Climate Change: An Agenda for Global Collective Action

Over the past decade, and especially over the past few years, climate change has emerged as one of the most important issues facing the international community. A global consensus now exists that climate change represents a significant potential threat to the world's well-being. But there is disagreement about how and when to address that threat. To motivate the discussion of both the timing and magnitude of emissions mitigation policy, the paper begins with an overview of the underlying science and economics. Understanding the uncertainties and differences in the timing of costs and benefits of climate change mitigation helps frame the extensive discussion of political economy issues that we examine in the second section. Specifically, we explore the interaction of economic and political concerns in enforcing emissions commitments and encouraging developing country participation within the "voluntaristic" framework entailed by the current system of global governance. Given these political economy constraints, in the third section we evaluate the Kyoto Protocol and alternative formulations to climate change policy. We conclude that modifications to the Kyoto framework are required to advance the effort to address climate change. At the very least, a thorough re-examination of alternative frameworks may prove helpful in building a global consensus behind a more effective strategy. The final section concludes with a discussion of one promising approach to addressing climate change: a flexible hybrid system that combines a permit trading program with the ability of governments to sell additional permits at a given maximum price.Environment, Technology and Industry, Regulatory Reform, Other Topics

An Economic Assessment of Tax Policy in the Bush Administration, 2001-2004

This Article analyzes the economic effects of the George W. Bush administration\u27s tax policies. It describes the 2001, 2002, and 2003 tax cuts and the proposals to make them permanent, and then explores the consequences of making the tax cuts permanent on the fiscal status of the government, the distribution of after-tax income, long-term economic growth, and the prospects for fundamental tax reform. This article also examines the role of the tax cuts as a short-term stimulus over the past few years.

Budget Deficits, National Saving, and Interest Rates

macroeconomics, Budget Deficits, National Saving, Interest Rates

HOW THE GROWING GAP IN LIFE EXPECTANCY MAY AFFECT RETIREMENT BENEFITS AND REFORMS.

Older Americans have experienced dramatic gains in life expectancy in recent decades, but an emerging literature reveals that these gains are accumulating mostly to those at the top of the income distribution. We explore how growing inequality in life expectancy affects lifetime benefits from Social Security, Medicare, and other programs and how this phenomenon interacts with possible program reforms. We first project that life expectancy at age 50 for males in the two highest income quintiles will rise by 7 to 8 years between the 1930 and 1960 birth cohorts, but that the two lowest income quintiles will experience little to no increase over that time period. This divergence in life expectancy will cause the gap between average lifetime program benefits received by men in the highest and lowest quintiles to widen by $130,000 (in$2009) over this period. Finally we simulate the effect of Social Security reforms such as raising the normal retirement age and changing the benefit formula to see whether they mitigate or enhance the reduced progressivity resulting from the widening gap in life expectancy

The Maturity Structure of Administrative Costs: Theory and the UK Experience

Front-loading of charges on insurance products can impose considerable costs on consumers when policies lapse early. This paper develops a theory of the maturity structure of charges similar to that used to examine the term structure of interest rates, and applies it to the UK experience with individual accounts. We find that the implied term structure of charges was historically sharply decreasing (so that charges relative to the account balance were higher the shorter the maturity of the account), with implicit yields in the early years of an account strongly negative. In the past year, however, the relationship has changed dramatically as a result of regulated charge levels and structures associated with the new Stakeholder pensions. 1 Mamta Murthi is Research Fellow at Clare Hall, Cambridge, U.K. Her address is Centre for History and Economics, Kings College, Cambridge CB2 1ST. Phone: +44-1223-331-197, Fax: +44-1223-331-198. Email: [email protected]. 2 J. Michael Orszag is..

Annuity Costs in the UK

This paper reviews some results from a recent study of ours on the cost of annuities in the UK. The study was part of a wider World Bank project on annuities markets throughout the world. Our full paper is available at http://www.econ.bbk.ac.uk/psi