“A Climate Accord Based on Global Peer Pressure” – New York Times, 14 December 2014

Last month, almost 200 nations gathered in Lima, Peru to agree on a global pact to reduce fossil fuel emissions, one of the primary causes of climate change. The deal — called the Lima Accord — shows huge progress in global effort to fight the effects of climate change: it’s the first time that these nations will make a unilateral effort to curb the use of oil, gas, and coal.

However, the Lima Accord is not lawfully mandatory. If it were legally binding, then the nearly 200 nations wouldn’t have agreed to the deal — not even the US. Instead, the hope is that global peer pressure will be the impetus to move the accord forward. At this point, every nation has agreed to place limits on its carbon emissions.

According to the accord, each nation will have to introduce carbon-cutting domestic legislation by either March or June. Laws will delineate how each country will curb emissions after 2020. These proposals are known to the UN as “Intended Nationally Determined Contributions,” which will be included in an upcoming climate deal in Paris in 2015.

But because the Lima Accord has no requirements, countries could conceive of feeble plans that wouldn’t drastically combat the effects of climate change. Countries also have the choice of not even offering a plan — and if they don’t submit a plan, there are no fines or retribution.

Again, the accord relies on peer pressure and a method called “name-and-shame.” Each countries’ plan will be posted to the UN’s site as public information. If the countries’ plans are made public and some are found to be weak in comparison, then the shame of such a weakness will hopefully push that country to strengthen its plan.

The biggest worry comes with the top three polluters: the US, China, and India. While President Obama has tried to make climate change a vital element of his second term, his legacy really depends on what happens after his term is over. He has vowed to reduce emissions by at least 28 percent by 2025, which can be attained if tailpipe and power plant emissions regulations are passed. Unfortunately, most Republican White House contenders are staunch opponents of Obama’s climate change policies and likely don’t care about global urgencies.

China has been pushed to seek methods of reducing emissions due to discord among its citizens, as citizens disapproved of China’s worsening air quality. The country has now eclipsed the US as the number one polluter — President Xi Jinping has promised that China’s emissions will spike in 2030 and then fall. In order to ensure that target, the country is enacting a national cap-and-trade structure where polluters will have to purchase greenhouse gas emissions.

Because curbing emissions can be costly, it is a difficult burden for developing nations. India Prime Minister Narendra Modi has cast aside any efforts towards reversing climate change, instead focusing on economic growth and poverty, which could mean building new coal power plants. However, India’s Environment Minister Prakash Javadekar has stated that the country will offer a plan in June.

Other countries that climate change policy observers are following are Russia and Australia. Russian President Vladimir V. Putin doesn’t believe that humans cause climate change, and Australia has phased out its Department of Climate Change, and also revoked a carbon tax.

While we have a majority of the countries on board with the deal, there are a few important strays that will determine whether or not the Lima Accord is indeed productive.

(From New York Times)

Developed and Written by Dr. Subodh Das and Tara Mahadevan

December 15, 2014

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“Six Threats Bigger Than Climate Change” – Wall Street Journal, 28 August 2014

US Secretary of State John Kerry is concerned about climate change and rightfully so. The habits of people across the world have managed to impact our climate, causing large fluctuations in temperatures and more natural disasters, which significantly hit the world’s poorest nations and damage the global food supply. But yes, there are, as Wyoming Republican Senator John Barrasso points out, foreign policy issues that are just as important, or more important, than climate change.

Barrasso cites the following international issues that pose greater challenges to America than climate change: ISIS in Iraq; pulling out troops in Afghanistan and the subsequent terrorism; relations with Russia; Iran’s nuclear program; US assistance in Syria; and North Korea’s nuclear program.

While we concede that these are all very substantial concerns, Barrasso frames his argument as one or the other. We shouldn’t be concerned with climate change and new climate policy; we should completely focus our efforts on foreign policy and helping the world. Maybe Kerry made a lapse in judgement by stating that climate change is “the biggest challenge of all that we face right now,” but climate change is indeed a huge problem that can affect, and is affecting, our world.

Obama’s efforts to be diplomatic in regards US foreign policy seem to be a more long-term approach to the issues rather than making swift, rash decisions that could end badly. Conversely, Obama is able to make such swift political and economic issues in the US — such as using his power of executive order to push through new climate policy — because this is his home turf. Barrasso’s points are valid, but they seem to miss a key point — what change is Obama bringing to his own country, and why doesn’t change in America come first?

Though the US has lost a bit of its credibility recently, we have always been seen as the world’s savior and we’re always expected to lend a hand. That is an admirable trait and part of our identity as America, but perhaps it’s time that we — simultaneously, not exclusively — take care of our own for a bit. After all, juggling multiple goals and objectives is the President’s modus operandi.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

September 2, 2014

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“India became 3rd-largest economy in 2011 from 10th in 2005″ – Times of India, 30 April 2014

According to a report released by the International Comparison Program—presented by the Development Data Group at the World Bank—in 2011, India’s economy grew to the third largest in the world from placing at the 10th largest in 2005 and is now ahead of Japan. The US is still the largest economy, succeeded by China.

China, India, and Indonesia’s rankings, in comparison to the US, doubled; Brazil, Mexico, and Russia grew by a third or more. In 2011, worldwide production of goods and services amounted to more than $90 trillion, and almost half came from low and middle-income countries. Six of the world’s 12 largest economies have been classified as middle-income countries: China, India, Russia, Brazil, Indonesia, and Mexico.

The six biggest middle-income economies contributed 32.2 percent of the world GDP, while the six biggest high-income countries—US, Japan, Germany, France, UK, and Italy—contributed 32.9 percent.

China and India are growing rapidly and, with the exclusion of Japan and South Korea, account for two-thirds of the Asia and Pacific economy. China and India also account for almost 80 percent of investment expenditure in the same Asia and Pacific region.

Rise of middle-income countries will continue to provide the largest export markets for high-income countries, benefiting the world economy and reducing global income inequality.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

May 2, 2014

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“Turkey’s Crisis Dents American Steel” – Wall Street Journal, 5 February 2014

Turkey is the world’s biggest scrap steel importer and a key consumer in the $20 billion US steel scrap industry. But Turkey’s current economic crisis is taking its toll on the US scrap steel industry, the country’s weak demand and declining currency making imports very costly.

The US is the number one exporter of iron and steel scrap, selling $10 billion per year, more than two times the amount Japan sells, second to the US. Turkey has been the number one importer of US scrap since 2008; the country’s steelmaking companies mainly use electric-arc furnaces to melt down the scrap imports. Turkey, in turn, sells to Iraq, Saudi Arabia and the United Arab Emirates, becoming the largest exporter to these countries.

In the first 11 months of 2013, Turkey’s imports dropped 18% to 4.9 million tons, a huge hit to the US scrap steel industry. Turkey is now importing more steel from Europe, and manufacturing steel products from semi-finished steel items purchased from Russia, instead of manufacturing steel from scrap.

East Coast scrap traders are more widely affected by Turkey’s decline, whereas West Coast traders chiefly export to Asia. While demand from Asian countries, such as China, is predicted to continue growing, there is a worry that the demand could dwindle as China has its first “scrap cycle,” a phrase applied to a young, industrialized country that begins producing its own scrap with recycled steel goods. China will remain an importer for now, but the question remains whether China, like the US, will also become a global exporter of steel scrap. The US steel scrap industry has a lot to lose.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

February 24, 2014

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