Another excerpt from the climate chapter of my book-in-progress, Economic Consequences of the Pandemic. Comments, constructive criticism and compliments all appreciated.

[click to continue…]

Over the fold, another draft section of the climate chapter of Economic Consequences of the Pandemic. As always, comments, compliments and criticism appreciated

[click to continue…]

Another extract from the climate chapter of my book-in-progress, Economic Consequences of the Pandemic, over the fold

The UK’s Equality and Human Rights Commission has just published a report into the Windrush scandal. The report shows that policy makers ignored warnings about the likely impacts of the “hostile environment” policy on groups such as the Windrush generation. As a result of the policy, many people who had difficulty in proving their right to reside in the UK, often because the Home Office imposed a ludicrous evidential burden on them, lost their jobs, their homes, were denied access to vital health care, were detained in prison-like immigration detention centres or were deported and excluded from a country they had lived in all their lives.

The report makes grim reading, but what emerges clearly from it is that ministers and their civil servants, seeking to display a “get tough” message on immigration, were not disposed to listen to the people telling them about how things would turn out. They were already set on the policy and were going to stick to it whatever. Critics were to be ignored and rebutted and the UK government were not interested in finding evidence that would get in the way. Legal duties to promote equality and non-discrimination were not seen as goals that ought to inform policy but, at best, as obstacles to circumvented.

After the Windrush scandal broke in 2018, thanks to the work of activists and journalists, including Amelia Gentleman who wrote an excellent book about this, the Home Office pledged to put things right. But the compensation scheme for victims that the Home Office was forced to put in place has paid out a pittance to a very few of the victims, and a senior civil servant has resigned suggesting that racism is an important part of the explanation. Almost weekly new absurdities come to light, such as the case of a man who the Home Office illegally excluded from the country who has now applied for British citizenship, which the Home Office is denying him on the basis that he spent too long out of the country.

The British press, with the exception of the Guardian, has given little prominence to this story. Another report from the EHCR into anti-semitism in the Labour Party was all over the front pages, but one into the impact of immigration policy on the lives of thousands of people is, well, not. Too late to affect this report but ominously for the future, the UK government has now appointed David Goodhart, a prominent advocate of the hostile environment (who now says he was always against “abuses”), as one of the commissioners for the EHRC. As US Republicans have learnt from the experience of the Supreme Court, the answer to the problem of referees giving decisions against you is to appoint new, more pliant, referees.

Another (long) extract from the climate chapter of my book-in-progress Economic Consequences of the Pandemic is over the fold. Comments, compliments and criticism appreciated as ever.
[click to continue…]

(Another extract from the climate chapter of my book-in-progress, Economic Consequences of the Pandemic)

The Covid-19 pandemic has accelerated a variety of social and economic trends, some beneficial and some harmful, that were already underway before 2020.

An important example of a beneficial effect has been an acceleration of the decline of carbon-based fuels. Lockdowns early in the pandemic produced a substantial reduction in demand for both electricity and transport. As well as providing a brief glimpse of a world with greatly reduced atmospheric pollution, the lockdown accelerated shifts in the energy mix that were already underway.

Since solar PV and wind plants cost nothing to operate, the reduction in electricity demand fell most severely on carbon-based fuels, particularly coal. As a result, the combined contribution of PV, wind and hydroelectricity to US energy generation surpassed that of coal for the first time in 130 years.

Official projections from the EIA suggest that coal use will return to its gradually declining trend in the wake of the pandemic, exceeding renewables for some years to come. However, the pace at which coal plants are being closed or converted to run on gas has accelerated during pandemic. Meanwhile, despite weak demand, wind and PV plants are being installed at a record pace, partly because near-zero interest rates make capital investments cheaper.

The reduction in transport usage reduced demand for oil, at one point leading to a startling situation where the price of oil was negative, as unsold oil exceed the capacity for storage. Although the price has recovered somewhat, it seems unlikely that transport demand will return to its previous trend.

At the same time, there has been continued progress, both technological and political, in the electrification of transport. British Prime Minister Boris Johnson recently announced that the sale of petrol and diesel cars would be prohibited after 2030, an advance on previous commitments. The decline in long-term interest rates also enhances the economic position of electric vehicles, which have higher upfront costs and lower operating and maintenance costs than petrol and diesel vehicles. https://www.prnewswire.com/news-releases/auto-loan-interest-rates-drop-in-may-to-lowest-level-since-2013-according-to-edmunds-301069143.html

Not all energy-related developments associated with Covid have been positive. The convenience and cheapness of online taxi platforms like Uber and Lyft has reduced use of public transport in many cities. The pandemic, with the need to avoid crowded spaces like buses and subway cars has exacerbated this trend. And, while the option of working remotely reduces the need for travel, it has encouraged a more dispersed workforce with less need to commute to the central city locations best served by public transport.

Many decades ago, I remember watching a British comedy sketch framed around a show called Controversy, the idea of which was that two experts with opposed views on some issue would slug it out for the entertainment of viewers. It turned out, however, that one of the experts had completely reversed himself and now agreed with the other. The host desperately tried to provoke some disagreement, with no success before giving up and saying “Well that’s it, for tonight’s Controversy“. At this point, each of the experts interjected that he had pronounced the word wrongly, each offering their own preferred stress pattern. (I found someone else who remembered it here, but also couldn’t recall the show).

I’m often surprised by which of my opinions on various issues turn out to be controversial or otherwise, and I thought I’d check a couple on Twitter, with some mildly interesting results

[click to continue…]

Even as the future of US democracy remains in the balance, and as the pandemic still rages, I’m still working on my book The Economic Consequences of the Pandemic. At this stage, it’s hard to get a clear idea of how things will look when and if the pandemic is brought under control. One thing that is certain is that the problem of climate change/global heating will not have gone away. Over the fold, the intro for the chapter I’m writing on this topic. Comments, criticism and compliments all gratefully accepted.

[click to continue…]

The United Nations Development Program’s flagship index of wellbeing and social progress, the Human Development Index, no longer captures what humans need, and needs to be replaced by a Green Human Development Index. That’s what I’ll argue in this post.

First, some context for those who do not know the Human Development Index (HDI). The HDI is the main index of the annual Human Development Reports, which, since 1990, have been published by the United Nations Development Program (UNDP). The reports analyse how countries are doing in terms of the wellbeing of their citizens, rather than the size of the economy. In 1990, the Pakistani economist Mahbub ul Haq had the visionary idea that in order to dethrone GDP per capita and economic growth as the yardstick for governmental policies, an alternative index was needed. He asked Amartya Sen to help him construct such an index. The rest is history. The HDI became a powerful alternative to GDP per capita. It consists of three dimensions and several indicators. The first dimension is human life itself, for which the indicators are child mortality and life expectancy. The second dimension is knowledge, captured by school enrollment rates and adult literacy rates. And the last dimension is the standard of living, for which the logarithmic function of GDP per capita is used.

It is easy to criticize the HDI for not capturing all dimensions of wellbeing, or for other shortcomings. For whatever those academic arguments are worth, there is no denying at how successful the HDI has been at accomplishing its two primary purposes: to dethrone GDP per capita and economic growth as the sole yardsticks for societal progress, and to stimulate policy makers to put human beings central in their institutional design and policy making. And by that yardstick, the HDI has been a great success. Each year, the release of the Human Development Reports captures the attention of media and policy makers worldwide. Many politicians and governments care about their ranking in comparison with other countries. And, most importantly, the political power of the HDI provides an incentive for countries to try to invest more in education and health, combatting child mortality and increasing life expectancy.

Yet, it is now time to abandon the HDI. Paradoxically, this is not despite, but because of its political success. The reason is that we have entered the Anthropocene – the geological epoch in which the human species is changing ecosystems and the geology of the Earth. The most well-known of those changes that humans have caused is climate change. And since these ecosystems and planetary boundaries in turn affect human flourishing, they must be central in any analyses of that human flourishing. [click to continue…]

That’s the self-explanatory title of my latest piece in The Conversation. It’s wonkish, but important. As I’ve explained here and here, an economy with zero real interest rates works very differently from the kind we are used to.