Economic Times ⁽²¹⁸⁾

Specious ideas about climate change are occupying public policy space.Read full articleAbstract:According to Gresham’s Law, bad money drives out good. In debate on complex policy issues, ideas sometimes suffer the same fate as money. The debate on climate change offers a good example. Many specious ideas have come to occupy public policy space. These must be exposed and clarity restored, as done below. Idea 1 Meaningful mitigation is not possible without China and India accepting mitigation obligations. The US Congress has adopted this position and many commentators based in Europe and the US embrace it. Two arguments are offered in its support. First, China and India are such large emitters that without their participation, mitigation effort will fall short of the necessary. Second, unless these countries accept emission caps, developed-country carbon-intensive industries will simply migrate to them with no net reductions in emissions. The fallacy in the first argument is that India is a small emitter and not in the same league as China. Whereas the latter accounts for 21% of global emissions, India’s share is only 4%. In per-capita…

Read full articleThe HRD minister needs to divert his political capital to tackling the reform of college and university education.When the United Progressive Alliance (UPA) II announced Kapil Sibal as its human resource development (HRD) minister, the advocates of higher education reform were delighted. Two of his predecessors - Murli Manohar Joshi and Arjun Singh - had been stubbornly opposed to all reforms. The higher education system in India could not afford yet one more anti-reform HRD minister.Under the guiding hand of Prime Minister Atal Bihari Vajpayee, his reformist finance minister Yashwant Sinha had worked to implement economic reforms in virtually all sectors of the economy. But when it came to higher education, the dynamic duo could not budge the wall that was Joshi. The sector met the same fate under Arjun Singh during the UPA-I rule.

The global financial crisis is a year old this month. Here is why the crisis went so deep and why it spread so quickly and so widely. Read full article In the 1980s and early 1990, the United States had witnessed another crisis that saw 750 savings and loan associations (S&Ls) fail. S&Ls had specialised in accepting savings deposits and making residential mortgage loans. Deregulation in the 1980s allowed them to lend to increasingly risky borrowers who defaulted once the housing boom ended. The crisis remained confined to the S&Ls, however, with government successfully rescuing the depositors for just $125 billion in public money. In contrast, the current crisis engulfed the entire globe largely because the proliferation of financial derivatives comprising the so-called "shadow financial economy" indirectly placed the risky mortgages on the balance sheets of financial institutions around the world. Defaults in the housing market impacted all holding these derivatives.

If emitters were to take mitigation, they could achieve reductions without denying poor in India prospects of humane existence.Read full article Abstract: I have been surprised by the number of reasonable Indians who have come to accept the proposition, advanced by equally reasonable but perhaps nationalistically-motivated Americans, that the acceptance of internationally-mandated restrictions on carbon emissions by India is in its own national interest. Some have even come to argue that India should actively seek a climate change treaty at the Copenhagen conference in December 2009. I disagree with this proposition. The foremost objective India must pursue in the forthcoming decades is to provide a humane existence with adequate access to basic amenities such as shelter, water and electricity to all citizens.

At Copenhagen, India should indicate to the US that it would not sign an unjust treaty permitting trade sanctions against other nations. Read full article During her recent visit, the US secretary of state Hillary Clinton forcefully urged India to contribute to carbon-emission reductions to combat global warming. India's environment minister Jairam Ramesh responded with equal force stating that emission caps would not cut ice in India. Widespread criticisms of this response in the western press notwithstanding, Ramesh is on a strong wicket when refusing to accept mitigation obligations. The push secretary Clinton has made for emission reductions by India partially reflects a switch in the US policy towards climate change under President Obama. The Congress, which has also come to be dominated by the Democratic Party following the November 2008 elections, reinforces this switch. Specifically, the House of Representatives recently passed the American Clean Energy and Security (ACES) Bill of 2009, which provides for a "cap and trade" program that would place an annual cap on the overall carbon emissions in the US.