Friday, 30 January 2009

Celebs and refugees - Ben Affleck

Ben Affleck video of refugees in the DR Congo for UNHCR was well received and showed respect to Africans in their terrible plight. Chris Blattman gives his take on it.

More celeb awareness raising

Here is UNHCR's awareness raising on Refugees at Davos this week. The concept is called Refugee Run. The participants of Davos are invited to "step into the world of conflict and experience life as a refugee" and then "a debrief will follow and discuss your experience". Bill Easterly author of seminal White Man's Burden gives his perspective.

Thursday, 29 January 2009

Celebs pledge on development

Excerpt from commentary by Marbury:

The problem can be summed up in two pledges that comes hard on the heels of each other early on. We hear one from Courtney Cox and her stalker "to end hunger in America" OK - not bad. A little grandiose, but it's a clear enough goal and the relevant charity is namechecked. Next up, a pledge to "smile more." Smile more? If it's just about smiling more then anything counts. As if that weren't bad enough, it's closely followed by, "To laugh more and to love more." No, no, no.

Cameron Diaz pledges to give her neighbours a smile. Look, by all means, flash those perfect teeth to the bejewelled and befurred millionaires you pass in the lobby, but don't tell me that this is an act of service to your country. Don't you see, Cameron, that this devalues the very notion of service, of "pledges"? Cameron? Are you listening to me?

Somebody else pledges to plant five hundred trees this year - ten out of ten. This, my friends, is what I'm talking about. Next up, P Diddy says he's going to turn the lights off - and then points at me and says, now you turn the lights off. OK Diddy, it's a deal - but only if you surrender your private jet.

Demi Moore: "I pledge to free one million people from slavery in the next five years." Hmm, specific and worthy - if a little over-ambitious for one person.

You see, I'm not being cynical. Quite the opposite. I admire the spirit of collective endeavour and public service. But this video does violence to that noble idea, by confusing public service with the trivial and the personal. If millions of Americans view this video and conclude that they can meet their president's rousing call to service by "smiling more" then it will have done far more harm than good, to the country and to his presidency.

Wednesday, 28 January 2009

Carbon pricing in a recession

Posner and Becker argue that raising tax on petrol in a recession is a bad idea

" A further weakening of the financial position of American carmakers would increase the size of the bailout of the American auto industry needed to prevent it from going bankrupt. This implies that higher gas taxes would have a multiplier effect on the tax burden facing American families and businesses- not only would they have to pay more for gas, but they also would at some point have to pay higher taxes to finance a larger bailout. "

Tuesday, 27 January 2009

Different effects of the stimulus package

How economists analyse the stimulus
It depends on which effect you think will prevail:
Keynes effect,
Galbraith effect,
a Housework effect
a Feldstein effect

Too many labels

Do you need 4 organic labels on a pot of jam?

In the picture you can see on the left the 2 blue EU organic logo (2 different languages). On the botton left you have the green AB label which in the national French organic logo and on the right you have the Carrefour supermarket chain's logo "Bio" showing that this is an organic product.

In the queue, if they could find space on the jar would potentially be a fair trade mark, a carbon label and a symbol saying the ingrediants werent airfreighted.

Monday, 26 January 2009

Carrion crows attacking Switzerland

Every year the Swiss anti immigration party UDC come out with an eye catching piece of advertising that is regarded by many as offensive. This year's effort sitting outside my office, and so far with no graffiti on it, shows two large crows pecking at the heart of Switzerland with a by line "Open the door to abuse? No!". This refers to the recent vote to open its borders to the EU Member States.

The crows apparently refer to Romanians and Bulgarians and preys on the usual fears about the loss of jobs/national/racial identity of the electorate.

Last year's poster from UDC showed three white sheep kicking a black sheep out of Switzerland with the words "To create security" - it was banned in Geneva open spaces because of its obvious racial provocation.

One question is how does the political class to the left of the extreme right react to this arguably rascist advertising. (Bird lovers were also angered, seriously) Outrage has not stemmed the growth of the UDC and even creates more interest in it. Perhaps satire is the way forward...

Friday, 23 January 2009

Understanding carbon labels

Do you understand what this means?

A till survey reported by ClimateChangeCorp has found that just 28 per cent of customers from UK pharmacist Boots knew that a product carbon footprint related to climate change. And 44 per cent confused it with fair trade.

But the survey showed a majority thought it was important that a figure was given on how much carbon was used during an item’s production. Another problem was that while few products carry the labels, even clued-up consumers cannot compare like with like.

Who survived the Titanic and why

Bruno Frey, David Savage, and Benno Torgler report:

This paper explores the determinants of survival in a life-and-death situation created by an external and unpredictable shock. We are interested in seeing whether pro-social behaviour matters in such extreme situations. We therefore focus on the sinking of the RMS Titanic as a quasi-natural experiment to provide behavioural evidence that is rare in such a controlled and life threatening event.

The empirical results support that social norms such as "women and children first" survive in such an environment. We also observe that women of reproductive age have a higher probability of surviving among women. On the other hand, we observe that crew members used their information advantage and their better access to resources (e.g. lifeboats) to generate a higher probability of surviving. The paper also finds that passenger class, fitness, group size, and cultural background matter.

Via Marginal Revolution

Thursday, 22 January 2009

Marking up on fair trade

Is Fair Trade delivering as much as it could to farmers?

In my local supermarket today I bought some very tasty dried mangos. They help offset my chocolate urges.

They cost 3 swiss francs for 150g (20 francs per kg). Their texture is perfect and the colour a nice bright orange. They come from South Africa.

On the shelf above sits a smaller pack of fair trade dried mango from Burkina Faso costing 2 swiss francs from 100g (30 francs per kg). The fair traded product is thus 10 francs per kilo (50%) more expensive that an equivalent product. Given its lower quality (dark colour of the dried fruit), the mark up is arguably higher.

Is the higher price due to higher production and processing costs in the fair traded product or simply Coop exploiting the ethical shopper's insensitivity to price.

According to the fair trade standard, dried mango from West Africa gets an fair trade premium of 0.70 euro/kg. So all things being equal, the producer gets around 10% of the higher price that fair trade commands. Even less, if you take into account the lower quality of the fair trade product.

Wednesday, 21 January 2009

Shopping for shirts

Size 38s are cheaper than medium or large.

Yesterday I went to the sales to find some new shirts for work. In the two major chains here in Geneva the only shirts left were small size. Next time I will have to get to the shops on the first day of the sales.

Being a size 38 obviously appears to have its advantages at least in saving cash on the clothes budget. The first few days see medium and large sizes selling out leaving only small sizes. The retailer by then will be looking at the next round of reductions thus giving size 38s greater savings than for the rest of us.
This give small size purchasers plenty of time to browse at heavily discounted prices.

Which means that other than emergency buys, purchasers of size 38 have almost no incentive to buy outside the sales.

Tuesday, 20 January 2009

Lord's Resistance Army

This week, the LRA commited another atrocity in the Congo. For a background on the LRA and the less-than-heroic characters in charge, go no further than the blog post from Wronging Rights.
Photo courtesy of Stoke Newington Quakers

Monday, 19 January 2009

Books on Africa

Over Christmas I zipped through The Reader by Bernard Schink, Northern Lights by Philip Pullman and JG Ballard's autobiography, Miracles of Life.

Next on my list is Shadow of the Sun, by Ryszard Kapuscinski.

On the subject of Africa, the 100 best books on Africa has been announced, via Chris Blattman. See also the Africa reading challenges on Siphoning off a Few Thoughts.

Thursday, 15 January 2009

Snow and galaxies

Whilst the snow is still lying on the ground, here are some amazing pictures of snowflakes up close as you have never seen them from the New Scientist. Photos taken by Kenneth Libbreth of CalTech

At the other end of the spectrum here are photos of the galaxies on Wikisky

Wednesday, 14 January 2009

Carbon tax versus cap and trade

There is an endless stream of articles about the climate impact of our daily lives and shopping choices. Today, it transpires that surfing the internet is bad. This lengthens the list of daily activities that we are told is causing climate change. One minute you think you are doing the right thing (like buying local food) and then an expert points out that it depends what time of year you are buying it, what country is comes from, if it was grown in a greenhouse or not, what energy sources were used, whether it come it by road, rail or air, how you got to the shop and how you prepared it (oven, boiled or fried).

All this needless to say is a) disconcerting and b) a complete waste of our time c) ineffective way to deal with global warming.

The alternative promoted by economists and endorsed by some politicians is to price carbon. This means raising the price on carbon to account for its environmental damage. This will change the relative price of energy in favour of low carbon technologies and energy conservation measures. Whilst most agree that this is a good idea (some industry groups disagree), there is disagreement about whether a carbon tax or cap and trade emissions scheme is the best approach. I will leave it to the chief proponents of these respective economic instruments to argue which is the best approach.

Greg Mankiw of Harvard University on carbon taxes as the best approach to reduce carbon emissions and Robert Stavins also of Harvard on cap and trade.

Tuesday, 13 January 2009

Organic farming in a Nairobi slum

You dont get many farms in the middle of slums let alone organic ones. Here in Kibera, Africa second largest slum after Soweto, a community of people started growing their own organic food. The mover behind this scheme was Su Kahumba, founder of Green Dreams an organic vegetable retailer in Nairobi.
Photo courtesy of Green Dreams

Monday, 12 January 2009

Making sandwiches

Continuing on last week's weighty interface between the recession and the environment, here is a way to save money on lunch and reduce your environmental impact. Apparently, sales of lunch boxes are up 68% on last year at Robert Dyas, while Thermos are reporting a 30% sales increase over the last year.

Friday, 9 January 2009

Walking between the Twin Towers

I remember I got giddy whilst reading Philippe Petit's book about his incredible 1974 walk between the Twin Towers. It is an adventure that ranks with walking on the moon - however whilst there would be thousands in the queue to be an astronaut, surely noone other than this French maestro would ever have wanted to walk between the Twin Towers.

Here is a clip of the walk.

China power generation drops

China's strong growth in the last twenty years has been driven by cheap and plentiful coals supplies. Good news for growth, bad news for global warming. Dotearth reports that with the recession however,

China's carbon emissions will fall around 2 billion tons less carbon dioxide from 2008 to 2010 than it would have under “business as usual” if current recession continues.

To avoid going beyond 450 ppm we must stabilizing the world's (and China's) emissions by 2020. See more commentary and resume of the International Energy Authority's report on Climate Progress.

Recession = back to fossil fuels?

In 2008 when oil prices were at record levels, the conditions looked right for greater uptake of renewable energy technologies. Now the world is in recession and oil is at US$40 a barrel. Despite Obama's promises to invest in green technologies, what really are the prospects. At Freakonomics, three economists say what they think the prospects for green energy use in 2009 and beyond.
John Whitehead
laments how close the US was in 2008 to what economists call the Hotelling switch point where high fossil fuel prices and falling renewable prices would cross paths and lead the economy to a switch to renewable energy sources. With the recession the gap between renewable and fossil fuel prices is now widening and as a result "most all large, private renewable-energy investments will be put on hold in 2009".
George Tolley
also sees the recession as dampening demand for renewable energy with high oil prices key to bringing about its adoption, "this is a more powerful influence on clean technology adoption than any U.S. policy".
Ethan Zindler is more optimistic pointing out
the clean-energy boom took off when crude traded at $50 per barrel or below, not $140 per barrel.

Thursday, 8 January 2009

Japanese carbon label

Japan's Ministry of Industry, Trade and Economy has launched a carbon label for "daily items and food". According to MITE, they received 500 applications from companies to trial the label in 2009. I question how consumers will respond to the label - will they understand what it means? I don't!

Will it transpire that consumers simply feel assured to see the label without understanding what information it is conveying?

Whatever it does mean, it won't make much difference to reducing carbon emissions if you are driving (rather than biking or walking) to the supermarket to pick up a kilo of carbon labelled goods...

Challenges for WTO

The WTO announced this week that its Director General Pascal Lamy will run unopposed for a new tenure. The challenges facing Mr Lamy and the WTO are outlined by Dr Carolyn Deere of the Global Trade Governance Project at Oxford University.

She says:
"Amidst global debates on financial instability, on climate, on energy, on the massive explosion of private standards, technology transfer, and on food security as well as on development and the reduction of poverty, the WTO should not and cannot claim all global problems as its turf or demand to be the forum for their discussion, but to ensure trade policies and laws do not thwart solutions but supports them, governments do need to decide where and how to discuss inevitable linkages".

(Their link to trade resources)

Wednesday, 7 January 2009

Star economists of development

Two leading young economists identified by The Economist who are concerned with development.

Firstly, Ester Duflo of MIT Poverty Action Lab who:

"studies economic development as seen from the field, clinic or school, rather than the finance ministry. They might be called the “peace corps” of economists, bringing the blessing of their investigative technique to the neglected villages of India or the denuded farms of western Kenya.

Ms Duflo has made her name carrying out randomised trials of development projects, such as fertiliser subsidies and school recruitment. In these trials, people are randomly assigned to a “treatment” group, which benefits from the project, and a “control” group, which does not. By comparing the average outcome of each group, she can establish whether the project worked and precisely how well.

In one study, Ms Duflo and her colleagues showed that mothers in the Indian state of Rajasthan are three times as likely to have their children vaccinated if they are rewarded with a kilogram of daal (lentils) at the immunisation camp. The result is useful to aid workers, but puzzling to economists: why should such a modest incentive (worth less than 50 cents) make such a big difference? Immunisation can save a child’s life; a bag of lentils should not sway the mother’s decision either way.

Randomised trials “give you the chance to be surprised”, Ms Duflo says. Had they arrived at this result using some other method, she and her colleagues would have assumed they had made a mistake. But randomisation removes such doubts, showing that it was indeed the lentils that made the difference. The result cannot be dismissed; it must be explained.

The approach has its critics. A randomised trial can prove that a remedy works, without necessarily showing why. It may not do much to illuminate the mechanism between the lever the experimenters pull and the results they measure. This makes it harder to predict how other people would respond to the remedy or how the same people would respond to an alternative. And even if the trial works on average, that does not mean it will work for any particular individual".

Secondly, Marc Melitz, a trade economist at Princeton University

"Mr Melitz is a pioneer of the “new, new trade theory”, which succeeds the “new” trade theory propounded by Mr Krugman almost 30 years ago. The source of its novelty is its recognition that firms differ, and only the best firms export. In America, for example, exporting factories are more than twice as big as plants that do not sell beyond their shores, and they squeeze 14% more out of their workers.

In Mr Melitz’s theory firms first prove themselves at home, discovering their own limits and abilities. Only the best then venture overseas. Entering a foreign market is an expensive endeavour, he points out, even before firms encounter the tariffs or transport costs that preoccupy most trade models. An exporter must find and introduce itself to distant customers, comply with alien regulations and set up distribution channels abroad. One study found that it cost Colombian chemical factories over $1m to enter a foreign market.

The gains from trade also differ in Mr Melitz’s model. In the new trade theory that preceded it, international commerce raises the productivity of firms by enlarging their market, allowing them to reap economies of scale. In Mr Melitz’s model, trade raises the productivity of industries, not by allowing firms to grow bigger, but by giving the better firms a bigger share of the market. Foreign competition sifts and sorts firms, winnowing out the weakest firms and leaving a greater share of the market to their stronger rivals".

50 years of taking pictures

My dad's pictures from a 50 year career

This one is of Harold Pinter who died last week. I met him once at a cricket match. He was umpiring at square leg.

Tuesday, 6 January 2009

Creating green jobs

Obama talked in his presidential campaign about mitigating climate change through stimulating green technologies and so creating millions of new jobs and at the same time energy independence - a "win win win".

What is the reality behind this comforting vision? Can environmental policies really work in stimulating the economy. Would the number of jobs created by expanding solar industry would be greater than the number lost through, say, a shrinking coal-mining industry. Professor Stavins at Harvard, via the Wall Street Journal offers the following analogy:

“Let’s say I want to have a dinner party. It’s important that I cook dinner, and I’d also like to take a shower before the guests arrive. You might think, Well, it would be really efficient for me to cook dinner in the shower. But it turns out that if I try that I’m not going to get very clean and it’s not going to be a very good dinner. And that is an illustration of the fact that it is not always best to try to address two challenges with what in the policy world we call a single-policy instrument.”
Photo by phault, flickr

Monday, 5 January 2009

Stimulus for a green economy

The calls for a stimulus for green technologies are getting louder. Obama himself said we need to fund them to have a win win of jobs and reducing greenhouse gas emissions. People are asking therefore why a bail out for a failed industry (US cars) and not for innovation. Joseph Stiglitz says in the NY Times:

“I’ve been a bit astonished that all the discussion around the private-sector stimulus has centered on infrastructure. Bailouts, too, are aimed at correcting mistakes of the past, so they are backward-looking. We would be much better off spending our money forward-looking. If we spend $700 billion on new technology and innovation, we’d have a stronger, new, real economy. Up to now, the discussion has focused on the sectors that have been mismanaged rather than the sectors that are creating our future.”

Maps illustrating development issues

World Mapper does a good job illustrating development issues through the use of maps. Territories are re-sized on each map according to the subject of interest.

This one shows the paucity of doctors working in Africa - The most concentrated 50% of doctors live in territories with less than a fifth of the world population. The worst off fifth are served by only 2% of the world’s doctors.

Who is causing the most global warming per capita - the West of course, plus Qatar equivalent to 86 tonnes of carbon dioxide per year, around 160 greater than the average for African countries.

Sunday, 4 January 2009


Links of interest...

1. 10 leading economists under 40

2. 10 most influential thinkers under 40

3. ...and worth a look to see the mood of President Bush who is not shaking hands with the world's leaders.

Saturday, 3 January 2009

Climate letter to Obama

Let's hope Obama finds the time to read this letter from Colombia/NASA Professor James Hansen and his wife in which they highlights the "disconnect" between science (we are going to hell fast) and policy (do nothing substantial about climate change) - (my brackets). They say that it is still "feasible" to save the planet but three actions are needed fast:

• Moratorium on and phasing out of coal power stations without carbon capture, what he calls the "sine qua non for solving the climate problem".

• Raising the price of emissions via a "carbon tax and 100% dividend".

• Urgent research on "fourth generation" nuclear power with international co-operation.

At the heart of the response lies taxation on carbon.

A carbon tax, he says "is the essential underlying support needed to make all other climate policies work... and essential to decarbonize society".
- A carbon tax will be accepted by the public if it is returned to them. No bureaucracy is needed.
- The tax will spur innovation as entrepreneurs compete to develop and market low-carbon and no-carbon energies and products.
- A carbon tax is honest, clear and effective

With oil prices low now is a good time to introduce a tax.

He trashes the idea of cap and trade emissions schemes as these "generate special interests, lobbyists, and trading schemes, yielding non productive millionaires"

In this rich letter, he highlights the urgency of the situation which "derives from the nearness of climate tipping points, beyond which climate dynamics will cause rapid changes out of humanity's control". He also says that we are already past the safe level of 350 ppm of carbon dioxide in the atmosphere. This is pretty alarming given policy makers are saying we have to level off emissions at 450ppm - which a likely scenario being 550ppm. Pre industrial levels were 280ppm...