Would US Climate Mitigation Efforts Matter? Yes, If They’re Done Right

A recent post by David Bailey and David Bookbinder on the Niskanen Center blog Climate Unplugged addresses a common Conservative criticism of unilateral climate mitigation efforts by the United States or other developed countries. As the critics point out, emissions from developing countries are expected to grow so rapidly that even if the US or […]

How Natural is Natural Monopoly? The Case of China’s Crumbling Hold on Rare Earths

Rare earth elements (REEs) are a group of seventeen elements with exotic names like neodymium and yttrium that are key ingredients in many high-tech products, many important for national defense. Imagine the consternation of Western officials when they woke up one morning in September 2010 to learn that China held a near-monopoly in the production […]

Consequences of the World Oil Glut

Forecasting crude oil prices has been difficult. Forecast errors have been large, especially for the end of 2014, when typical forecasts were more than $40 per barrel too high. A panel of Wall Street Journal analysts forecast $94.65 per barrel, but the actual price was $53.27 per barrel. Forecasts implicit in oil futures contracts exhibited […]

Reverse Oil Shock: Part 3 – Feeding Financial Instability

Financial markets have generally assumed lower oil prices are positive for asset prices, resulting from the positive effect on growth and lower inflation which extends the period of low interest rates. In reality, the large movement in oil prices has the potential to create significant financial instability. Monetary Disorder… Lower oil prices will reduce already […]

Reverse Oil Shock: Part 2 – Winners & Losers in the Energy Wheel of Fortune

The consensus view is that lower oil prices are likely to assist the global economy. Quantitative greasing will augment quantitative easing, supporting economic activity. Oil Lottery… A US$40 fall in oil prices equates to an income transfer of around US$1.3 trillion (around 2 percent of global GDP) from oil producers to oil consumers. A sustained […]

Why a Global Climate Deal Will Remain Challenging

For quarter of a century, global climate change talks have suffered from a stalemate between major advanced nations and large emerging economies. Since Lima’s climate conference could not resolve it, it deferred the divide to Paris 2015. Recently, world’s leading nations gathered in Lima, Peru, for the 2014 U.N. Climate talks. The procedural objective was […]