Tom Barry

Green Global Recovery

I've highlighted the Prime Minister's enthusiasm for a green global recovery. Trevor Houser at Peterson has been writing about what the best way to spend government money in order to "green" a recovery:

In a study from the Peterson Institute for International Economics, I propose a framework for evaluating both the economic and environmental effectiveness of green stimulus plans.

Economically, it is a question of speed and scope; how quickly and how broadly the money is put to work. Environmentally, it is about strategic design.

He reckons the easiest projects to get underway quickly - and that would have the most economic and environmental impact - are in energy efficiency.

Judging from progress made so far, many G-20 countries will have included programs similar to those described above in their stimulus plans by the time their leaders arrive in London for the April 2 summit. Taken together, these programs will help lay the groundwork for a more concerted international effort to address climate change.

The cumulative emission reductions resulting from green stimulus efforts directly will be modest, but highlighting a common commitment to emerge from our current economic morass on a more environmentally sustainable footing will help build confidence ahead of what promise to be challenging climate negotiations later this year.

He's right, of course. Investment in energy efficiency is no substitute for a comprehensive replacement to the Kyoto Treaty. But by setting the mood, it may help difficult negotiations become a bit easier.

Posted at 09:47 05 February 2009 by Tom Barry  |  Comments[1]

Low Carbon Recovery

Gordon Brown's been in Davos. Much interesting on the UK's approach to the recession is on the Number 10 website.

Some of his views on a low carbon recovery:

We find ourselves today in difficult and sober circumstances. And in these testing economic times, some say the pledges we have made on climate change will be too hard, too costly, too demanding.

I disagree. For, as Nick Stern and Al Gore have warned us, the costs of unchecked climate change are far, far higher than the costs of combating it. If we do not reduce our emissions from their present path - by at least half, globally, by 2050, with a peak in 2020 - we will bring upon ourselves a human and economic catastrophe that will make today’s crisis look small.  And it will be the poorest and the most vulnerable who will suffer first and greatest.

So we cannot afford to relegate climate change to the international pending tray because of our current economic difficulties.  Instead, we must use the imperative of building a low carbon economy as a route to creating jobs and growth, the path that will see us through the current downturn.

And already, together, we have begun the long walk down that road.  In the European Union’s economic recovery plan, in President Obama’s green jobs package, in the stimulus packages of China, Japan, Australia, South Korea, France, Germany, Spain and Denmark, and in my own government’s forthcoming green industrial strategy, the contours of a resilient low carbon recovery are becoming clear.

Posted at 01:21 04 February 2009 by Tom Barry  |  Comments[1]

London (G20) Summit

I promised to let you know when the London Summit's website was live. Well you can now find it at www.londonsummit.gov.uk.

You should also check out www.g20.org, which has more technical information on the working groups that doing the heavy lifting of the work following the Washington Summit in November.

There are four working groups, each co-chaired by representatives from a developed and an emerging economy. They are looking at:

• Enhancing sound regulation and strengthening transparency
• Reinforcing international co-operation and promoting integrity in financial markets
• Reforming the IMF
• The World Bank and other multilateral development banks

Posted at 10:18 02 February 2009 by Tom Barry  |  Comments[1]

Deglobalisation 2

The Prime Minister spoke at the Foreign Press Association about the global economy earlier this week. In his speech, he talks about what's wrong in the global economy and what the upcoming G20 London Summit must do to fix it.

Here's a link to the transcript, and you can watch it here:

One of most interesting things he talks about is "deglobalisation". My colleague Oliver Griffiths wrote about this yesterday. Economists have spent a lot of the last year warning of the perils of protectionism. The Smoot-Hawley Tariff Act prolonged the Great Depression. And it seems that political leaders have (more or less) taken this lesson on board.

But a retreat from the world can take many forms: it doesn't just have to mean jacking up tariffs. Borders can be closed to capital, people and companies as well as to goods and services. That's part of why the upcoming Summit is so important. Leaders must make the positive case for globalisation. And ensure that the world has the right co-ordination mechanisms and regulations to deal with it.

Posted at 14:56 28 January 2009 by Tom Barry  |  Comments[0]

Opportunities for Adults

I wrote last week about the new UK government paper on "New Opportunities". Its aim is to join up all the different bits of government that prepare today's workforce (from better childcare to apprenticeships).

One of the most interesting new slants is the emphasis on helping those who are already in the workforce. The paper notes that:

The majority of the people who will make up the workforce at the start of the decade after next, are already over 25. If we are to seize the new opportunities afforded by an increasingly global economy and make the most of the potential in our country, it is vital that we also focus are opportunities for lifelong learning available to those in work, but also  supporting those who are currently outside the workforce to develop skills, increase their aspirations and become more valuable to potential employers. Those who enter the labour market with low skills have fewer job opportunities and more limited progression prospects. Evidence shows they are also less likely to receive in-work training, further compounding their disadvantage, and more likely to face periods of worklessness.

Adults are harder to reach. The joy of regular school is that you have a captive audience. Adult education is more difficult as you have to convince free agents that signing up is worthwhile. For example, as a sixth former (high school senior), I signed up for a typing course at my local college. I was the only one under 40 and the only male. (And it was one of best things I ever did. I can still type like lightning.) The women on the course were mostly stay-at-home mothers returning to work. When they completed the course, they could walk into jobs as secretaries.

Typing skills are still important. But the traditional secretary has become a personal assistant - expected to do a bewildering variety of things. Adult education must teach the skills to do those tasks if it's to help people get into the labour market.

The paper was published along with case study web videos (I'm impressed). Here's a short clip about the difference adult education can make:

Posted at 18:20 26 January 2009 by Tom Barry  |  Comments[0]

A Healthy Constitution

There are a few enduring American views of Britain, many of them based around our enduring institutions. The three most famous are the monarchy, the BBC and the National Health Service. And seen from this republican land of cable and private healthcare, they do seem distinctively different and somehow difficult to explain.

Our royals, TV and hospitals have shown themselves capable of reinventing themselves for a changing country. None more so than the NHS. Founded after the Second World War, it is enduringly popular despite its flaws. In the last few years, on the back of huge investment, it has changed almost beyond recognition. Hospitals are rarely the tatty run down places they used to be. And high quality care is now the standard not the exception.

But the underlying ideals of the service haven't changed. And the government's had a stab at putting those ideals down on paper in an NHS Constitution. While the drafting may lack a certain Jeffersonian élan, it's pretty clear. The purpose of the NHS:

The NHS belongs to the people.

It is there to improve our health and well-being, supporting us to keep mentally and physically well, to get better when we are ill and, when we cannot fully recover, to stay as well as we can to the end of our lives. It works at the limits of science - bringing the highest levels of human knowledge and skill to save lives and improve health. It touches our lives at times of basic human need, when care and compassion are what matter most.

Some of the core principles:

-The NHS provides a comprehensive service, available to all

-Access to NHS services is based on clinical need, not an individual's ability to pay

In the future, I'll point people who ask what the NHS is about to its Constitution. And apologies for the dreadful pun in the title of this post.

Posted at 09:14 26 January 2009 by Tom Barry  |  Comments[0]

Inauguration Day

I went to the National Mall on Tuesday, where I watched President Barack Obama's Inauguration.

It was freezing outside, so I dug out my ski clothes. My wife did the same, although her twenty-week pregnancy meant that she couldn't quite fasten her trousers. We had debated whether or not to go given the expected crowds and cold weather. But we decided that we couldn't pass up the opportunity. This was an event our as-yet unborn son should go to.

We live near the centre of DC so walked. Even though we set off before nine o'clock, with the ceremony not due to start until eleven thirty, the streets were full. As we got closer, it reminded me of the way that the crowds build around a football stadium before a big game.

By the time we arrived at the Mall, it was already packed as far as the Washington Monument - two miles from the Capitol itself. We couldn't see the building, let alone the President and the Chief Justice, so we watched on a large screen. There were people to the horizon. I've never seen so many human beings in one place.

Around me people were crying as Obama took the Oath of Office and then spoke.

It was a privilege to attend such a moment.

Posted at 10:30 23 January 2009 by Tom Barry  |  Comments[0]

Support for lending

More about this soon, but, for those with questions, here are the links to the UK's announcements on financial intervention to support lending in the economy:

• HM Treasury statement on the intervention
• Asset protection scheme
• Restructuring the agreement with RBS
• Bank of England Asset Purchase Scheme

Posted at 10:05 19 January 2009 by Tom Barry  |  Comments[0]

Helping small businesses

One of the recurring themes of the financial crisis has been the role of small and medium sized businesses. With credit drying up, businesses that are otherwise healthy have found themselves unable to access to working capital to meet payroll and other routine expenses. This creates a vicious cycle in the economy which must be broken for recovery to take hold.

On both sides of the Atlantic a lot of attention has been focused on banks. They have benefited from government bailouts and many feel they should respond by providing lending. The British government today launched a new scheme to try to get working capital into companies. The idea is that the government part-guarantees pools of loans:

The Government will provide banks with guarantees covering 50 per cent of the risk on existing and new working capital portfolios worth up to £20bn. The guarantee will secure up to £20bn of working capital credit lines for companies - ensuring they are safe from reduction or withdrawal. In addition, the guarantee will free up capital which the banks must use for new lending as a condition of this scheme. This is lending that would otherwise not have been provided.

In the US too, Congress is considering what kind of measures it can take to help out small businesses. Government can do its part in the meantime, but recovery - when it comes - will be driven by entrepreneurs and small businesses.

Posted at 15:32 16 January 2009 by Tom Barry  |  Comments[1]

Making Government Work Better

I spent Wednesday morning in a committee room on Capitol Hill, listening to the confirmation hearing for Peter Orszag - Obama's nominee to head the Office of Management and Budget. In the embassy, we're proud to say that Peter's PhD is from the London School of Economics, which he obtained partially through a Marshall Scholarship.

Although the Office of Management and Budget sounds like an obscure bit of government machinery, it plays a big role in helping the federal government work better. It seems like Peter's team is going to be doing some exciting things with the appointment of Nancy Killefer as Chief Performance Officer and Cass Sunstein (who has pioneered thinking on how you can use new behavioural economics to help government help people make better choices through "nudges") as head of the Office of Information and Regulatory Affairs.

I'm looking forward to them working with the Prime Minister's Delivery Unit in London to share experiences and new ideas.

And, of course, I wish Peter all the best in his new job.

Posted at 22:19 15 January 2009 by Tom Barry  |  Comments[0]

New Opportunities

It's easy to be afraid of the phenomenon called globalisation. One downside of interconnectedness can be seen right now. The world economy is going through arguably the first financial crisis of the new global age.

But along with the challenges, come new opportunities. The UK government is trying to help British people and businesses take advantage of them. It's just published a new paper called "New Opportunities" that brings together many of these policies:

Taken together, these changes will create immense opportunities for business growth and individual success. The Government is determined to work with UK businesses so that our country can benefit strongly from this changing economy, creating more and better jobs for all.

The report is a hefty 108 pages and I've not read the whole thing yet. By way of a change on this blog, I'll be writing about the different ideas in the chapters as I read through them. (As well as keeping you up to date on my peripheral brushes with Obama's hot dog eating, of course.)

I'd also be interested to hear your views. Are there real new opportunities in this new world? Or is this just making the best of a bad situation?

Posted at 09:24 14 January 2009 by Tom Barry  |  Comments[0]

Climate Change Economics

Over the two years since the publication of the Stern Review on the Economics of Climate Change, there's been a flowering of work on the subject.

A welcome addition is this site from the Center for Environmental Policy and Management of the University of Louisville:

Our objective is to offer access to the best available objective analysis of the options facing the United States, fifty individual states and the US territories as we address the carbon intensity of our economy. As more and more Americans are realizing, our nation faces a growing double threat  posed by both climate changes in our local communities and the rapidly increasing costs of fossil fuels. Climate Change Economics will equip policymakers and researchers at every level of government with a clearinghouse of resources and tools to tackle these challenges comprehensively.

The database collects both technical publications and more accessible articles for general readers. With climate change now viewed as much as an economic problem (what are the costs and benefits of taking action? how can we do it most efficiently?) as a scientific one (is it happening?), the best public policy will come from better and broader understanding provided by sites like this.

Posted at 23:20 12 January 2009 by Tom Barry  |  Comments[2]

Hot Dogs with the President-elect

On Friday night, I stopped at Ben's Chili Bowl, a U Street diner I love for their chili half-smokes (DC's answer to the hot dog - bigger and covered in chili sauce). The next day, Barack Obama also paid a visit in the company of DC's mayor Adrian Fenty. I was pleased to see that he ordered the same thing as me.

I mention this, not to impress you with the high class of my dining (the half-smoke goes for $4.95 plus tax), but because Obama is very obviously now in DC. Along with the President-elect's dining choices, the press has covered his daughters' first day at their new school and the continuing speculation over the Obamas' choice of "first pet" (apparently they've 
got it down to either a labradoodle or a Portuguese water dog).

The town is poised for Inauguration Day on the 20th. If the estimates of attendees are right, the number of people assembled on the National Mall will be the largest ever gathering in the Western Hemisphere. Even before the ceremony of the Inauguration, the Obama transition team is moving to win support for its proposed economic stimulus package. In the past week Obama made his first major speech since the election and has met Congressmen from both parties. And Christina Romer, the Chair-designate for the Council of Economic Advisers, and Jared Bernstein, the chief economist for the Office of the Vice President-elect, have already released a detailed report on the plans.

It feels like Washington has just taken a collective intake of breath as it waits to see what the new President will do. Only a week until we find out.

Posted at 09:47 12 January 2009 by Tom Barry  |  Comments[0]

How Will the Recession Affect Clean Technology?

The Freakonomics blog's Steve Dubner asks experts how will the recession will affect clean technology? John Whitehead of Appalachian State University identifies a crucial switching point that has now dropped away from our immediate grasp:

During the summer of 2008, we were oh-so-achingly close to what economists call the Hotelling switch point.  ...[T]he switch point occurs when rising nonrenewable energy prices meet falling renewable energy prices and energy users switch from dirty nonrenewable energy (ie, oil, coal) to cleaner renewable energy (ie,wind, solar).

But Ethan Zindler of New Energy Finance is optimistic for the long-run:

The fundamentals that spurred its growth originally haven't disappeared. Yes, oil has fallen since a year ago, but it is still high by historic standards. Furthermore, climate change concerns have not diminished and the president-elect has signaled he plans to engage fully on the issue.... Then there is the issue of energy security, which got plenty of traction during the recent presidential campaign.... Finally, there is growing hope that the clean-energy sector can be a driver of economic development by providing so-called "green collar" jobs.

I think it's sadly true that the economic downturn has made taking some of the tough but necessary long-term policies (like putting a price on carbon) more difficult to achieve politically. But the prospect of greening the recovery (to use the current jargon) is an opportunity amid the gloom. Immediate investment in energy efficiency makes sense in the short-term (it creates jobs), medium-term (it saves money for businesses and consumers) and long-term (it reduces our dependence on fossil fuels). There're very few policies that can offer that.

Posted at 17:49 08 January 2009 by Tom Barry  |  Comments[0]

Summers on Fiscal Stimulus

The soon-to-be Director of the National Economic Council, Larry Summers, wrote about fiscal stimulus in the Washington Post this week:

In this crisis, doing too little poses a greater threat than doing too much. Any sound economic strategy in the current context must be directed at both creating the jobs that Americans need and doing the work that our economy requires. Any plan geared toward only one of these objectives would be dangerously deficient. Failure to create enough jobs in the short term would put the prospect of recovery at risk. Failure to start undertaking necessary long-term investments would endanger the foundation of our recovery and, ultimately, our children's prosperity.

Summers was among the first to call for a fiscal stimulus - around this time last year. His mantra then was that stimulus should be "timely, targeted and temporary". He now wants one that's "sizeable, sustained and speedy". His reasons are very similar to those in the recent UK government paper "Managing the Global Economy Through Turbulent Times".

Posted at 15:02 02 January 2009 by Tom Barry  |  Comments[0]