EU Carbon Border Adjustment Could Facilitate a Global Climate Solution

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May 27, 2024 — The European Union’s Carbon Border Adjustment Mechanism (CBAM) has begun asking EU importers to report data on emissions of greenhouse gases by their foreign suppliers (direct, but also indirect, i.e., embodied in the electricity they use).  The first round of reports were due January 31 of this year.  European importers are required by July to have established access to the data on emissions embedded in their suppliers’ products. The full CBAM regime, with European penalties against imports from countries that don’t price carbon as the EU does, will go into operation on January 1st, 2026.   It will have a major impact on producers of carbon-intensive products among EU trading partners. read more

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Elections and Devaluations

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May 2, 2024 — Lots of countries are voting.  Recent elections in a number of Emerging Market and Developing Economies (EMDEs) have demonstrated anew the proposition that major currency devaluations are more likely to come immediately after an election, rather than before one. Nigeria, Turkey, Argentina, Egypt, and Indonesia are five countries that have experienced post-election devaluations within the last year.

  1. The election-devaluation cycle

Economists will recall a 50-year-old paper by Nobel Prize winning professor Bill Nordhaus as essentially initiating research on the Political Business Cycle (PBC).  The PBC refers to governments’ general inclination towards fiscal and monetary expansion in the year leading up to an election, in hopes of re-electing the incumbent president or at least the incumbent party.  The idea is that growth in output and employment will accelerate before the election, boosting the government’s popularity, whereas the major costs in terms of debt troubles and inflation will come after the election. read more

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“False imbalance” in coverage of Columbia’s president

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April 25, 2024 —  I have in the past identified a media phenomenon that I called the syndrome of “False Imbalance.”   No, not “False Balance,” where the journalist takes an issue that is in truth unbalanced and pretends it is balanced. In a misguided attempt to sound impartial, he or she presents an unsupported viewpoint (say, climate change denial) on equal basis with a factual one.

False Imbalance takes a debate that is in truth balanced and pretends it is imbalanced.  A leader is described as under widespread attack, without indicating that half the attacks are coming from one direction and half from the opposite direction.  The reader is given no way of knowing that the public figure may be steering a path that carefully balances the pros and cons. read more

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