Advice on climate policy for the 2020 presidential candidates – Henry Jacoby, Richard Richels, and Gary Yohe

Henry D. Jacoby, Professor Emeritus, MIT Sloan School of Management

Gary Yohe, Huffington Foundation Professor of Economics and Environmental Studies, Wesleyan University

Richard Richels, directed climate change research at the Electric Power Research Institute.

From The Hill

The Paris Agreement, with its goal of halting global warming short of 2 degree Celsius, conjures up an image of a temperature threshold which we dare not exceed, akin to Thelma and Louise knowingly and recklessly driving over a cliff to their ruin.

For that hapless couple, there may have been a sudden abyss that they chose to breach. But in the case of global warming, a better metaphor might be that of the can that gets kicked down a road that becomes increasingly treacherous with every mile travelled. Due to our past reluctance to apply the brakes, the can is now farther down the road, and it is going faster than we realize.

The science is clear. When we include the pent-up momentum of the climate system, we have already committed to warming of at least 1.5 degree C. Moreover, with the additional heating that will occur as we reduce emissions to zero, a 2-degree limit is also in doubt.

Have no illusions. The case for coordinated action both nationally and internationally is compelling, even if the articulated temperature targets turn out to be only aspirational. The intensity of the wildfires in the West, the unrelenting flooding in the midsection of the country and the fury of hurricanes striking our coastlines are but a preview of what’s to come—just like the recognition of increases in the frequency of heatwaves and the severity of droughts.

It doesn’t take a genius to see the absurdity of inaction in the face of these risks. Continuing to kick the can down the road will place an intolerable burden on future generations.

But all the news is not bad. Recent polls suggest that we may be entering a new era of public concern over climate change. The number of Americans witnessing the growing destruction has risen. Many see it out of their kitchen windows; all observe it on the evening news.

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Empty outrage will not do – Kritarth Yudhish

Kritarth Yudhish, MBA Candidate, MIT Sloan School of Management

From Daily News and Analysis 

On the eve of the 2019 Lok Sabha results, the New York Times published an article titled “How Narendra Modi Seduced India with Envy and Hate”. A little before the election, Time magazine featured NaMo on their cover and in bold letters labelled him as the “Divider in Chief”. Kapil Komireddi’s analysis of the Indian political landscape for The Guardian went on to call Indians “intellectually vacant” and the country a “make believe land of fudge and fakery”.

These scathing remarks from the international community crystallized national support for Modi and May 23, 2019 put the debate to rest, telling the world what India really is – an exemplary democracy that does not seek validation from a few writers in Manhattan or London to create the ideological roadmap for our future.

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How do populists win? – Daron Acemoglu and James A. Robinson

Daron Acemoglu, Elizabeth and James Killian Professor of Economics, MIT Sloan School of Management

From Project Syndicate

In the Middle Ages, Italian city-states led the European “commercial revolution” with innovations in finance, trade, and technology. Then something strange happened. In 1264, to take one example, the people of Ferrara decreed that, “The magnificent and illustrious Lord Obizzo … is to be Governor and Ruler and General and permanent Lord of the City.” Suddenly, a democratic republic had voted itself out of existence.

In fact, this was not an uncommon occurrence in Northern Italy at the time. As Niccolo Machiavelli explains in The Prince, the people, seeing that they cannot resist the nobility, give their support to one man, in order to be defended by his authority. The lesson is that people will abandon democracy if they are worried that an elite has captured its institutions.

Medieval Italy’s democratic institutions succumbed to what we might now call populism: an anti-elitist, anti-pluralistic, and exclusionary strategy for building a coalition of the discontented. The method is exclusionary because it relies on a specific definition of “the people,” whose interests must be defended against not just elites, but all others. Hence, in the United Kingdom, the Brexit leader Nigel Farage promised that a vote for “Leave” in 2016 would be a victory for the “real people.” As Donald Trump told a campaign rally the same year, “the other people don’t mean anything.” Likewise, former Colombian President Álvaro Uribe often speaks of the “gente de bien” (the “good people”).

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Warren’s corporate tax ‘solution’ is fundamentally flawed – Michelle Hanlon and Jeff Hoopes

MIT Sloan Professor Michelle Hanlon

MIT Sloan Professor Michelle Hanlon

From The Hill

Sen. Elizabeth Warren (D-Mass.) recently proposed a tax on financial accounting income, which she calls her “Real Corporate Profits Tax.” This is a bad idea that will create many problems.

Warren is correct that public companies in the U.S. calculate income under (at least) two different sets of rules.

First, there are Generally Accepted Accounting Principles (GAAP) written by the Financial Accounting Standards Board (FASB). These rules are meant to reflect the economic performance of the business so that shareholders, among others, can evaluate the firm and its management.

Second, corporations calculate profits according to the Internal Revenue Code, created by Congress, to determine taxable income. The Internal Revenue Code is meant to raise revenue for the government, and in some cases, to change the ways companies behave — encouraging investment and research and development (R&D), for example.

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Globalism is under siege. Here’s how to save it — and why. – JoAnne Yates and Craig N. Murphy

MIT Sloan Distinguished Professor of Management JoAnne Yates

MIT Sloan Distinguished Professor of Management JoAnne Yates

From The Washington Post

Over the past few years, world politics have been governed by a backlash against globalization. From the Brexit mess in Britain to restrictive immigration policies and tariffs in the United States and elsewhere, global economic integration is under assault.

But such integration offers many benefits: a greater variety of less expensive goods, greater opportunities for travel and cultural exchange, a more cosmopolitan world. In this climate, nongovernmental entities may be crucial to preserving them.

Thankfully, engineers have spent the past century building just such international bodies, because they believed that economic integration must remain above politics. These organizations have long set voluntary standards to ensure integration even when the political winds blow against them. This conception of global business standards will be crucial in the years to come as we struggle to preserve the benefits of cohesive systems for international trade, even as politicians battle over how interconnected they want to be.

It is ironic that the British should find themselves in the Brexit mess, because it was British engineers who created the first of the national standards bodies. Their project, a forerunner of today’s British Standards Institution (BSI), was a product of the expansive British Empire. It was founded in 1901 to ensure that industrial products and transportation networks within the United Kingdom and across its empire would be compatible with one another. Although some government representatives were included in its processes, the engineers leading the effort believed such standards should be voluntary, not government-mandated.

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