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1481. Stranded Fossil-Fuel Assets Translate into Major Losses for Investors in Advanced Economies

Author:
Gregor Semieniuk, Philip B. Holden, Jean-Francois Mercure, Pablo Salas, Hector Pollitt, Katharine Jobson, Pim Vercoulen, Unnada Chewpreecha, Neil Edwards, and Jorge E Viñuales
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
The distribution of ownership of transition risk associated with stranded fossil-fuel assets remains poorly understood. We compute global stranded assets of US$1.4 trillion in the upstream oil and gas sector as expectations change to be consistent with stated climate policies. We trace the equity risk ownership from these 43,439 assets through a global equity network of 1.8 million companies to their ultimate owners. Most of the market risk falls on private investors, overwhelmingly in OECD countries, including substantial exposure through pension funds. Financial markets are exposed to a US$690 billion correction, comparable to the mispricing that triggered the 2007-08 crisis. The ownership distribution also shows the large stake OECD investors have in the continued operation of fossil-fuel facilities incompatible with climate change mitigation goals.
Topic:
Climate Change, Political Economy, Economy, Investment, and Fossil Fuels
Political Geography:
Global Focus

1482. Climate Variability and Steppe Empires: New Findings and Future Directions

Author:
Nicola Di Cosmo
Publication Date:
03-2021
Content Type:
Video
Institution:
Weatherhead East Asian Institute, Columbia University
Abstract:
Nicola Di Cosmo, Henry Luce Foundation Professor of East Asian History, Institute for Advanced Study; Associate Member at the Weatherhead East Asian Institute, Columbia University Moderated by: Gray Tuttle, Leila Hadley Luce Professor of Modern Tibetan Studies, Department of East Asian Languages and Cultures, Columbia University Three decades of climatological research in Mongolia and neighboring regions have transformed our knowledge about the environmental history of Inner Asian empires. The processes that gave rise to these political formations, many of which have played a distinct and crucial role in Chinese history, are still very poorly understood. High-resolution climatic reconstructions, when placed in historical contexts, provide clues about the nomads' responses to climatic variability, and thus illuminate critical nexuses between economic production, social structures, and political change. By illustrating a range of representative historical cases studies, this lecture will explore both the nature of the data and the methods that historians and climatologists have adopted to gauge the impact of climate upon pre-modern nomadic peoples.
Topic:
Climate Change, Environment, Politics, History, and Economy
Political Geography:
China, Mongolia, and Asia

1483. Russia in the Arctic—A Critical Examination

Author:
Eugene Rumer, Richard Sokolsky, and Paul Stronski
Publication Date:
03-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Russia has big Arctic plans, but how they will be realized is uncertain. For the United States this will likely mean the return to a Cold War–like environment rather than a new chapter in great-power competition in the Arctic. Russia’s Arctic ambitions have attracted increasing attention in the West over the past decade as climate change opens up new opportunities in the region for navigation and exploration of its riches. For its part, Moscow casts a wary eye on what it sees as a challenge from the United States and the North Atlantic Treaty Organization (NATO) to its position and ambitions there. The Kremlin’s rhetoric about Western encroachment has become more strident, in sync with its enhanced military posture and ambitious economic and infrastructure projects.
Topic:
NATO, Cold War, Infrastructure, Geopolitics, and Economy
Political Geography:
Russia, Eurasia, North America, Arctic, and United States of America

1484. India’s Sustained Economic Recovery Will Require Changes to Its Bankruptcy Law

Author:
Anirudh Burman
Publication Date:
04-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
As India’s economy recovers from the coronavirus pandemic, Indian businesses need efficient financial structures to regain their ground. Key reforms to India’s Insolvency and Bankruptcy Code could fill these gaps. One of the key drivers of economic recovery in India will be the efficient movement of capital from inefficient firms to efficient ones. The economic downturn caused by the coronavirus pandemic has been severe, and India’s economy was one of the worst affected in 2020–2021. Though the economy is recovering faster than initial estimates, sustained economic recovery will not take place if stressed businesses cannot restructure their debts properly or if failing firms cannot be resolved efficiently. India’s bankruptcy law is key to solving these challenges. In 2016 India enacted the Insolvency and Bankruptcy Code, 2016 (IBC), which was a landmark reform to the nation’s financial system and the first comprehensive law to regulate insolvency.1 But the IBC has been suspended for a period of one year since the COVID-19-related lockdown was imposed in March 2020. In its place, India’s banking regulator, the Reserve Bank of India (RBI), has introduced a limited restructuring scheme for COVID-19-related stress in the meantime. Older mechanisms for insolvency that are still in operation have historically not worked according to expectations. As the one-year period of suspension comes to a close, this paper argues that bringing back the IBC—with adequate modifications—is an important prerequisite for sustained economic growth. India historically suffered from a patchwork framework of insolvency laws that either did not give lenders adequate powers to recover their debts upon default or only catered to the interests of certain kinds of lenders—to the exclusion of others.2 The IBC is a modern and comprehensive bankruptcy law that since its enactment has had a significant role in reducing the problem of nonperforming assets (NPAs), or “bad loans,” in India’s financial system. In the wake of the economic disruption caused by COVID-19, the Indian government suspended the operation of critical parts of the IBC. These changes meant that lenders could not trigger insolvency proceedings against defaulting businesses if the default occurred after March 20, 2020. While this suspension possibly prevented unnecessary business failures and provided a “calm period” for the economy, these measures have outlived their utility.
Topic:
Law, Finance, Economy, and COVID-19
Political Geography:
South Asia and India

1485. Tracking Reforms in Land Leasing and Change in Land Use: Insights From Gujarat and Karnataka

Author:
Ankit Bhatia
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
As India’s economy has become more urban and industrialized, property and land rights have evolved, too. In the states of Gujarat and Karnataka, key reforms in land leasing and change in land use show what may—and what may not—be a path forward. India is primarily an agrarian society. More than 60 percent of its population is dependent on agriculture and allied services and dwells in rural areas. In the past couple of decades, India has attempted to shift away from its rural-agrarian base toward an urban-industrialized economy. In this journey, it encountered many challenges, but none remain as severe and persistent as the ones related to the assignment and balancing of land and property rights. Land governance in India remains historically complex, politically sensitive, and economically inefficient. In recent times, state governments have attempted proactive measures to reform the sector and bring greater efficiency to land markets. Despite the exigency of these reforms, issues surrounding equity, abuse of power, and nexus among powerbrokers remain central and require thorough analysis. To unpack the fuller effects of the recent reforms, this paper aims to examine key reforms in land leasing and change in land use sub-sectors initiated by Gujarat and Karnataka states. The paper takes a comparative assessment approach to decipher the nuances and complexities of land governances in the two states. Given that land has deep historical connections, this paper briefly delves into the historical evolution of land leasing and change in land use regulation in the two states. The historical analysis highlights the political economy context of each sector and is followed by an in-depth review of the recent reforms. The paper covers reforms effectuated through legislative, executive, and judiciary actions. This approach allows a comprehensive tracking of different mechanisms at play. The paper brings out some interesting findings. In both the states, the change in land use sub-sector was able to reform more frequently than the land leasing sub-sector. Despite both states relying upon all three branches of government to initiate reforms, executive action was used most frequently. On occasion, the judiciary played a critical role, especially when lower branches passed judgments that provided windfall relaxation to the protective regulation. Further, the paper finds that most reforms were not structural in nature; they were merely attempts to ease the restrictions on the transfer of agricultural land. In a complete departure from past objectives, recent reforms attempted to dilute the protective framework of land leasing and change in land use regulation. It is understandable that socioeconomic and political realities have shifted and the archaic regulation may not serve its intended purpose. However, the recent reforms have failed to show a concrete new direction. Instead, they largely focused on allowing a greater transfer of land resources to industries, pushing toward more capital-intensive agriculture, and promoting digitalization of land-related governance and public service delivery.
Topic:
Reform, Economy, Urban, and Land Reform
Political Geography:
South Asia and India

1486. Israel in the Mediterranean: Policy Questions and Answers

Author:
Mitvim
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Mitvim: The Israeli Institute for Regional Foreign Policies
Abstract:
This paper presents insights and recommendations from a policy workshop of the “Israel in the Mediterranean” group led by the Mitvim Institute, the Hebrew University’s Leonard Davis Institute for International Relations and Haifa University’s National Security Studies Center. The workshop, convened on 19 November 2020, focused on key diplomatic, economic, energetic, environmental and identity issues that Israel faces in the Mediterranean. The document does not necessarily reflect agreement by all participants.
Topic:
Foreign Policy, Diplomacy, Environment, Economy, Regional Integration, and Identity
Political Geography:
Israel, Palestine, and Mediterranean

1487. Israel's Relations with Arab Countries: The Unfulfilled Potential

Author:
Roee Kibrik, Nimrod Goren, and Merav Kahana-Dagan
Publication Date:
01-2021
Content Type:
Book
Institution:
Mitvim: The Israeli Institute for Regional Foreign Policies
Abstract:
Israel’s Relations with Arab Countries: The Unfulfilled Potential examines relations between Israel and seven key Arab states – Egypt. Jordan, Saudi Arabia, the UAE, Qatar, Morocco and Iraq – against the backdrop of the changes sweeping the Middle East over the past decade. The researchers mapped out the potential for cooperation with each state based on shared interests, challenges and opportunities, and on the abilities, strengths and needs of Israel and those states. The researchers described existing diplomatic, security, economic and civilian cooperation – relying on open source material, their expertise in the arena and interviews they conducted. The studies found that despite progress in cooperation between Israel and Arab countries, and notwithstanding certain growing normalization with specific Middle Eastern countries, the strategic-diplomatic, economic, social, civilian and cultural opportunities are significant and far greater than their current level. There is wide-ranging, unfulfilled potential in Israel’s relations with Arab countries, and it is more evident now than it was in the past. The ongoing Israeli-Palestinian conflict and absence of significant progress in resolving it constitute the main obstacle to tapping the potential for cooperation between Israel and the Arab world, capping relations with a glass ceiling. In formulating its policy and actions in the region, Israel should learn the lessons of the past. It must take into consideration current realities and limitations, existing interests and processes. Just as important, it must also shape its actions, assessing and choosing from among various alternatives with a view to the future potential and tremendous promise they hold out. We hope this publication helps those interested in sketching the current complex picture and the potential that lies in relations between Israel and major Arab countries, and paves the way to expanded cooperation and normalization between Israel and its neighbors in the Middle East. As the studies in this publication indicate, the potential for regional cooperation is great and its realization also depends on progress towards Israeli-Palestinian peace.
Topic:
International Relations, Security, Foreign Policy, Diplomacy, Regional Cooperation, and Economy
Political Geography:
Iraq, Middle East, Israel, Palestine, Arab Countries, Saudi Arabia, Egypt, Jordan, Morocco, Qatar, and UAE

1488. The First Months of Israel-UAE Peace: Israel’s Perspective on the Abraham Accords

Author:
Ksenia Svetlova
Publication Date:
05-2021
Content Type:
Special Report
Institution:
Mitvim: The Israeli Institute for Regional Foreign Policies
Abstract:
In the few months that have passed since the signing of the historical Abraham Accords, Israel and the UAE have opened embassies and exchanged ambassadors, launched direct flights between Tel Aviv and Abu Dhabi, hosted dozens of businesses, cultural and academic delegations (among them a high-ranking Emirati delegation led by the UAE ministers of finance and economy), and facilitated visits of thousands of Israeli tourists to Dubai. Universities and think tanks from both countries have established connections, and news outlets have launched different forms of cooperation. Israel, the UAE, and the US set an investment fund worth 3 billion USD (the fund is not operational yet) and banks on both sides established agreements on financial services. The scope of activity between the two countries is impressive, and it seems that in case of Israel and the UAE, the seeds of peace have fallen on fertile ground, mainly due to high level of economic development and mutual geopolitical interests and concerns, such as the Iranian threat (although both sides evaluate and treat it differently).Today, it is almost impossible to imagine that just a few years ago Israeli athletes were only allowed to compete in the UAE if they agreed to participate without their national flag or national anthem sung at the closing ceremony. Why is it that the peace between Israel and the UAE appears to be such a stark contrast from previous peace agreements that Israel has signed with other Arab countries? Several factors have facilitated the newly established relationship: the positive image of the UAE in Israel; the lack of past hostilities, casualties, and territorial demands between the two countries; the unofficial ties forged long before the official recognition; the many mutual interests that seem to be aligned together; and the right timing that allowed for this bold and important development. Will the parties be able to maintain a similar level of enthusiasm also when the honeymoon stage passes? How will the two countries deal with various regional and international challenges? This paper presents an Israeli perspective on the first months of the relationship between Israel and UAE, and looks at prospects for the near future of these relations.
Topic:
Diplomacy, Treaties and Agreements, Economy, Peace, and Abraham Accords
Political Geography:
Middle East, Israel, Palestine, and UAE

1489. Do gendered laws matter for women’s economic empowerment?

Author:
Marie Hyland, Simeon Djankov, and Pinelopi Koujianou Goldberg
Publication Date:
03-2021
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
reater legal equality between men and women is associated with a narrower gender gap in opportunities and outcomes, fewer female workers in positions of vulnerable employment, and greater political representation for women. While legal equality is on average associated with better outcomes for women, the experience of individual countries may differ significantly from this average trend, depending on the countries’ stage of development (as proxied by per capita GDP). Case studies from the Democratic Republic of the Congo, India, and Spain demonstrate this deviation. Especially in developing countries, legislative measures may not necessarily translate into actual empowerment, due mainly to deeply entrenched social norms, which render legal reforms ineffective. Women are more likely than men to be in vulnerable employment in low- and lower-middle-income economies but less likely than men to be in vulnerable employment in upper-middle- and high-income economies. Analysis of a 50-year panel of gendered laws in 190 countries reveals that country attributes that do not vary or change only slowly over time—such as a country’s legal origin, form of government, geographic characteristics, and dominant religion—explain a very large portion of the variation across countries. This finding suggests that the path to legal equality between men and women may be a long and arduous one. Nevertheless, the data also show that the past five decades have seen considerable progress toward legal gender equality. Gendered laws do evolve, suggesting a role for legal reforms in women’s economic empowerment.
Topic:
Gender Issues, Law, Women, Inequality, and Economy
Political Geography:
Africa, Europe, South Asia, India, Democratic Republic of the Congo, and Spain

1490. Do US firms have an incentive to comply with the FLSA and the NLRA?

Author:
Anna Stansbury
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
To what extent do US firms have an incentive to comply with the Fair Labor Standards Act (FLSA) and the National Labor Relations Act (NLRA)? Stansbury examines this question through a simple comparison of the expected costs of noncompliance (in terms of legal sanctions) to the profits firms can earn through noncompliance. In the case of the FLSA minimum wage and overtime provisions, typical willful violators are required to pay back wages owed and in some cases additional penalties, if detected by the Department of Labor (DOL). Based on available data on the penalties levied, a typical firm would need to expect a chance of at least 78-88 percent that its violation would be detected in order to have an incentive to comply with the FLSA. In practice, the probability of detection many firms can expect to face is likely much lower than this. In the case of the NLRA, a firm that fires a worker illegally is required to reinstate the worker with back pay if the violation is detected. Based on empirical estimates of the effect of unionization on firm profits, a typical firm may have an incentive to fire a worker illegally for union activities if this illegal firing would reduce the likelihood of unionization at the firm by as little as 0.15-2 percent. These analyses illustrate that neither the FLSA nor the NLRA penalty and enforcement regimes create sufficient incentive to comply for many firms. In this context, the substantial evidence of minimum wage and overtime violations, and of illegal employer behavior toward unions, is not surprising.
Topic:
Labor Issues, Regulation, and Economy
Political Geography:
North America and United States of America