elected officials will face questions on national security and foreign policy issues. In this memo, we provide short talking points on these issues that acknowledge the concerns of Americans, critique current approaches and policies, and present a vision for the future: 1. Global Health Security, 2. China & COVID-19, 3. China Trade War, 4. Russia, 5. Terrorism, 6. Domestic Extremism, 7. Iran, 8. Election Security, 9. Saudi Arabia & Yemen, 10. Syria, 11. Alliances, 12. North Korea, 13. Cyberthreats, 14. Venezuela, 15. Afghanistan, 16. Forever War, 17. Border Security, 18. Defense Spending, 19. Impeachment, 20. Climate Change, 21. Corruption
  • Topic: Security, Defense Policy, Military Strategy, Elections
  • Political Geography: United States, North America, Global Focus
  • Author: Choong Yong Ahn
  • Publication Date: 03-2020
  • Content Type: Working Paper
  • Institution: Korea Economic Institute of America (KEI)
  • Abstract: India and South Korea, Asia’s third- and fourth-largest economies, respectively, established a Comprehensive Economic Partnership Agreement (CEPA) in 2010 and upgraded their relationship to a special strategic partnership in 2015. South Korean President Moon Jae-in’s “New Southern” policy and Indian Prime Minister Narendra Modi’s “Act East” policy share important objectives and values through which Korea and India can maximize their potential to pursue high tech-oriented, win-win growth. Both countries face the great challenge of diversifying their economic partners in their respective geo-economic domains amid newly emerging international geo-economic dynamics as well as rapidly changing Fourth Industrial Revolution technologies. Given the two countries’ excessive dependence on the Chinese market and potential risks and uncertainties involved in the U.S.-China trade war and related security conflicts, South Korea and India need to deepen bilateral linkages in trade, investment, and cultural contacts. South Korea-India cooperation is crucial in promoting plurilateralism, prosperity, and harmony in East Asia. This paper suggests a specific action agenda to fulfill mutual commitments as entailed in the “Special Strategic Partnership” between these two like-minded countries of South Korea and India.
  • Topic: International Relations, Foreign Policy, Science and Technology, Bilateral Relations, Industry
  • Political Geography: United States, China, South Asia, India, Asia, South Korea, Korea
  • Author: Richard Nephew
  • Publication Date: 03-2020
  • Content Type: Working Paper
  • Institution: Center on Global Energy Policy
  • Abstract: Despite having played a central role in the creation of the international nuclear commercial sector, today the United States is increasingly on the outside looking in when it comes to civil nuclear projects. The United States now accounts for a relatively small number of new reactor builds, both at home and abroad. There are a few rays of sunshine for the US nuclear industry, especially when it comes to new technology. In fact, many of the new reactor builds that are underway do involve US technology and intellectual property, even if others are performing the construction. To take advantage of a similar dynamic, US innovators are looking to both new and forgotten designs as a way of managing the challenges of nuclear fuel manufacture, safety, waste management, security cost, and proliferation. But these new technologies face an uncertain future (and so consequently does the US role), even notwithstanding the advantages nuclear energy would bring to managing climate change and the edge the United States may have in their development. Various factors account for the challenges facing the US nuclear industry, including the complex political, economic, scientific, and popular environment around nuclear technology and civil nuclear energy. Of the various problems potentially plaguing US nuclear energy policy, one remains both difficult to address and controversial: US requirements for nuclear cooperation, and in particular, the demand from many in Congress and the nonproliferation community that the United States insist on binding commitments from its cooperating partners to forswear developing enrichment and reprocessing technology. While this policy is not responsible for the decline of the US nuclear industry, it adds additional hindrance to US nuclear commerce abroad and may even be to the long-term detriment of US nonproliferation policy interests. If so, then the questions that arise are whether this is in the US interest and, if not, how the US ought to respond. If the government believes that having a role in international nuclear commerce is advisable on both economic and strategic grounds, then it needs to decide whether to commit resources to incentivize foreign partners to overlook the problems its nonproliferation policies may cause these partners or seek modifications to those policies. From a pure nonproliferation perspective, it would be preferable for the United States to invest in its nuclear industry to ensure it is competitive globally. But, this does not seem to be a likely course of action for the United States given the myriad political, legal, and budgetary complexities that would be involved. Consequently, this paper recommends several changes to how US nuclear cooperation agreements are negotiated as well as enhancements to overall US nuclear nonproliferation policies. In aggregate, they seek to rebalance and reformulate some aspects of US nuclear nonproliferation policy to make it more effective and efficient, particularly regarding engagement in civil nuclear commerce, but without compromising the core nonproliferation interests the current US diplomatic approach seeks to advance. With respect to nuclear cooperation agreements, the paper recommends the following: Relaxing the current US preference for a legally binding commitment to forswear all enrichment and reprocessing capabilities indefinitely for these agreements, while continuing traditional US policy to discourage these technologies development through various means. Relying on enhanced inspector access and improved verification tools, technology, and practices to provide confidence on the nondiversion of civil nuclear cooperation rather than assurances regarding enrichment and reprocessing that, in any event, are potentially revocable. Adopting a favorable view of “black box” transfers of nuclear power reactors and building this into policy as new, advanced reactor concepts are being explored, developed, and marketed. Creating a new sanctions regime to cover countries that pursue enrichment and reprocessing capabilities after concluding a 123 agreement. With respect to nuclear nonproliferation policy more generally, the paper recommends the following: Developing an annual nonproliferation indicators publication to identify trends in proliferation, including the kinds of goods that proliferators are potentially seeking. This document would also include a list of countries where there are presently enhanced concerns regarding national nuclear programs or concerns about transshipment and export control risk. Its objective would not be to serve as a proxy for future sanctions designations decisions but rather to give a broad perspective of the challenges that exist with particular jurisdictions even—and perhaps especially—if there is no need or justification for sanctions at present. Developing a warning system for sought-after goods. The United States should work with industry to develop a restricted database that identifies sensitive goods that are being sought. This database would be accessible to corporate compliance officers, who would be vetted for access to the information. Within it, the database could also include additional information about the sorts of tactics being employed by proliferators. Making greater use of end use verification as a means of facilitating monitoring of the nonproliferation commitments of countries, particularly regarding dual use technology. This could also be built out to include greater collaboration with partner countries and companies. Amending Executive Order 13382, which provides for sanctions against proliferators of weapons of mass destruction, to add a prong of “willful negligence.”
  • Topic: Energy Policy, International Cooperation, United Nations, Infrastructure, Nuclear Power, Nonproliferation
  • Political Geography: United States
  • Author: Helena Legarda
  • Publication Date: 02-2020
  • Content Type: Working Paper
  • Institution: International Institute for Strategic Studies
  • Abstract: China hits back after NATO calls it a security challenge, dormant Chinese hacking group resumes attacks, and more.
  • Topic: Security, Defense Policy, NATO, Diplomacy
  • Political Geography: United States, China, Europe, North Atlantic, Beijing, Asia, Vietnam, Sri Lanka
  • Author: Trevon Logan, Peter Temin
  • Publication Date: 01-2020
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: This paper records the path by which African Americans were transformed from enslaved persons in the American economy to partial participants in the progress of the economy. The path was not monotonic, and we organize our tale by periods in which inclusiveness rose and fell. The history we recount demonstrates the staying power of the myth of black inferiority held by a changing white majority as the economy expanded dramatically. Slavery was outlawed after the Civil War, and blacks began to participate in American politics en masse for the first time during Reconstruction. This process met with white resistance, and black inclusion in the growing economy fell as the Gilded Age followed and white political will for black political participation faded. The Second World War also was followed by prosperity in which blacks were included more fully into the white economy, but still not completely. The Civil Rights Movement proved no more durable than Reconstruction, and blacks lost ground as the 20th century ended in the growth of a New Gilded Age. Resources that could be used to improve the welfare of whites and blacks continue to be spent on the continued repressions of blacks.
  • Topic: Economics, Race, History, Capitalism, Slavery
  • Political Geography: United States, Global Focus
  • Author: Serhii Plokhy
  • Publication Date: 03-2020
  • Content Type: Working Paper
  • Institution: The Toynbee Prize Foundation
  • Abstract: It is only in the past decade that Ukrainian history has begun to be researched in the context of international or global history. The American historian Serhii Plokhy, Mykhailo S. Hrushevs'kyi Professor of Ukrainian History at Harvard University and director of the Harvard Ukrainian Research Institute, is a prominent exponent of this approach. His books The Gates of Europe: A History of UkraineandChernobyl: History of a Tragedy analyze the major problems of the Ukrainian past from a transnational perspective. His latest book, Forgotten Bastards of the Eastern Front: An Untold Story of World War II, deals with the establishment of United States Air Force bases in the Poltava region of Soviet Ukraine in 1944—the only place where Soviet and American troops lived and fought side by side during the war, putting the anti-Nazi alliance to the test. Plokhy's research interests include the early modern history of Ukraine, twentieth-century international history, and intellectual history. I spoke with Serhii Plokhy about the integration of Ukrainian history into global history, the colonial status of Ukraine, and environmental history.
  • Topic: History, Military Affairs, World War II, Air Force
  • Political Geography: Russia, United States, Ukraine, Soviet Union
  • Author: Meredith Lily, Hugo Perezcano, Christine McDaniel
  • Publication Date: 02-2019
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The Canada-United States-Mexico Agreement (CUSMA) — known in the United States as the United States-Mexico-Canada Agreement (USMCA) — was reached on September 30, 2018, and will replace its predecessor if successfully ratified by legislatures in all three countries. Several weeks later, on October 14–16, 2018, thought leaders from Mexico, the United States and Canada gathered for the fourteenth annual North American Forum in Ottawa, Ontario. In light of these events, CIGI initiated a trilateral project to anticipate and predict how North American trade and economic relations would unfold in the near term and further into the future. Three authors, Christine McDaniel, Hugo Perezcano Díaz and Meredith Lilly, each from one of the North American countries, explain the importance of the new CUSMA to their respective countries and how economic relations could be reshaped in the coming months and years. Earlier versions of these papers were presented in a panel discussion at the North American Forum.
  • Topic: International Trade and Finance, Regional Cooperation, NAFTA, USMCA
  • Political Geography: United States, Canada, North America, Mexico
  • Author: Olena Ivus, Marta Paczos
  • Publication Date: 05-2019
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: In recent years, Canada has adopted the Comprehensive Economic and Trade Agreement (CETA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Canada-United States-Mexico Agreement (CUSMA). Like other modern international trade agreements, CETA, the CPTPP and the CUSMA include protections for innovators’ profits and technologies in the form of intellectual property rights (IPRs) regulations. These trade agreements will have a first-order impact on the volume and composition of trade in goods and innovation with sensitive intellectual property (IP) in Canada, as well as having an impact on global welfare distribution. But is Canada’s membership in these agreements good for Canadian firms looking to compete globally? This paper begins with a review of the IP protections instituted through recent trade deals involving Canada. It discusses the nature and scope of Canada’s IP obligations under CETA, the CPTPP and the CUSMA and explains how these obligations fit within the current Canadian legal framework. The changes in the standards of IPRs under these agreements will have a first-order impact on the volume and composition of trade in IP-sensitive goods, innovation and global welfare distribution and so deserve thorough debate. The paper then proceeds with a broader discussion of the reasons to include IP provisions in international trade agreements and the rationale for international coordination of the IPRs policy. Next, the paper discusses how IP provisions in trade agreements limit the freedom to use IP policy to promote national interests, while acknowledging that the various IP obligations are counterbalanced by several flexibilities, including the right to establish local exhaustion policies. The paper concludes with policy recommendations.
  • Topic: International Trade and Finance, NAFTA, Trans-Pacific Partnership, Innovation, USMCA
  • Political Geography: United States, China, Canada, Asia, North America, Mexico
  • Author: James A. Haley
  • Publication Date: 07-2019
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: This paper discusses the nexus between the Donald Trump administration’s trade policy and International Monetary Fund (IMF) exchange rate surveillance. It reviews the evolution of IMF surveillance and the possible implications of incorporating currency manipulation clauses into bilateral trade agreements. Such clauses constitute a key US trade negotiation objective. While they may reflect genuine concern over practices to thwart international adjustment, they could erode the effectiveness of the IMF at a time of transition and resulting tension in the global economy. Managing this tension calls for a cooperative approach to the issue of adjustment, one consistent with the fundamental mandate of the IMF. An approach based on indicators of reserve adequacy is proposed. Such a framework was briefly considered and dismissed almost 50 years ago, which was likewise a period of tension in trade and global monetary affairs. Prospects for success today are equally dim because cooperative measures to assuage adjustment challenges would require repudiation of the view that exchange rate surveillance is about bilateral trade balances and abandonment of the zero-sum game approach to international arrangements on which Trump administration trade actions are based.
  • Topic: International Cooperation, International Trade and Finance, Exchange Rate Policy, IMF
  • Political Geography: United States, North America
  • Author: Armand de Mestral, Lukas Vanhonnaeker
  • Publication Date: 09-2019
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: In response to concerns raised about investor-state arbitration (ISA), different proposals for reform of this means of dispute settlement have been proposed. One such proposal is to entrust domestic courts with the resolution of investment disputes. Although opting for the resolution of investment disputes before domestic courts has led to some discussion about the advantages and difficulties of this approach, very few studies have analyzed the specificities of domestic regimes in this regard. Many questions remain unanswered, including whether foreign investors have, in practice, access to domestic courts in the host state and whether the remedies available domestically are comparable to those available in ISA. In an attempt to answer some of these questions, a questionnaire was prepared and answered by respondents in 17 countries, in addition to Canada, from different regions of the world.
  • Topic: Reform, Democracy, Legal Theory , Investment
  • Political Geography: United States, Canada, South America, North America, Mexico, Peru
  • Publication Date: 10-2019
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: In December 2017, trade ministers met in Buenos Aires, Argentina, for the Eleventh Ministerial Conference of the World Trade Organization (WTO), against the backdrop of crisis in the WTO dispute settlement system. After the meeting achieved only modest outcomes, and none related to dispute settlement, the Centre for International Governance Innovation convened a group of experts in Ottawa for a round table discussion of the way forward to restoring and improving the dispute settlement system. The round table discussion addressed three issues: ideas for reforming the operation of the WTO dispute settlement system; US concerns over the operation of the WTO dispute settlement system and the US decision to block appointments to the Appellate Body; and solutions to break the deadlock on WTO Appellate Body appointments and what to do if members are unable to reach an agreement. There was broad agreement that, while the WTO dispute settlement system has made an important contribution to maintaining the security and predictability of the rules-based trading system, there is still room for improvement in its operation. Participants discussed a number of procedural, systemic and substantive issues that could be addressed through reform, some of which might be easily agreed on and implemented, whereas others would require further consideration. It was agreed that the most pressing challenge to the system is the refusal of the United States to allow new appointments to the Appellate Body. While there was sympathy for some of the concerns raised by the United States, participants agreed that the ultimate objectives of the United States remain unclear, and, therefore, participants cautioned against making hasty concessions that might undermine the integrity and independence of the dispute settlement system.
  • Topic: International Trade and Finance, World Trade Organization, Settlements
  • Political Geography: United States, Canada, North America
  • Author: Patrick Leblond
  • Publication Date: 10-2019
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: On the margins of the Group of Twenty leaders’ meeting in Osaka, Japan on June 28-29, 2019, Canada and 23 others signed the Osaka Declaration on the Digital Economy. This declaration launched the “Osaka Track,” which reinforces the signatories’ commitment to the World Trade Organization (WTO) negotiations on “trade-related aspects of electronic commerce.” In this context, unlike its main economic partners (China, the European Union and the United States), Canada has yet to decide its position. The purpose of this paper is thus to help Canada define its position in those negotiations. To do so, it offers a detailed analysis of the e-commerce/digital trade chapters found in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Canada-United States-Mexico Agreement (CUSMA), the North American Free Trade Agreement’s replacement, in order to identify the potential constraints that these agreements could impose on the federal government’s ability to regulate data nationally as it seeks to establish a trusting digital environment for consumers and businesses. The analysis leads to the conclusion that Canada’s CPTPP and CUSMA commitments could ultimately negate the effectiveness of future data protection policies that the federal government might want to adopt to create trust in the data-driven economy. As a result, Canada should not follow the United States’ position in the WTO negotiations. Instead, the best thing that Canada could do is to push for a distinct international regime (i.e., separate from the WTO) to govern data and its cross-border flows.
  • Topic: International Cooperation, International Trade and Finance, World Trade Organization, European Union, Digital Economy
  • Political Geography: United States, China, Europe, Canada, Asia, North America
  • Author: Chios Carmody
  • Publication Date: 10-2019
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: This is a guide to the legal framework for emissions trading under the cap-and-trade system created and adhered to under the Western Climate Initiative (WCI). This guide is intended to serve three aims. First, the guide is an overview of the WCI cap-and-trade system for emissions trading by current users of the system; potential industry participants; state, provincial and municipal governments; academic institutions; and members of civil society. Second, the guide’s aim is to foster learning among domestic and international actors interested in North America’s collective response to climate change and highlights one attempt to combat climate change through a subnational cap-and-trade system on the continent. Third, during the course of research for this guide in 2018, the province of Ontario linked its WCI-inspired cap-and-trade system with that of California and Quebec and six months later delinked its system, eventually terminating it altogether and announcing its intention to withdraw from the WCI. A third purpose of this guide is therefore to serve as an account of Ontario’s short-lived cap-and-trade system and its brief experience with linkage.
  • Topic: Civil Society, Climate Change, Environment, Carbon Emissions
  • Political Geography: United States, Canada, North America, Mexico
  • 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, Border Control
  • Political Geography: United States, Central America, North America, Honduras, Guatemala, El Salvador
  • 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, Refugees
  • Political Geography: United States, Central America, North America, Honduras, Guatemala, El Salvador
  • Author: Paul Saunders, John Van Oudenaren
  • Publication Date: 03-2019
  • Content Type: Working Paper
  • Institution: Center for the National Interest
  • Abstract: The report provides a synthesis of Japanese and American expert perspectives on the recent history, current state and future prospects for Japan-Russia relations. The authors examine the political, diplomatic, security, economic and energy dynamics of this important, but understudied relationship. They also assess how the Japan-Russia relationship fits within the broader geopolitical context of the Asia-Pacific region, factoring in structural determinants such as China’s rise and the level of U.S. presence in the region. Finally, the authors consider potential policy implications for the United States, paying special attention to how shifts in relations between Tokyo and Moscow could impact the U.S.-Japan alliance. As Saunders observes in his introduction to the volume, the currently shifting strategic environment in the Asia-Pacific region, which is a central factor in Tokyo and Moscow’s efforts to foster constructive relations, also raises a host of questions for the US-Japan alliance. What are the prospects for Japan-Russia relations? What are Russian and Japanese objectives in their bilateral relations? How does the Trump administration view a possible improvement in Russia-Japan relations and to what extent will U.S. officials seek to limit such developments? Is the U.S.-Russia relationship likely to worsen and in so doing to spur further China-Russia cooperation? Could a better Russia-Japan relationship weaken the U.S.-Japan alliance? Or might it in fact serve some U.S. interests?
  • Topic: Foreign Policy, Diplomacy, International Cooperation, Regional Cooperation
  • Political Geography: Russia, United States, Japan, China, Europe, Asia
  • Author: Steve Chan
  • Publication Date: 11-2019
  • Content Type: Working Paper
  • Institution: Centre for Non-Traditional Security Studies (NTS)
  • Abstract: This short essay introduces some concepts and propositions from social science research that I personally find helpful in understanding the ongoing Sino-American trade dispute. Naturally, they are not meant to suggest a comprehensive or exhaustive list of factors that inform this topic. Given the purpose and the limits of my essay, I also do not engage any specific theory or method, such as the efficient-market hypothesis or game theory pioneered by well-known Nobel laureates (e.g., Burton Malkiel and Eugene Fama1; Thomas Schelling2).
  • Topic: Conflict, Trade, Economic Cooperation
  • Political Geography: United States, China, Asia-Pacific
  • 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, Islamic State
  • Political Geography: United States, Iraq, Middle East, Baghdad, Kurdistan
  • 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, Military Strategy
  • Political Geography: United States, Iraq, Iran, Middle East, Tehran, Washington, D.C.
  • 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, State Building
  • Political Geography: United States, Iraq, Middle East, Baghdad
  • 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, Deterrence
  • Political Geography: Russia, United States, Europe
  • 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, Deterrence
  • Political Geography: United States, Japan, China, Asia, South Korea, North Korea
  • 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, Nonproliferation
  • Political Geography: United States, China, Taiwan, Asia
  • 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, Nuclear Power
  • Political Geography: United States, China, Beijing, Asia
  • Publication Date: 02-2019
  • Content Type: Working Paper
  • Institution: Fundación Alternativas
  • Abstract: Our starting point was the observation that the international order, but also the political, social and economic order on a domestic level in the West are undergoing profound changes, some of which stem from the new social, political and economic situation in the United States. The world’s major power has become the epicentre of numerous transformations that have accelerated with the arrival of Donald Trump in the White House. The consolidation of a populist political narrative and the implementation of a series of highly disruptive policies in the international system are unequivocal signs of profound transformations rooted in changes that have been under way for years. At the Fundación Alternativas’s Observatory of Foreign Policy (OPEX) we set out to coordinate a Working Group commissioned with the task of analysing those transformations and trends in the United States, primarily from a European standpoint. Our goal was to explore the new social, political, technological, economic and cultural trends that are going to shape thought and debate in Europe and the rest of the world on numerous and very diverse topics – from the new geopolitics to social breakdown; from globalisation and the technological shift to transatlantic relations; the crisis of the traditional political parties; robotization and digitalisation; migration flows, climate change and renewable energies; fake news and new media. Lastly, we tried to begin reflection with regard to Spanish and European political and social agents, drawing a prospective map of important changes that all of these trends are causing on both sides of the Atlantic. The project included several work sessions at the Fundación Alternativas offices over the course of 2018. They were built around a short presentation, followed by a lively exchange of ideas. Numerous experts linked to the Fundación Alternativas, practitioners and guests from other prestigious Spanish and international institutions took part in the Working Group. To have them with us and Vicente Palacio US Trends That Matter For Europe January 2019 5 be able to broadcast the sessions live to a wide audience, we also made use of Skype and social media. The result, then, is a starting point rather than an end point: an initial cognitive map that will have to be continued and extended in the future. We have chosen to put into print and disseminate this material electronically thanks to the collaboration of the School of International Relations at the Instituto de Empresa (IE) and its Transatlantic Relations Initiative (TRI) led by Manuel Muñiz, Dean of IE School of Global and Public Affairs, to be more precise. Special thanks go to him and to Waya Quiviger, Executive Director of the TRI, for their collaboration in the completion of this project that we present jointly at the IE headquarters in Madrid.
  • Topic: Diplomacy, International Cooperation, Europe Union, Transatlantic Relations
  • Political Geography: United States, Europe, Atlantic Ocean
  • 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, Military Strategy
  • Political Geography: United States, Europe, North Atlantic, North America
  • 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, Financial Crisis
  • Political Geography: United States, Latin America, Venezuela, North America
  • 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, Revolution
  • Political Geography: Russia, United States, Europe, Soviet Union, Armenia, Azerbaijan, Ottoman Empire
  • 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, Geopolitics
  • Political Geography: Russia, United States, Europe, Ukraine, Eastern Europe, Crimea
  • 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, Military Intervention
  • Political Geography: Pakistan, United States, Europe, India, Asia, Soviet Union, Australia
  • 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, Decentralization
  • Political Geography: United States, Iraq, Middle East, Baghdad
  • 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, Repression
  • Political Geography: United States, Middle East, Israel, Palestine, Lebanon
  • 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, State Building
  • Political Geography: United States, Iraq, Middle East, Baghdad
  • 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, Repression
  • Political Geography: Russia, United States, Iran, Middle East, Syria, Damascus
  • Author: David Sandlow, Anders Hove
  • Publication Date: 02-2019
  • Content Type: Working Paper
  • Institution: Center on Global Energy Policy
  • 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, Electricity
  • Political Geography: United States, China, Asia, North America
  • Author: Justin Gundlach, Ron Minsk, Noah Kaufman
  • Publication Date: 03-2019
  • Content Type: Working Paper
  • Institution: Center on Global Energy Policy
  • 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, Carbon Tax
  • Political Geography: United States
  • Author: Richard Nephew
  • Publication Date: 03-2019
  • Content Type: Working Paper
  • Institution: Center on Global Energy Policy
  • 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, Global Political Economy
  • Political Geography: United States, Europe
  • Author: Adele Morris, Noah Kaufman, Siddhi Doshi
  • Publication Date: 07-2019
  • Content Type: Working Paper
  • Institution: Center on Global Energy Policy
  • 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, Domestic Policy
  • Political Geography: United States
  • Author: John Macwilliams, Sarah Lamonaca, James Kobus
  • Publication Date: 08-2019
  • Content Type: Working Paper
  • Institution: Center on Global Energy Policy
  • 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, Electricity
  • Political Geography: United States, California
  • Author: Richard Nephew
  • Publication Date: 10-2019
  • Content Type: Working Paper
  • Institution: Center on Global Energy Policy
  • Abstract: Though historically China has been a sanctions recipient, with only a few isolated incidents of using sanctions in return, this situation is likely going to change in the years to come. China’s global economic position — as well as its ambitions to serve as not only a global power, but also potentially the leading international power — will push it to consider means of exerting international leverage. The United States has shown vividly in the last 30 years that sanctions are one means to this end, and Chinese scholars are demonstrating increasing facility with sanctions doctrine. China’s increasing assertiveness in economic sanctions will allow it to not only hit back directly against the United States with retaliatory measures, but also to develop independent rationales to apply sanctions in pursuit of Chinese policy objectives. China may begin using sanctions as an affirmative instrument of policy. The United States is vulnerable to disruptions in U.S.-Chinese economic ties. The U.S. reliance on Chinese financing, especially for U.S. national debt, and Chinese economic growth in areas where the U.S. typically excels demonstrate China’s capacity to target the U.S. To combat this potential emerging threat, the United States should seek first to negotiate with China on ways to avoid conflict. But, given the likelihood of competition nonetheless, the United States should also add sanctions development to its crisis management process, and increase intelligence and analytical capabilities that focus directly on Chinese sanctions doctrine and practice.
  • Topic: Diplomacy, Sanctions, Global Political Economy
  • Political Geography: United States, China, Asia, North America
  • Author: Daniel Raimi, Ron Minsk, Alan Krupnick
  • Publication Date: 10-2019
  • Content Type: Working Paper
  • Institution: Center on Global Energy Policy
  • Abstract: Growth in US oil production has created substantial economic and energy security benefits for the nation. Over the course of a decade, new oil production has virtually eliminated the US trade deficit in petroleum and, in 2020, the Congressional Budget Office projects that US GDP will be 0.7% higher than it would have been without shale development. However, the rise in oil output has also expanded the number of communities closely tied to swings in crude prices—the boom and bust cycles that have confounded producers since the first commercial wells were spudded in the mid-19th century. US oil producing regions enjoy significant economic growth during boom times, boosting state and local investment, employment, and household income. This growth often comes with its own challenges—such as strains on local housing, school, and infrastructure—which are amplified by uncertainty over when, and to what extent, prices and production will fall. When oil prices drop, local and state economies can face sharp declines, and decisions or investments made during the boom period may become obsolete. This volatility creates planning challenges for both the public and private sectors, along with substantial risks for residents of oil producing regions. In this report for Columbia University’s Center on Global Energy Policy, the authors address whether the federal government can and should intervene to reduce the challenges associated with this volatility. In their research, the authors convened two expert workshops, reviewed the existing evidence, and analyzed a range of potential policy options. The report recommends a modest intervention: establishing a federal interagency Oil Volatility Advisory Board. The board would synthesize data on local economic, fiscal, and social conditions in producing communities. With this information, the board would play a coordinating role by connecting public and private institutions in producing regions with existing federal programs designed to manage near-term challenges and diversify local economies over the longer term. While this proposal is unlikely to eliminate all of the local challenges associated with oil price volatility, it could help smooth fluctuations, providing the basis for a higher quality of life along with more stable economic growth in producing regions. The paper finds that: The experience of booms and busts in oil producing regions is distinct from other regional economic challenges, as local businesses, governments, and residents must prepare for—and respond to—large, rapid, and unpredictable changes in local economic conditions. While the federal government has established programs to assist with long-term economic decline in some coal, military, and trade-impacted communities, no analogous program exists for supporting oil-producing communities experiencing economic volatility. State governments in Texas, North Dakota, Colorado, and elsewhere have shown varying levels of interest in assisting localities manage the challenges of volatility. Where they exist, these efforts have mostly focused on managing infrastructure demand during “boom” periods. However, some states have done little to address local impacts during booms, and no states have taken major steps to support economic diversification or other efforts that could soften the local impacts of “busts.” In some states—particularly Texas—existing tax policy exacerbates, rather than smooths out, revenue volatility for local governments. Several existing federal offices and programs can provide a base of knowledge to support oil-producing communities. These include the U.S. Economic Development Administration (EDA), the Department of Defense’s Office of Economic Adjustment, and federal Trade Adjustment Assistance. We believe that EDA offers the clearest model to support long-term economic diversification in oil producing communities. If Congress were to fund EDA to support oil producing communities, clear guidelines would need to be established to determine eligibility criteria. In the absence of new, devoted federal funding, a federal Oil Volatility Advisory Board may provide the best option to mobilize and align federal resources to meet the needs of oil producing communities. This interagency body would synthesize data to identify communities most in need of support, conduct outreach efforts to these communities, and assist them in accessing available federal resources.
  • Topic: Energy Policy, Oil, Federalism
  • Political Geography: United States
  • Author: Noah Kaufman, John Larsen, Peter Marsters, Hannah Kolus, Shashank Mohan
  • Publication Date: 11-2019
  • Content Type: Working Paper
  • Institution: Center on Global Energy Policy
  • Abstract: Growing public concern about the social, economic, and environmental impacts of climate change, along with pressure for lawmakers to introduce policy proposals that reduce emissions, have brought carbon taxes to the center of policy discussions on Capitol Hill. Thus far in 2019, seven different carbon tax legislative proposals have been introduced in Congress. The proposal with the most cosponsors, totaling 64 Democrats and 1 Republican as of the end of September 2019, is the Energy Innovation and Carbon Dividend Act (EICDA), introduced in February 2019 by lead sponsor Ted Deutch (D-FL). This study assesses the potential impacts of EICDA on the US energy system, environment, and economy. EICDA establishes a fee on each ton of greenhouse gas (GHG) emissions. It covers over 80 percent of gross national emissions. The fee starts at $15 per metric ton and increases by $10 or $15 each year, depending on future emissions levels. Revenue raised by the carbon fee is used for “carbon dividends,” a rebate to every eligible US citizen or lawful resident. The bill also includes measures to protect US competitiveness and to reduce the risk that companies will relocate their operations to a different country with laxer climate laws. Through the carbon fee and additional regulations if necessary, EICDA targets 90 percent emissions reductions by 2050 compared to 2016 levels. This study is part of a joint effort by Columbia University’s Center on Global Energy Policy (CGEP) and Rhodium Group to help policymakers, journalists, and other stakeholders understand the important decisions associated with the design of carbon tax policies and the implications of these decisions. This analysis uses a version of the National Energy Modeling System maintained by the Rhodium Group (RHG-NEMS) to quantify the energy and environmental implications of EICDA, focusing on outcomes through 2030. Supplemental analyses provide insights on how EICDA would affect households, the economy, and government budgets. The following are key results: GHG emissions decline substantially. Compared to 2005 levels, implementing EICDA as a stand-alone policy leads to economy-wide net GHG emissions reductions of 32–33 percent by 2025 and 36–38 percent by 2030. These emissions reductions exceed the targets in the EICDA proposal through 2030 and exceed the US commitments to the Paris Agreement over this period. Most of the near-term emission reductions occur in the power sector, where emissions fall 82–84 percent by 2030. Air pollution also declines. EICDA reduces local air pollution from power plants. Sulfur dioxide (SO2) and mercury emissions from the power sector decline by more than 95 percent and emissions of oxides of nitrogen (NOx) decline by about 75 percent by 2030 relative to a current policy scenario. Electricity generation shifts to cleaner sources. The price on carbon causes the US economy to shift from carbon-intensive energy sources to low- and zero-carbon energy sources. Coal is nearly eliminated from the power sector by 2030, with solar, wind, nuclear, and natural gas with carbon capture and storage all providing significantly larger generation shares compared to a current policy scenario. Energy prices rise but do not skyrocket. The price on carbon causes energy prices to increase for all carbon-emitting fuels, which leads to significantly higher overall energy expenditures, though within the range of recent historical variation. Taking two prominent examples, results show EICDA causing national average gasoline prices to increase by about 12 cents per gallon in 2020 and 90 cents per gallon in 2030 and causing national average electricity prices to increase by about 1 and 3 cents per kilowatt hour in 2020 and 2030, respectively. EICDA causes per capita energy expenditures to increase by $200-$210 in 2020 and $1,160-$1,170 in 2030 compared to a current policy scenario. In all years, annual per capita energy expenditures remain below the recent historical peak during the commodities crisis in 2008. The carbon dividend cushions energy price impacts. EICDA generates substantial revenue that is distributed in the form of equal dividend payments. EICDA generates $72–$75 billion in carbon tax revenues in 2020 and $403–$422 billion in 2030. This translates into an annual dividend for eligible adults of $250-$260 in 2020 and $1,410-$1,470 in 2030, with half those amounts also paid to eligible children. On average, the carbon dividend payments are comparable to the changes in energy expenditures caused by EICDA. Because higher-income households purchase far more carbon-intensive goods and services, distributing dividends equally implies that average low- and middle-income households receive more in dividends than they pay in increased economy-wide prices for goods and services resulting from the carbon tax. Net government revenue declines slightly, at least initially. Carbon tax-and-dividend policies are often described as “revenue neutral,” but the impacts of EICDA on government revenue are uncertain and likely negative in the near term. We estimate that the net government revenues under EICDA decline by roughly 10 percent of the annual carbon tax revenue in the early years of the policy. This estimate considers government revenue gains from taxing emissions and dividends, dividend payouts, and government revenue losses from reduced income and payroll taxes from those who pay the carbon tax. However, the proposal will also affect government revenue in other ways that are beyond the scope of our analysis, so the overall impacts on net government revenue is uncertain.
  • Topic: Climate Change, Energy Policy, Green Technology, Carbon Tax
  • Political Geography: United States
  • Author: Ilan Goldenberg, Jessica Schwed, Kaleigh Thomas
  • Publication Date: 11-2019
  • Content Type: Working Paper
  • Institution: Center on Global Energy Policy
  • Abstract: In recent months, Iran has responded to rising tensions with the United States—particularly the US launch of the “maximum pressure” campaign against Iran—by attacking oil tankers and infrastructure in the Persian Gulf region around the Strait of Hormuz (the Strait). These actions have been designed to signal to the United States, the Gulf states, and the international community that the American strategy of strangling Iran economically will not be cost-free, and to Saudi Arabia in particular that it is highly vulnerable to Iranian retaliation. As the Strait of Hormuz is one of the world’s most critical energy chokepoints, the implications of Iran’s efforts merit close scrutiny and analysis. This study was designed to examine three scenarios for military conflict between Iran and the United States and assess the potential impacts on global oil prices—as one specific representation of the immediate economic impact of conflict—as well as broader strategic implications. The three scenarios are: Increasing US-Iran tensions that ultimately lead to a new “Tanker War” scenario similar to the conflict of the 1980s, in which Iran attacks potentially hundreds of ships in the Persian Gulf and Gulf of Oman over a prolonged period while also launching missiles at Gulf oil infrastructure. An escalation of tensions between Iran and the United States in which Iran significantly increases the scope and severity of missile attacks directed at major oil and energy infrastructure in Saudi Arabia and the UAE. A major conflict between Iran and the United States that includes damage to Gulf oil infrastructure and a temporary closure of the Strait of Hormuz. Its main conclusions are: The risk of a major military confrontation between the United States and Iran has increased in recent months but still remains relatively low, as neither the United States nor Iran wants war. That said, the September 14, 2019, attack on the Abqaiq and Khurais facilities was a strategic game changer and shows that the biggest risk is a prolonged, low-intensity military conflict. The fact that Iran was willing to conduct such an attack was a surprise to most analysts and to the US government and its Gulf partners. The level of accuracy it showed in the strike demonstrated a technical proficiency the US government and outside analysts did not believe Iran had. In the more moderate and likely conflict scenarios, increasing tensions between the United States and Iran are unlikely to dramatically affect global oil prices. The most profound costs in the more likely scenarios are not energy-related but security-related. Even in the less escalatory scenarios, the United States would be forced into long-term deployments of a large number of air and naval assets that would need to remain in the Middle East for years at a cost of billions of dollars. Such deployments would take away resources that would otherwise be dedicated to managing great power competition with China and Russia. In the more extreme conflict scenarios, major loss of life and an even bigger and longer-term American military deployment would be expected. In the lower likelihood scenario of a major military confrontation between the United States and Iran, global oil prices would be dramatically affected, though price impacts would not be prolonged. All assumptions about the potential impacts on oil prices are based on the supposition that the United States protects global shipping lanes, but that theory deserves further scrutiny. For more than a generation, the United States has viewed securing global shipping lanes that are critical for commerce and energy as a core vital interest. But given the isolationist tendencies in the United States and President Donald Trump’s attitude that America should stop underwriting the defense of its allies, it is conceivable he may choose not to respond in the types of scenarios described in this paper or demand that countries most dependent on oil trade from the Gulf—most notably China—step up instead. Another wild card for oil prices in a major crisis scenario would be President Trump’s unpredictable policies regarding the Strategic Petroleum Reserve. Typically, an administration would be expected to coordinate an international response with the International Energy Agency (IEA) to release the SPR of a number of countries, but this cannot be assumed in the current administration. Though these conclusions are to some extent comforting, the authors acknowledge that a key issue with any analysis of this situation is the unpredictability of the United States. In the present moment, neither US adversaries nor partners know quite what to expect—and, for that matter, neither does the US government or its observers.
  • Topic: Foreign Policy, Energy Policy, Oil, Global Political Economy
  • Political Geography: United States, China, Iran, Middle East, Asia
  • Author: Noah Kaufman, David Sandlow, Clotilde Rossi de Schino
  • Publication Date: 12-2019
  • Content Type: Working Paper
  • Institution: Center on Global Energy Policy
  • Abstract: In the United States, commercial and residential buildings produce roughly 12 percent of greenhouse gas emissions. Most of these emissions come from burning fossil fuels for space heating. These emissions must be significantly reduced or eliminated for the US to achieve deep decarbonization goals, including net zero emissions by midcentury. Air source heat pumps (ASHPs) are powered by electricity, using well-established technology to move heat from outdoor air to indoor air. When powered by zero-carbon electricity, ASHPs provide space heating with almost no greenhouse gas emissions. ASHPs are especially effective for space heating in mild climates. In 2015, roughly 10 percent of US households (mostly in the Southeast) used air source heat pumps as their primary heating source.[1] ASHPs account for roughly one-third of residential space heating in Japan. The world’s largest ASHP market is in China, where sales are growing rapidly. Prominent studies on decarbonization of the US energy system focus on deployment of air source heat pumps as the primary strategy for reducing emissions from space heating. Some studies show near-universal electrification of space heating, suggesting that ASHPs (with some backup from electric resistance heaters) can be almost a silver bullet solution for decarbonizing space heating. These studies start with the assumption that fossil fuel furnaces and boilers will be gradually phased out. Other studies assume that electric heating technologies such as ASHPs will continue to compete against fossil fuel burning furnaces and boilers in the decades ahead. These studies conclude that furnaces and boilers will retain a significant share in space heating markets, even with technological progress and strong policy support for ASHPs, but often fail to explain why. Do high costs or inferior performance limit market penetration in these studies? Or do other barriers limit ASHP deployment? The answer has important implications for policy makers shaping decarbonization strategies. To help answer these questions, we built a simple model of ASHP adoption that estimates the lifetime costs of space heating and cooling configurations in three US cities with markedly different climates and energy costs: Atlanta, Georgia; San Diego, California; and Fargo, North Dakota. The model analyzes the choices facing hypothetical consumers installing new heating and cooling equipment in residential buildings. The consumers have the option to purchase an ASHP for heating and cooling (with backup if needed) or a natural gas furnace and air conditioner. Based on the model results and related research, we conclude: Air source heat pumps are cost competitive today in places where electricity is cheap and the climate is mild. With climate policies consistent with rapid decarbonization and reasonably foreseeable technological progress, air source heat pumps are the low-cost option for typical residential buildings across much of the US by the mid-2030s. Even in the very cold climate of Fargo, North Dakota, the combination of a price on carbon emissions and steady innovation in ASHPs causes ASHPs (with an electric resistance heater as a backup) to be cost competitive with new natural gas furnaces and air conditioners by the 2030s. If the United States commits to the rapid decarbonization of space heating by midcentury, the costs and performance of ASHPs are unlikely to be major barriers to deployment. However, other important barriers may persist, including contractors’ and homeowners’ greater familiarity with incumbent fossil fuel technologies and the slow turnover of the building stock. As a result of these additional barriers, emissions pricing and technological progress alone may not lead to deployment of air source heat pumps in the United States sufficient to achieve deep decarbonization by midcentury. That would likely require additional policy instruments such as technology standards, emissions caps, or mandates. Other technologies can also contribute to decarbonizing space heating, including renewable natural gas, hydrogen produced with carbon capture and storage (CCS) or electrolysis, and centralized or district heating. Each of these options comes with challenges that will require policy support to overcome. This study does not point to a proper balance between ASHPs and other space heating decarbonization technologies. More research is needed to compare different approaches and strategies. In the meantime, our analysis suggests little if any downside to pursuing ambitious policies to promote deployment of ASHPs, prioritizing regions where heat pumps are currently most cost effective. A large-scale increase in ASHP deployments is likely to be an important part of any space heating decarbonization scenario.
  • Topic: Climate Change, Energy Policy, Green Technology, Renewable Energy, Fossil Fuels
  • Political Geography: United States
  • Author: Ben Barry, Douglas Barrie, Lucie béraud-Sudreau, Henry Boyd, Nick Childs, 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, Free Trade
  • Political Geography: Russia, United States, Europe
  • 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, Military Spending
  • Political Geography: United States, Japan, China, Europe, Canada, Taiwan, France, North America
  • 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, Maritime
  • Political Geography: United States, United Kingdom, Europe, London
  • Author: Lianna Fix, Bastain Giegerich, 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, European Union
  • Political Geography: United States, Europe, North Atlantic, North America, Brussels
  • 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, Trade
  • Political Geography: Africa, United States, China, Europe, Beijing, Asia
  • Author: Michael Kende1, 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, Free Trade
  • Political Geography: United States, Europe, Switzerland, Global Focus
  • Author: Tarek A. Hassan, Laurence van Lent, Stephan Hollander, 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, Economic Policy
  • Political Geography: Britain, United States, United Kingdom, Europe, European Union
  • 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, Common Market
  • Political Geography: United States, Europe, Germany, Global Focus
  • 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, Money
  • Political Geography: United States
  • Author: Catherine Ruetschli, 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, Antitrust Law
  • Political Geography: United States
  • 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, Microeconomics
  • Political Geography: United States
  • 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 , Risk
  • Political Geography: United States
  • 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, Fiscal Policy
  • Political Geography: United States
  • 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, Macroeconomics
  • Political Geography: United States, Global Focus
  • Author: Claudia Fontanari, Antonella Palumbo, 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, Demand
  • Political Geography: United States, Global Focus
  • 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, Macroeconomics
  • Political Geography: United States, Global Focus
  • 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, Manufacturing
  • Political Geography: United States
  • Author: Roman Frydman, Søren Johansen, Anders Rahbek, 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, Mathematics
  • Political Geography: United States
  • 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, Drugs
  • Political Geography: United States
  • 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, Keynes
  • Political Geography: United States, Global Focus
  • 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, Macroeconomics
  • Political Geography: United States
  • Author: Ricardo Perez Truglia, Matias Giaccobasso, Guillermo Cruces, Rodrigo Ceni, 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, Macroeconomics
  • Political Geography: United States, Argentina, Global Focus
  • Author: David Jaume, 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, Labor Issues
  • Political Geography: United States
  • 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, Artificial Intelligence
  • Political Geography: United States
  • Author: Feng Jin
  • Publication Date: 10-2019
  • Content Type: Working Paper
  • Institution: Pacific Forum
  • Abstract: The issue of gray zone conflict between the US and China has attracted much attention in recent years. “Gray” indicates actions below the threshold of war, yet beyond normal diplomacy. The fundamental characteristics of gray zone activity include that they are well-planned, designed to be ambiguous amid strategic competition, and intended to leave opponents unable to launch an effective response. What demands special attention is that gray zone activity could cause unintended escalation, and that assertive responses to them may not be the best option. For instance, the United States’ gray zone retaliation to China’s activities in the South China Sea is hardly helpful to contain China’s activities, but certainly slow the pace of resolving the South China Sea dispute through negotiation and dialogue and jeopardize bilateral strategic stability. In the United States, current studies on the gray zone issue view the activity conducted by “measured revisionists” (such as Russia, China and Iran) as a major challenge to US national interest and the US-led international order. Today, as China and the United States are dancing on the precipice of a trade war, the geopolitical rivalry between the two countries raises major concerns and the possibility of a new Cold War has been discussed with increasing frequency. Although the United States and China are highly interconnected in many ways, entanglement also creates friction. In this context, the gray zone issue between China and the United States has a significant role in the relationship. How do we understand gray zone conflict? What challenges does the current gray zone activity pose to China and the United States? What measures should be taken to address such challenges?
  • Topic: Conflict Prevention, Diplomacy, War, Peace
  • Political Geography: United States, China
  • Author: Anu Anwar
  • Publication Date: 06-2019
  • Content Type: Working Paper
  • Institution: Pacific Forum
  • Abstract: India, often considered the natural leader of South Asia, is facing stiff competition from China. The recent tilt of the “non-nuclear five” South Asian states (i.e. Bangladesh, Sri Lanka, Nepal, Maldives and Bhutan) toward China has become quite visible as China has significantly increased its influence across the region through investment, trade, military ties, diplomatic and cultural initiatives. Meanwhile, the US envisages playing a more prominent role in South Asia by teaming up with India to challenge China and exert influence in the Indo-Pacific region. A key consideration in the US “Free and Open Indo-Pacific Strategy” hinges on India’s influence in South Asia. This paper looks closely at how Chinese bilateral trade, investment, political and military ties with the “non-nuclear five” nations have evolved and how that may affect India’s ambitions in the region. Recommendations are offered for both the US and India on how they may retain their supremacy in the region despite an ambitious and resourceful China.
  • Topic: Diplomacy, Regional Cooperation, Economic Diplomacy, Cultural Diplomacy
  • Political Geography: United States, China, Asia, Asia-Pacific, Indo-Pacific
  • Author: David Santoro, Anton Khlopkov
  • Publication Date: 02-2019
  • Content Type: Working Paper
  • Institution: Pacific Forum
  • Abstract: Much ink has been spilled on the return to major-power competition in recent years, singling out three states: the United States, Russia, and China. For good reasons: the relationships between these three states have become increasingly complicated, notably between the United States and Russia and between the United States and China. What’s more, there are few signs that the current trajectory could change for the better. If anything, we can expect these relationships to become more, not less, complicated.
  • Topic: Conflict Resolution, Diplomacy, Peace
  • Political Geography: Russia, United States, China, Korean Peninsula
  • Author: Amat Adarov, Robert Stehrer
  • Publication Date: 11-2019
  • Content Type: Working Paper
  • Institution: The Vienna Institute for International Economic Studies (WIIW)
  • Abstract: In the age of globalisation, international trade and foreign direct investment (FDI) have become integral elements of cross-country production sharing. In this paper we empirically assess the impact of FDI, as well as capital dynamics and structure, on the formation of global value chains (GVC) and trade in value added at country and sectoral levels based on a database constructed for a sample of European countries over the period 2000-2014. The analysis reveals that inward FDI is especially conducive to the formation of backward linkages while outward FDI facilitates forward GVC participation, especially in high-tech manufacturing sectors. A particularly robust influence of FDI and capital accumulation on GVC integration is identified in the textile and clothing industry. While capital accumulation in general intensifies GVC linkages for most sectors, ICT capital appears to be especially instrumental for backward integration of electrical and transportation equipment sectors.
  • Topic: Globalization, International Trade and Finance, Foreign Direct Investment, Trade, Global Value Chains
  • Political Geography: United States, Japan, Europe
  • Author: Anthony H. Cordesman
  • Publication Date: 01-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: The United States, its allies, and international organizations are just beginning to come to grips with the civil dimensions of "failed state" wars in Afghanistan, Iraq, Libya, Somalia, the Sudans, Syria, and Yemen. In each case, it is clear that the civil dimension of the war will ultimately be as important as the military one. Any meaningful form of "victory" requires far more than defeating the current extremist threat in military terms, and reaching some temporary compromise between the major factions that divide the country. The current insurgent and other security threats exist largely because of the deep divisions within the state, the past and current failures of the government to deal with such internal divisions, and the chronic failure to meet the economic, security, and social needs of much of the nation's population. In practical terms, these failures make a given host government, other contending factions, and competing outside powers as much of a threat to each nation’s stability and future as Islamic extremists and other hostile forces. Regardless of the scale of any defeat of extremists, the other internal tensions and divisions with each country also threaten to make any such “victory” a prelude to new forms of civil war, and/or an enduring failure to cope with security, stability, recovery, and development. Any real form of victory requires a different approach to stability operations and civil-military affairs. In each case, the country the U.S. is seeking to aid failed to make the necessary economic progress and reforms to meet the needs of its people – and sharply growing population – long before the fighting began. The growth of these problems over a period of decades helped trigger the sectarian, ethnic, and other divisions that made such states vulnerable to extremism and civil conflict, and made it impossible for the government to respond effectively to crises and wars.
  • Topic: Security, War, Fragile/Failed State, ISIS, Conflict
  • Political Geography: Afghanistan, Africa, United States, Iraq, Middle East, Yemen, Syria, Somalia, South Sudan, Sundan
  • Author: Rhys McCormick, Andrew Philip Hunter, Gregory Sanders
  • Publication Date: 01-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: The presence of a technologically superior defense industrial base has been a foundation of U.S. strategy since 1945. While the implementation of the budget cuts in the Budget Control Act of 2011 has caused concerns for the industrial base, the resulting debate has been lacking in empirical analysis. The purpose of this research is to measure the impact of the current defense drawdown across all the tiers of the industrial base. This report analyzes prime and subprime Defense Department contract data to measure the impacts of the drawdown by sector to better understand how prime and subprime contractors have responded to this external market shock.
  • Topic: Science and Technology, Military Strategy, Budget, Defense Industry
  • Political Geography: United States
  • Author: Tom Karako, Wes Rumbaugh
  • Publication Date: 01-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: Despite the rising salience of missile threats, current air and missile defense forces are far too susceptible to suppression. Today’s U.S. air and missile defense (AMD) force lacks the depth, capacity, and operational flexibility to simultaneously perform both missions. Discussions about improving AMD usually revolve around improvements to the capability and capacity of interceptors or sensors. Rather than simply doing more of the same, the joint integrated air and missile defense (IAMD) efforts might be well served by new or reinvigorated operational concepts, here discussed collectively as “Distributed Defense.” By leveraging networked integration, Distributed Defense envisions a more flexible and more dispersible air and missile defense force capable of imposing costs and dilemmas on an adversary, complicating the suppression of U.S. air and missile defenses. Although capability and capacity improvements remain essential to the high-end threats, the Distributed Defense concept focuses on creating a new architecture for today’s fielded or soon-to-be fielded IAMD force to boost flexibility and resilience.
  • Topic: Security, Defense Policy, Military Strategy, Missile Defense
  • Political Geography: United States
  • Author: Melissa Dalton
  • Publication Date: 02-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: 2017 marked a significant shift in the two wars in Syria. Syrian Democratic Forces (SDF) and Coalition forces drove ISIS from its self-proclaimed caliphate capital in Raqqa, across northern Syria, and down the Euphrates River Valley. Meanwhile, President Bashar al-Assad of Syria, backed by Russia and Iran, secured key population areas and strategic locations in the center and coast, and stretched to the eastern border to facilitate logistics and communications for Iranian-backed militias. In both wars, Syrian civilians have lost profoundly. They also have shown incredible resilience. Still, the outcome of both wars is inconclusive. Although major areas have been cleared of ISIS, SDF and Coalition forces are fighting the bitter remnants of ISIS in the Middle Euphrates River Valley. Enduring security in ISIS-cleared areas now depends on governance and restoration of services. Turkey’s intervention into Syrian Kurdish-controlled Afrin risks pulling the sympathetic Kurdish components of the SDF away from the counterterrorism and stabilization efforts in Syria’s east in order to fight Turkey, a U.S. ally. With a rumbling Sunni insurgency in pockets of Syria’s heartland, Assad and his supporters continue to pummel Eastern Ghouta outside Damascus and threaten Idlib. They are unleashing both conventional and chemical weapons on the remnants of Syrian opposition fighters and indiscriminately targeting civilians. The Trump administration now is attempting to connect the outcome of these two wars. The Obama administration tried similarly but ultimately prioritized the counter-ISIS mission. The drivers of the Syrian civil war and the ISIS war are rooted in the same problem: bad governance. Thus, a sensible resolution of both wars must address Syria’s governance. However, squaring U.S. policy goals with current operations and resources the United States has employed in Syria will require a degree of calibration, stitching together several lines of effort, and committing additional U.S. and international resources. Orchestrating this level of U.S. effort has proven elusive over the last six years.
  • Topic: Civil War, Violent Extremism, ISIS, Civilians
  • Political Geography: United States, Iran, Middle East, Syria
  • Author: James Andrew Lewis, John J. Hamre
  • Publication Date: 01-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: The U.S.-China relationship is one that neither country can escape. Both benefit from it in important ways. The question for quite some time, though, has been whether China’s economy, international presence, and participation in global institutions would come to look more like our own, or whether it would seek to challenge the order the United States has built and led over the past 70 years. While China’s economic size does not necessarily threaten the United States, China’s willingness to use its economic leverage to forge a global economy closer to its image raises complicated questions considering its lack of transparency. The essays in this volume, written by a diverse group of CSIS scholars, address some of the key issues that currently vex the U.S.-China economic relationship.
  • Topic: Diplomacy, Global Political Economy, Economic Cooperation
  • Political Geography: United States, China, Asia, North America, Asia-Pacific
  • Author: Daniel F. Runde, Romina Bandura
  • Publication Date: 01-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: The U.S. Trade and Development Agency (USTDA) is a small independent federal agency whose mission is to help American “companies create U.S. jobs through the export of U.S. goods and services for priority development projects in emerging economies.” USTDA links American businesses to export opportunities in emerging markets by funding activities such as project preparation and partnership building in sectors including transportation, energy, and telecommunications. Since it was established 25 years ago, the agency has generated a total of $61 billion in U.S. exports and supported over 500,000 American jobs. In connecting American business to such opportunities, USTDA also links American technology’s best practices and ingenuity with U.S. trade and development policy priorities. USTDA is an instrument to enable American-led infrastructure development in emerging economies and, therefore, frequently sees increasing competition from government-backed Chinese firms and the challenge they can pose to American commercial engagement under the flag of One Belt, One Road (OBOR). OBOR is paving the way for Chinese engineering, procurement, and construction companies to prepare and develop infrastructure projects in OBOR countries in a way that favors Chinese standards, thereby exerting significant pressure to select Chinese suppliers. This creates a potentially vicious cycle—the more China builds, the faster their standards become the international norm, and, ultimately, this cycle could foreclose export opportunities for U.S. businesses and harm American competitiveness in global infrastructure development. U.S. exporters are increasingly requesting USTDA intervention at the pivotal, early stages of a project’s development, to compete in markets, such as the OBOR countries, where they frequently face Chinese competition. Of note, 40 percent of USTDA’s activities in 2016 were in OBOR countries across South and Southeast Asia, Central Asia, the Middle East, and Africa. Although there are other agencies that may seem to do work similar to USTDA, there are various aspects that make it a unique agency. This paper provides a brief description of USTDA, its origin and evolution, the impact on the U.S. economy and its proactive collaboration across U.S agencies. Finally, it offers a set of recommendations for USTDA on how to improve its operations and strengthen its role in the developing world.
  • Topic: Development, Energy Policy, Communications, Infrastructure, Trade, Transportation
  • Political Geography: Africa, United States, Middle East, Asia, North America
  • Author: James Michel
  • Publication Date: 01-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: “Fragility”—the combination of poor governance, limited institutional capability, low social cohesion, and weak legitimacy—leads to erosion of the social contract and diminished resilience, with significant implications for peace, security, and sustainable development. This study reviews how the international community has responded to this challenge and offers new ideas on how that response can be improved. Based on that examination, the author seeks to convey the importance of addressing this phenomenon as a high priority for the international community. Chapters explore the nature of these obstacles to sustainable development, peace, and security; how the international community has defined, measured, and responded to the phenomenon of fragility; how the international response might be made more effective; and implications for the United States.
  • Topic: Development, Governance, Fragile States, Social Cohesion
  • Political Geography: United States, Global Focus
  • Author: Moises Rendon
  • Publication Date: 02-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: Nicolas Maduro’s misguided attempt to create a government-controlled and natural resource-backed cryptocurrency (“Petro”) is nothing more than a desperate effort to try to facilitate international finance while avoiding U.S. sanctions on new debt issuance. However, there remains the potential for blockchain platforms to empower Venezuelans through legitimate means during the country’s future recovery. These benefits can extend to future government institutions, the private sector, and nonprofit organizations. Blockchain technology can radically shape the rebuilding of Venezuela during a “Day After” scenario for the better.
  • Topic: Science and Technology, Sanctions, Cryptocurrencies, Recovery
  • Political Geography: United States, South America, Venezuela, North America
  • Author: Seth G. Jones
  • Publication Date: 02-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: The Trump administration’s National Security Strategy and National Defense Strategy outline a U.S. shift from counterterrorism to inter-state competition with China, Russia, Iran, and North Korea. However, U.S. policymakers need to be prepared for much of this competition to occur at the unconventional level, since the costs of conventional and nuclear war would likely be catastrophic. U.S. strategy is evolving from a post-9/11 focus on counterterrorism against groups like al Qaeda and the Islamic State to competition between state adversaries. As the National Defense Strategy notes, “Inter-state strategic competition, not terrorism, is now the primary concern in U.S. national security.”1 This shift has significant implications for the U.S. military, since it indicates a need to improve U.S. capabilities to fight—and win—possible wars against China, Russia, Iran, and North Korea if deterrence fails. Though it is prudent to prepare for conventional—and even nuclear—war, the risks of conflict are likely to be staggering. Numerous war games and analyses of U.S. conflicts with Russia in the Baltics, China in the Taiwan Strait and South China Sea, and North Korea on the Korean peninsula suggest the possibility of at least tens of thousands of dead and billions of dollars in economic damages. In addition, these conflicts could escalate to nuclear war, which might raise the number of dead to hundreds of thousands or even millions. According to one analysis, for example, a U.S. war with China could reduce China’s gross domestic product (GDP) by between 25 and 35 percent and the United States’ GDP by between 5 and 10 percent. The study also assessed that both countries could suffer substantial military losses to bases, air forces, surface naval forces, and submarines; significant political upheaval at home and abroad; and huge numbers of civilian deaths.2 These costs and risks will likely give Washington, Moscow, Beijing, Tehran, and even Pyongyang pause, raising several questions. Will these high costs deter the possibility of conventional and nuclear war? If so, what are the implications for the United States as it plans for a rise in inter-state competition? The Cold War offers a useful historical lens. NATO planners prepared for a possible Soviet and Warsaw Pact invasion of Western Europe. The U.S. military, for example, deployed forces to the Fulda Gap, roughly 60 miles outside of Frankfurt, Germany, as one of several possible invasion routes by Soviet and other Warsaw Pact forces. NATO also planned for nuclear war. The United States built up its nuclear arsenal and adopted strategies like mutually assured destruction (MAD). The concept of MAD assumed that a full-scale use of nuclear weapons by two or more opposing sides would cause the annihilation of both the attacker and the defender. The threat of such heavy costs deterred conflict, despite some close calls. During the 1962 Cuban Missile Crisis, the two superpowers nearly went to war after a U.S. U-2 aircraft took pictures of Soviet medium-range and intermediate-range ballistic nuclear missiles (MRBMs and IRBMs) under construction in Cuba. But Washington and Moscow ultimately assessed that direct conflict was too costly. Deterrence held. Instead, the United States and Soviet Union engaged in intense security competition at the unconventional level across Latin America, Africa, Asia, and Europe. Both countries backed substate groups and states to expand their power and influence. Under the Reagan Doctrine, for example, the United States provided overt and covert assistance to anticommunist governments and resistance movements to roll back communist supporters. The Soviets did the same and supported states and substate actors across the globe. In addition, the Soviets adopted an aggressive, unconventional approach best captured in the phrase “active measures” or aktivnyye meropriatia. As used by the KGB, active measures included a wide range of activities designed to influence populations across the globe. The KGB established front groups, covertly broadcast radio and other programs, orchestrated disinformation campaigns, and conducted targeted assassinations. The Soviets used active measures as an offensive instrument of Soviet foreign policy to extend Moscow’s influence and power throughout the world, including in Europe. Unlike the Cold War, the United States confronts multiple state adversaries today—not one. As the National Defense Strategy argues, the United States is situated in “a security environment more complex and volatile than any we have experienced in recent memory” where “the central challenges to U.S. prosperity and security is the reemergence of long-term, strategic competition by what the National Security Strategy classifies as revisionist powers.” But based on the likely costs and risks of conventional and nuclear war with China, Russia, Iran, and North Korea, much of the competition will likely be unconventional—and include what former U.S. State Department diplomat George Kennan referred to as “political warfare.” The term political warfare refers to the employment of military, intelligence, diplomatic, financial, and other means—short of conventional war—to achieve national objectives. It can include overt operations like public broadcasting and covert operations like psychological warfare and support to underground resistance groups.3 The United States’ adversaries today are already engaged in political warfare. Russia, for instance, utilizes a range of means to pursue its interests, such as technologically sophisticated offensive cyber programs, covert action, and psychological operations. Moscow has conducted overt operations like the use of RT and Sputnik, as well as semitransparent and covert efforts. It has also become increasingly active in supporting state and substate actors in countries like Ukraine, Syria, Afghanistan, and Libya to expand its influence in the Middle East, Asia, Europe, and even North Africa. Finally, Russia is attempting to exploit European and transatlantic fissures and support populist movements to undermine European Union and NATO cohesion, thwart economic sanctions, justify or obscure Russian actions, and weaken the attraction of Western institutions for countries on Russia’s periphery. Iran is using political warfare tools like propaganda, cyber attacks, and aid to substate proxies to support its security priorities, influence events and foreign perceptions, and counter threats. Tehran is also assisting state and substate actors in Yemen, Lebanon, Syria, Iraq, Bahrain, and Afghanistan. Iran supports Shia militia groups in Iraq, Hezbollah in Lebanon, the Bashar al-Assad regime in Syria, and Houthi rebels in Yemen. In the South China Sea, China is pouring millions of tons of sand and concrete onto reefs, creating artificial islands. It is also conducting a sophisticated propaganda campaign, utilizing economic coercion, and using fleets of fishing vessels to solidify its assertion of territorial and resource rights throughout the Pacific. Finally, Beijing is targeting the U.S. government, its allies, and U.S. companies as part of a cyber-espionage campaign. With political warfare already alive and well with the United States’ state adversaries, there are several implications for U.S. defense strategy. First, U.S. policymakers need to be prepared for significant inter-state competition to occur at the unconventional level, since the costs and risks of conventional and nuclear war may be prohibitively high. This should involve thinking through trade-offs regarding force posture, procurement, acquisition, and modernization. A U.S. military that predominantly focuses on preparing for conventional or nuclear war with state competitors—by modernizing the nuclear triad, building more resilient space capabilities, acquiring more effective counter-space systems, equipping U.S. forces with high-technology weapons, and emphasizing professional military education (PME) to fight conventional wars—may undermine U.S. unconventional readiness and capabilities. Second, even organizations that already engage in some types of political warfare—such as U.S. Special Operations Command and the U.S. intelligence community—will need to continue shifting some of their focus from counterterrorism to political warfare against state adversaries. This might include, for example, providing more aid to the Baltic States to conduct an effective resistance campaign against unconventional action by Moscow. Or it might involve aiding proxies in countries like Syria and Yemen to counter Iranian-backed organizations. It could also include improving the border security capabilities and effectiveness of Ukrainian military and police units against Russian-backed rebels. Third, the United States should invest in resources and capabilities that allow the military and other U.S. government agencies to more effectively engage in political warfare—and to provide agencies with sufficient authorities to conduct political warfare. One example is improving capabilities to conduct aggressive, offensive cyber operations. Other examples might include advanced electronic attack capabilities, psychological warfare units, security force assistance brigades, and precision munitions. Recognizing that other powers routinely conduct political warfare, George Kennan encouraged U.S. leaders to disabuse themselves of the “handicap” of the “concept of a basic difference between peace and war” and to wake up to “the realities of international relations—the perpetual rhythm of struggle, in and out of war.” Kennan’s advice may be even more relevant today in such a competitive world.
  • Topic: Security, Defense Policy, Nuclear Weapons, Military Strategy, Counter-terrorism
  • Political Geography: Russia, United States, China, Europe, Asia, North Korea
  • Author: Heather A Conley
  • Publication Date: 02-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: Twenty-five years of relative calm and predictability in relations between Russia and the West enabled European governments largely to neglect their military capabilities for territorial defense and dramatically redraw Northern Europe’s multilateral, regional, and bilateral boundaries, stimulating new institutional and cooperative developments and arrangements. These cooperative patterns of behavior occurred amid a benign security environment, a situation that no longer obtains. Following Russia’s annexation of Crimea, its military incursion into eastern Ukraine, its substantial military modernization efforts, heightened undersea activity in the North Atlantic and Baltic Sea, and its repeated air violations, the region’s security environment has dramatically worsened. The Baltic Sea and North Atlantic region have returned as a geostrategic focal point. It is vital, therefore, that the United States rethink its security approach to the region—what the authors describe as Enhanced Deterrence in the North.
  • Topic: Security, Regional Cooperation, Military Strategy, Modernization
  • Political Geography: Russia, United States, Europe, North Atlantic, Northern Europe, Crimea, Baltic Sea
  • Author: David Kelly
  • Publication Date: 02-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: The debate about China’s changing role in global affairs is often framed as a dichotomous choice between a peacefully rising China that seeks to be a constructive stakeholder and an increasingly dangerous China that is challenging the status quo, both in terms of its norms and the place of the United States. The reality is more complicated. There are not only signs of both elements, but the foundations shaping Chinese behavior is multifold. Most international relations scholars examine China through one or another version of realism or liberalism. David Kelly, head of research at China Policy, offers an alternative approach that examines the nature of Chinese identity, or rather, Chinese identities, plural, and how they exhibit themselves in Chinese foreign policy. Using his renowned skills in reading Chinese-language official documents and the broader commentary, Kelly teases out seven narratives that Chinese tell themselves and the world, and he provides a codebook for explicating shifting Chinese behavior in different arenas. Kelly concludes that some of these narratives facilitate cooperation, but most point toward deep-seated tensions between China and the West in the years ahead.

  • Topic: Foreign Policy, Globalization, Imperialism, Conflict
  • Political Geography: United States, China, Asia, North America, Asia-Pacific
  • Author: Reid Hamel
  • Publication Date: 02-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: Social protection programming, such as cash transfers and vouchers provided at the individual or household level, has become increasingly prominent as a tool to combat food insecurity worldwide. Advantages of a social protection approach include the ability to target and reach the most vulnerable segments of society and to provide direct support for basic needs without reliance on complex causal pathways.The U.S. Agency for International Development (USAID) invests relatively little in social protection despite its flagship initiative, Feed the Future, which seeks to mitigate food insecurity and to reduce the prevalence of stunting in 12 countries (formerly in 19). Ghana’s LEAP (Livelihood Empowerment Against Poverty) program represents an exception to the U.S. investment pattern. In partnership with UNICEF, USAID/Ghana has made noteworthy investments in the expansion of the LEAP cash transfer program to add a new eligible group of beneficiaries: pregnant women and children under one year old. The intention to intervene during pregnancy and the first year of life is motivated by a growing understanding that good nutrition during this window is critical to physical and cognitive health and human development outcomes that last a lifetime. This report explores the development of Ghana’s LEAP program since 2008; its current coverage, successes, and challenges; and opportunities for both the government of Ghana and donor partners to spearhead continuous improvements for program outcomes and resource efficiency.
  • Topic: Development, Poverty, Social Policy, Development Aid
  • Political Geography: Africa, United States, North America, Ghana
  • Author: Melissa Dalton, Hijab Shah
  • Publication Date: 02-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: With the range of security challenges confronting the United States in the 21st century, characterized by competition by both state and nonstate actors, the importance of working with allies and partners to address common challenges is paramount. Deeper examination of the relative effectiveness of U.S. security sector assistance and how it must nest in a broader foreign policy strategy, including good governance, human rights, and rule of law principles, is required. Improving oversight and accountability in U.S. security sector assistance with partners are at the core of ongoing security assistance reform efforts to ensure that U.S. foreign policy objectives are met and in accordance with U.S. interests and values. This report examines key areas in security sector programming and oversight where the U.S. Departments of Defense and State employ accountability mechanisms, with the goal of identifying ways to sharpen and knit together mechanisms for improving accountability and professionalism into a coherent approach for partner countries.
  • Topic: Security, Foreign Policy, Defense Policy, Diplomacy, Human Rights
  • Political Geography: United States, North America
  • Author: Suzanne Spaulding
  • Publication Date: 02-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: This report, informed by a CSIS-convened Experts Group, calls for a whole-of-nation approach to address the threat to, and improve the resilience of, the country's democratic institutions. The report proceeds in four sections. First, it outlines the nature of the threat posed by the Russian government, building upon what Russia has done in other countries, as well as in the United States. The second section describes how technology has magnified this threat. The third section examines essential elements of a "National Strategy to Counter Russian and Other Foreign Adversary Threats to Democratic Institutions." The final section is a call for action.
  • Topic: Science and Technology, Military Strategy, Democracy, Resilience
  • Political Geography: Russia, United States, Europe, North America
  • Author: Anthony H. Cordesman
  • Publication Date: 02-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: The U.S. has learned many lessons in its wars in Afghanistan, Iraq, and Syria—most of them the hard way. It has had to adapt the strategies, tactics, and force structures designed to fight regular wars to conflicts dominated by non-state actors. It has had to deal with threats shaped by ideological extremism far more radical than the communist movements it struggled against in countries like Vietnam. It has found that the kind of “Revolution in Military Affairs,” or RMA, that helped the U.S. deter and encourage the collapses of the former Soviet Union does not win such conflicts against non-state actors, and that it faces a different mix of threats in each such war—such as in cases like Libya, Yemen, Somalia and a number of states in West Africa. The U.S. does have other strategic priorities: competition with China and Russia, and direct military threats from states like Iran and North Korea. At the same time, the U.S. is still seeking to find some form of stable civil solution to the conflicts in Afghanistan, Iraq, and Syria—as well as the conflicts Libya, Yemen, Somalia, Sudan and West Africa. Reporting by the UN, IMF, and World Bank also shows that the mix of demographic, political governance, and economic forces that created the extremist threats the U.S. and its strategic partners are now fighting have increased in much of the entire developing world since the attack on the World Trade Center and Pentagon in 2001, and the political upheavals in the Middle East and North Africa in 2011. The Burke Chair at CSIS has prepared a working paper that suggests the U.S. needs to build on the military lessons it has learned from its "long wars" in Afghanistan, Iraq, and other countries in order to carry out a new and different kind of “Revolution in Civil-Military Affairs,” or RCMA. This revolution involves very different kinds of warfighting and military efforts from the RMA. The U.S. must take full advantage of what it is learning about the need for different kinds of train and assist missions, the use of airpower, strategic communications, and ideological warfare. At the same time, the U.S. must integrate these military efforts with new civilian efforts that address the rise of extremist ideologies and internal civil conflicts. It must accept the reality that it is fighting "failed state" wars, where population pressures and unemployment, ethnic and sectarian differences, critical problems in politics and governance, and failures to meet basic economic needs are a key element of the conflict. In these elements of conflict, progress must be made in wartime to achieve any kind of victory, and that progress must continue if any stable form of resolution is to be successful.
  • Topic: Civil Society, United Nations, Military Strategy, Governance, Military Affairs, Developing World
  • Political Geography: Africa, United States, Iraq, Middle East, West Africa, Somalia, Sundan
  • Author: Edward C. Chow, Andrew J. Stanley
  • Publication Date: 02-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: After the Soviet Union collapsed and Russia was roiled by political and economic chaos, many state-owned assets were privatized based on political connections and corrupt practices. The oil sector was a particularly attractive, but by no means the only, target for these privatizations. By the end of the 1990s, almost all of Russia’s oil production was privately owned. In spite of continued nontransparency, the oil sector began to resemble a competitive market with private investors introducing Western technology, financial accounting, and operating and management practices. It also started to attract major foreign investments. The remaining state oil assets were managed by a sleepy state enterprise named Rosneft that, in spite of its name (Russian Oil), produced less than 5 percent of Russia’s oil. Today, majority state-owned Rosneft produces almost half of Russia’s oil. Its daily oil production of 4.6 million barrels, according to its last reported quarterly results, is double that of the world’s largest oil company by market capitalization, ExxonMobil, which last reported daily liquids production of 2.3 million barrels. Rosneft’s rapid rise coincided with the rule of Vladimir Putin, who first became president of Russia in 2000. Its production increases were built largely on the backs of controversial acquisitions of assets previously held by private companies such as Yukos, TNK-BP, and Bashneft. Rosneft’s acquisition spree accelerated after Putin’s close associate and Russia’s then-deputy prime minister Igor Sechin became chairman of its board of directors in 2004. Sechin left government in 2012 to take over as Rosneft’s chief executive officer. Rosneft’s board of directors is now chaired by former German chancellor Gerhard Schroeder. Rosneft’s transformation as Russia’s national oil champion is consistent with Putin’s policy of regaining state control over the commanding heights of the Russian economy, which is more reliant on oil income today than the Soviet Union ever was. Rosneft is Russia’s largest taxpayer and contributed a quarter of government revenue in 2014. Until recently, Rosneft concentrated mainly on consolidating its dominance over the domestic oil patch. It is also Russia’s leading refiner and is increasing natural gas production for direct sales to domestic gas users, producing 67 billion cubic meters in 2016. In 2014, Russia was hit by the twin shocks of a global oil price collapse and Western economic sanctions enacted after its aggression against Ukraine in the Donbas region and annexation of Crimea. These developments affected Rosneft severely since it involved the value of the commodity it produces and sells and restricted Rosneft’s access to international financing when it was heavily indebted from the aforementioned acquisitions. A normal company might hunker down, repair its balance sheet, and wait for external conditions to improve. Instead Rosneft has done the exact opposite and expanded its international business aggressively. As part of the 2014 U.S.-led sanction efforts, Igor Sechin, as the leading figure of Russia’s largest petroleum company and his having “shown utter loyalty to Vladimir Putin,” was directly sanctioned. Further Russian sanctions enacted by Congress in 2017 called on the U.S. Department of the Treasury to submit a detailed report on senior political figures, oligarchs, and parastatal entities as determined by their “closeness to the Russian regime and their net worth.” While the unclassified version of the report released to Congress on January 29 included Igor Sechin, the report was poorly received and largely regarded as nothing more than a “rich list” by Russian experts. However, the report also contains classified annexes, including a list of parastatal entities and supporting analysis, which by definition would have included Rosneft. Although Rosneft’s rapid international expansion is too recent to assess definitely, this paper describes some of Rosneft’s overseas ventures and explores possible motivations, economic and political, behind them.
  • Topic: Energy Policy, Oil, Foreign Direct Investment, Sanctions, Gas, Transparency, Private Sector
  • Political Geography: Russia, United States, Europe, Eastern Europe
  • Author: Tom Karako, Wes Rumbaugh
  • Publication Date: 02-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: President Trump’s 2019 budget request includes $12.9 billion for missile defense programs, including $9.9 billion for the Missile Defense Agency and about $3 billion in modernization in the military services, building upon the acceleration initiated in the $323 million FY 2017 Above Threshold Reprogramming and the FY 2018 Budget Amendment of $2.0 billion. The proposed budget continues the recent trend of procurement consuming a greater portion of overall missile defense spending, reflecting a choice for prioritizing near-term capacity over longer-term capability. With the exception of two new Pacific radars and a modest effort for tracking hypersonic threats, the request includes strikingly few changes to the program of record. The submission fails to address past shortfalls for more research and development of new missile defense technologies and capabilities, most significantly with its lack of real movement toward a space-based sensor layer for tracking and discrimination, as opposed to merely missile warning. Pursuit of more advanced capabilities will require substantial programmatic changes in the 2020 budget, or with a budget amendment later this year, if such capabilities are recommended by the forthcoming Missile Defense Review. On February 12, the Department of Defense (DoD) released its budget request for FY 2019, which included a total of $12.9 billion for missile defense-related activities. The proposed topline for the Missile Defense Agency comes in at $9.9 billion, comprising $2.4 billion for procurement, $6.8 billion for research, development, test, and evaluation (RDT&E), $500 million for operations and maintenance (O&M), and $206 million for military construction (MILCON). The $9.9 billion request is a 26 percent increase from the FY 2018 budget request of $7.9 billion. Funding for ballistic missile defense within the services includes about $3 billion, largely for the procurement of Patriot Advanced Capability-3 Missile Segment Enhancement (PAC-3 MSE) and Standard Missile-6 (SM-6) interceptors. Overall, the budget reflects a near-term focus on capacity of existing programs, even at the expense of capability improvements. In its current form, the request boosts funding for all four families of interceptors. For homeland missile defense, this includes the continued improvements to the capacity and reliability of the Ground-based Midcourse Defense (GMD) system by continuing to deploy an additional 20 interceptors, several testing spares, and a new missile field at Fort Greely, Alaska. The request also deepens the magazines for Terminal High Altitude Area Defense (THAAD), Aegis, and Patriot interceptors, continuing a procurement-heavy trend from last year.1 The focus on capacity does not answer the question, however, how missile defense efforts will be adapted to the new reality of great power competition described by the National Security Strategy and the National Defense Strategy.2 One of the few new muscle movements in the entire budget is the addition of two radars in the Pacific for discriminating long-range missile threats to the homeland. The idea of a discrimination radar for Hawaii had been publicly floated over the past two years, and had previously been part of the yet-unpassed appropriations marks from the House and Senate appropriations committees. The Hawaii radar is scheduled for a 2023 deployment, with an additional radar deployed by 2024 at a yet-undisclosed location. The two radars will cost approximately $2.5 billion over the course of the Future Years Defense Program (FYDP). The inadequacy of the request lies not with the top line, but rather with the capabilities and strategy that the top line fails to prioritize. Although these radars would be useful to close the near-term Pacific midcourse gap against limited ballistic missile threats to the homeland, such funds must be weighed against the opportunity cost for larger improvements in capability provided by a space-based sensor layer that could provide substantially more capable birth-to-death tracking and discrimination on a more global scale and against a wider diversity of threats. The choice for capacity over capability reflects a near-term time horizon, but further delay in more advanced technologies will carry costs at a later time. In sum, the administration’s budget request for FY 2019 prioritizes near-term readiness against limited but growing ballistic missile threats from sources such as North Korea. This choice, however, falls short of connecting missile defense efforts to the reality of renewed great power competition as articulated in the National Defense Strategy. The inadequacy of the request lies not with the top line, but rather with the capabilities and strategy that the top line fails to prioritize. The 2019 request’s modesty of ambition is manifested by low funding for more advanced programs, such as boost-phase intercept, space-based sensors, and volume kill. Should the forthcoming Missile Defense Review address some of these issues and recommend programmatic changes, their implementation may have to wait until the 2020 budget, unless a budget amendment of some kind prioritizes them for the coming fiscal year.
  • Topic: Security, Defense Policy, Military Strategy, Budget, Missile Defense
  • Political Geography: United States, Europe, Asia, North America
  • Author: William A Carter, William Crumpler
  • Publication Date: 03-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: Machine Intelligence (MI) is poised to create profound changes to our lives, jobs, and economy. In breadth and scale of impact, MI will rival or exceed past technological revolutions while potentially altering centers of economic power and regional and global influence. Many countries are already making significant policy decisions to prepare for the impact of MI and are investing in MI research and development to outpace allies and competitors across economic and national security dimensions. If the United States wants to avoid being left behind in the “MI Revolution” we need to develop a coordinated national strategy that covers research and development, industrial specialization, and the social impacts of these technologies. This report offers a framework for determining which guiding principles should shape U.S. policy in response to the growth of MI applications in defense, education, health care, and the economy. The authors offer recommendations for how the United States can maintain a competitive advantage in MI and navigate the risks and challenges associated with it.
  • Topic: Intelligence, Science and Technology, Artificial Intelligence, Industrialization
  • Political Geography: United States, North America
  • Author: Anthony H. Cordesman
  • Publication Date: 03-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: Whatever his other limitations, Vladimir Putin has shown he is a master in exploiting Russian nationalism and American and European sensitivities. His latest gambit—publicizing new Russian nuclear systems—several of which are still developmental, may have key components that are untested, or do not yet exist—give him political credibility in asserting Russian national strength in a Russian election year, and emphasize the one key area where Russia remains a leading global super power: its possession of nuclear weapons. The key question is whether they represent any real change in the nuclear balance, Russian and U.S. ability to pose an existential threat to the other state, and mutual assured destruction. If they do not, they are more technological status symbols or “toys” than real threats, although the proliferation of such weapons might allow smaller nuclear powers like Iran and North Korea to defeat today’s missile and air defense systems and technologies. An analysis of the actual content of his speech, the changing nuclear and conventional balance between the superpowers—the U.S., Russia, and China, the global balance of deployed nuclear weapons, the shifts taking in US and Russian balance since the Cold War, and as a result of START, the full range of new U.S. and Russian nuclear programs, and of what Putin did and did not say about Russia's new programs, provides a very different picture from the one Putin portrayed in his speech. It shows that Putin focused on the "toy factor" in emphasize technology over any real world aspects of the balance, arms control, and war fighting.
  • Topic: Defense Policy, Nationalism, Military Strategy, Authoritarianism, Nuclear Power
  • Political Geography: Russia, United States, China, Europe, Asia
  • Author: Kathleen H. Hicks
  • Publication Date: 03-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: Northern Europe, and specifically the Baltic and Norwegian Seas, has been the site of increasingly provocative and destabilizing Russian actions. The country’s use of a range of military, diplomatic, and economic tools to undermine the North Atlantic Treaty Organization (NATO) and its allies highlights the need to monitor and understand Russian activity. The region is characterized by complex factors like unique geographic features, considerable civilian maritime traffic, the presence of advanced Russian and Western military capabilities, and strategic proximity to Russia and the Kola peninsula, home to the Russian Northern Fleet. While the Norwegian and Baltic Seas do differ in key ways, they are linked by the emerging risk posed by Russia’s long-range strike capabilities. Responding to Russian challenges across the competitive space requires a deep understanding of the Northern European maritime environment. Maritime Domain Awareness (MDA), defined by the United States as the effective understanding of anything associated with the maritime domain that could impact the security, safety, economy, or environment of a nation or region, is an exceptionally broad concept. At its core, MDA has three functions: the collection of raw data, the analysis of that data, and the action of disseminating information to and coordinating among the different components of the framework. In order to provide security in Northern Europe, NATO and its allies must use MDA frameworks to understand and respond to the challenges above, on, and underneath the sea, as well as the surrounding land environment. While some constructive work has been done to address the evolving Russian threat, NATO and its partners must make changes to their current MDA capabilities to evolve alongside with it. Russia presents three challenges of particular concern to the MDA efforts in Northern Europe: maritime hybrid warfare, electronic and cyber warfare capabilities, and long-range strike systems. Maritime Hybrid Warfare—The Russian military is experienced and effective in its use of hybrid warfare, seen in Syria, Crimea, and Northern Europe. The ambiguity possible in the maritime domain lends itself well to this strategy. Russia uses three specific approaches in this realm: deception through different types of vessels including civilian ships, deniable forces like the amphibious and light infantry that easily navigate the complex Baltic and Norwegian Seas, and the country’s well-developed and diverse force for seabed warfare. Cyber and Electronic Warfare—Russia’s advanced EW capabilities have the potential to hinder information gathering and dissemination methods, which are both vital functions of MDA. These capabilities are challenging for military personnel but potentially devastating in civilian contexts, especially as civilian networks and technology (like GPS) are far less secure. Long-Range Strike Capabilities—New challenges for NATO and Northern European partners have emerged with Russia’s development of a long-range precision strike complex. The weapons, now being mounted on new and existing Russian naval vessels, give these vessels the option to stay in the Barents or White Seas and strike targets across Northern Europe. This, combined with air force capabilities based on the Kola Peninsula and in Kaliningrad, presents threats unlike any seen by NATO before. These capabilities require NATO and its partners to use MDA frameworks to monitor launch platforms across the domain. The modern history of MDA begins in the United States, with Homeland Security Presidential Directive – 13 (HSPD-13) / National Security Presidential Directive – 41 (NSPD-41) issued in 2004 by President George W. Bush. The document lays out core interests for the United States to enhance security in the maritime domain and creates a cooperative framework to support MDA operations across different spheres. At the same time, the European concept of maritime security awareness was built upon the U.S. definition of the challenge, placed within the context of rising illicit traffic in the Mediterranean. A weakness of the original MDA and Maritime Situational Awareness (MSA) concepts is that many of the associated capabilities and frameworks are focused on civil maritime issues. Given the global proliferation of advanced military capabilities, like antiship cruise missiles, NATO and its partners require a holistic understanding of the maritime environment that focuses on everything from civil maritime actions to high-end military operations and even issues associated with the maritime environment. A key implication of the heightened maritime threat environment is the need to improve the integration of and attention to undersea aspects of MDA. Antisubmarine warfare (ASW), a traditional strength of Western naval intelligence and operations, has atrophied since the end of the Cold War. Today, Russian submarines with conventional long-range missiles pose a threat to NATO. ASW must be integrated with MDA to address these concerns. Comprehensive understanding of the undersea realm should extend beyond ASW. Russia’s amphibious special forces and combat swimmers threaten more than just military targets, including civilian vessels and undersea cables, which are an integral part of MDA. ASW technology can be useful in countering these and other threats. In the Norwegian Sea, the biggest challenge for NATO is detecting advanced ultra-quiet submarines. This issue is sharpened by dramatically depleted stockpiles of sonobuoys, a constant need for increasingly advanced sonobuoy technology, and an American unwillingness to share highly classified information about the undersea domain. NATO would benefit from an apparatus like the ASW Operations Centers (ASWOC), used most prominently during the Cold War to streamline ASW operations. Integration of platforms is a challenge in the Baltic Sea as well, largely because Sweden and Finland are not NATO states, making data sharing challenging. Frameworks like Sea Surveillance Co-Operation Baltic Sea (SUCBAS) and the Maritime Surveillance (MARSUR) project facilitate the work of regional states to address these issues but more must be done. Additionally, NATO monitoring of the Baltic region is largely domain specific and suffers from not examining the maritime domain holistically. The alliance and its partners should also act to focus on resiliency to continue to operate in the face of jamming and nonkinetic attacks from Russia. The key to enhancing MDA capabilities in Northern Europe is the integration of frameworks across the maritime domain. Cooperation between NATO states and allies is vital to understanding the complex environment. The CSIS study team has identified seven recommendations of particular importance: Create a Baltic Sea MDA analytic center at the Baltic Maritime Component Command (BMCC) at Rostock, Germany; Empower a small analytic team at the BMCC to focus on maritime hybrid issues; Develop a training course for military intelligence officers on best practices for Baltic Sea MDA analysis; Create a classified Baltic Sea data environment that can incorporate both NATO and partner states; Develop a multinational operational framework for the Baltic Sea; Integrate subsurface sensors and antisubmarine warfare into a comprehensive MDA framework; and Acquire significant stockpiles of advanced sonobuoys and associated acoustic processing systems. These priority recommendations are presented in detail in Chapter 4 of the report, along with others. Collectively, their implication would markedly enhance security in Northern Europe by closing identified gaps and ensuring capabilities for collection, analysis, and action in MDA.
  • Topic: Defense Policy, NATO, Regional Cooperation, Military Strategy, Maritime
  • Political Geography: Russia, United States, Europe, North Atlantic, North America, Western Europe, Baltic Sea, Norwegian Seas
  • Author: Bonnie S. Glaser, Matthew Funaiole
  • Publication Date: 03-2018
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: The papers in this compendium were written by the 10 members of the 2017 CSIS Taiwan-U.S. Policy Program (TUPP) delegation. TUPP provides a much-needed opportunity for future leaders to gain a better understanding of Taiwan through first-hand exposure to its politics, culture, and history. Each participant was asked to reflect on his or her in-country experience and produce a short article analyzing a policy issue related to Taiwan. These papers are a testament to the powerful impact that follows first-hand exposure to Taiwan.
  • Topic: Foreign Policy, Diplomacy, Regional Cooperation
  • Political Geography: United States, China, Taiwan, Asia, Asia-Pacific