Roubini Topic Archive: Energy Security and Policy
On Sunday the Tokyo Electric Power Company announced that they had found puddles at the damaged Fukushima nuclear facility’s No. 2 reactor containing extraordinarily high levels of radioactivity—10 million times higher than would be found in water in a normally functioning nuclear reactor. Thirty minutes later they retracted the statement.
Thankfully the markets were closed and beyond the temporary scare, no lasting damage was done. But more serious problems have plagued the recovery effort and the Japanese political system is beginning to confront the possibility that emergency management reforms introduced after the 1995 Kobe earthquake have been inadequate.
By Mohsin S. Khan and Shuja Nawaz
The floods in Pakistan have affected one-fifth of the country (an area roughly the size of England) and engulfed large parts of all four provinces—Punjab, Balochistan, Sindh, and Khyber Pakhtunkhwa (formerly the North West Frontier Province). The vast scope of the damage makes this a truly national disaster bearing long-term economic and political consequences for the whole country. With waters still rising, it is far too early to assess the economic costs, which will continue to mount. A proper assessment will be made in time by the government of Pakistan, assisted by the United Nations and the World Bank, but some indicators already allow for a preliminary and admittedly impressionistic view of the damage.
Nicholas R. Lardy says relations with China are deteriorating over climate change, Iran, and the possible return of global current account imbalances. Steve Weisman: It’s early 2010 and China is increasingly the focus of news on several fronts including climate change, the possibility of sanctions in Iran, and the future of the global economy. This […]
How should climate change goals be met to ensure that developing countries’ energy needs are not sacrificed? In a previous posting on RealTime Economic Issues, Meera Fickling offered a different view on an issue posed earlier by Nancy Birdsall and me in our article “Forget Emissions, Focus on Research” in the Financial Times. In this […]
In a recent op-ed in the Financial Times, Nancy Birdsall and Arvind Subramanianasserted that rich countries were unfairly blaming the developing world for contributing to global warming, and they called for a shift away from focusing on emissions and toward exploiting “the latest available clean technologies” for poor countries. Unfortunately, their recommendation dangerously downplays the […]
Hard on the heels of his tour of China—a visit that produced mixed results and even more mixed reviews—President Obama welcomes Prime Minister Manmohan Singh to the White House in the first state visit of his presidency. For both Mr. Obama and Dr. Singh, the trip will be important symbolically, politically, and economically—even if it […]
Op-ed in Business Standard, New Delhi October 28, 2009 Never mind that it was a confidential communication. Never mind too that the establishment came down on him and crushed any possibility of his private views translating into public policy. Never mind, in short, that it is back to the status quo with a vengeance. The […]
Trade and environment intersect in many ways. Aside from the broad debate as to whether economic growth and trade adversely affect the environment, there are linkages between existing rules of the World Trade Organization (WTO) and rules established in various multilateral environmental agreements. Controlling greenhouse gas emissions promises to be a top priority for both […]
Testimony before the Subcommittee on Asia, the Pacific and the Global Environment, Committee on Foreign Affairs, US House of Representatives September 10, 2009
The Policy Context
The United States and China are the two most important national economies in the world:
- China will shortly pass Japan to become the world’s second largest economy behind the United States;
- the two together accounted for almost one half of all global growth during the four-year boom prior to the crisis;
- they are the two largest trading nations;
- they are the two largest polluters;
- they are on opposite ends of the world’s largest trade and financial imbalance: the United States is the largest deficit and debtor country while China is the largest surplus country and holder of dollar reserves; and
- they are the leaders of the two groups, the high-income industrialized countries and the emerging markets/developing nations, that each now account for about one half of global output.
It is clear that effective international policy coordination requires the closest possible cooperation between the United States and China. The two countries do not have to agree on every issue, let alone pursue identical policies. But they must be willing and able to work constructively together, in terms of the domestic politics of each as well as their direct diplomatic contacts, if enough agreement is to ensue to permit progress across the entire spectrum of crucial international economic issues—ranging from recovery from the current crisis to creating a new global regime to counter global warming. Their relationship must therefore focus increasingly on the wide range of global economic issues for which they bear systemic responsibility rather than the bilateral frictions that have traditionally been its centerpiece.
In anticipation of these conditions, I proposed five years ago that the United States and China work toward the creation of an informal G-2 that could provide effective joint leadership of the world economy.1 The idea was, and is, to develop a close working relationship between them that would supplement (not supplant) the existing steering committees, including the G-7/8 and the newly dominant G-20, and the multilateral institutions (notably the IMF and WTO). The overriding goal is to make those institutions function more effectively and thus strengthen the world economy.
My assessment of the initial meeting of the Strategic and Economic Dialogue (S&ED), and of its future prospects, is thus governed largely by an assessment of whether it is helping to create such a G-2. Viewed as a further extension of the earlier Senior Dialogue and Strategic Economic Dialogue (SED), I believe that the S&ED is indeed moving in that direction and holds considerable promise for continuing to do so. I thus strongly endorse the administration’s initiative, praise the Chinese for their active participation in the process, and offer a few suggestions for how it can best be used to achieve the desired outcome.
The Conceptual Framework
Op-ed in the Business Standard, New Delhi Narratives matter. Not just for creating and sustaining nationhood as Isaiah Berlin famously argued. They also matter critically in international negotiations. At the moment, India is not winning the battle of the narrative on climate change. And that’s a worry. The situation on climate change is somewhat reminiscent […]