Low Carbon Fuel Standards: Recipes for Higher Gasoline Prices and Greater Reliance on Middle Eastern Oil
IER, Feb 18, 2009
Last December, California released a draft low carbon fuel standard (LCFS) which calls for a 10.5 percent reduction in the carbon intensity of gasoline and a 10 percent reduction for diesel. Following California’s lead, representatives of 11 Northeastern states recently signed an agreement to pursue a region-wide low-carbon fuel standard.
The proponents of LCFS claim the plan’s goal is to reduce emissions from motor vehicles and home-heating fuels. But as this analysis shows, an LCFS is another tax on transportation. An LCFS increases the price of gasoline and home heating oil, leads to more oil imports from the Middle East, and penalizes oil imports from our largest trading partner and biggest oil supplier—Canada.
What is a Low Carbon Fuel Standard?
For all practical purposes, LCFS is a new tax on gasoline and heating oil. It is new regulation designed to reduce the greenhouse gas emissions from fuels. The goal of these regulations is to take into account all of the greenhouse gas emissions from the production (including land use changes), manufacture, transportation and combustion of these fuels and then reduce these emissions.
According to the letter of intent signed by 11 states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New York, New Hampshire, New Jersey, Pennsylvania, Rhode Island and Vermont) participating in the Northeastern LCFS scheme, an LCFS is a “market-based, technologically neutral policy to address the carbon content of fuels by requiring reductions in the average lifecycle GHG [greenhouse gas] emissions per unit of useful energy.”
Despite the assertions of LCFS proponents, an LCFS is not market-based— it’s a classic top-down regulation. It is not entirely technology neutral—in practice it obviously penalizes certain fuel-producing technologies. More importantly, it does not address the difficultly and possibly impracticality of accurately calculating “lifecycle GHG emissions.”
Seven Reasons Why LCFS Schemes are Flawed:
LCFS are based on the Field of Dreams principle—if you mandate it, it will come. LCFS are expensive, harmful to consumers, and diverts resources away from more productive investments. Breakthroughs in technology occur in the marketplace, not in government committee rooms. Policymakers are free to set standards and goals—such as 10 percent less carbon intensity or a manned missions to Mars—but that does not mean the technology to economically achieve those goal will immediately follow. For example, a couple of years ago, many people thought we could economically have low carbon fuels by merely increasing the biofuel content of gasoline. The majority of the science, however, does not support this belief (see bullet point 4 below).
Biofuel production increases the price of food and makes life more difficult for the world’s poor. Biofuels are “a crime against humanity” in the words of Jean Ziegler, the UN special rapporteur on the right to food. Biofuel takes land that has been used for food crops and replaces the food crops with fuel crops. This unnecessarily takes food out of the mouths of the world’s poor. Increased ethanol production has helped increase food prices and has led to great hardships around the world including food riots. Next-generation biofuels are supposed to somewhat relieve this problem by using non-food crops, such as switchgrass or miscanthus, to produce biofuel, but these crops will still compete for arable land and agricultural resources.
A nationwide LCFS would dramatically increase the price of gasoline. CRA International found that an LCFS of 8 percent by 2015 would cause motor fuel prices to increase by 140 percent in 2015.[1] An LCFS would reduce motor fuel supplies or cause fuel producers to purchase carbon dioxide offsets.
Many biofuels emit more greenhouse gases than gasoline. According to a recent study published in Science from the Nature Conservancy and the University of Minnesota, many biofuels emit more greenhouse gases than gasoline. The study’s authors stated that many biofuels produce “17 to 420 times more carbon dioxide than the fossil fuels they replace.” Other research has come to similar conclusions. The Energy and Resources Group at the University of Berkeley found that “if indirect emissions [resulting from the production of ethanol] are applied to the ethanol that is already in California’s gasoline, the carbon intensity of California’s gasoline increases by 3% to 33%.” Corn-based ethanol production not only emits more greenhouse gases than gasoline, but it may also be worse for air quality.[2]
An LCFS discriminates against oil production from oil sands in Canada and favors oil from the Middle East. The U.S. gets more oil from Canada than any other foreign country. Much of Canada’s oil production comes from oil sands. The production of oil from oil sands requires more energy (and carbon dioxide emissions) to produce than production of crude in the Middle East. As a result, an LCFS favors oil from the Middle East and penalizes our friends to the North.
An LCFS discriminates against coal-to-liquids technology and oil shale technologies. The United States has vast reserves of coal and oil shale. These sources are not yet economically competitive with other sources of oil, but if prices where to return to last summer’s highs, these technologies would be cost-competitive. One possible source of fuel is coal-to-liquids technology. The U.S. has the world’s largest reserves of coal. At current usage rates, we have 200-250 years of demonstrated coal reserves. Coal-to-liquids could give the U.S. much larger reserves of petroleum fuels. The U.S. also has massive reserves of oil locked in oil shale—at least 800 billion recoverable barrels of oil. This is nearly three times as much oil as Saudi Arabia has in reserves. Because we would need more energy to recover these energy sources than it takes to produce light crude, an LCFS discriminates against these domestic resources.
If the United States implemented and somehow complied with a nationwide LCFS of 10.5 percent today, the American reduction in emissions would be offset by emissions increases from the rest of the world in less than 80 days.[3] Global warming is a global issue. What matters are not just emissions from the United States, but emissions worldwide. Unilateral changes by the United States alone will not have much of an impact, especially when we are talking about very small reductions in one sector. Because developing countries are dramatically increasing their carbon dioxide emissions, the U.S. will emit a smaller and smaller share of the world’s total greenhouse gas emissions.[4] According to data from the Global Carbon Project, from 2000 through 2007, global total greenhouse gas emissions increased 26 percent. During that same period, China’s carbon dioxide emissions increased 98 percent, India’s increased 36 percent and Russia’s increased 10 percent, while the U.S. increase was a mere 3 percent.[5] Because of these increases from developing countries, unilateral actions by the U.S., such as implementation of a nationwide LCFS, will have little to no effect on the global climate. Actions taken by California, or 11 Northeastern states will have even less impact.
Conclusion: An LCFS is Another Tax on Transportation
An LCFS, either nationwide or at the state level, would damage economy without having an impact global temperatures. The technology to implement an LCFS does not currently exist. If an LCFS resulted in increased biofuel use, it would be very harmful to the world’s poor. Finally, for those worried about energy security, an LCFS would favor Middle Eastern oil over Canadian and domestic fuels.
References
[1] CRA International, Economic Analysis of the Lieberman-Warner Climate Security Act of 2007 Using CRA’s MRN-NEEM Model (Apr. 8, 2008) p. 29, cited in Larry Parker & Brent Yacobucci, CRS Report for Congress: Climate Change: Costs and Benefits of S. 2191, (Mar. 15, 2008) p. CRS-56.
[2] The study will soon be published in the Proceedings of the National Academy of Sciences.
[3] Calculated using the emissions data from the Global Carbon Project. According to EPA, the GHG emissions from the transportation sector total 28 percent of total U.S. emissions in 2006. Environmental Protection Agency, Regulating Greenhouse Gas Emissions Under the Clean Air Act; Proposed Rule, 73 Fed. Reg. 44354, 44403 (July, 30, 2008). Twenty-eight percent of the U.S.’s 2006 carbon dioxide emissions are 436,141 GgC. A nationwide LCFS for the entire transportation sector, if it followed California’s example, would reduce transportation emissions by 10.5 percent, or 45,795 GgC per year. From 2006 to 2007, the world’s carbon dioxide emissions (excluding the United States) increased by 213,436 GgC. At this rate of change, the 10.5percent LCFS-forced reduction in U.S. transportation emissions would be replaced in 78.3 days.
[4] According to the Global Carbon project in 2007, China emitted 21 percent of the world’s carbon equivalent and the U.S. emitted 19 percent.
[5] Calculated using the emission data from the Global Carbon Project. In 2000, China emitted 910,950 GgC, India 316,804 GgC, Russia 391,652 GgC, and the U.S. 1,541,013 GgC. By 2007, China emitted 1,801,932 GgC, India 429,601 GgC, Russia 432,486 GgC, and the U.S. 1,586,213 GgC.
Wednesday, February 18, 2009
Slaying of two dissidents, Stanislav Markelov and Anastasia Baburova
Murder in Moscow, by Stephen Schwartz
Press criticism, KGB-style.
The Weekly Standard, Feb 23, 2009, Volume 014, Issue 22
Vice President Joseph Biden has told the Europeans that the new administration wishes to "reset" relations with Vladmir Putin's Russia. But the January 19 slaying of two dissidents, 34-year-old human rights lawyer Stanislav Markelov and journalism student Anastasia Baburova, 25, on a Moscow street is one of several recent reminders that Americans cannot be comfortable in Putin's embrace.
Markelov, head of the Institute for the Supremacy of Law, may well have been murdered as a result of the release from custody, one week before, of Russian army colonel Yuri Budanov, who had been sent to prison for crimes he committed while serving in Chechnya. Markelov had been crucial to Budanov's 2003 conviction in the kidnapping, torture, multiple sexual assault, and murder of an 18-year-old Chechen girl, Elza Kheda Kungaeva. Budanov, although he admitted his guilt and was sentenced to 10 years' imprisonment, had benefited from an early release.
On the day he perished, Markelov delivered a statement to the press. Representing the family of the Chechen female victim, he accused the Russian authorities of improperly arranging for Budanov to be let go. He then walked to a metro station near the Kremlin with Baburova. The killer, wearing a ski mask, approached from behind and shot Markelov in the back of the head. Baburova pursued the shooter, who turned and fired into her forehead. She died several hours later.
Anticipating her graduation from journalism school, Baburova was working for the daily Novaya Gazeta, which has employed a distinguished roster of liquidated investigative journalists. Novaya Gazeta is co-owned by Alexander Lebedev, an ex-KGB official and billionaire turned political reformer, who purchased the ailing London Evening Standard on January 21, only two days after Baburova's death.
As the largest individual shareholder in Novaya Gazeta--he owns 39 percent--Lebedev is responsible for a publication that has experienced the high-profile killing of several of the country's leading reporters. Anna Politkovskaya, murdered in the elevator of her apartment building in 2006, was his top staffer; she too had exposed atrocities in Chechnya, and Markelov was her lawyer. Igor Domnikov was killed in a brutal beating in 2000. His colleague Yury Shchekochikhin was poisoned in 2003.
Indeed, the poison cabinet seems to have become a favored anti-dissident weapon of the Russian state, as it was under Stalin. Politkovskaya herself was poisoned (though not fatally) in 2004 when she tried to travel to Beslan during the hostage crisis there. And less than two months after her eventual murder, Alexander Litvinenko, another former KGB agent critical of the Putin regime, was killed in a highly unusual poisoning in London.
In the aftermath of the Markelov-Baburov assassinations, the U.S.-based Committee to Protect Journalists reported that Lebedev, perhaps spurred by his KGB experiences, had announced the intention of Novaya Gazeta journalists to petition to arm themselves if necessary. Novaya Gazeta editor Dmitry Muratov denounced the Russian government for its inability to protect the press and asserted, "We have three options. The first one--to leave and turn off the lights. . . . The second--to stop writing about the special services, corruption, drugs, fascists; to stop investigating the crimes of the powerful. . . . The third option is to somehow defend ourselves."
Russian political life has increasingly assumed a pogrom atmosphere. Markelov had extended his investigation of human rights violations from Chechnya to the central Russian republic of Bashkortostan, which has a Turkic Muslim majority, but has not been the scene of Chechen-style rebellion against Russian rule. At the end of 2004, local police beat up to 1,000 people in Bashkortostan over a period of four days. Markelov had warned against "the spread of the Chechnya syndrome throughout other regions of Russia" and exposed the existence of a secret "order number 870" issued by the Ministry of Internal Affairs in 2003, which authorized the police to declare states of emergency without informing the public and to follow them up with repressive actions.
One of his closest friends, an academic named Vladislav Bugera, described Markelov as a perhaps naïve product of the old Soviet way of life. Writing in the online periodical Johnson's Russia List, Bugera called the dead lawyer a "socialist and an internationalist" whose many causes included an independent labor union, but whose socialism was "moderate . . . and reformist. . . . He was a reliable person. You could always be sure of him. . . . He is my hero."
Needless to say, a return to socialist ideals would stand no chance of protecting human rights from state abuse. Russia has been through its dark eras of internal strife and compulsory social experiment; Putinism, now aggravated by the global economic crisis, represents an attempt to revive aspects of both. The staggering challenge before Russian supporters of democracy is to find a way to construct a new and unburdened system of individual rights, secured by due process. Russian democrats and those abroad who would help them can ill afford to look away from the blood of Russian lawyers and journalists shed in the street.
Stephen Schwartz is a frequent contributor to The Weekly Standard.
Press criticism, KGB-style.
The Weekly Standard, Feb 23, 2009, Volume 014, Issue 22
Vice President Joseph Biden has told the Europeans that the new administration wishes to "reset" relations with Vladmir Putin's Russia. But the January 19 slaying of two dissidents, 34-year-old human rights lawyer Stanislav Markelov and journalism student Anastasia Baburova, 25, on a Moscow street is one of several recent reminders that Americans cannot be comfortable in Putin's embrace.
Markelov, head of the Institute for the Supremacy of Law, may well have been murdered as a result of the release from custody, one week before, of Russian army colonel Yuri Budanov, who had been sent to prison for crimes he committed while serving in Chechnya. Markelov had been crucial to Budanov's 2003 conviction in the kidnapping, torture, multiple sexual assault, and murder of an 18-year-old Chechen girl, Elza Kheda Kungaeva. Budanov, although he admitted his guilt and was sentenced to 10 years' imprisonment, had benefited from an early release.
On the day he perished, Markelov delivered a statement to the press. Representing the family of the Chechen female victim, he accused the Russian authorities of improperly arranging for Budanov to be let go. He then walked to a metro station near the Kremlin with Baburova. The killer, wearing a ski mask, approached from behind and shot Markelov in the back of the head. Baburova pursued the shooter, who turned and fired into her forehead. She died several hours later.
Anticipating her graduation from journalism school, Baburova was working for the daily Novaya Gazeta, which has employed a distinguished roster of liquidated investigative journalists. Novaya Gazeta is co-owned by Alexander Lebedev, an ex-KGB official and billionaire turned political reformer, who purchased the ailing London Evening Standard on January 21, only two days after Baburova's death.
As the largest individual shareholder in Novaya Gazeta--he owns 39 percent--Lebedev is responsible for a publication that has experienced the high-profile killing of several of the country's leading reporters. Anna Politkovskaya, murdered in the elevator of her apartment building in 2006, was his top staffer; she too had exposed atrocities in Chechnya, and Markelov was her lawyer. Igor Domnikov was killed in a brutal beating in 2000. His colleague Yury Shchekochikhin was poisoned in 2003.
Indeed, the poison cabinet seems to have become a favored anti-dissident weapon of the Russian state, as it was under Stalin. Politkovskaya herself was poisoned (though not fatally) in 2004 when she tried to travel to Beslan during the hostage crisis there. And less than two months after her eventual murder, Alexander Litvinenko, another former KGB agent critical of the Putin regime, was killed in a highly unusual poisoning in London.
In the aftermath of the Markelov-Baburov assassinations, the U.S.-based Committee to Protect Journalists reported that Lebedev, perhaps spurred by his KGB experiences, had announced the intention of Novaya Gazeta journalists to petition to arm themselves if necessary. Novaya Gazeta editor Dmitry Muratov denounced the Russian government for its inability to protect the press and asserted, "We have three options. The first one--to leave and turn off the lights. . . . The second--to stop writing about the special services, corruption, drugs, fascists; to stop investigating the crimes of the powerful. . . . The third option is to somehow defend ourselves."
Russian political life has increasingly assumed a pogrom atmosphere. Markelov had extended his investigation of human rights violations from Chechnya to the central Russian republic of Bashkortostan, which has a Turkic Muslim majority, but has not been the scene of Chechen-style rebellion against Russian rule. At the end of 2004, local police beat up to 1,000 people in Bashkortostan over a period of four days. Markelov had warned against "the spread of the Chechnya syndrome throughout other regions of Russia" and exposed the existence of a secret "order number 870" issued by the Ministry of Internal Affairs in 2003, which authorized the police to declare states of emergency without informing the public and to follow them up with repressive actions.
One of his closest friends, an academic named Vladislav Bugera, described Markelov as a perhaps naïve product of the old Soviet way of life. Writing in the online periodical Johnson's Russia List, Bugera called the dead lawyer a "socialist and an internationalist" whose many causes included an independent labor union, but whose socialism was "moderate . . . and reformist. . . . He was a reliable person. You could always be sure of him. . . . He is my hero."
Needless to say, a return to socialist ideals would stand no chance of protecting human rights from state abuse. Russia has been through its dark eras of internal strife and compulsory social experiment; Putinism, now aggravated by the global economic crisis, represents an attempt to revive aspects of both. The staggering challenge before Russian supporters of democracy is to find a way to construct a new and unburdened system of individual rights, secured by due process. Russian democrats and those abroad who would help them can ill afford to look away from the blood of Russian lawyers and journalists shed in the street.
Stephen Schwartz is a frequent contributor to The Weekly Standard.
Ethanol & Greenhouse Gas Emissions - Reconsidering the University of Nebraska Study
Ethanol & Greenhouse Gas Emissions - Reconsidering the University of Nebraska Study. By Jerry Taylor
Master Resource, February 18, 2009
The debate about the environmental impact of ethanol rages on. Last month, the most recent study on the greenhouse gas (GHG) emissions associated with ethanol use was published by researchers from the University of Nebraska (Liska et al.). That analysis used the most recent data available on individual facility operations and emissions, observed corn yields, nitrogen fertilizer emissions profiles, and co-product use; all of which prove important because of improved energy efficiencies associated with ethanol production over the past several years. The authors found that the total life-cycle GHG emissions from the most common type of ethanol processing facility in operation today are 48-59 percent lower than gasoline, one of the highest savings reported in the literature. Even without subtracting-out the GHG emissions associated with ethanol cop-products (which accounted for 19-38 percent of total system emissions), ethanol would still present GHG advantages relative to gasoline. The ethanol lobby went wild.
This may be the best study on the subject, but it is not the final word. There are three fundamental problems with the analysis.
First, the study examines only a subset of corn production operations and ethanol processing facilities; dry mill ethanol processors fired by natural gas in six corn-belt states. Together, those facilities accounted for 23 percent of US ethanol production in 2006. While this approach makes the study stronger because the authors are not forced to rely as heavily on estimates and aggregated analysis, the down-side is that the study ignores a large number of older, less efficient ethanol processing facilities and thus cannot be used to assess the GHG balance of the ethanol industry as a whole. While the findings may well point to where the industry will be in the future as older, less efficient facilities lose market share and are upgraded or retired, the bankruptcies that are shutting down many newer facilities at present caution against certainty on this point.
Second, estimates regarding emissions are still relied on to some degree, and one of those estimates in particular – the estimate pertaining to the release of nitrous oxide (N2O) from fertilizer use in corn production – is problematic. While the study comports with convention in that it relies on emission estimates offered by the Intergovernmental Panel on Climate Change, a recent study finds that the IPCC estimates as they pertain to N2O release from fertilizer does not comport with the observed data (Crutzen et al., 2007). That study finds that N2O emissions from fertilizers used in biofuels production are 3-5 times greater than assumed by the IPCC and that, if we plug those higher emissions into the ethanol life-cycle models, “the outcome is that the production of commonly used biofuels, such as biodiesel from rapeseed and bioethanol from corn (maize), can contribute as much or more to global warming by N2O emissions than cooling by fossil fuel savings.” Given that the lead author of the study – Paul Crutzen – is a Nobel laureate chemist who has specialized in fields related to atmospheric science, his findings cannot be lightly dismissed.
Third, the study acknowledges the importance of the impact that ethanol production has on crop prices and, thus, on global land-use patterns, but it does not account for the GHG emissions associated with those changes. Those emissions are substantial and no life-cycle analysis of ethanol can credibly ignore them.
A worldwide agricultural model constructed by Searchinger et al. (2008) finds that the increases in crop prices that follow from the increased demand for ethanol will induce a global change in the pattern of land use. Those land use changes produce a surge in GHG emissions that is only dissipated by conventional life-cycle emissions savings many decades hence. Although Searchinger et al. modeled ethanol production increases that were beyond those mandated in existing law, “the emissions from land-use change per unit of ethanol would be similar regardless of the ethanol increase analyzed.”
While critics of Searchinger et al. are right to point out that the agricultural model employed in the study was crude, that much is unknown about the factors that influence global land use decisions, that improved yields are reducing the amount of land necessary to meet global crop demands, and that any land additions to crop production do not need to come from forests or other robust carbon sequestration sinks, none of those observations is sufficient to reject the basic insight forwarded in that study. If ethanol demand increases corn and other crop prices beyond where they otherwise would have been, profit incentives will induce investors to increase crop production beyond where production would otherwise have been. If that increased production comes in part from land use changes relative to the baseline, then significant volumes of GHG will likely be released and those emissions threaten to swamp the GHG savings found elsewhere in the life-cycle analysis. Even if the upward pressure on crop prices that are a consequence of ethanol consumption is more than offset by downward price pressures following from other factors, crop acreage retirement will not be as large as might otherwise have been the case and terrestrial sequestration will be lower as a consequence. Every link in that chain of logic is unassailable.
This is but one of the many impacts that ethanol might have on hundreds of industrial sectors worldwide. Searchinger et al. is ultimately unsatisfying because it is only a crude and partial consideration of those impacts, many of which might indirectly affect global land use patterns. For instance, if ethanol consumption reduces the demand for – and thus the price of – crude oil in global markets, how much of those “booked” reductions in oil consumption will be offset by increased demand induced elsewhere by the lower global crude oil prices that follow (known as a “rebound effect” in economics)? How might that increase in global demand for crude oil in response to lower price affect all sort of GHG emissions vectors? None of these sorts of questions are asked in ethanol GHG life-cycle analyses but they are clearly crucial to the analysis.
To summarize, the narrow, conventional consideration of the GHG emissions associated with ethanol from Liska et al. suggest that it reduces climate change harms relative to gasoline. If the IPCC has underestimated N2O emissions from fertilizer – as appears to be the case – then ethanol probably is at best a wash with regards to GHG emissions. Even if that’s not the case, consideration of secondary and tertiary emissions impacts strongly suggests that most if not all of all advertised GHG gains are lost in the changes in land use patterns that follow from increases in ethanol production relative to the baseline. Other changes in anthropogenic emissions – positive and negative – would almost certainly follow as well, but existing models do not bother to search for them and thus we do not know enough to say much beyond this with confidence.
Based on what we know now, it would be hard to make a compelling case that ethanol is preferable to gasoline with regards to total greenhouse gas emissions - and last month’s study out of the University of Nebraska does not change that.
Master Resource, February 18, 2009
The debate about the environmental impact of ethanol rages on. Last month, the most recent study on the greenhouse gas (GHG) emissions associated with ethanol use was published by researchers from the University of Nebraska (Liska et al.). That analysis used the most recent data available on individual facility operations and emissions, observed corn yields, nitrogen fertilizer emissions profiles, and co-product use; all of which prove important because of improved energy efficiencies associated with ethanol production over the past several years. The authors found that the total life-cycle GHG emissions from the most common type of ethanol processing facility in operation today are 48-59 percent lower than gasoline, one of the highest savings reported in the literature. Even without subtracting-out the GHG emissions associated with ethanol cop-products (which accounted for 19-38 percent of total system emissions), ethanol would still present GHG advantages relative to gasoline. The ethanol lobby went wild.
This may be the best study on the subject, but it is not the final word. There are three fundamental problems with the analysis.
First, the study examines only a subset of corn production operations and ethanol processing facilities; dry mill ethanol processors fired by natural gas in six corn-belt states. Together, those facilities accounted for 23 percent of US ethanol production in 2006. While this approach makes the study stronger because the authors are not forced to rely as heavily on estimates and aggregated analysis, the down-side is that the study ignores a large number of older, less efficient ethanol processing facilities and thus cannot be used to assess the GHG balance of the ethanol industry as a whole. While the findings may well point to where the industry will be in the future as older, less efficient facilities lose market share and are upgraded or retired, the bankruptcies that are shutting down many newer facilities at present caution against certainty on this point.
Second, estimates regarding emissions are still relied on to some degree, and one of those estimates in particular – the estimate pertaining to the release of nitrous oxide (N2O) from fertilizer use in corn production – is problematic. While the study comports with convention in that it relies on emission estimates offered by the Intergovernmental Panel on Climate Change, a recent study finds that the IPCC estimates as they pertain to N2O release from fertilizer does not comport with the observed data (Crutzen et al., 2007). That study finds that N2O emissions from fertilizers used in biofuels production are 3-5 times greater than assumed by the IPCC and that, if we plug those higher emissions into the ethanol life-cycle models, “the outcome is that the production of commonly used biofuels, such as biodiesel from rapeseed and bioethanol from corn (maize), can contribute as much or more to global warming by N2O emissions than cooling by fossil fuel savings.” Given that the lead author of the study – Paul Crutzen – is a Nobel laureate chemist who has specialized in fields related to atmospheric science, his findings cannot be lightly dismissed.
Third, the study acknowledges the importance of the impact that ethanol production has on crop prices and, thus, on global land-use patterns, but it does not account for the GHG emissions associated with those changes. Those emissions are substantial and no life-cycle analysis of ethanol can credibly ignore them.
A worldwide agricultural model constructed by Searchinger et al. (2008) finds that the increases in crop prices that follow from the increased demand for ethanol will induce a global change in the pattern of land use. Those land use changes produce a surge in GHG emissions that is only dissipated by conventional life-cycle emissions savings many decades hence. Although Searchinger et al. modeled ethanol production increases that were beyond those mandated in existing law, “the emissions from land-use change per unit of ethanol would be similar regardless of the ethanol increase analyzed.”
While critics of Searchinger et al. are right to point out that the agricultural model employed in the study was crude, that much is unknown about the factors that influence global land use decisions, that improved yields are reducing the amount of land necessary to meet global crop demands, and that any land additions to crop production do not need to come from forests or other robust carbon sequestration sinks, none of those observations is sufficient to reject the basic insight forwarded in that study. If ethanol demand increases corn and other crop prices beyond where they otherwise would have been, profit incentives will induce investors to increase crop production beyond where production would otherwise have been. If that increased production comes in part from land use changes relative to the baseline, then significant volumes of GHG will likely be released and those emissions threaten to swamp the GHG savings found elsewhere in the life-cycle analysis. Even if the upward pressure on crop prices that are a consequence of ethanol consumption is more than offset by downward price pressures following from other factors, crop acreage retirement will not be as large as might otherwise have been the case and terrestrial sequestration will be lower as a consequence. Every link in that chain of logic is unassailable.
This is but one of the many impacts that ethanol might have on hundreds of industrial sectors worldwide. Searchinger et al. is ultimately unsatisfying because it is only a crude and partial consideration of those impacts, many of which might indirectly affect global land use patterns. For instance, if ethanol consumption reduces the demand for – and thus the price of – crude oil in global markets, how much of those “booked” reductions in oil consumption will be offset by increased demand induced elsewhere by the lower global crude oil prices that follow (known as a “rebound effect” in economics)? How might that increase in global demand for crude oil in response to lower price affect all sort of GHG emissions vectors? None of these sorts of questions are asked in ethanol GHG life-cycle analyses but they are clearly crucial to the analysis.
To summarize, the narrow, conventional consideration of the GHG emissions associated with ethanol from Liska et al. suggest that it reduces climate change harms relative to gasoline. If the IPCC has underestimated N2O emissions from fertilizer – as appears to be the case – then ethanol probably is at best a wash with regards to GHG emissions. Even if that’s not the case, consideration of secondary and tertiary emissions impacts strongly suggests that most if not all of all advertised GHG gains are lost in the changes in land use patterns that follow from increases in ethanol production relative to the baseline. Other changes in anthropogenic emissions – positive and negative – would almost certainly follow as well, but existing models do not bother to search for them and thus we do not know enough to say much beyond this with confidence.
Based on what we know now, it would be hard to make a compelling case that ethanol is preferable to gasoline with regards to total greenhouse gas emissions - and last month’s study out of the University of Nebraska does not change that.
Tuesday, February 17, 2009
India Gov't: Climate Billions an Entitlement, not Aid
India: Climate Billions an Entitlement. By Chris Horner
Planet Gore/NRO, Tuesday, February 17, 2009
I recall being in the room at the Hague in November 2000, when then-French president Jacques Chirac’s opening remarks praised the Kyoto Protocol as “the first component of an authentic global governance" (and I remember my editor with UPI, for whom I was writing from the talks, berating me and refusing to run my piece reporting this as hysterically making up something no one would ever say . . . )
I even more clearly recall Rep. James Sensenbrenner (R., Wisc.) holding an impromptu press availability afterward in the hallway outside the media cubes, instructing European reporters that if there is a better way of making sure that the U.S. stays out of any such pact than praising it as “global governance,” he doesn’t know what it is. (I also remember one of the Brit reporters, from the Guardian I believe, snapping back “Bollocks! Bollocks!” at the congressman.)
With Chirac’s departure to other pastimes such as being “mauled by his own ‘clinically depressed’ pet dog,” I think we may have found that better way to keep the U.S. out of such absurdity.
Sitting down? Good. Here’s a Climate Wire story’s headline and opening today:
Yeaahhh.
Planet Gore/NRO, Tuesday, February 17, 2009
I recall being in the room at the Hague in November 2000, when then-French president Jacques Chirac’s opening remarks praised the Kyoto Protocol as “the first component of an authentic global governance" (and I remember my editor with UPI, for whom I was writing from the talks, berating me and refusing to run my piece reporting this as hysterically making up something no one would ever say . . . )
I even more clearly recall Rep. James Sensenbrenner (R., Wisc.) holding an impromptu press availability afterward in the hallway outside the media cubes, instructing European reporters that if there is a better way of making sure that the U.S. stays out of any such pact than praising it as “global governance,” he doesn’t know what it is. (I also remember one of the Brit reporters, from the Guardian I believe, snapping back “Bollocks! Bollocks!” at the congressman.)
With Chirac’s departure to other pastimes such as being “mauled by his own ‘clinically depressed’ pet dog,” I think we may have found that better way to keep the U.S. out of such absurdity.
Sitting down? Good. Here’s a Climate Wire story’s headline and opening today:
Climate funding is entitlement, not aid, India says
The West owes billions of dollars to developing nations in order compensate
for climate change, India's government says.
In a submission to the U.N. Framework Convention on Climate Change, the
Indian government warns rich countries against defining funding for adaptation
or sustainable development in vulnerable nations as traditional development aid.
Rather, it says, it is an "entitlement" for poor countries whose development
will be further set back by global warming.
"There is a tendency to equate such resources to foreign 'aid' or Overseas
Development Assistance," the government wrote, adding that financing should not
be left up to the legislatures in wealthy nations, nor should it be in the form
of loans.
"The providers of finance cannot be discretionary 'donors,' but must be
legally obligated 'assessees,'" the document says.
Yeaahhh.
North Korea's Missile Gambit
North Korea's Missile Gambit, by Bruce Klingner
Heritage, February 17, 2009
Full article w/references here.
North Korea may be preparing to test-launch a long-range Taepo Dong-2 missile from its eastern coast. A missile launch, or even observable preparations for such a launch, would be the next step in Pyongyang's escalating efforts to pressure the U.S. and South Korea to soften their policies toward the North Korean dictatorship. Needless to say, it would be deeply embarrassing to the Obama Administration, which, prior to Secretary of State Hillary Clinton's Asia trip, seemed to be climbing down from some of the firmer positions President Obama held during the campaign.
Pyongyang is sending a signal to the Obama Administration that, despite the change in U.S. leadership, North Korea will not adopt a more accommodating stance in nuclear negotiations. Pyongyang's increasingly bellicose campaign is also directed--perhaps primarily--at forcing South Korean President Lee Myung-bak to abandon his requirements for conditionality, reciprocity, and transparency in South Korean engagement with the North.
Target: North America
Scientists remain uncertain over the range and payload capabilities of the long-range Taepo Dong-1 and -2 missiles as well as of potential variants. A 2001 National Intelligence Estimate by the U.S. intelligence community assessed a two-stage Taepo Dong 2 "could deliver a several-hundred-kilogram payload up to 10,000 km--sufficient to strike Alaska, Hawaii, and parts of the continental United States." The report projected that including a third stage could increase the range to 15,000 km, which would allow the missile to reach all of North America with a payload sufficiently large to accommodate a nuclear warhead. [1]
North Korea may not intend to actually launch a missile--that is, if Pyongyang seeks to achieve its diplomatic objectives without escalating tension beyond a counter-productive level. Its launch of a Taepo Dong-2 missile in 2006 angered ally China to such a degree that Beijing acquiesced to a U.S.-sponsored UN resolution against North Korea. Knowing that any activity at its missile test facility would be observed by satellites and interpreted as launch preparations, Pyongyang might hope that concerns over escalating tensions would cause South Korea and the U.S. to weaken negotiating positions. After all, the Bush Administration softened its position when North Korea threatened to reprocess plutonium in late 2008.
North Korea's actions may also be an attempt to trigger a resumption of bilateral negotiations which stalled at the end of the Clinton Administration. At that time, Pyongyang demanded $1 billion annually in return for a cessation of its missile exports. The U.S. rejected the demand and sought a more comprehensive agreement. But North Korea's demand for a presidential summit and refusal to discuss details of an agreement during Secretary of State Madeleine Albright's October 2000 trip to Pyongyang and November 2000 bilateral meetings in Kuala Lumpur doomed the initiative.
A High Risk Gambit
A launch would be a high-risk gambit. If North Korea were to successfully launch a Taepo Dong missile, it would significantly alter the threat potential to the U.S. and its Asian allies. Pyongyang's previous Taepo Dong missile launches in 1998 and 2006 failed and its nuclear test in 2006 was only partially successful. A successful launch of a missile theoretically capable of reaching the United States with a nuclear warhead would reverse perceptions of a diminishing North Korean military threat. Pyongyang calculates that international concerns over rising tensions would soften demands for North Korea to fully comply with its denuclearization commitments. Pyongyang would seek to defuse international anger by claiming, as it did with its 1998 launch, that it was simply launching a civilian space satellite.
On the other hand, another North Korean long-range missile failure would not only once again provide fodder for late night comedians; it would also further reduce the perception of North Korea as a military threat, thereby undermining its negotiating leverage. Such failure could reduce any sense of urgency for making progress either in missile negotiations or the Six Party Talks. Pyongyang could compensate by increasing tensions elsewhere, perhaps by initiating a naval confrontation with South Korea in the West Sea as occurred in 1999 and 2002.
A missile launch would be the Obama Administration's first foreign policy test. During the presidential campaign, Barack Obama declared that "if the North Koreans do not meet their obligations, we should move quickly to re-impose sanctions that have been waived, and consider new restrictions going forward." [2]How will the President react to a North Korean missile launch? Will the strong words of the campaign and Secretary of State Clinton's confirmation hearing be matched by resolute action?
What the U.S. Should Do
Emphasize that North Korea's actions are provocative, counterproductive, and call into question Pyongyang's viability as a negotiating partner. Highlight that North Korea's threatening belligerence, not U.S. "hostile policy" as Pyongyang claims, has hindered negotiations.
Affirm U.S. commitment to defend our allies against any North Korean provocation, including missile launches or naval confrontation in the West Sea.
Underscore Secretary of Defense Robert Gates' pledge to shoot down the North Korean missile if it approaches U.S. territory.
Emphasize that North Korea's missile threat demonstrates the continuing need for the U.S., Japan, and South Korea to develop and deploy missile defense systems. It is ironic that President Obama's Secretary of Defense has suggested using missile defenses that Obama would likely not have funded had he been in office during their development.
Declare that the U.S. is willing to resume negotiations to eliminate North Korea's missile threats to its neighbors. Such negotiations, however, must comprehensively constrain missile development, deployment, and proliferation rather than simply seeking a quid pro quo agreement--cash payments in exchange for not exporting missile technology. Nor should such negotiations deflect attention from Pyongyang's denuclearization requirements in the Six Party Talks.
Demand that all UN member nations fully implement their existing requirements. A North Korean launch would be a clear violation of UN Resolutions 1695 and 1718. In response, the U.S. should Washington should insist that the UN Security Council adopt a follow-on resolution that includes chapter VII, article 42 of the UN charter which makes sanctions mandatory and allows for enforcement by military means.
Initiate a multilateral effort--comprised of financial, military, law enforcement, and intelligence organizations--to sanction North Korean and other foreign companies and government entities that are involved in North Korean missile and WMD development and proliferation.
Adhering to the above-noted recommendations will ensure that the U.S. sends a clear message to Pyongyang, America's Asian allies, and the rest of the world: A nuclear North Korea will not be tolerated.
Bruce Klingner is Senior Research Fellow for Northeast Asia in the Asian Studies Center at The Heritage Foundation.
Heritage, February 17, 2009
Full article w/references here.
North Korea may be preparing to test-launch a long-range Taepo Dong-2 missile from its eastern coast. A missile launch, or even observable preparations for such a launch, would be the next step in Pyongyang's escalating efforts to pressure the U.S. and South Korea to soften their policies toward the North Korean dictatorship. Needless to say, it would be deeply embarrassing to the Obama Administration, which, prior to Secretary of State Hillary Clinton's Asia trip, seemed to be climbing down from some of the firmer positions President Obama held during the campaign.
Pyongyang is sending a signal to the Obama Administration that, despite the change in U.S. leadership, North Korea will not adopt a more accommodating stance in nuclear negotiations. Pyongyang's increasingly bellicose campaign is also directed--perhaps primarily--at forcing South Korean President Lee Myung-bak to abandon his requirements for conditionality, reciprocity, and transparency in South Korean engagement with the North.
Target: North America
Scientists remain uncertain over the range and payload capabilities of the long-range Taepo Dong-1 and -2 missiles as well as of potential variants. A 2001 National Intelligence Estimate by the U.S. intelligence community assessed a two-stage Taepo Dong 2 "could deliver a several-hundred-kilogram payload up to 10,000 km--sufficient to strike Alaska, Hawaii, and parts of the continental United States." The report projected that including a third stage could increase the range to 15,000 km, which would allow the missile to reach all of North America with a payload sufficiently large to accommodate a nuclear warhead. [1]
North Korea may not intend to actually launch a missile--that is, if Pyongyang seeks to achieve its diplomatic objectives without escalating tension beyond a counter-productive level. Its launch of a Taepo Dong-2 missile in 2006 angered ally China to such a degree that Beijing acquiesced to a U.S.-sponsored UN resolution against North Korea. Knowing that any activity at its missile test facility would be observed by satellites and interpreted as launch preparations, Pyongyang might hope that concerns over escalating tensions would cause South Korea and the U.S. to weaken negotiating positions. After all, the Bush Administration softened its position when North Korea threatened to reprocess plutonium in late 2008.
North Korea's actions may also be an attempt to trigger a resumption of bilateral negotiations which stalled at the end of the Clinton Administration. At that time, Pyongyang demanded $1 billion annually in return for a cessation of its missile exports. The U.S. rejected the demand and sought a more comprehensive agreement. But North Korea's demand for a presidential summit and refusal to discuss details of an agreement during Secretary of State Madeleine Albright's October 2000 trip to Pyongyang and November 2000 bilateral meetings in Kuala Lumpur doomed the initiative.
A High Risk Gambit
A launch would be a high-risk gambit. If North Korea were to successfully launch a Taepo Dong missile, it would significantly alter the threat potential to the U.S. and its Asian allies. Pyongyang's previous Taepo Dong missile launches in 1998 and 2006 failed and its nuclear test in 2006 was only partially successful. A successful launch of a missile theoretically capable of reaching the United States with a nuclear warhead would reverse perceptions of a diminishing North Korean military threat. Pyongyang calculates that international concerns over rising tensions would soften demands for North Korea to fully comply with its denuclearization commitments. Pyongyang would seek to defuse international anger by claiming, as it did with its 1998 launch, that it was simply launching a civilian space satellite.
On the other hand, another North Korean long-range missile failure would not only once again provide fodder for late night comedians; it would also further reduce the perception of North Korea as a military threat, thereby undermining its negotiating leverage. Such failure could reduce any sense of urgency for making progress either in missile negotiations or the Six Party Talks. Pyongyang could compensate by increasing tensions elsewhere, perhaps by initiating a naval confrontation with South Korea in the West Sea as occurred in 1999 and 2002.
A missile launch would be the Obama Administration's first foreign policy test. During the presidential campaign, Barack Obama declared that "if the North Koreans do not meet their obligations, we should move quickly to re-impose sanctions that have been waived, and consider new restrictions going forward." [2]How will the President react to a North Korean missile launch? Will the strong words of the campaign and Secretary of State Clinton's confirmation hearing be matched by resolute action?
What the U.S. Should Do
Emphasize that North Korea's actions are provocative, counterproductive, and call into question Pyongyang's viability as a negotiating partner. Highlight that North Korea's threatening belligerence, not U.S. "hostile policy" as Pyongyang claims, has hindered negotiations.
Affirm U.S. commitment to defend our allies against any North Korean provocation, including missile launches or naval confrontation in the West Sea.
Underscore Secretary of Defense Robert Gates' pledge to shoot down the North Korean missile if it approaches U.S. territory.
Emphasize that North Korea's missile threat demonstrates the continuing need for the U.S., Japan, and South Korea to develop and deploy missile defense systems. It is ironic that President Obama's Secretary of Defense has suggested using missile defenses that Obama would likely not have funded had he been in office during their development.
Declare that the U.S. is willing to resume negotiations to eliminate North Korea's missile threats to its neighbors. Such negotiations, however, must comprehensively constrain missile development, deployment, and proliferation rather than simply seeking a quid pro quo agreement--cash payments in exchange for not exporting missile technology. Nor should such negotiations deflect attention from Pyongyang's denuclearization requirements in the Six Party Talks.
Demand that all UN member nations fully implement their existing requirements. A North Korean launch would be a clear violation of UN Resolutions 1695 and 1718. In response, the U.S. should Washington should insist that the UN Security Council adopt a follow-on resolution that includes chapter VII, article 42 of the UN charter which makes sanctions mandatory and allows for enforcement by military means.
Initiate a multilateral effort--comprised of financial, military, law enforcement, and intelligence organizations--to sanction North Korean and other foreign companies and government entities that are involved in North Korean missile and WMD development and proliferation.
Adhering to the above-noted recommendations will ensure that the U.S. sends a clear message to Pyongyang, America's Asian allies, and the rest of the world: A nuclear North Korea will not be tolerated.
Bruce Klingner is Senior Research Fellow for Northeast Asia in the Asian Studies Center at The Heritage Foundation.
Does anyone believe that a smaller fraction of Americans lived in absolute poverty in 1973 than today?
Poor Statistics, by Nicholas Eberstadt
The American economy is in the midst of a severe recession, and increasing material hardship is an unfortunate but inevitable consequence. Now more than ever, we must find a better way to measure poverty.
AEI, Tuesday, February 17, 2009
http://aei.org/publications/pubID.29401,filter.all/pub_detail.asp
With the economy in an ominous recession of uncertain depth and duration, the incidence of material hardship in America will surely spike in the year (or years) ahead. But amazingly, Washington lacks the statistical tools to assess--and thus address efficiently--the coming surge in need.
America's official poverty rate--for over four decades the main indicator for all our antipoverty policies--is an outdated and badly broken index. Its built-in defects make it incapable of providing accurate information about poverty trends. If the Obama Administration hopes to wage an effective fight against domestic poverty, it will need a much more reliable yardstick. The rate calculation dates back to 1965, during LBJ's war on poverty.
Essentially it matches a family's reported annual income against a "poverty threshold"--a hypothetical bare-bones budget, based on household size and composition, that is adjusted with the inflation rate. If a family's reported income falls below that given threshold, it is counted as poor. The poverty rate is the percentage of the population that is officially poor. The government's aim here is to track absolute poverty rather than relative poverty or inequality. If the least prosperous families are doing better, then the poverty rate should be going down, even though these families may remain as far behind the rest of us as they ever were. According to official figures, America's lowest poverty rate ever was in 1973, at 11.1%; in 2006, a prerecession year, America's official poverty rate was 12.3%. This is nonsense with decimal points. Does anyone seriously believe that a smaller fraction of Americans lived in absolute poverty in 1973 than today?
According to the Census Bureau, inflation-adjusted per capita income was well over 50% higher in 2006 than in 1973--and median family income (for smaller families today, remember) was over 20% higher. The unemployment rate--a key driver of poverty in all industrial societies—was lower in 2006 than in 1973 (4.6% versus 4.9%).
Educational attainment (and thus productivity potential) for the adult population was also significantly higher in 2006, and yet means-tested spending on government antipoverty programs is now at least twice as high as in the Watergate era.
Only a misprogrammed computer would designate 1973--that Vietnam War and "stagflation era" year--as America's golden age of progress against poverty. Yet this is what the official rate asserts. This isn't the only fault in the statistics: They also miss the improvement in living standards among the officially poor. Consider: In 1973 over half the families in America's poorest fifth didn't own a car. By 2003 over 73% of them owned some sort of motor vehicle--and 14% had two cars or more. By the same token, about 27% of American children below the poverty line failed to see a doctor annually in 1985; 20 years later, the figure was 11%. Thus poor children nowadays are more likely to have an annual doctor visit than nonpoor kids a few years ago.
What is wrong with the official poverty rate? It measures the wrong thing--and always has. That thing is income. But poverty is a matter of consumption, and a huge gap has come to separate income and consumption at the lower strata of our income distribution. In 2006, according to the annual Bureau of Labor Statistics Consumer Expenditure Survey, reported purchases by the poorest fifth of American households were more than twice as high as reported incomes.
For reasons still only partly understood, the surfeit of spending over income among poorer U.S. households has increased dramatically since the 1970s--making income an ever less dependable predictor of living standards for the disadvantaged. Indeed, while the official poverty thresholds are meant to be constant over time, a whole host of data confirm the (welcome) fact that material conditions for our population in "poverty" have been steadily improving. The official statistic is incapable of documenting--or even recognizing--any changes in living standards among America's poor.
Now, more than ever, it is urgent for America to be capable of monitoring the material need in our midst. Our official poverty rate is ill-suited for that task and cannot be repaired by inventive tinkering. It is time to discard this broken compass and start over.
The American economy is in the midst of a severe recession, and increasing material hardship is an unfortunate but inevitable consequence. Now more than ever, we must find a better way to measure poverty.
AEI, Tuesday, February 17, 2009
http://aei.org/publications/pubID.29401,filter.all/pub_detail.asp
With the economy in an ominous recession of uncertain depth and duration, the incidence of material hardship in America will surely spike in the year (or years) ahead. But amazingly, Washington lacks the statistical tools to assess--and thus address efficiently--the coming surge in need.
America's official poverty rate--for over four decades the main indicator for all our antipoverty policies--is an outdated and badly broken index. Its built-in defects make it incapable of providing accurate information about poverty trends. If the Obama Administration hopes to wage an effective fight against domestic poverty, it will need a much more reliable yardstick. The rate calculation dates back to 1965, during LBJ's war on poverty.
Essentially it matches a family's reported annual income against a "poverty threshold"--a hypothetical bare-bones budget, based on household size and composition, that is adjusted with the inflation rate. If a family's reported income falls below that given threshold, it is counted as poor. The poverty rate is the percentage of the population that is officially poor. The government's aim here is to track absolute poverty rather than relative poverty or inequality. If the least prosperous families are doing better, then the poverty rate should be going down, even though these families may remain as far behind the rest of us as they ever were. According to official figures, America's lowest poverty rate ever was in 1973, at 11.1%; in 2006, a prerecession year, America's official poverty rate was 12.3%. This is nonsense with decimal points. Does anyone seriously believe that a smaller fraction of Americans lived in absolute poverty in 1973 than today?
According to the Census Bureau, inflation-adjusted per capita income was well over 50% higher in 2006 than in 1973--and median family income (for smaller families today, remember) was over 20% higher. The unemployment rate--a key driver of poverty in all industrial societies—was lower in 2006 than in 1973 (4.6% versus 4.9%).
Educational attainment (and thus productivity potential) for the adult population was also significantly higher in 2006, and yet means-tested spending on government antipoverty programs is now at least twice as high as in the Watergate era.
Only a misprogrammed computer would designate 1973--that Vietnam War and "stagflation era" year--as America's golden age of progress against poverty. Yet this is what the official rate asserts. This isn't the only fault in the statistics: They also miss the improvement in living standards among the officially poor. Consider: In 1973 over half the families in America's poorest fifth didn't own a car. By 2003 over 73% of them owned some sort of motor vehicle--and 14% had two cars or more. By the same token, about 27% of American children below the poverty line failed to see a doctor annually in 1985; 20 years later, the figure was 11%. Thus poor children nowadays are more likely to have an annual doctor visit than nonpoor kids a few years ago.
What is wrong with the official poverty rate? It measures the wrong thing--and always has. That thing is income. But poverty is a matter of consumption, and a huge gap has come to separate income and consumption at the lower strata of our income distribution. In 2006, according to the annual Bureau of Labor Statistics Consumer Expenditure Survey, reported purchases by the poorest fifth of American households were more than twice as high as reported incomes.
For reasons still only partly understood, the surfeit of spending over income among poorer U.S. households has increased dramatically since the 1970s--making income an ever less dependable predictor of living standards for the disadvantaged. Indeed, while the official poverty thresholds are meant to be constant over time, a whole host of data confirm the (welcome) fact that material conditions for our population in "poverty" have been steadily improving. The official statistic is incapable of documenting--or even recognizing--any changes in living standards among America's poor.
Now, more than ever, it is urgent for America to be capable of monitoring the material need in our midst. Our official poverty rate is ill-suited for that task and cannot be repaired by inventive tinkering. It is time to discard this broken compass and start over.
Bottled Water and the Overflowing Nanny State: How Misinformation Erodes Consumer Freedom
Bottled Water and the Overflowing Nanny State, by Angela Logomasini
How Misinformation Erodes Consumer Freedom
CEI, February 17, 2009
For the past couple decades, bottled water had been growing in popularity as an environmentally preferred choice and as a healthy beverage alternative. Yet in recent years, environmental activists have begun attacking its value and quality. The activists’ claims do not hold water, yet, based on those claims, they are promoting bans, taxes, and regulations on bottled water—taking the Nanny State to a whole new level. The following analysis counters this “new wisdom,” questioning the justifications for this new assault on consumer freedom.
Some key facts include:Bottled water regulation is at least as stringent as tap water regulation. Under federal law the Food and Drug Administration (FDA) must pass bottled water regulations that are “no less stringent” than Environmental Protection Agency (EPA) regulations. The law does not allow the FDA to set standards that produce a lower quality product. As a result, FDA regulations mirror EPA regulations very closely and are more stringent in some respects because FDA applies additional food, packaging, and labeling regulations.
Bottled water is substantially different from tap. About 75 percent of bottled water is from sources other than municipal systems such as springs or underground sources. Much of the bottled municipal water undergoes additional purification treatments to produce a higher quality product that must meet FDA bottled water quality standards, packaging, and labeling mandates. In terms of safety, tap water has more documented health-related case reports compared to bottled water. The Centers for Disease Control and Prevention recommends bottled water for individuals with compromised immune systems to reduce the risks associated with tap water.
Bottled water containers are a tiny fraction of the solid waste stream. Many people have turned to bottled water to replace other portable drinks containing sugar and calories, producing little increase in total waste. In any case, single-serving plastic water bottles amount to just 0.3 percent of the nation’s solid waste. Bottles used in water coolers are recycled at high rates and have even less impact on landfill waste. Taxing and banning either type of container will not matter much in terms of overall waste.
Plastic bottles are safe for consumers. The chemicals which environmental activists suggest are a problem are not even used in the PET plastic used for single-serving water bottles. Bisphenol A, a chemical found in large five-gallon water cooler jugs and other food containers exists at such low trace levels that there have been no reported health problems and the FDA, along with several scientific organizations around the world, have not found any problem with this substance.
The public has freely turned to bottled water as an alternative to drinks with calories, for convenience, freshness, and whatever other reasons they themselves find worthy. Misinformation spread by activists should not determine who can access this product. People who do not like the product can make their own choices. They should not have any right to make them for the rest of us.
See the full report.
How Misinformation Erodes Consumer Freedom
CEI, February 17, 2009
For the past couple decades, bottled water had been growing in popularity as an environmentally preferred choice and as a healthy beverage alternative. Yet in recent years, environmental activists have begun attacking its value and quality. The activists’ claims do not hold water, yet, based on those claims, they are promoting bans, taxes, and regulations on bottled water—taking the Nanny State to a whole new level. The following analysis counters this “new wisdom,” questioning the justifications for this new assault on consumer freedom.
Some key facts include:Bottled water regulation is at least as stringent as tap water regulation. Under federal law the Food and Drug Administration (FDA) must pass bottled water regulations that are “no less stringent” than Environmental Protection Agency (EPA) regulations. The law does not allow the FDA to set standards that produce a lower quality product. As a result, FDA regulations mirror EPA regulations very closely and are more stringent in some respects because FDA applies additional food, packaging, and labeling regulations.
Bottled water is substantially different from tap. About 75 percent of bottled water is from sources other than municipal systems such as springs or underground sources. Much of the bottled municipal water undergoes additional purification treatments to produce a higher quality product that must meet FDA bottled water quality standards, packaging, and labeling mandates. In terms of safety, tap water has more documented health-related case reports compared to bottled water. The Centers for Disease Control and Prevention recommends bottled water for individuals with compromised immune systems to reduce the risks associated with tap water.
Bottled water containers are a tiny fraction of the solid waste stream. Many people have turned to bottled water to replace other portable drinks containing sugar and calories, producing little increase in total waste. In any case, single-serving plastic water bottles amount to just 0.3 percent of the nation’s solid waste. Bottles used in water coolers are recycled at high rates and have even less impact on landfill waste. Taxing and banning either type of container will not matter much in terms of overall waste.
Plastic bottles are safe for consumers. The chemicals which environmental activists suggest are a problem are not even used in the PET plastic used for single-serving water bottles. Bisphenol A, a chemical found in large five-gallon water cooler jugs and other food containers exists at such low trace levels that there have been no reported health problems and the FDA, along with several scientific organizations around the world, have not found any problem with this substance.
The public has freely turned to bottled water as an alternative to drinks with calories, for convenience, freshness, and whatever other reasons they themselves find worthy. Misinformation spread by activists should not determine who can access this product. People who do not like the product can make their own choices. They should not have any right to make them for the rest of us.
See the full report.
To save the planet, build more skyscrapers—especially in California
Green Cities, Brown Suburbs. By Edward L. Glaeser
To save the planet, build more skyscrapers—especially in California.
http://www.city-journal.org/2009/19_1_green-cities.html
On a pleasant April day in 1844, Henry David Thoreau—the patron saint of American environmentalism—went for a walk along the Concord River in Massachusetts. With a friend, he built a fire in a pine stump near Fair Haven Pond, apparently to cook a chowder. Unfortunately, there hadn’t been much rain lately, the fire soon spread to the surrounding grass, and in the end, over 300 acres of prime woodland burned. Thoreau steadily denied any wrongdoing. “I have set fire to the forest, but I have done no wrong therein, and now it is as if the lightning had done it,” he later wrote. The other residents of Concord were less forgiving, taking a reasonably dim view of even inadvertent arson. “It is to be hoped that this unfortunate result of sheer carelessness, will be borne in mind by those who may visit the woods in future for recreation,” the Concord Freeman opined.
Thoreau’s accident illustrates a point that is both paradoxical and generally true: if you want to be good to the environment, stay away from it. Move to high-rise apartments surrounded by plenty of concrete. Americans who settle in leafy, low-density suburbs will leave a significantly deeper carbon footprint, it turns out, than Americans who live cheek by jowl in urban towers. And a second paradox follows from the first. When environmentalists resist new construction in their dense but environmentally friendly cities, they inadvertently ensure that it will take place somewhere else—somewhere with higher carbon emissions. Much local environmentalism, in short, is bad for the environment.
Matthew Kahn, a professor of economics at UCLA, and I have quantified the first paradox. We begin by estimating the amount of carbon dioxide that an average household would emit if it settled in each of the 66 major metropolitan areas in the United States. Then we calculate, for 48 of those areas, the difference between what that average household would emit if it settled in the central city and what it would emit in the suburbs. (The remaining 18 areas had too little data for our calculations.) A few key points about our methodology follow; if you’re interested in all the methodological details, click here.
First, by “average household,” we mean average in terms of income and family size, so that we aren’t comparing urban singles with large suburban families. However, we don’t want to standardize the physical size of the home. People who move to suburban Dallas aren’t likely to live in apartments as small as those in Manhattan. Smaller housing units are one of the important environmental benefits of big-city living.
Second, we try to estimate the energy use from a typical new home in an area—specifically, one built in the last 20 years—which sometimes means something quite different from an average one. The reason is simple. We aren’t playing a ratings game to figure out which city pollutes least; rather, we’re trying to determine where future home construction would do the least environmental damage.
We calculate carbon emissions from four different sources: home heating (that is, fuel oil and natural gas); electricity; driving; and public transportation. Residential energy use and non-diesel motor fuel are each responsible for about 1.2 billion tons of carbon dioxide emissions each year, out of total U.S. emissions of 6 billion tons. So these sources together reflect about 40 percent of America’s carbon footprint. Our procedure is admittedly imperfect and incomplete: for example, we do not include carbon dioxide generated as a by-product of workplace activity.
The table below shows some of the results of our research. The five metropolitan areas with the lowest levels of carbon emissions are all in California: San Francisco, San Jose, San Diego, Los Angeles, and Sacramento. These areas have remarkably low levels of both home heating and electricity use. There are cold places, like Rochester, that don’t air-condition much and thus use comparably little electricity. There are warm places, like Houston, that don’t heat much and thus have comparably low heating emissions. But coastal California has little of both sorts of emissions, because of its extremely temperate climate and because California’s environmentalists have battled for rules that require energy-efficient appliances, like air conditioners and water heaters, and for green sources of electricity, such as natural gas and hydropower. (Some analysts argue that this greenness is partly illusory—see “California’s Potemkin Environmentalism,” Spring 2008—but certainly, by our measures, California homes use less energy.) Also, despite the stereotypes about California highways and urban sprawl, some of these five cities, like San Francisco, have only moderate levels of transportation emissions, since their residents actually live at relatively high densities, which cuts down on driving.
Read more.
Edward L. Glaeser is a professor of economics at Harvard University, a City Journal contributing editor, and a Manhattan Institute senior fellow. His article describes research jointly performed with Matthew Kahn of UCLA.
To save the planet, build more skyscrapers—especially in California.
http://www.city-journal.org/2009/19_1_green-cities.html
On a pleasant April day in 1844, Henry David Thoreau—the patron saint of American environmentalism—went for a walk along the Concord River in Massachusetts. With a friend, he built a fire in a pine stump near Fair Haven Pond, apparently to cook a chowder. Unfortunately, there hadn’t been much rain lately, the fire soon spread to the surrounding grass, and in the end, over 300 acres of prime woodland burned. Thoreau steadily denied any wrongdoing. “I have set fire to the forest, but I have done no wrong therein, and now it is as if the lightning had done it,” he later wrote. The other residents of Concord were less forgiving, taking a reasonably dim view of even inadvertent arson. “It is to be hoped that this unfortunate result of sheer carelessness, will be borne in mind by those who may visit the woods in future for recreation,” the Concord Freeman opined.
Thoreau’s accident illustrates a point that is both paradoxical and generally true: if you want to be good to the environment, stay away from it. Move to high-rise apartments surrounded by plenty of concrete. Americans who settle in leafy, low-density suburbs will leave a significantly deeper carbon footprint, it turns out, than Americans who live cheek by jowl in urban towers. And a second paradox follows from the first. When environmentalists resist new construction in their dense but environmentally friendly cities, they inadvertently ensure that it will take place somewhere else—somewhere with higher carbon emissions. Much local environmentalism, in short, is bad for the environment.
Matthew Kahn, a professor of economics at UCLA, and I have quantified the first paradox. We begin by estimating the amount of carbon dioxide that an average household would emit if it settled in each of the 66 major metropolitan areas in the United States. Then we calculate, for 48 of those areas, the difference between what that average household would emit if it settled in the central city and what it would emit in the suburbs. (The remaining 18 areas had too little data for our calculations.) A few key points about our methodology follow; if you’re interested in all the methodological details, click here.
First, by “average household,” we mean average in terms of income and family size, so that we aren’t comparing urban singles with large suburban families. However, we don’t want to standardize the physical size of the home. People who move to suburban Dallas aren’t likely to live in apartments as small as those in Manhattan. Smaller housing units are one of the important environmental benefits of big-city living.
Second, we try to estimate the energy use from a typical new home in an area—specifically, one built in the last 20 years—which sometimes means something quite different from an average one. The reason is simple. We aren’t playing a ratings game to figure out which city pollutes least; rather, we’re trying to determine where future home construction would do the least environmental damage.
We calculate carbon emissions from four different sources: home heating (that is, fuel oil and natural gas); electricity; driving; and public transportation. Residential energy use and non-diesel motor fuel are each responsible for about 1.2 billion tons of carbon dioxide emissions each year, out of total U.S. emissions of 6 billion tons. So these sources together reflect about 40 percent of America’s carbon footprint. Our procedure is admittedly imperfect and incomplete: for example, we do not include carbon dioxide generated as a by-product of workplace activity.
The table below shows some of the results of our research. The five metropolitan areas with the lowest levels of carbon emissions are all in California: San Francisco, San Jose, San Diego, Los Angeles, and Sacramento. These areas have remarkably low levels of both home heating and electricity use. There are cold places, like Rochester, that don’t air-condition much and thus use comparably little electricity. There are warm places, like Houston, that don’t heat much and thus have comparably low heating emissions. But coastal California has little of both sorts of emissions, because of its extremely temperate climate and because California’s environmentalists have battled for rules that require energy-efficient appliances, like air conditioners and water heaters, and for green sources of electricity, such as natural gas and hydropower. (Some analysts argue that this greenness is partly illusory—see “California’s Potemkin Environmentalism,” Spring 2008—but certainly, by our measures, California homes use less energy.) Also, despite the stereotypes about California highways and urban sprawl, some of these five cities, like San Francisco, have only moderate levels of transportation emissions, since their residents actually live at relatively high densities, which cuts down on driving.
Read more.
Edward L. Glaeser is a professor of economics at Harvard University, a City Journal contributing editor, and a Manhattan Institute senior fellow. His article describes research jointly performed with Matthew Kahn of UCLA.
Large-Scale Test to Inject One Million Metric Tonnes of Carbon Dioxide into Saline Formation
Carbon Sequestration Partner Initiates Drilling of CO2 Injection Well in Illinois Basin
Large-Scale Test to Inject One Million Metric Tonnes of Carbon Dioxide into Saline Formation
US Energy Dept, February 17, 2009
Washington, D.C. — The Midwest Geological Sequestration Consortium (MGSC), one of seven regional partnerships created by the U.S. Department of Energy (DOE) to advance carbon sequestration technologies nationwide, has begun drilling the injection well for their large-scale carbon dioxide (CO2) injection test in Decatur, Illinois. The test is part of the development phase of the Regional Carbon Sequestration Partnerships program, an Office of Fossil Energy initiative launched in 2003 to determine the best approaches for capturing and permanently storing gases that can contribute to global climate change.
The large-scale project will capture CO2 from the Archer Daniels Midland (ADM) Ethanol Production Facility in Decatur, Ill., and inject it in a deep saline formation more than a mile underground. Starting in early 2010, up to one million metric tonnes of CO2 from the ADM ethanol facility will be compressed to a liquid-like dense phase and injected over a three-year period.
The rock formation targeted for the injection is the Mt. Simon Sandstone, at a depth between 6,000 and 7,000 feet. The Mt. Simon Sandstone is the thickest and most widespread saline reservoir in the Illinois Basin, with an estimated CO2 storage capacity of 27 to 109 billion metric tonnes. Analysis of data collected during the characterization phase of the project indicated that the lower Mt. Simon formation has the necessary geological characteristics to be a good injection target.
In January, ADM — in collaboration with the Illinois State Geologic Survey at the University of Illinois, which leads the MGSC — was issued an Underground Injection Control permit by the Illinois Environmental Protection Agency for the injection well. Obtaining the permit is significant because it allows the consortium to proceed with drilling, making the MGSC the first DOE Regional Partnership to begin drilling a development phase injection well. The drilling is expected to take about 2 months to complete.
Following injection, a comprehensive monitoring program will be implemented to ensure that the injected CO2 is safely and permanently stored. The position of the underground CO2 plume will be tracked, and deep subsurface, groundwater, and surface monitoring around the injection site will be conducted. The monitoring program will be evaluated yearly and modified as needed.
The project under which this effort is being performed will, on average, create nearly 250 full-time jobs per year. These jobs will be supported throughout the project’s life of more than ten years, thus resulting in more than 2,500 job-years (calculated as the number of full-time jobs per year times the number of years that the jobs are supported.)
MGSC is one of seven regional partnerships in a nationwide network that is investigating the comparative merits of numerous carbon capture and storage approaches to determine those best suited for different regions of the country. The consortium is investigating options for the 60,000 square mile Illinois Basin, which underlies most of Illinois, southwestern Indiana, and western Kentucky. Emissions in this area exceed 304 million metric tonnes of CO2 yearly, mostly attributed to the region's 126 coal-fired power plants.
Large-Scale Test to Inject One Million Metric Tonnes of Carbon Dioxide into Saline Formation
US Energy Dept, February 17, 2009
Washington, D.C. — The Midwest Geological Sequestration Consortium (MGSC), one of seven regional partnerships created by the U.S. Department of Energy (DOE) to advance carbon sequestration technologies nationwide, has begun drilling the injection well for their large-scale carbon dioxide (CO2) injection test in Decatur, Illinois. The test is part of the development phase of the Regional Carbon Sequestration Partnerships program, an Office of Fossil Energy initiative launched in 2003 to determine the best approaches for capturing and permanently storing gases that can contribute to global climate change.
The large-scale project will capture CO2 from the Archer Daniels Midland (ADM) Ethanol Production Facility in Decatur, Ill., and inject it in a deep saline formation more than a mile underground. Starting in early 2010, up to one million metric tonnes of CO2 from the ADM ethanol facility will be compressed to a liquid-like dense phase and injected over a three-year period.
The rock formation targeted for the injection is the Mt. Simon Sandstone, at a depth between 6,000 and 7,000 feet. The Mt. Simon Sandstone is the thickest and most widespread saline reservoir in the Illinois Basin, with an estimated CO2 storage capacity of 27 to 109 billion metric tonnes. Analysis of data collected during the characterization phase of the project indicated that the lower Mt. Simon formation has the necessary geological characteristics to be a good injection target.
In January, ADM — in collaboration with the Illinois State Geologic Survey at the University of Illinois, which leads the MGSC — was issued an Underground Injection Control permit by the Illinois Environmental Protection Agency for the injection well. Obtaining the permit is significant because it allows the consortium to proceed with drilling, making the MGSC the first DOE Regional Partnership to begin drilling a development phase injection well. The drilling is expected to take about 2 months to complete.
Following injection, a comprehensive monitoring program will be implemented to ensure that the injected CO2 is safely and permanently stored. The position of the underground CO2 plume will be tracked, and deep subsurface, groundwater, and surface monitoring around the injection site will be conducted. The monitoring program will be evaluated yearly and modified as needed.
The project under which this effort is being performed will, on average, create nearly 250 full-time jobs per year. These jobs will be supported throughout the project’s life of more than ten years, thus resulting in more than 2,500 job-years (calculated as the number of full-time jobs per year times the number of years that the jobs are supported.)
MGSC is one of seven regional partnerships in a nationwide network that is investigating the comparative merits of numerous carbon capture and storage approaches to determine those best suited for different regions of the country. The consortium is investigating options for the 60,000 square mile Illinois Basin, which underlies most of Illinois, southwestern Indiana, and western Kentucky. Emissions in this area exceed 304 million metric tonnes of CO2 yearly, mostly attributed to the region's 126 coal-fired power plants.
Obama Should Play Hardball
Obama Should Play Hardball. By Matthew Rothschild
The Progressive, February 17, 2009
It’s time for Obama to start playing hardball.
Forget about bipartisanship. The Republicans have.
And take the fight to them.
He should fan out across the country several days a week, targeting states with contested Senate and House seats.
And he should tell the voters in these states that their own elected officials voted against jobs in their area.
Their own elected officials voted against rebuilding schools in their neighborhood.
Their own elected officials voted against repairing roads and bridges in their county.
Their own elected officials voted against tax relief for people like them.
Their own elected officials voted against giving families like them a $2,500 tax break for sending their kids to college.
And then he should ask these same voters to contact those legislators and register their disapproval, and then register their disapproval again at the polls the first chance they get.
This is how Obama can turn the heat up on Republicans and make some of them come to their senses—or lose their jobs.
Playing nice didn’t get Obama anywhere.
Flexing his muscle and his popularity will get him a lot further.
The Progressive, February 17, 2009
It’s time for Obama to start playing hardball.
Forget about bipartisanship. The Republicans have.
And take the fight to them.
He should fan out across the country several days a week, targeting states with contested Senate and House seats.
And he should tell the voters in these states that their own elected officials voted against jobs in their area.
Their own elected officials voted against rebuilding schools in their neighborhood.
Their own elected officials voted against repairing roads and bridges in their county.
Their own elected officials voted against tax relief for people like them.
Their own elected officials voted against giving families like them a $2,500 tax break for sending their kids to college.
And then he should ask these same voters to contact those legislators and register their disapproval, and then register their disapproval again at the polls the first chance they get.
This is how Obama can turn the heat up on Republicans and make some of them come to their senses—or lose their jobs.
Playing nice didn’t get Obama anywhere.
Flexing his muscle and his popularity will get him a lot further.
State Sec Hillary Clinton Remarks on Japan: A Cornerstone of U.S. Foreign Policy
Japan: A Cornerstone of U.S. Foreign Policy. Remarks by Hillary Rodham Clinton, Secretary of State
Secretary of State Hillary Rodham Clinton With Japanese Foreign Minister Hirofumi Nakasone
Tokyo, Japan, February 17, 2009
FOREIGN MINISTER NAKASONE: (Via interpreter) A while ago, I had a meeting with Secretary of State Hillary Rodham Clinton and myself, and I think we had a very good meeting, and let me discuss the content of that meeting. I told her that I welcomed the fact that she chose Japan as the destination for her first overseas trip as Secretary of State, because that is an indication that Secretary Clinton and the U.S. Administration attaches importance to Japan and the Japan-U.S. relations.
At the Senate hearings, the Secretary mentioned that the Japan-U.S. alliance is the cornerstone of U.S. policy and for the peace and security of the Asia-Pacific region - that this alliance is indispensible for that. And I certainly agree that this is very important, the alliance is very important, so I couldn’t agree more, that being our relations. But also, globally, as we face various challenges, I believe we have to further step up Japan-U.S. alliance, and we agreed on that. In the meeting, as a foreign leader to be invited to the White House by the U.S. President, President Obama – as you conveyed to us, an invitation by President Obama to invite Prime Minister Aso on the 24th of February, that the Japanese Foreign Minister will be the first foreign leader to be invited – again, a reflection of the importance of Japan-U.S. relationship that we most welcome this.
Prime Minister Aso very gladly accepts this invitation and would like to visit the United States with the consent of (inaudible). And through Japan-U.S. cooperation, we would like to make the necessary preparations. This early bilateral summit meeting, I believe, will indicate to the entire world that the first and the second economic powers in the world will together address the financial and economic difficulties that are confronting the world.
We too see instabilities in the Asia-Pacific region, and Secretary Clinton expressed the U.S. commitment to the defense of Japan, including nuclear deterrents, and we welcome this. With regard to the realignment of U.S. forces, we agreed that we will steadily implement this realignment on the basis of a roadmap from the viewpoint of alleviating burdens on Okinawa and local communities while maintaining deterrents. The Guam Agreement we signed is a reflection of that firm commitment of the two countries vis-à-vis the realignment of U.S. forces in Japan. We agreed to aim at building an affluent, stable, and open East Asian region, and in that, we shared the hope that China will play a constructive role in the international community.
With regard to the North Korean issue, we agreed on the importance of resolving, in a comprehensive manner, the abduction issue, nuclear, and missile and other pending issues. And we also agreed to further step up Japan-U.S. coordination and Japan, U.S., and South Korea coordination at the Six-Party Talks towards the realization of complete denuclearization of the peninsula. And we also agreed that our two countries will further step up our efforts with regard to Afghanistan and Pakistan, because the stabilization of Afghanistan and Pakistan is a challenge for the entire international community. I also proposed our preparedness to host a Pakistan support conference, and towards this realization, I meant that we agreed that we will step up cooperation between our two countries, as well as consult with other countries and institutions concerned.
Now, the international community today is faced with numerous difficulties and challenges such as climate change and energy, financial and global economic issues, nuclear disarmament and nonproliferation, development and healthcare in Africa, global – other global challenges including UN Security Council reform as well as international situations such as the Middle East peace, counter piracy measures off Somalia, et cetera. And we agreed to further strengthen our partnership in addressing these issues.
As I mentioned, we had a very good meeting and we agreed to further step up the information exchange and policy coordination on strategically important challenges. And especially between I, myself, and Secretary Clinton, we agreed to get in touch and consult with each other at any time by phone and other means, even when there is no specific agenda or issue. Thank you.
MODERATOR: Thank you very much. Secretary Clinton, please.
SECRETARY CLINTON: Thank you very much, Foreign Minister Nakasone. I first met the foreign minister 18 years ago, and so it was a great pleasure to renew our acquaintances in this new setting. And I thank you for your hospitality, and for the broad-ranging discussion that we had today.
The alliance between the United States and Japan is a cornerstone of our foreign policy. And working together to deal with the multitude of issues that affect not only Asia, but the entire world, is a high priority of the Obama Administration. I was very pleased to extend an invitation on behalf of President Obama to welcome Prime Minister Aso to Washington, D.C. on February 24th. This will be the first foreign leader visit that President Obama will be receiving at the White House.
We have just signed the Guam International Agreement on behalf of our two nations. This agreement reflects the commitment we have to modernize our military posture in the Pacific. It reinforces the core of our alliance, the mission to ensure the defense of Japan against attack and to deter any attack by all necessary means. It enshrines our two nations’ shared contributions in carrying out the realignment of our forces and the relocation of marines from Okinawa to Guam.
This is one more example of the strong and vibrant alliance that we enjoy. Mr. Nakasone and I ranged across the world. Of course, there are matters that we are concerned about on a bilateral basis. But equally, we are concerned about what we can do together to address the challenges and seize the opportunities of this time. We addressed the economic challenges facing our two countries and the world as a whole, which demand a coordinated global response. As the first and second largest economies in the world, we understand those responsibilities, and we also know the importance of making sure our economies work on behalf of our own citizens. So it is a great responsibility that both Japan and the United States assume. Japan has been a leader in laying the groundwork for a clean energy future, and we look forward to working together on a bilateral and multilateral basis on energy and climate change.
With respect to North Korea, we discussed the importance of very close coordination in our approach to the Six-Party Talks. We must advance our efforts to secure the complete and verifiable denuclearization of North Korea. The possible missile launch that North Korea is talking about would be very unhelpful in moving our relationship forward. I know the abductee issue is of great concern here in Japan, and I will be meeting with families later today to express my personal sympathy and our concern about what happened to those who were abducted.
I want to commend Japan because this nation has been a leader in promoting stability and prosperity in Pakistan and Afghanistan. The minister shared with me in very particular detail the amount of work and the financial contributions that Japan has undertaken, and I pledged high-level U.S. participation in the Pakistan donors conference that will be held later. I also want to thank Japan and the Japanese people for your support in Operation Enduring Freedom. It’s been very important for our overall success of the coalition mission in Afghanistan. I also appreciate Japan’s dispatch of two naval vessels to the Gulf of Aden to help fight this scourge of piracy.
There is so much that we discussed that it is hard to do it justice in this short review. But let me underscore how closely we will be working together. We’ve already discussed how we will have our ministries – the Foreign Ministry and the State Department – work on economic, climate change, clean energy, and other issues of great responsibility and importance.
I am delighted to be back in Japan. I looked at that old picture of us, Minister, and a lot of time has passed, 18 years since we first met in the United States. But I know that our enduring relationship on behalf of our two nations is as strong as ever. And it will be our responsibility to chart that course into the future. I’m looking forward to hearing from some of the young people in Japan when I later am privileged to be at Tokyo University, because everything we do is about their future, and we share a great hope for the kind of future that the young people of both Japan and the United States will have in a world of peace, progress, and prosperity. Thank you.
MODERATOR: Thank you very much. We would like to entertain questions from the Japanese press first. Please, (inaudible).
QUESTION: (Via interpreter) A question for Secretary Clinton. The fight against terrorism in Afghanistan, and so on, I wonder how you appreciate Japan’s contribution, and what you would hope to get from Japan? And you also signed the relocation agreement, but Okinawa prefecture is seeking the correction or modification of the air station replacement facility.
And now, in the meeting you were having with Mr. Ozawa, I wonder if you can exchange views on the Futenma station – Air Station issue.
SECRETARY CLINTON: Well, with respect to Afghanistan, we greatly appreciate the work that the Japanese Government has already undertaken in supporting coalition efforts and in contributing to the improvement of life for the people of Afghanistan. I invited the minister to have someone work with us on our policy review of Afghanistan and Pakistan, because we want to have the benefit of the experience of the Japanese involvement as we go forward to determine the approach that we will be taking. I’m very pleased that we were able to sign the agreement concerning Guam. It embodies the understandings that exist between our two nations, and we intend to move forward to implement it.
MR. WOOD: Next question will be Paul Richter of the Los Angeles Times.
QUESTION: Yes. Madame Secretary, Pakistan has reached an agreement with militants in the Northwest Territories that will halt government military offenses there in the hope of reaching peace, and I wonder if you have any concern that this might end up being a capitulation to a strategy that hasn’t worked in the past.
And Mr. Foreign Minister, I’d like to get your specific thoughts about what you’d like the U.S. to do on the abductees issue.
SECRETARY CLINTON: Well, Paul, I think that the decision that was announced by the Government of Pakistan has to be thoroughly understood, and we’re in the process of pursuing that at this time. Obviously, we believe that the activity by the extremist elements in Pakistan poses a direct threat to the Government of Pakistan, as well as to the security of the United States, Afghanistan, and a number of other nations not only in the immediate region.
So before I comment on what its meaning might be, I want to be sure that we have as good an understanding of both the Pakistan Government’s intention and the actual agreed-upon language. And that I don’t have at this time, so I want to wait until we can provide that.
FOREIGN MINISTER NAKASONE: (Via interpreter) With regard to what sort of support we would get from the United States concerning the abduction issue, well, over the years – well, or President Obama and Secretary Clinton have been saying that they are very much concerned about this abduction issue, concerned by North Korea, and that they have expressed their deep sympathies.
Having had my meeting with Secretary Clinton – and of course, North Korean issues are not just abduction issues, but there is the nuclear issue, missile issue, as well as the abduction issue, but especially with regard to the abduction issue, she expressed that she will continue to support us strongly and help us.
Following this meeting, I understand the Secretary is going to meet with the families of the abductees. So, from this fact alone, you can see that the Secretary is very much concerned about this abduction issue. And it’s not just an issue for Japan and the United States, but we also need the cooperation of other countries, Republic of Korea, et cetera, for the earliest possible resolution of the problem.
I would like to receive third question from the Japanese press, (inaudible).
QUESTION: (Via interpreter.) A question first for Foreign Minister Nakasone. From the experience of the U.S.-North Korea rapprochement under the Democratic Clinton Administration and the delisting of North Korea by the Bush Administration, there are people who are concerned here in Japan that the Obama Administration might become more easy on North Korea. And I wonder if that concern has been allayed.
Now, with regard to reconstruction contributions in Afghanistan, I wonder how you appreciate Japan’s support, and what you would expect of Japan, Secretary Clinton.
FOREIGN MINISTER NAKASONE: (Via interpreter) Well, let me first answer the question. As I have mentioned earlier, with regard to North Korea-related issues, the U.S. is very concerned. And also through the Six-Party Talks, we believe we need to work on the denuclearization of North Korea. And also, we have been – in fact, over the years, we have been addressing these issues, including denuclearization and missile and abduction issues.
Japan and U.S. should maintain close contacts and also through cooperation with South Korea, Russia, and China. And it is our intent to, through this cooperation, try to resolve these problems. We are not, therefore, concerned that the U.S. policy vis-à-vis North Korea is going to change in any significant way.
And also, with regard to abduction issue, as was mentioned, we can count on further cooperation by the United States. So we would count on that sort of cooperation, and make remaining close contacts and coordination with the United States.
SECRETARY CLINTON: Well, let me underscore the commitment that the United States has to the denuclearization of North Korea, and to the prevention of further proliferation by the North Koreans. This is a matter of great concern. We discussed it in-depth today. And the Six-Party Talks are the framework that we believe is best positioned to make progress on our goals with respect to North Korea.
The abductee issue is part of the Six-Party Talks, and we believe it should be, because it is more likely to yield to progress as part of a comprehensive engagement with North Korea. And I would underscore that the North Koreans should in no way be mistaken. President Obama, on his Inauguration, during his address, made it clear that the United States will reach out a hand to those with whom we have differences so long as they unclench their fists. But the decision as to whether North Korea will cooperate in the Six-Party Talks, end provocative language and actions, is up to them. And we are watching very closely.
I have said on several occasions that if North Korea abides by the obligations it has already entered into and verifiably and completely eliminates its nuclear program, then there will be a reciprocal response, certainly from the United States: a chance to normalize relations, to enter into a peace treaty rather than an armistice, and to expect assistance for the people of North Korea. So it is truly up to the North Koreans. But in the meantime, those of us who are parties to the Six-Party Talks will be coordinating and working together to renew the vigorous outreach that we want to have in order to build on what has already occurred.
I want to express deeply the appreciation to Japan for the reconstruction assistance that has already been provided in Afghanistan. Schools have been built. Children are going to school that would not otherwise have been able to do so without the generosity of the Japanese people. There will be a new airline terminal opening up. And it is, again, a tangible sign of the willingness by the Japanese people to try to help the people of Afghanistan, and there are many other examples. So we are very, very grateful, Mr. Minister.
MR. WOOD: The next question will be from Indira Lakshmanan from Bloomberg News Service.
QUESTION: Secretary Clinton, was it a mistake for the Bush Administration to remove North Korea from the list of state sponsors of terrorism? And what can you do now to pressure the North Korean Government on the Japanese abductee issue?
And Foreign Minister Nakasone, how responsible is the U.S. for the financial crisis that threw your own economy into the worst contraction in the last quarter in 35 years? And what do you want the U.S. to do to address the effects of the financial crisis on Japan, and is your own stimulus package insufficient? Thank you.
SECRETARY CLINTON: A lot of questions, Mr. Minister. (Laughter.)
I’m not going to go into an analysis of the past. We have inherited a set of challenges that we are going to address, and one of those is the fact that in the last eight years, the North Koreans have obtained the capacity to, as we expect from the information available to us, make nuclear weapons through its reprocessing of plutonium.
Now if we could turn the clock back, we would not have let that occur. It is, unfortunately, much easier to obtain the fissile material necessary through the reprocessing of plutonium than through the process of highly enriching uranium. But we are where we are. And what we are underscoring is the obligations that North Korea entered into in 2007. And we expect them to continue on that path. Now, we know that the work ahead of us is not easy. People have acted in good faith trying to determine the best way forward. We will be looking at where we are today and determining what is the best path to take now.
Our goal remains the same: a denuclearized North Korea with the kind of complete and verifiable inspections that will put to rest questions about whether or not they have the capacity to make nuclear weapons. In addition, we wish to end the proliferation that has emanated from North Korea. So those are our goals. They’re goals that we share with our Japanese friends, and it is what we will pursue in the Six-Party Talk framework.
FOREIGN MINISTER NAKASONE: (Via interpreter) Well, the question for me – I think there were two points – one is how we work on North Korea. And the second point was our views on U.S. stimulus policy, or package.
First, on North Korea: U.S. and North Korea relations unfortunately have failed to make progress. On the abduction issue, through the Japan-North Korea consultations on August the 12th, North Korea agreed to establish an authoritative committee on reinvestigation, that they will establish that committee early on and redo the investigation. And in response of that, Japan will lift sanctions –in other words, allow the resumption of charter flights, and also allow the resumption of people-to-people exchanges. So we entered into that mutual commitment.
In September we had a new cabinet. Yet I think if they wanted to see – make sure what the new administration’s policy will be on this matter, but Prime Minister Aso, as well as I, myself, in Diet queries have expressed that our policy will remain the same as in the past. Once North Korea resumes reinvestigation, we are ready to lift sanctions. So we have been making that point time and again.
For more than 30 years, they have not met their families. The abductees and the families are waiting for the earliest return of the abductees. So Japan would like to resolve this issue as soon as possible, and we are working on that with that intent. And yet the reality is what I’ve said just now. So with the cooperation of other countries concerned, we would like to do our best to resolve this problem as early as possible.
On the economic question, in November last year, there was a G-20 in Washington, D.C, and then there was APEC meetings, and then in April, there will be the London summit on the financial crisis. Now this is a global financial and economic crisis, and therefore, all economic powers will need to cooperate with each other, and try to resolve the issue in a concerted manner.
But above all, the largest economy in the world, the United States, has passed a relevant bill in the Congress, which accompanies large-scale spending and tax cuts. And I think this is most meaningful.
Japan today, following the supplementary budget, is deliberating on next fiscal year’s budget. And I think each country needs to work to improve its real economy. I think that is important for our recovery.
Well, thank you very much. With this, we would like to conclude this joint press conference. Thank you very much.
# # #
PRN: 2009/T1-3
Secretary of State Hillary Rodham Clinton With Japanese Foreign Minister Hirofumi Nakasone
Tokyo, Japan, February 17, 2009
FOREIGN MINISTER NAKASONE: (Via interpreter) A while ago, I had a meeting with Secretary of State Hillary Rodham Clinton and myself, and I think we had a very good meeting, and let me discuss the content of that meeting. I told her that I welcomed the fact that she chose Japan as the destination for her first overseas trip as Secretary of State, because that is an indication that Secretary Clinton and the U.S. Administration attaches importance to Japan and the Japan-U.S. relations.
At the Senate hearings, the Secretary mentioned that the Japan-U.S. alliance is the cornerstone of U.S. policy and for the peace and security of the Asia-Pacific region - that this alliance is indispensible for that. And I certainly agree that this is very important, the alliance is very important, so I couldn’t agree more, that being our relations. But also, globally, as we face various challenges, I believe we have to further step up Japan-U.S. alliance, and we agreed on that. In the meeting, as a foreign leader to be invited to the White House by the U.S. President, President Obama – as you conveyed to us, an invitation by President Obama to invite Prime Minister Aso on the 24th of February, that the Japanese Foreign Minister will be the first foreign leader to be invited – again, a reflection of the importance of Japan-U.S. relationship that we most welcome this.
Prime Minister Aso very gladly accepts this invitation and would like to visit the United States with the consent of (inaudible). And through Japan-U.S. cooperation, we would like to make the necessary preparations. This early bilateral summit meeting, I believe, will indicate to the entire world that the first and the second economic powers in the world will together address the financial and economic difficulties that are confronting the world.
We too see instabilities in the Asia-Pacific region, and Secretary Clinton expressed the U.S. commitment to the defense of Japan, including nuclear deterrents, and we welcome this. With regard to the realignment of U.S. forces, we agreed that we will steadily implement this realignment on the basis of a roadmap from the viewpoint of alleviating burdens on Okinawa and local communities while maintaining deterrents. The Guam Agreement we signed is a reflection of that firm commitment of the two countries vis-à-vis the realignment of U.S. forces in Japan. We agreed to aim at building an affluent, stable, and open East Asian region, and in that, we shared the hope that China will play a constructive role in the international community.
With regard to the North Korean issue, we agreed on the importance of resolving, in a comprehensive manner, the abduction issue, nuclear, and missile and other pending issues. And we also agreed to further step up Japan-U.S. coordination and Japan, U.S., and South Korea coordination at the Six-Party Talks towards the realization of complete denuclearization of the peninsula. And we also agreed that our two countries will further step up our efforts with regard to Afghanistan and Pakistan, because the stabilization of Afghanistan and Pakistan is a challenge for the entire international community. I also proposed our preparedness to host a Pakistan support conference, and towards this realization, I meant that we agreed that we will step up cooperation between our two countries, as well as consult with other countries and institutions concerned.
Now, the international community today is faced with numerous difficulties and challenges such as climate change and energy, financial and global economic issues, nuclear disarmament and nonproliferation, development and healthcare in Africa, global – other global challenges including UN Security Council reform as well as international situations such as the Middle East peace, counter piracy measures off Somalia, et cetera. And we agreed to further strengthen our partnership in addressing these issues.
As I mentioned, we had a very good meeting and we agreed to further step up the information exchange and policy coordination on strategically important challenges. And especially between I, myself, and Secretary Clinton, we agreed to get in touch and consult with each other at any time by phone and other means, even when there is no specific agenda or issue. Thank you.
MODERATOR: Thank you very much. Secretary Clinton, please.
SECRETARY CLINTON: Thank you very much, Foreign Minister Nakasone. I first met the foreign minister 18 years ago, and so it was a great pleasure to renew our acquaintances in this new setting. And I thank you for your hospitality, and for the broad-ranging discussion that we had today.
The alliance between the United States and Japan is a cornerstone of our foreign policy. And working together to deal with the multitude of issues that affect not only Asia, but the entire world, is a high priority of the Obama Administration. I was very pleased to extend an invitation on behalf of President Obama to welcome Prime Minister Aso to Washington, D.C. on February 24th. This will be the first foreign leader visit that President Obama will be receiving at the White House.
We have just signed the Guam International Agreement on behalf of our two nations. This agreement reflects the commitment we have to modernize our military posture in the Pacific. It reinforces the core of our alliance, the mission to ensure the defense of Japan against attack and to deter any attack by all necessary means. It enshrines our two nations’ shared contributions in carrying out the realignment of our forces and the relocation of marines from Okinawa to Guam.
This is one more example of the strong and vibrant alliance that we enjoy. Mr. Nakasone and I ranged across the world. Of course, there are matters that we are concerned about on a bilateral basis. But equally, we are concerned about what we can do together to address the challenges and seize the opportunities of this time. We addressed the economic challenges facing our two countries and the world as a whole, which demand a coordinated global response. As the first and second largest economies in the world, we understand those responsibilities, and we also know the importance of making sure our economies work on behalf of our own citizens. So it is a great responsibility that both Japan and the United States assume. Japan has been a leader in laying the groundwork for a clean energy future, and we look forward to working together on a bilateral and multilateral basis on energy and climate change.
With respect to North Korea, we discussed the importance of very close coordination in our approach to the Six-Party Talks. We must advance our efforts to secure the complete and verifiable denuclearization of North Korea. The possible missile launch that North Korea is talking about would be very unhelpful in moving our relationship forward. I know the abductee issue is of great concern here in Japan, and I will be meeting with families later today to express my personal sympathy and our concern about what happened to those who were abducted.
I want to commend Japan because this nation has been a leader in promoting stability and prosperity in Pakistan and Afghanistan. The minister shared with me in very particular detail the amount of work and the financial contributions that Japan has undertaken, and I pledged high-level U.S. participation in the Pakistan donors conference that will be held later. I also want to thank Japan and the Japanese people for your support in Operation Enduring Freedom. It’s been very important for our overall success of the coalition mission in Afghanistan. I also appreciate Japan’s dispatch of two naval vessels to the Gulf of Aden to help fight this scourge of piracy.
There is so much that we discussed that it is hard to do it justice in this short review. But let me underscore how closely we will be working together. We’ve already discussed how we will have our ministries – the Foreign Ministry and the State Department – work on economic, climate change, clean energy, and other issues of great responsibility and importance.
I am delighted to be back in Japan. I looked at that old picture of us, Minister, and a lot of time has passed, 18 years since we first met in the United States. But I know that our enduring relationship on behalf of our two nations is as strong as ever. And it will be our responsibility to chart that course into the future. I’m looking forward to hearing from some of the young people in Japan when I later am privileged to be at Tokyo University, because everything we do is about their future, and we share a great hope for the kind of future that the young people of both Japan and the United States will have in a world of peace, progress, and prosperity. Thank you.
MODERATOR: Thank you very much. We would like to entertain questions from the Japanese press first. Please, (inaudible).
QUESTION: (Via interpreter) A question for Secretary Clinton. The fight against terrorism in Afghanistan, and so on, I wonder how you appreciate Japan’s contribution, and what you would hope to get from Japan? And you also signed the relocation agreement, but Okinawa prefecture is seeking the correction or modification of the air station replacement facility.
And now, in the meeting you were having with Mr. Ozawa, I wonder if you can exchange views on the Futenma station – Air Station issue.
SECRETARY CLINTON: Well, with respect to Afghanistan, we greatly appreciate the work that the Japanese Government has already undertaken in supporting coalition efforts and in contributing to the improvement of life for the people of Afghanistan. I invited the minister to have someone work with us on our policy review of Afghanistan and Pakistan, because we want to have the benefit of the experience of the Japanese involvement as we go forward to determine the approach that we will be taking. I’m very pleased that we were able to sign the agreement concerning Guam. It embodies the understandings that exist between our two nations, and we intend to move forward to implement it.
MR. WOOD: Next question will be Paul Richter of the Los Angeles Times.
QUESTION: Yes. Madame Secretary, Pakistan has reached an agreement with militants in the Northwest Territories that will halt government military offenses there in the hope of reaching peace, and I wonder if you have any concern that this might end up being a capitulation to a strategy that hasn’t worked in the past.
And Mr. Foreign Minister, I’d like to get your specific thoughts about what you’d like the U.S. to do on the abductees issue.
SECRETARY CLINTON: Well, Paul, I think that the decision that was announced by the Government of Pakistan has to be thoroughly understood, and we’re in the process of pursuing that at this time. Obviously, we believe that the activity by the extremist elements in Pakistan poses a direct threat to the Government of Pakistan, as well as to the security of the United States, Afghanistan, and a number of other nations not only in the immediate region.
So before I comment on what its meaning might be, I want to be sure that we have as good an understanding of both the Pakistan Government’s intention and the actual agreed-upon language. And that I don’t have at this time, so I want to wait until we can provide that.
FOREIGN MINISTER NAKASONE: (Via interpreter) With regard to what sort of support we would get from the United States concerning the abduction issue, well, over the years – well, or President Obama and Secretary Clinton have been saying that they are very much concerned about this abduction issue, concerned by North Korea, and that they have expressed their deep sympathies.
Having had my meeting with Secretary Clinton – and of course, North Korean issues are not just abduction issues, but there is the nuclear issue, missile issue, as well as the abduction issue, but especially with regard to the abduction issue, she expressed that she will continue to support us strongly and help us.
Following this meeting, I understand the Secretary is going to meet with the families of the abductees. So, from this fact alone, you can see that the Secretary is very much concerned about this abduction issue. And it’s not just an issue for Japan and the United States, but we also need the cooperation of other countries, Republic of Korea, et cetera, for the earliest possible resolution of the problem.
I would like to receive third question from the Japanese press, (inaudible).
QUESTION: (Via interpreter.) A question first for Foreign Minister Nakasone. From the experience of the U.S.-North Korea rapprochement under the Democratic Clinton Administration and the delisting of North Korea by the Bush Administration, there are people who are concerned here in Japan that the Obama Administration might become more easy on North Korea. And I wonder if that concern has been allayed.
Now, with regard to reconstruction contributions in Afghanistan, I wonder how you appreciate Japan’s support, and what you would expect of Japan, Secretary Clinton.
FOREIGN MINISTER NAKASONE: (Via interpreter) Well, let me first answer the question. As I have mentioned earlier, with regard to North Korea-related issues, the U.S. is very concerned. And also through the Six-Party Talks, we believe we need to work on the denuclearization of North Korea. And also, we have been – in fact, over the years, we have been addressing these issues, including denuclearization and missile and abduction issues.
Japan and U.S. should maintain close contacts and also through cooperation with South Korea, Russia, and China. And it is our intent to, through this cooperation, try to resolve these problems. We are not, therefore, concerned that the U.S. policy vis-à-vis North Korea is going to change in any significant way.
And also, with regard to abduction issue, as was mentioned, we can count on further cooperation by the United States. So we would count on that sort of cooperation, and make remaining close contacts and coordination with the United States.
SECRETARY CLINTON: Well, let me underscore the commitment that the United States has to the denuclearization of North Korea, and to the prevention of further proliferation by the North Koreans. This is a matter of great concern. We discussed it in-depth today. And the Six-Party Talks are the framework that we believe is best positioned to make progress on our goals with respect to North Korea.
The abductee issue is part of the Six-Party Talks, and we believe it should be, because it is more likely to yield to progress as part of a comprehensive engagement with North Korea. And I would underscore that the North Koreans should in no way be mistaken. President Obama, on his Inauguration, during his address, made it clear that the United States will reach out a hand to those with whom we have differences so long as they unclench their fists. But the decision as to whether North Korea will cooperate in the Six-Party Talks, end provocative language and actions, is up to them. And we are watching very closely.
I have said on several occasions that if North Korea abides by the obligations it has already entered into and verifiably and completely eliminates its nuclear program, then there will be a reciprocal response, certainly from the United States: a chance to normalize relations, to enter into a peace treaty rather than an armistice, and to expect assistance for the people of North Korea. So it is truly up to the North Koreans. But in the meantime, those of us who are parties to the Six-Party Talks will be coordinating and working together to renew the vigorous outreach that we want to have in order to build on what has already occurred.
I want to express deeply the appreciation to Japan for the reconstruction assistance that has already been provided in Afghanistan. Schools have been built. Children are going to school that would not otherwise have been able to do so without the generosity of the Japanese people. There will be a new airline terminal opening up. And it is, again, a tangible sign of the willingness by the Japanese people to try to help the people of Afghanistan, and there are many other examples. So we are very, very grateful, Mr. Minister.
MR. WOOD: The next question will be from Indira Lakshmanan from Bloomberg News Service.
QUESTION: Secretary Clinton, was it a mistake for the Bush Administration to remove North Korea from the list of state sponsors of terrorism? And what can you do now to pressure the North Korean Government on the Japanese abductee issue?
And Foreign Minister Nakasone, how responsible is the U.S. for the financial crisis that threw your own economy into the worst contraction in the last quarter in 35 years? And what do you want the U.S. to do to address the effects of the financial crisis on Japan, and is your own stimulus package insufficient? Thank you.
SECRETARY CLINTON: A lot of questions, Mr. Minister. (Laughter.)
I’m not going to go into an analysis of the past. We have inherited a set of challenges that we are going to address, and one of those is the fact that in the last eight years, the North Koreans have obtained the capacity to, as we expect from the information available to us, make nuclear weapons through its reprocessing of plutonium.
Now if we could turn the clock back, we would not have let that occur. It is, unfortunately, much easier to obtain the fissile material necessary through the reprocessing of plutonium than through the process of highly enriching uranium. But we are where we are. And what we are underscoring is the obligations that North Korea entered into in 2007. And we expect them to continue on that path. Now, we know that the work ahead of us is not easy. People have acted in good faith trying to determine the best way forward. We will be looking at where we are today and determining what is the best path to take now.
Our goal remains the same: a denuclearized North Korea with the kind of complete and verifiable inspections that will put to rest questions about whether or not they have the capacity to make nuclear weapons. In addition, we wish to end the proliferation that has emanated from North Korea. So those are our goals. They’re goals that we share with our Japanese friends, and it is what we will pursue in the Six-Party Talk framework.
FOREIGN MINISTER NAKASONE: (Via interpreter) Well, the question for me – I think there were two points – one is how we work on North Korea. And the second point was our views on U.S. stimulus policy, or package.
First, on North Korea: U.S. and North Korea relations unfortunately have failed to make progress. On the abduction issue, through the Japan-North Korea consultations on August the 12th, North Korea agreed to establish an authoritative committee on reinvestigation, that they will establish that committee early on and redo the investigation. And in response of that, Japan will lift sanctions –in other words, allow the resumption of charter flights, and also allow the resumption of people-to-people exchanges. So we entered into that mutual commitment.
In September we had a new cabinet. Yet I think if they wanted to see – make sure what the new administration’s policy will be on this matter, but Prime Minister Aso, as well as I, myself, in Diet queries have expressed that our policy will remain the same as in the past. Once North Korea resumes reinvestigation, we are ready to lift sanctions. So we have been making that point time and again.
For more than 30 years, they have not met their families. The abductees and the families are waiting for the earliest return of the abductees. So Japan would like to resolve this issue as soon as possible, and we are working on that with that intent. And yet the reality is what I’ve said just now. So with the cooperation of other countries concerned, we would like to do our best to resolve this problem as early as possible.
On the economic question, in November last year, there was a G-20 in Washington, D.C, and then there was APEC meetings, and then in April, there will be the London summit on the financial crisis. Now this is a global financial and economic crisis, and therefore, all economic powers will need to cooperate with each other, and try to resolve the issue in a concerted manner.
But above all, the largest economy in the world, the United States, has passed a relevant bill in the Congress, which accompanies large-scale spending and tax cuts. And I think this is most meaningful.
Japan today, following the supplementary budget, is deliberating on next fiscal year’s budget. And I think each country needs to work to improve its real economy. I think that is important for our recovery.
Well, thank you very much. With this, we would like to conclude this joint press conference. Thank you very much.
# # #
PRN: 2009/T1-3
Libertarian on Klein's Shock Doctrine, FDR, Lyndon Johnson, and big government
Obama's Shock Doctrine, by David Boaz
Cato, February 12, 2009
"Profound economic emergency," the president says. Failure to pass his spending plan could "turn a crisis into a catastrophe". Any delay will mean "paralysis" and "disaster". It's all out of the "shock doctrine" playbook: scare people to death and then demand that your agenda be enacted without delay.
Naomi Klein made waves two years ago with her book The Shock Doctrine, in which she claimed that conservative governments use crises to ram through free-market policies. As she put it in an interview: "The Shock Doctrine is a political strategy that the Republican right has been perfecting over the past 35 years to use for various different kinds of shocks. They could be wars, natural disasters, economic crises, anything that sends a society into a state of shock to push through what economists call 'economic shock therapy' – rapid-fire, pro-corporate policies that they couldn't get through if people weren't in a state of fear and panic."
And that's just what we're seeing today – only in reverse.
Last year the US economy was hit with one shock after another: the Bear Stearns bail-out, the Indymac collapse, the implosion of Fannie Mae and Freddie Mac, the AIG nationalisation, the biggest stock market drop ever, the $700bn Wall Street bail-out and more – all accompanied by a steady drumbeat of apocalyptic language from political leaders.
And what happened? Did the Republican administration summon up the spirit of Milton Friedman and cut government spending? Did it deregulate and privatise?
No.
It did what governments actually do in a crisis – it seized new powers over the economy. It dramatically expanded the regulatory powers of the Federal Reserve and injected a trillion dollars of inflationary credit into the banking system. It partially nationalised the biggest banks. It appropriated $700bn with which to intervene in the economy. It made General Motors and Chrysler wards of the federal government. It wrote a bail-out bill giving the secretary of the treasury extraordinary powers that could not be reviewed by courts or other government agencies.
Now the Obama administration is continuing this drive toward centralisation and government domination of the economy. And its key players are explicitly referring to heir own version of the shock doctrine. Rahm Emanuel, the White House chief of staff, said the economic crisis facing the country is "an opportunity for us". After all, he said: "You never want a serious crisis to go to waste. And this crisis provides the opportunity for us to do things that you could not do before" such as taking control of the financial, energy, information and healthcare industries.
That's just the sort of thing Naomi Klein would have us believe that free-marketers like Milton Friedman think. "Some people stockpile canned goods and water in preparation for major disasters," Klein wrote. "Friedmanites stockpile free-market ideas." But that is exactly what American left-liberals have been doing in anticipation of a Democratic administration coming to power at a time when the public might be frightened into accepting more government than it normally would. For instance, the Centre for American Progress, run by John Podesta, who was President Bill Clinton's chief of staff and President-elect Obama's transition director, has just released Change for America: A Progressive Blueprint for the 44th President.
Paul Krugman, the Bush-bashing New York Times columnist, endorsed Emanuel's enthusiasm: "Progressives hope that the Obama administration, like the New Deal, will respond to the current economic and financial crisis by creating institutions, especially a universal healthcare system, that will change the shape of American society for generations to come."
Arianna Huffington had called Klein's book "prophetic". As the Obama team began drawing up plans, she proved just how right she was, declaring: "A crisis is a terrible thing to waste. And it might be this particular crisis that will make it possible for the Obama administration to do some really innovative, bold things on healthcare, on energy independence, on all the areas that have been neglected."
None of this should surprise us. It's crazy to think that most governments will respond to a crisis by reducing their own powers and deregulating the economy, as Klein would have us believe. Political leaders naturally respond to crisis by riding in as the man on the white horse and taking control.
As Rick Perlstein, liberal historian, wrote: "The Oval Office's most effective inhabitants have always understood [that a crisis is the best opportunity to make radical change]. Franklin D Roosevelt hurled down executive orders and legislative proposals like thunderbolts during his first hundred days, hardly slowing down for another four years before his window slammed shut; Lyndon Johnson, aided by John F Kennedy's martyrdom and the landslide of 1964, legislated at such a breakneck pace his aides were in awe. Both presidents understood that there are too many choke points – our minority-enabling constitutional system, our national tendency toward individualism and our concentration of vested interests – to make change possible any other way."
Robert Higgs, the libertarian historian, is less enthusiastic. In Crisis and Leviathan, he demonstrated that government growth in the US has not been slow and steady, year in and year out. Rather, its scope and power tend to shoot up during wars and economic crises.
Occasionally, around the world, there have been instances where a crisis led to free-market reforms, such as the economic reforms in Britain and New Zealand in response to deteriorating economic conditions. Generally, though, governments seek to expand their power, and they take advantage of crises to do so. But they rarely spell their intentions out as clearly as Rahm Emanuel did.
Cato, February 12, 2009
"Profound economic emergency," the president says. Failure to pass his spending plan could "turn a crisis into a catastrophe". Any delay will mean "paralysis" and "disaster". It's all out of the "shock doctrine" playbook: scare people to death and then demand that your agenda be enacted without delay.
Naomi Klein made waves two years ago with her book The Shock Doctrine, in which she claimed that conservative governments use crises to ram through free-market policies. As she put it in an interview: "The Shock Doctrine is a political strategy that the Republican right has been perfecting over the past 35 years to use for various different kinds of shocks. They could be wars, natural disasters, economic crises, anything that sends a society into a state of shock to push through what economists call 'economic shock therapy' – rapid-fire, pro-corporate policies that they couldn't get through if people weren't in a state of fear and panic."
And that's just what we're seeing today – only in reverse.
Last year the US economy was hit with one shock after another: the Bear Stearns bail-out, the Indymac collapse, the implosion of Fannie Mae and Freddie Mac, the AIG nationalisation, the biggest stock market drop ever, the $700bn Wall Street bail-out and more – all accompanied by a steady drumbeat of apocalyptic language from political leaders.
And what happened? Did the Republican administration summon up the spirit of Milton Friedman and cut government spending? Did it deregulate and privatise?
No.
It did what governments actually do in a crisis – it seized new powers over the economy. It dramatically expanded the regulatory powers of the Federal Reserve and injected a trillion dollars of inflationary credit into the banking system. It partially nationalised the biggest banks. It appropriated $700bn with which to intervene in the economy. It made General Motors and Chrysler wards of the federal government. It wrote a bail-out bill giving the secretary of the treasury extraordinary powers that could not be reviewed by courts or other government agencies.
Now the Obama administration is continuing this drive toward centralisation and government domination of the economy. And its key players are explicitly referring to heir own version of the shock doctrine. Rahm Emanuel, the White House chief of staff, said the economic crisis facing the country is "an opportunity for us". After all, he said: "You never want a serious crisis to go to waste. And this crisis provides the opportunity for us to do things that you could not do before" such as taking control of the financial, energy, information and healthcare industries.
That's just the sort of thing Naomi Klein would have us believe that free-marketers like Milton Friedman think. "Some people stockpile canned goods and water in preparation for major disasters," Klein wrote. "Friedmanites stockpile free-market ideas." But that is exactly what American left-liberals have been doing in anticipation of a Democratic administration coming to power at a time when the public might be frightened into accepting more government than it normally would. For instance, the Centre for American Progress, run by John Podesta, who was President Bill Clinton's chief of staff and President-elect Obama's transition director, has just released Change for America: A Progressive Blueprint for the 44th President.
Paul Krugman, the Bush-bashing New York Times columnist, endorsed Emanuel's enthusiasm: "Progressives hope that the Obama administration, like the New Deal, will respond to the current economic and financial crisis by creating institutions, especially a universal healthcare system, that will change the shape of American society for generations to come."
Arianna Huffington had called Klein's book "prophetic". As the Obama team began drawing up plans, she proved just how right she was, declaring: "A crisis is a terrible thing to waste. And it might be this particular crisis that will make it possible for the Obama administration to do some really innovative, bold things on healthcare, on energy independence, on all the areas that have been neglected."
None of this should surprise us. It's crazy to think that most governments will respond to a crisis by reducing their own powers and deregulating the economy, as Klein would have us believe. Political leaders naturally respond to crisis by riding in as the man on the white horse and taking control.
As Rick Perlstein, liberal historian, wrote: "The Oval Office's most effective inhabitants have always understood [that a crisis is the best opportunity to make radical change]. Franklin D Roosevelt hurled down executive orders and legislative proposals like thunderbolts during his first hundred days, hardly slowing down for another four years before his window slammed shut; Lyndon Johnson, aided by John F Kennedy's martyrdom and the landslide of 1964, legislated at such a breakneck pace his aides were in awe. Both presidents understood that there are too many choke points – our minority-enabling constitutional system, our national tendency toward individualism and our concentration of vested interests – to make change possible any other way."
Robert Higgs, the libertarian historian, is less enthusiastic. In Crisis and Leviathan, he demonstrated that government growth in the US has not been slow and steady, year in and year out. Rather, its scope and power tend to shoot up during wars and economic crises.
Occasionally, around the world, there have been instances where a crisis led to free-market reforms, such as the economic reforms in Britain and New Zealand in response to deteriorating economic conditions. Generally, though, governments seek to expand their power, and they take advantage of crises to do so. But they rarely spell their intentions out as clearly as Rahm Emanuel did.
U.S. Congratulates Kosovo on One Year of Independence
U.S. Congratulates Kosovo on One Year of Independence. By Gordon Duguid, Acting Deputy Department Spokesman, Office of the Spokesman
US State Dept, Public Affairs, Washington, DC, February 17, 2009
The United States congratulates the people of the Republic of Kosovo as they celebrate the first anniversary of Kosovo’s historic Declaration of Independence. One year ago today Kosovo became a sovereign and independent state.
Over the past year, Kosovo has moved quickly to build democratic institutions and to implement the principles of UN Special Envoy and Nobel Laureate Martti Ahtisaari’s Plan, including strong constitutional protections for minority rights and religious and cultural heritage. Fifty-four countries from every continent have recognized Kosovo, including an overwhelming majority of EU, NATO and OSCE members. As an independent state, Kosovo has welcomed and is coordinating effectively with the EU-led EULEX rule of law mission, NATO, the EU-led International Civilian Office and other representatives of the international community, to build a sound and sustainable economy, a single and transparent rule of law system, and other institutions of a modern, multi-ethnic, European democracy.
The United States commends the efforts of the people and Government of Kosovo to promote stability in the region and work cooperatively across ethnic and religious lines to develop a secure and prosperous future. The Secretary of State looks forward to welcoming the President and Prime Minister of Kosovo to the State Department on February 26 to reaffirm our pledge of friendship and support for Kosovo.
PRN: 133
US State Dept, Public Affairs, Washington, DC, February 17, 2009
The United States congratulates the people of the Republic of Kosovo as they celebrate the first anniversary of Kosovo’s historic Declaration of Independence. One year ago today Kosovo became a sovereign and independent state.
Over the past year, Kosovo has moved quickly to build democratic institutions and to implement the principles of UN Special Envoy and Nobel Laureate Martti Ahtisaari’s Plan, including strong constitutional protections for minority rights and religious and cultural heritage. Fifty-four countries from every continent have recognized Kosovo, including an overwhelming majority of EU, NATO and OSCE members. As an independent state, Kosovo has welcomed and is coordinating effectively with the EU-led EULEX rule of law mission, NATO, the EU-led International Civilian Office and other representatives of the international community, to build a sound and sustainable economy, a single and transparent rule of law system, and other institutions of a modern, multi-ethnic, European democracy.
The United States commends the efforts of the people and Government of Kosovo to promote stability in the region and work cooperatively across ethnic and religious lines to develop a secure and prosperous future. The Secretary of State looks forward to welcoming the President and Prime Minister of Kosovo to the State Department on February 26 to reaffirm our pledge of friendship and support for Kosovo.
PRN: 133
Americans are losing faith in the fairness and wisdom of economic policy
Don't Believe the Stimulus Scaremongers. By Amar Bhidé
Americans are losing faith in the fairness and wisdom of economic policy.
WSJ, Feb 17, 2009
Our ignorance of what causes economic ailments -- and how to treat them -- is profound. Downturns and financial crises are not regular occurrences, and because economies are always evolving, they tend to be idiosyncratic, singular events.
After decades of diligent research, scholars still argue about what caused the Great Depression -- excessive consumption, investment, stock-market speculation and borrowing in the Roaring '20s, Smoot-Hawley protectionism, or excessively tight monetary policy? Nor do we know how we got out of it: Some credit the New Deal while others say that that FDR's policies prolonged the Depression.
Similarly, there is no consensus about why huge public-spending projects and a zero-interest-rate policy failed to pull the Japanese out of a prolonged slump.
The economic theory behind the nearly $800 billion stimulus package may be cloaked in precise mathematics but is ultimately based on John Maynard Keynes's speculative conjecture about human nature. Keynes claimed that people cope with uncertainty by assuming the future will be like the present. This predisposition exacerbates economic downturns and should be countered by a sharp fiscal stimulus that reignites the "animal spirits" of consumers and investors.
But history suggests that dark moods do change on their own. The depressions and panics of the 19th century ended without any fiscal stimulus to speak of, as did the gloom that followed the stock-market crash of 1987. Countercyclical fiscal policy may or may not have shortened other recessions; there are too few data points and too much difference in other conditions to really know.
Unfounded assertions that calamitous consequences make opposition to the rapid enactment of a large stimulus package "inexcusable and irresponsible" are likely to offset any placebo effect the package might have. Shouting "fire" in a crowded theater, as our last Treasury secretary did to peddle the Troubled Asset Relief Program (TARP), didn't restore financial confidence. Similarly, a president elected on a platform of hope isn't likely to spark shopping sprees by painting a bleak picture of our prospects.
Stimulus therapy poses great risks. Years of profligacy have put the federal government in a precarious financial position. We don't have the domestic savings to finance much larger budget deficits. Unlike the Japanese, Americans don't have much stashed away under their mattresses: We are reliant on capital inflows from abroad. An insurrection by bond vigilantes or the long-predicted run on the dollar triggered by fears of a flood of new government debt is a real possibility.
Large increases in public spending usurp precious resources from supporting the innovations necessary for our long-term prosperity. Everyone isn't a pessimist in hard times: The optimism of many entrepreneurs and consumers fueled the takeoff of personal computers during the deep recession of the early 1980s. Amazon has just launched the Kindle 2; its (equally pricey) predecessor sold out last November amid the Wall Street meltdown. But competing with expanded public spending makes it harder for innovations like the personal computer and the Kindle to secure the resources they need.
Hastily enacted programs jeopardize crucial beliefs in the value of productive enterprise. Americans are unusually idealistic and optimistic. We believe that we can all get ahead through innovations because the game isn't stacked in favor of the powerful. This belief encourages the pursuit of initiatives that contribute to the common good rather than the pursuit of favors and rents. It also discourages the politics of envy. We are less prone to begrudge our neighbors' fortune if we think it was fairly earned and that it has not come at our expense -- indeed, that we too have derived some benefit.
To sustain these beliefs, Americans must see their government play the role of an even-handed referee rather than be a dispenser of rewards or even a judge of economic merit or contribution. The panicky response to the financial crisis, where openness and due process have been sacrificed to speed, has unfortunately undermined our faith. Bailing out AIG while letting Lehman fail -- behind closed doors -- has raised suspicions of cronyism. The Fed has refused to reveal to whom it has lent trillions. Outrage at the perceived use of TARP funds to pay bonuses is widespread.
The Obama administration assures us that it will only fund "worthwhile" and "shovel-ready" projects. But choices will have to be made by harried and fallible humans; witness the nominees who failed to calculate their taxes properly. What's more, subjecting projects to scrutiny conflicts with a strategy of sparking the economy with a jolt of new spending. We may get the worst of all worlds -- savvy and well-connected operators get funding while good projects languish.
The alternative isn't, as the stimulus scaremongers suggest, to turn our backs to the downturn. We do have mechanisms in place to deal with economic distress. Public aid for the indigent has been modernized and expanded to provide a range of unemployment and income-maintenance schemes. Bankruptcy courts and laws give individuals another chance and facilitate the orderly reorganization or liquidation of troubled businesses. The FDIC has been dealing with bank failures for more than 70 years, and the Federal Reserve has been empowered to provide liquidity in the face of financial panics for even longer.
These mechanisms are not perfect or to everyone's taste -- liberals and conservatives obviously disagree about their scope and generosity -- but they have been forged through a much more deliberate, open process than the stimulus bill or TARP. Legislators, the executive branch, judges, competing interest groups and the press have all had their say in their initial design and evolution. As a result there may be occasional mistakes and fraud but not widespread favoritism.
If the current crisis is indeed unprecedented, why not increase the funding and resources to battle-tested measures? When earthquakes or tsunamis strike, we rush in more doctors and supplies. We don't use untested medical procedures or set up new relief agencies on the fly.
Increasing unemployment insurance, bankruptcy judges, and the FDIC's capital and staff would certainly cost money, but these targeted expenditures would be much smaller than grandiose measures to revive overall confidence. And while the cautious approach might lead to a slower recovery, we wouldn't jeopardize the venturesome, pluralistic foundations of our long-run prosperity.
Mr. Bhidé is a professor at Columbia Business School and author of "The Venturesome Economy" (Princeton University Press, 2008).
Americans are losing faith in the fairness and wisdom of economic policy.
WSJ, Feb 17, 2009
Our ignorance of what causes economic ailments -- and how to treat them -- is profound. Downturns and financial crises are not regular occurrences, and because economies are always evolving, they tend to be idiosyncratic, singular events.
After decades of diligent research, scholars still argue about what caused the Great Depression -- excessive consumption, investment, stock-market speculation and borrowing in the Roaring '20s, Smoot-Hawley protectionism, or excessively tight monetary policy? Nor do we know how we got out of it: Some credit the New Deal while others say that that FDR's policies prolonged the Depression.
Similarly, there is no consensus about why huge public-spending projects and a zero-interest-rate policy failed to pull the Japanese out of a prolonged slump.
The economic theory behind the nearly $800 billion stimulus package may be cloaked in precise mathematics but is ultimately based on John Maynard Keynes's speculative conjecture about human nature. Keynes claimed that people cope with uncertainty by assuming the future will be like the present. This predisposition exacerbates economic downturns and should be countered by a sharp fiscal stimulus that reignites the "animal spirits" of consumers and investors.
But history suggests that dark moods do change on their own. The depressions and panics of the 19th century ended without any fiscal stimulus to speak of, as did the gloom that followed the stock-market crash of 1987. Countercyclical fiscal policy may or may not have shortened other recessions; there are too few data points and too much difference in other conditions to really know.
Unfounded assertions that calamitous consequences make opposition to the rapid enactment of a large stimulus package "inexcusable and irresponsible" are likely to offset any placebo effect the package might have. Shouting "fire" in a crowded theater, as our last Treasury secretary did to peddle the Troubled Asset Relief Program (TARP), didn't restore financial confidence. Similarly, a president elected on a platform of hope isn't likely to spark shopping sprees by painting a bleak picture of our prospects.
Stimulus therapy poses great risks. Years of profligacy have put the federal government in a precarious financial position. We don't have the domestic savings to finance much larger budget deficits. Unlike the Japanese, Americans don't have much stashed away under their mattresses: We are reliant on capital inflows from abroad. An insurrection by bond vigilantes or the long-predicted run on the dollar triggered by fears of a flood of new government debt is a real possibility.
Large increases in public spending usurp precious resources from supporting the innovations necessary for our long-term prosperity. Everyone isn't a pessimist in hard times: The optimism of many entrepreneurs and consumers fueled the takeoff of personal computers during the deep recession of the early 1980s. Amazon has just launched the Kindle 2; its (equally pricey) predecessor sold out last November amid the Wall Street meltdown. But competing with expanded public spending makes it harder for innovations like the personal computer and the Kindle to secure the resources they need.
Hastily enacted programs jeopardize crucial beliefs in the value of productive enterprise. Americans are unusually idealistic and optimistic. We believe that we can all get ahead through innovations because the game isn't stacked in favor of the powerful. This belief encourages the pursuit of initiatives that contribute to the common good rather than the pursuit of favors and rents. It also discourages the politics of envy. We are less prone to begrudge our neighbors' fortune if we think it was fairly earned and that it has not come at our expense -- indeed, that we too have derived some benefit.
To sustain these beliefs, Americans must see their government play the role of an even-handed referee rather than be a dispenser of rewards or even a judge of economic merit or contribution. The panicky response to the financial crisis, where openness and due process have been sacrificed to speed, has unfortunately undermined our faith. Bailing out AIG while letting Lehman fail -- behind closed doors -- has raised suspicions of cronyism. The Fed has refused to reveal to whom it has lent trillions. Outrage at the perceived use of TARP funds to pay bonuses is widespread.
The Obama administration assures us that it will only fund "worthwhile" and "shovel-ready" projects. But choices will have to be made by harried and fallible humans; witness the nominees who failed to calculate their taxes properly. What's more, subjecting projects to scrutiny conflicts with a strategy of sparking the economy with a jolt of new spending. We may get the worst of all worlds -- savvy and well-connected operators get funding while good projects languish.
The alternative isn't, as the stimulus scaremongers suggest, to turn our backs to the downturn. We do have mechanisms in place to deal with economic distress. Public aid for the indigent has been modernized and expanded to provide a range of unemployment and income-maintenance schemes. Bankruptcy courts and laws give individuals another chance and facilitate the orderly reorganization or liquidation of troubled businesses. The FDIC has been dealing with bank failures for more than 70 years, and the Federal Reserve has been empowered to provide liquidity in the face of financial panics for even longer.
These mechanisms are not perfect or to everyone's taste -- liberals and conservatives obviously disagree about their scope and generosity -- but they have been forged through a much more deliberate, open process than the stimulus bill or TARP. Legislators, the executive branch, judges, competing interest groups and the press have all had their say in their initial design and evolution. As a result there may be occasional mistakes and fraud but not widespread favoritism.
If the current crisis is indeed unprecedented, why not increase the funding and resources to battle-tested measures? When earthquakes or tsunamis strike, we rush in more doctors and supplies. We don't use untested medical procedures or set up new relief agencies on the fly.
Increasing unemployment insurance, bankruptcy judges, and the FDIC's capital and staff would certainly cost money, but these targeted expenditures would be much smaller than grandiose measures to revive overall confidence. And while the cautious approach might lead to a slower recovery, we wouldn't jeopardize the venturesome, pluralistic foundations of our long-run prosperity.
Mr. Bhidé is a professor at Columbia Business School and author of "The Venturesome Economy" (Princeton University Press, 2008).
Japan's Downturn Is Bad News for the World
Japan's Downturn Is Bad News for the World. By Michael Auslin
The U.S. can't count on Japanese savers.
WSJ, Feb 17, 2009
As Hillary Clinton visits Tokyo for her first trip as secretary of state, she will find a country in the midst of its worst recession in 50 years. Japan's economy is contracting across the board: Exports have cratered, industrial production is on track to plummet 30% from a year ago, and the Japanese government projects that GDP will drop 12% from last year. The world's second largest economy, Japan is also the largest holder of U.S. Treasury bonds.
Recently, many economists and scholars in the U.S. have been looking backward to Japan's banking disaster of the 1990s, hoping to learn lessons for America's current crisis. Instead, they should be looking ahead to what might occur if Japan goes into a full-fledged depression.
If Japan's economy collapses, supply chains across the globe will be affected and numerous economies will face severe disruptions, most notably China's. China is currently Japan's largest import provider, and the Japanese slowdown is creating tremendous pressure on Chinese factories. Just last week, the Chinese government announced that 20 million rural migrants had lost their jobs.
Closer to home, Japan may also start running out of surplus cash, which it has used to purchase U.S. securities for years. For the first time in a generation, Tokyo is running trade deficits -- five months in a row so far.
The political and social fallout from a Japanese depression also would be devastating. In the face of economic instability, other Asian nations may feel forced to turn to more centralized -- even authoritarian -- control to try to limit the damage. Free-trade agreements may be rolled back and political freedom curtailed. Social stability in emerging, middle-class societies will be severely tested, and newly democratized states may find it impossible to maintain power. Progress toward a more open, integrated Asia is at risk, with the potential for increased political tension in the world's most heavily armed region.
This is the backdrop upon which the U.S. government is set to expand the national debt by a trillion dollars or more. Without massive debt purchases by Japan and China, the U.S. may not be able to finance the cost of the stimulus package, creating a trapdoor under the U.S. economy.
So far, Japan's politicians have been unable to find a way out of this mess. While another $53 billion stimulus package works its way through parliament, fully one-third of Japan's prefectures have instituted emergency economic stabilization measures.
But the big issues elude short-term solutions. Though Japan's leaders are currently cutting back on military expenditures and domestic services, they're unable to agree on budgets or reform plans. They have no strategic road map for reining in the yen, opening up to international competition, or taking an economic leadership role in Asia that will promote growth and strengthen democratic, market-oriented societies.
Things don't have to turn out this way. If Japan's leaders can craft a monetary policy that ends Japan's deflationary spiral by carefully expanding the money supply, recommit to structural reform, and halt the yen's rise, they can jump-start economic growth. They should also ignore the powerful domestic agriculture lobby and embrace a robust free-trade agenda, which would help them as well as the rest of Asia.
Mrs. Clinton's visit cannot be a simple photo opportunity. This trip needs to result in a clear U.S.-Japan approach to restoring confidence and rebuilding a robust and open international system. Without action, Japan and America may go over the cliff together, dragging Asia and the world down with them.
Mr. Auslin is a resident scholar at the American Enterprise Institute.
The U.S. can't count on Japanese savers.
WSJ, Feb 17, 2009
As Hillary Clinton visits Tokyo for her first trip as secretary of state, she will find a country in the midst of its worst recession in 50 years. Japan's economy is contracting across the board: Exports have cratered, industrial production is on track to plummet 30% from a year ago, and the Japanese government projects that GDP will drop 12% from last year. The world's second largest economy, Japan is also the largest holder of U.S. Treasury bonds.
Recently, many economists and scholars in the U.S. have been looking backward to Japan's banking disaster of the 1990s, hoping to learn lessons for America's current crisis. Instead, they should be looking ahead to what might occur if Japan goes into a full-fledged depression.
If Japan's economy collapses, supply chains across the globe will be affected and numerous economies will face severe disruptions, most notably China's. China is currently Japan's largest import provider, and the Japanese slowdown is creating tremendous pressure on Chinese factories. Just last week, the Chinese government announced that 20 million rural migrants had lost their jobs.
Closer to home, Japan may also start running out of surplus cash, which it has used to purchase U.S. securities for years. For the first time in a generation, Tokyo is running trade deficits -- five months in a row so far.
The political and social fallout from a Japanese depression also would be devastating. In the face of economic instability, other Asian nations may feel forced to turn to more centralized -- even authoritarian -- control to try to limit the damage. Free-trade agreements may be rolled back and political freedom curtailed. Social stability in emerging, middle-class societies will be severely tested, and newly democratized states may find it impossible to maintain power. Progress toward a more open, integrated Asia is at risk, with the potential for increased political tension in the world's most heavily armed region.
This is the backdrop upon which the U.S. government is set to expand the national debt by a trillion dollars or more. Without massive debt purchases by Japan and China, the U.S. may not be able to finance the cost of the stimulus package, creating a trapdoor under the U.S. economy.
So far, Japan's politicians have been unable to find a way out of this mess. While another $53 billion stimulus package works its way through parliament, fully one-third of Japan's prefectures have instituted emergency economic stabilization measures.
But the big issues elude short-term solutions. Though Japan's leaders are currently cutting back on military expenditures and domestic services, they're unable to agree on budgets or reform plans. They have no strategic road map for reining in the yen, opening up to international competition, or taking an economic leadership role in Asia that will promote growth and strengthen democratic, market-oriented societies.
Things don't have to turn out this way. If Japan's leaders can craft a monetary policy that ends Japan's deflationary spiral by carefully expanding the money supply, recommit to structural reform, and halt the yen's rise, they can jump-start economic growth. They should also ignore the powerful domestic agriculture lobby and embrace a robust free-trade agenda, which would help them as well as the rest of Asia.
Mrs. Clinton's visit cannot be a simple photo opportunity. This trip needs to result in a clear U.S.-Japan approach to restoring confidence and rebuilding a robust and open international system. Without action, Japan and America may go over the cliff together, dragging Asia and the world down with them.
Mr. Auslin is a resident scholar at the American Enterprise Institute.
WSJ Editorial Page: The left is already doubting Obama's Afghan surge
Barack of Afpakia. WSJ Editorial
The left is already doubting Obama's Afghan surge.
WSJ, Feb 17, 2009
The regents are on the ground and commanders are crafting new battle plans: President Obama is girding for a war surge in Afghanistan. Let's hope he's willing to see it through when his most stalwart supporters start to doubt the effort and rue the cost.
As a statement of principle, the new Administration's preoccupation with Afghanistan signals a welcome commitment to what has been known by that out-of-favor phrase "global war on terror." The Taliban claimed responsibility last week for coordinated suicide attacks in Kabul, which killed 28 people and reinforced perceptions that security is eroding. America's recent success in Iraq showed that the key to victory lies in shifting those perceptions. That means improving security.
More U.S. troops will likely be needed, and Central Command General David Petraeus is undertaking a review of goals and the resources to meet them. Mr. Obama has talked about doubling forces by another 30,000, and we hope he's willing to give his Afghan commander, General David McKiernan, the number he needs to clear and hold areas and protect the population. However, size of force matters less than having the proper counterinsurgency strategy for a conflict that is different than Iraq.
Among other useful things, Mr. Obama's surge may help to educate his friends on the political left about Islamist terror. The National Security Network, an outfit that never missed an opportunity to bash President Bush, has quickly come into line behind the new President. The group says Mr. Obama's strategy must be focused "first and foremost on preventing the Afghanistan-Pakistan region from becoming a staging ground for terrorist attacks against the U.S. and other nations or a source for instability that could throw Pakistan into chaos."
Sounds good to us -- and sounds a lot like the Bush strategy. America's goal isn't to turn a backward Central Asian country into the next Switzerland, but to keep al Qaeda and its Taliban allies from using it as a safe haven. Toward that end, the U.S. and its allies can help build Afghanistan's institutions and army and help a weak Pakistan government flush out the terrorists in its wild west.
No doubt the strategy can be tweaked. That started well before Mr. Obama's election, as America took back ownership of the Afghan mission from an unwieldy NATO command. Though Britain and Canada pull their weight, Secretary of Defense Robert Gates has learned that Americans can't count on Europe to fill the troop and equipment gaps, so the U.S. did.
Also like the Bush Administration, Team Obama recognizes the Pakistan dimension to the Afghan problem -- even calling the place "Afpak." The Taliban came back in the past three years only after finding sanctuary around Quetta, in southern Pakistan, and in the country's northwest tribal regions. The U.S. has also won Islamabad's sotto voce cooperation to strike terror leaders, though more should be done around Quetta.
Mr. Obama's special envoy, Richard Holbrooke, has been in Afpak for a week's fact-finding. Before arriving, he said, "In my view it's going to be much tougher than Iraq." Even by Holbrookeian standards, that's hyperbole. The government in Kabul isn't in danger of collapsing, the Taliban isn't popular where it has ruled, and the insurgents are no match for the U.S.-led force on the battlefield.
Ultimately, as in Iraq, the Afghans will need to stand up more for themselves. That may take a while. But start with expanding the increasingly able Afghan army, a bright spot. The force of 80,000 is too small for a country the size of Texas and bordered by enemies. The police are a shambles, alas. Corruption, narco-trafficking, a weak central government: Afghanistan shares vices with other Western protectorates like Bosnia, and could improve on all counts.
However, notwithstanding President Obama's swipe last Monday that "the national government seems very detached from what's going on in the surrounding community," the rulers in Kabul are legitimate. Hamid Karzai has tolerated too much corruption, but any change of leadership should come from an Afghan challenge, not a U.S. desire to play kingmaker. Mr. Obama and Vice President Joe Biden -- who stormed out of a meeting with Mr. Karzai last year -- need to avoid JFK's mistake of toppling South Vietnam ally Ngo Dinh Diem.
The Obama team wants to play up Afghanistan's troubles so it can look good by comparison a year from now. But soon enough Mr. Obama will own those troubles, and talking down Afghanistan carries risks. Our allies and the American people may come to doubt that the conflict is winnable, or worth the cost.
Already, canaries on the left are asking a la columnist Richard Reeves, "Why are we in Afghanistan?" The President's friends at Newsweek are helpfully referring to "Obama's Vietnam." Mr. Obama may find himself relying on some surprising people for wartime support -- to wit, Bush Republicans and neocons.
The left is already doubting Obama's Afghan surge.
WSJ, Feb 17, 2009
The regents are on the ground and commanders are crafting new battle plans: President Obama is girding for a war surge in Afghanistan. Let's hope he's willing to see it through when his most stalwart supporters start to doubt the effort and rue the cost.
As a statement of principle, the new Administration's preoccupation with Afghanistan signals a welcome commitment to what has been known by that out-of-favor phrase "global war on terror." The Taliban claimed responsibility last week for coordinated suicide attacks in Kabul, which killed 28 people and reinforced perceptions that security is eroding. America's recent success in Iraq showed that the key to victory lies in shifting those perceptions. That means improving security.
More U.S. troops will likely be needed, and Central Command General David Petraeus is undertaking a review of goals and the resources to meet them. Mr. Obama has talked about doubling forces by another 30,000, and we hope he's willing to give his Afghan commander, General David McKiernan, the number he needs to clear and hold areas and protect the population. However, size of force matters less than having the proper counterinsurgency strategy for a conflict that is different than Iraq.
Among other useful things, Mr. Obama's surge may help to educate his friends on the political left about Islamist terror. The National Security Network, an outfit that never missed an opportunity to bash President Bush, has quickly come into line behind the new President. The group says Mr. Obama's strategy must be focused "first and foremost on preventing the Afghanistan-Pakistan region from becoming a staging ground for terrorist attacks against the U.S. and other nations or a source for instability that could throw Pakistan into chaos."
Sounds good to us -- and sounds a lot like the Bush strategy. America's goal isn't to turn a backward Central Asian country into the next Switzerland, but to keep al Qaeda and its Taliban allies from using it as a safe haven. Toward that end, the U.S. and its allies can help build Afghanistan's institutions and army and help a weak Pakistan government flush out the terrorists in its wild west.
No doubt the strategy can be tweaked. That started well before Mr. Obama's election, as America took back ownership of the Afghan mission from an unwieldy NATO command. Though Britain and Canada pull their weight, Secretary of Defense Robert Gates has learned that Americans can't count on Europe to fill the troop and equipment gaps, so the U.S. did.
Also like the Bush Administration, Team Obama recognizes the Pakistan dimension to the Afghan problem -- even calling the place "Afpak." The Taliban came back in the past three years only after finding sanctuary around Quetta, in southern Pakistan, and in the country's northwest tribal regions. The U.S. has also won Islamabad's sotto voce cooperation to strike terror leaders, though more should be done around Quetta.
Mr. Obama's special envoy, Richard Holbrooke, has been in Afpak for a week's fact-finding. Before arriving, he said, "In my view it's going to be much tougher than Iraq." Even by Holbrookeian standards, that's hyperbole. The government in Kabul isn't in danger of collapsing, the Taliban isn't popular where it has ruled, and the insurgents are no match for the U.S.-led force on the battlefield.
Ultimately, as in Iraq, the Afghans will need to stand up more for themselves. That may take a while. But start with expanding the increasingly able Afghan army, a bright spot. The force of 80,000 is too small for a country the size of Texas and bordered by enemies. The police are a shambles, alas. Corruption, narco-trafficking, a weak central government: Afghanistan shares vices with other Western protectorates like Bosnia, and could improve on all counts.
However, notwithstanding President Obama's swipe last Monday that "the national government seems very detached from what's going on in the surrounding community," the rulers in Kabul are legitimate. Hamid Karzai has tolerated too much corruption, but any change of leadership should come from an Afghan challenge, not a U.S. desire to play kingmaker. Mr. Obama and Vice President Joe Biden -- who stormed out of a meeting with Mr. Karzai last year -- need to avoid JFK's mistake of toppling South Vietnam ally Ngo Dinh Diem.
The Obama team wants to play up Afghanistan's troubles so it can look good by comparison a year from now. But soon enough Mr. Obama will own those troubles, and talking down Afghanistan carries risks. Our allies and the American people may come to doubt that the conflict is winnable, or worth the cost.
Already, canaries on the left are asking a la columnist Richard Reeves, "Why are we in Afghanistan?" The President's friends at Newsweek are helpfully referring to "Obama's Vietnam." Mr. Obama may find himself relying on some surprising people for wartime support -- to wit, Bush Republicans and neocons.
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