Pity the friend-of-Larry blogger who is condemned top parse Summers' wide-ranging interviews for time immemorial! (But great job - this was very useful.)
Two things struck me & I think they would both be Hexapodia-worthy:
1) Wow, we have both Tooze and Summers calling for a "global stability strategy". Seems like time to expand both upon the possible attributes of such a beast and possible paths by which it might come into existence.
2) "Green transition is now not a cost and a drag on the rest of the economy but a benefit. Technologies have advanced remarkably fast, and have progressed sufficiently far that measured real output in the future will be higher the faster we make this transition." I think an episode justifying this claim is in order. I'm familiar with Ramez Naam's stuff on learning curves and with the Way, Ives, Mealy, Farmer "Empirically grounded" paper that projects these curves into a cost-saving ($13T!), logistic substitution model of an energy transition - but it would be good to hear if you (and Noah) take these predictions as reliable - and why. I think there are some flaws in the Way et al. model, but I should probably save those thoughts until you (or you and Noah) expand upon its virtues. (Apologies if you did this in some earlier post - I can't find it.)
Middle school tracking. How sure should be be about this? Might not the non-honors math student benefit from being taught math in a non-honors way? Or different material: Bayesian statistics instead of calculus,
We are not sure at all. If I were in charge of the world, I would have people start first grade staggered in three groups based on age, and have people skip 1/3 of a grade (or repeat 1/3 of a grade) rather than put them in an honors (or remedial) track, with special pull-outs for enrichment/support...
The WAY Larry could alter his tone would be to point to the TIPS expectation levels and also gently suggest that announcing future instrument settings is NOT being data sensitive. We want markets to expect that the Fed will at each decision point do what it thinks best to achieve it's FAIT, PL or NGDP target, NOT that it will set instrument X at value Y.
Do you think Larry could persuade Janet to add those intermediate tenor TIPS?
"the need to immediately build institutions to finance the rapid large-scale green transition is exactly on point. Green transition is now not a cost and a drag on the rest of the economy but a benefit."
But which investment should be financed? Which investments will not be a drag on the rest of the economy? Those not financed at the expense of other investment for starters. And those that pass net present value tests when the net CO2 and methane emissions have the appropriate social cost for another. Can we ensure those criteria will pertain in the finance institutions to be built? Without an explicit net tax on net CO2 and methane emissions?
I picked up on this too and suggested in my comment that Brad and Noah hexapod-ize this claim.
I think they are referring to the big-splash paper from Way, Ives, Mealy & Farmer ("Empirically grounded technology forecasts and the energy transition" - which makes some startling good-news-if-true predictions. Ives was interviewed on the Energy Transition show podcast (episode 159) and Farmer recently on Dave Robert's Volts podcast. A cautionary voice was raised by Jessica Jewell, ETS #169.
At least from the abstract, I could not answer my question. That future technology development can lower the costs of getting to an optimum CO2 concentration (likely to require some reduction from the higher concentration that will occur) I take for granted. It's those estimates that I'd expect to be used in setting (constantly adjusting) the tax rate on net emissions.
I don't think they are saying that the best rate today is zero.
I was not aware of this paper/conclusions. Still, I would like to be sure what price assumptions for non-zero CO2 technologies they are assume. IOW, what policy framework do they assume this great new technology is being developed and employed in?
One point of the paper is that carbon pricing is the wrong strategy (and, technically, unnecessary), since maintaining the fossil-based system will be $13T more expensive than replacing it.
But your point is correct. Doyne Farmer admits (in the Volts interview) that the paper establishes "physical feasibility" only (if indeed it does that). In one sense he's offering a perfect Lucasian macroeconomic model - the world's energy system is treated as a frictionless pool table that a price-motivated actor can and will "run". The only question is how many strokes of the cue: the fewer, the cheaper the transition cost. Political economy is not taken into account.
??? Why would it be "wrong?" As I understand pricing the net emissions of CO2, the price (constantly updated trajectory of the tax rate) is calculated as what is necessary to get the behavioral and technological changes necessary to achieve the desired result. If a bunch of technological changes are going to happen without the tax, the estimated tax will be zero; it is "unnecessary". But I do not see how that makes it "wrong."
Only "wrong" in the sense you mention - that the required estimated tax is zero and so it's a mistake to spend time and political capital on an unpopular tax concept. And that's the implication of the numbers in the Farmer paper - it doesn't have to be your conclusion or mine. I think the energy-system-level net zero transition is far from the only cost we face in beating climate change. But Noah Smith - Brad's "hexapodia" sidekick - has already jumped off the carbon pricing wagon. And Brad's comment here suggests he's under the influence! :-)
Yes, I was puzzled by that hexapodia podcast. I suppose it depends on who you think your audience is. If I had 5 minutes with Nancy Pelosi to try to do something to reduce net CO@ emissions, possibly I would not spend them trying persuade her of the virtues of a tax on net CO2 emissions. Maybe it would be giving geothermal drilling the same exemption from environmental regulations that oil and gas have. But ideally I'd be able to give her the cost and benefits of everything and SHE would make the judgment of political feasibility, not me in deciding which net CO2 emissions strategy to pitch.
But does that also imply that other kinds of things being done to reduce net CO2 emissions, "renewables set asides, subsidies for investment in zero carbon emitting technologies are also "wrong?" And if not, why not? Or is the argument that, given the existing set of net CO2 emission-reducing measures, the optimal tax on net CO2 emissions is zero. The latter does seem like an amazing coincidence.
On the WB and the (inevitable) next round of debt relief for post-HIPC countries, please learn from the past:
1. Cut the moralizing bullshit conditionality; countries can't pay, they can't pay; give them 75% NPV discount upfront no questions asked; and the other 25% on measures of quality of public spending. [NB this will require top management changes at the Bank]
2. Limit the Fund's role. They are easily (willingly) manipulated by the major shareholders, hide info from Bank staff, hold ex parte discussions with the borrowers about the only thing they care about (making their nut with PDR on the primary surplus), allow their own staff to be intimidated by political appointees on their Board, etc.
3. Impose strict limits on post-HIPC II on commercial borrowing by the beneficiary nations. The Fund looked the other way on that (hello Ethiopia !).
4. Get the Bank out of budget support. Go back to doing projects.
Pity the friend-of-Larry blogger who is condemned top parse Summers' wide-ranging interviews for time immemorial! (But great job - this was very useful.)
Two things struck me & I think they would both be Hexapodia-worthy:
1) Wow, we have both Tooze and Summers calling for a "global stability strategy". Seems like time to expand both upon the possible attributes of such a beast and possible paths by which it might come into existence.
2) "Green transition is now not a cost and a drag on the rest of the economy but a benefit. Technologies have advanced remarkably fast, and have progressed sufficiently far that measured real output in the future will be higher the faster we make this transition." I think an episode justifying this claim is in order. I'm familiar with Ramez Naam's stuff on learning curves and with the Way, Ives, Mealy, Farmer "Empirically grounded" paper that projects these curves into a cost-saving ($13T!), logistic substitution model of an energy transition - but it would be good to hear if you (and Noah) take these predictions as reliable - and why. I think there are some flaws in the Way et al. model, but I should probably save those thoughts until you (or you and Noah) expand upon its virtues. (Apologies if you did this in some earlier post - I can't find it.)
Middle school tracking. How sure should be be about this? Might not the non-honors math student benefit from being taught math in a non-honors way? Or different material: Bayesian statistics instead of calculus,
We are not sure at all. If I were in charge of the world, I would have people start first grade staggered in three groups based on age, and have people skip 1/3 of a grade (or repeat 1/3 of a grade) rather than put them in an honors (or remedial) track, with special pull-outs for enrichment/support...
The WAY Larry could alter his tone would be to point to the TIPS expectation levels and also gently suggest that announcing future instrument settings is NOT being data sensitive. We want markets to expect that the Fed will at each decision point do what it thinks best to achieve it's FAIT, PL or NGDP target, NOT that it will set instrument X at value Y.
Do you think Larry could persuade Janet to add those intermediate tenor TIPS?
"the need to immediately build institutions to finance the rapid large-scale green transition is exactly on point. Green transition is now not a cost and a drag on the rest of the economy but a benefit."
But which investment should be financed? Which investments will not be a drag on the rest of the economy? Those not financed at the expense of other investment for starters. And those that pass net present value tests when the net CO2 and methane emissions have the appropriate social cost for another. Can we ensure those criteria will pertain in the finance institutions to be built? Without an explicit net tax on net CO2 and methane emissions?
I picked up on this too and suggested in my comment that Brad and Noah hexapod-ize this claim.
I think they are referring to the big-splash paper from Way, Ives, Mealy & Farmer ("Empirically grounded technology forecasts and the energy transition" - which makes some startling good-news-if-true predictions. Ives was interviewed on the Energy Transition show podcast (episode 159) and Farmer recently on Dave Robert's Volts podcast. A cautionary voice was raised by Jessica Jewell, ETS #169.
At least from the abstract, I could not answer my question. That future technology development can lower the costs of getting to an optimum CO2 concentration (likely to require some reduction from the higher concentration that will occur) I take for granted. It's those estimates that I'd expect to be used in setting (constantly adjusting) the tax rate on net emissions.
I don't think they are saying that the best rate today is zero.
I was not aware of this paper/conclusions. Still, I would like to be sure what price assumptions for non-zero CO2 technologies they are assume. IOW, what policy framework do they assume this great new technology is being developed and employed in?
One point of the paper is that carbon pricing is the wrong strategy (and, technically, unnecessary), since maintaining the fossil-based system will be $13T more expensive than replacing it.
But your point is correct. Doyne Farmer admits (in the Volts interview) that the paper establishes "physical feasibility" only (if indeed it does that). In one sense he's offering a perfect Lucasian macroeconomic model - the world's energy system is treated as a frictionless pool table that a price-motivated actor can and will "run". The only question is how many strokes of the cue: the fewer, the cheaper the transition cost. Political economy is not taken into account.
??? Why would it be "wrong?" As I understand pricing the net emissions of CO2, the price (constantly updated trajectory of the tax rate) is calculated as what is necessary to get the behavioral and technological changes necessary to achieve the desired result. If a bunch of technological changes are going to happen without the tax, the estimated tax will be zero; it is "unnecessary". But I do not see how that makes it "wrong."
Only "wrong" in the sense you mention - that the required estimated tax is zero and so it's a mistake to spend time and political capital on an unpopular tax concept. And that's the implication of the numbers in the Farmer paper - it doesn't have to be your conclusion or mine. I think the energy-system-level net zero transition is far from the only cost we face in beating climate change. But Noah Smith - Brad's "hexapodia" sidekick - has already jumped off the carbon pricing wagon. And Brad's comment here suggests he's under the influence! :-)
Yes, I was puzzled by that hexapodia podcast. I suppose it depends on who you think your audience is. If I had 5 minutes with Nancy Pelosi to try to do something to reduce net CO@ emissions, possibly I would not spend them trying persuade her of the virtues of a tax on net CO2 emissions. Maybe it would be giving geothermal drilling the same exemption from environmental regulations that oil and gas have. But ideally I'd be able to give her the cost and benefits of everything and SHE would make the judgment of political feasibility, not me in deciding which net CO2 emissions strategy to pitch.
But does that also imply that other kinds of things being done to reduce net CO2 emissions, "renewables set asides, subsidies for investment in zero carbon emitting technologies are also "wrong?" And if not, why not? Or is the argument that, given the existing set of net CO2 emission-reducing measures, the optimal tax on net CO2 emissions is zero. The latter does seem like an amazing coincidence.
On the WB and the (inevitable) next round of debt relief for post-HIPC countries, please learn from the past:
1. Cut the moralizing bullshit conditionality; countries can't pay, they can't pay; give them 75% NPV discount upfront no questions asked; and the other 25% on measures of quality of public spending. [NB this will require top management changes at the Bank]
2. Limit the Fund's role. They are easily (willingly) manipulated by the major shareholders, hide info from Bank staff, hold ex parte discussions with the borrowers about the only thing they care about (making their nut with PDR on the primary surplus), allow their own staff to be intimidated by political appointees on their Board, etc.
3. Impose strict limits on post-HIPC II on commercial borrowing by the beneficiary nations. The Fund looked the other way on that (hello Ethiopia !).
4. Get the Bank out of budget support. Go back to doing projects.