Daily Archives: December 14, 2009

In this column for National Journal I argue that (supposedly) binding quantity caps for GHG emissions are not the most productive way to co-operate on climate change. Converging on a gradually rising carbon price would get better results.

We need a form of cooperation that economizes on momentous international treaties and cross-border obligations — which are difficult to frame in the first place and impossible to enforce once they exist. Instead, we need policies that can be sold to voters country by country, and that conform to a broad international effort, instead of seeming to be dictated by multinational (i.e., other people’s) goals.

Curbing global warming does need to be an international effort — because it is the stock of global gases that drives the process. There is no point in one country cutting its emissions if others do not. But this does not mean that a Kyoto-type approach — a global treaty specifying exact binding limits on emissions, regardless of the consequences — is the way to go. The difficulties in that method are obvious and have been amply demonstrated.

For one thing, achieving equity across countries is difficult. In setting hard targets, allowance has to be made for the fact that poor countries such as India and China emit less per capita than the United States. But how? Putting the political focus on questions like that, and trying to answer them once and for all at events like the Copenhagen conference — then holding the entire process hostage to the answers — is not the way to get things done.

Armed for reality. Robert Kagan, Washington Post

Tax cuts vs public spending. Greg Mankiw, NYT.

Profile of Steve McIntyre. Colby Cosh, Macleans.

Safeguarding the Fed’s independence. Mort Zuckerman, FT

Should the Fed fight bubbles? James Hamilton, Econbrowser

Atul Gawande says health care reformers lack a master plan for controlling costs. But this is not a criticism, he says. It has to be this way.

Sounding too much like Malcolm Gladwell, he says:

There are, in human affairs, two kinds of problems: those which are amenable to a technical solution and those which are not. Universal health-care coverage belongs to the first category: you can pick one of several possible solutions, pass a bill, and (allowing for some tinkering around the edges) it will happen. Problems of the second kind, by contrast, are never solved, exactly; they are managed.

He then develops at New Yorker length an analogy with farm policy, which he seems to regard as a success. That kind of approach is the best one can do when it comes to controlling health costs, he says: it’s an unending process.

Set aside whether farm policy is an encouraging model. In principle, there is surely something to the distinction Gawande draws between the two kinds of problem–but health reform is not an obvious instance. Note that reformers are approaching universal coverage in stages–as a process, not as something you do once and for all. (Look at Massachusetts, the model for this effort: coverage is less than universal.) Equally, if they wanted to, they could adopt a once-and-for-all policy to shift incentives and improve cost control. For instance, single-payer, with a hard budget cap (ie, rationing); or a private system based on health insurance vouchers, financed with an earmarked value added tax (as proposed by Zeke Emanuel). The Medicare cuts in the Senate bill are in this category.

In other words, curbing costs is certainly “amenable” to a “technical solution”, unless you decide for some reason to take that kind of solution off the table. In both cases, coverage and cost control, the obstacles are political–a matter of reconciling conflicting preferences. The methodological distinction is blurry at best.

As this WSJ editorial argues, one can think of over-arching innovations within the realm of the politically feasible that would shift the entire system in the direction of better cost control. The simplest one is abolishing the tax exemption for employer-provided health insurance. If you reject systemic reforms like that, then “managing” the problem–with luck, more effectively than farm policy–is all you have left. But shouldn’t you discuss them before you reject them?

Clive Crook’s blog

This blog is no longer updated but it remains open as an archive.

I have been the FT's Washington columnist since April 2007. I moved from Britain to the US in 2005 to write for the Atlantic Monthly and the National Journal after 20 years working at the Economist, most recently as deputy editor. I write mainly about the intersection of politics and economics.

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