CLIMATE PREDICTION MARKET
How to link a carbon tax to climate forecasting
A 2011 paper by SHI-LING HSU suggests a way of using a carbon tax to generate more accurate predictions of future climate conditions:
“The market for tradable permits to emit in the future is essentially a prediction market for climate outcomes. And yet, unlike prediction markets that have been operated or proposed thus far, this prediction market for climate outcomes operates against the backdrop of an actual and substantial tax liability. Whereas prediction markets have heretofore largely involved only recreational trading, this prediction market will operate against a regulatory backdrop and thus will provide much stronger incentives for traders to acquire and trade on information.”
Link to the full paper.
A 2018 paper by GARY LUCAS and FELIX MORMANN suggests using similar predictions for climate policies beyond carbon taxes:
“We explain how both the federal and state governments could use prediction markets to help resolve high-profile controversies, such as how best to allocate subsidies to promote clean technology innovation and which policy strategy promises the greatest reduction in carbon emissions.”
Link to their paper.
- In 2016, a group of researchers modeled the way that information would converge in a climate prediction market, and found “market participation causes most traders to converge quickly toward believing the ‘true’ climate model, suggesting that a climate market could be useful for building public consensus.” Link.
- Tyler Cowen wrote about Hsu’s paper in 2011: “I think of such fine-tuning as a misguided approach. Is there such a good ‘basket’ measure of climate outcomes with sufficiently low short-term volatility?” Link.
- A 2017 paper by Michael Thicke makes a similar point about prediction models for science generally: “Prediction markets for science could be uninformative or deceptive because scientific predictions are often long-term, while prediction markets perform best for short-term questions.” Link.
The changing landscape of labor organizing in the US
The Supreme Court ruled in Janus v. AFSCME this week, finding that public sector workers can no longer be compelled to pay union dues.
Link to SCOTUSblog coverage of the case and the ruling.
A 2016 article in YALE LAW JOURNAL by KATE ANDRIAS assesses the paltry state of labor in America and uses the Service Employees International Union's Fight for $15 campaigns as a case study in what may be a way forward for American labor that bears resemblances to European sectoral bargaining:
“American labor unions have collapsed. While they once bargained for more than a third of American workers, unions now represent only about a tenth of the labor market and even less of the private sector.… For many reasons, current law offers little hope for reversing the trend. The familiar explanation, and the focus of most attempts at labor law reform, is that the National Labor Relations Act’s (NLRA) weak enforcement mechanisms, slight penalties, and lengthy delays—all of which are routinely exploited by employers resisting unionization—fail to protect workers’ ability to organize and bargain collectively with their employers.
The new labor law would combine social bargaining—i.e., bargaining that occurs in the public arena on a sectoral and regional basis—with both old and new forms of worksite representation. It is a more inclusive and political model of labor relations, with parallels to regimes in Europe and elsewhere.”
Link to the paper.
- Back to Tyler Cowen: in February, Cowen wrote about Janus v. AFSCME, noting that the decision will also seriously affect electoral politics and policy. Link. JFI covered the impacts of right-to-work legislation on political participation in a January newsletter. Link.
- A 2007 paper by Benjamin Sachs in the Harvard Law and Policy Review covers similar territory to Andrias', arguing that "the dysfunctionality of the National Labor Relations Act has led not to 'ossification'—as many believe—but to a hydraulic effect: unable to find an outlet through the NLRA, the continuing demand for collective action has forced open alternative legal channels." Link. And a 2015 report from the Roosevelt Institute makes a systematic policy argument for multi-employer labor organizing. Link.
- At Vox, an article by Dylan Matthews reflects on the wave of wildcat teachers strikes from this past spring and explains American enterprise-level bargaining and the European sectoral model, including wage boards, works councils, codetermination, and union-administered unemployment insurance. Link.
- To that last item, Matthews links to a 2016 report for the Aspen's Future of Work Initiative by David Rolf, Shelby Clark, and Corrie Watterson Bryant. The authors endorses the Ghent system, in which unions provide unemployment insurance, alongside a number of other ambitious proposals for a strengthened and "portable" 21st century safety net. Link to the report. And a 2012 article by Matthew Dimick examines the Ghent system's applicability to the US. Link.
- New Labor in New York, a 2014 book edited by Ruth Milkman and Ed Ott, examines some of these new organizing trends through the lens of 13 case studies of workers centers and sectoral campaigns in New York City, where the rate of unionization is roughly double the national average. Link.
- A new post at Princeton CITP's blog by Arvind Narayanan on browser fingerprinting. Link.
- Forthcoming in the AER by Joshua Blumenstock, Michael Callen, and Tarek Ghani: a report on "an experiment examining why default options impact behavior," using a mobile money-based savings wallet in Afghanistan. Link to the paper, link to a write-up on the findings. ht Sidhya
- The effect of institutional origin on inventors' attention to science. Link.
- The New York Times reports on Americans for Carbon Dividends, a new group including Trent Lott and Janet Yellen. Link. As we noted in a previous newsletter, some climate scientists are adamant that a universal dividend with carbon tax revenue wastes the opportunity to build on the tax’s effects by pouring the money back into subsidies or investment in renewables. Here’s David Roberts’s highly skeptical response to the Lott and Yellen news: “It certainly makes sense to use a portion of the revenue to shield middle- and low-income taxpayers from the regressive effects of a carbon tax. But that leaves plenty of revenue left over.”
- Adam Tooze: "Trade and Finance – Two Different Visions of the 21st Century Global Condition." Link.
- On the growth of the palm oil trade in Southeast Asia in the early 1900s: "This analysis stresses the historical dimension of clusters, which has been neglected in the previous management and strategy works, by connecting cluster emergence to the business history of trading firms.… the rise of this cluster occurred parallel, and intimately related, to the product specialization within international trading houses." Link. (And link to an excellent discussion of the paper at the NEP-HIS blog.)
- A paper examining the effects of Walmarts on food security: "Results suggest that closer proximity to a Walmart Supercenter improves the food security of households and children, as measured by number of affirmative responses to a food insecurity questionnaire and an indicator for food insecurity." Link.
- A post by David Levinson on the opportunity cost of land used for roads: "At the margins, what is the value of road space, and how might that cost look on a per vehicle-km traveled basis?" Link.
- A new paper on how to de-bias training data gathered "in the wild." Link. ht Margarita
- A couple weeks ago we shared a link to slides from a presentation by Gabriel Zucman titled "The Missing Profits of Nations." This week at the HLS Forum for Corporate Governance and Financial Regulation blog, a post by Zucman and co-authors introducing a paper on the same subject. Link to the post, link to the paper.
- From EHS The Long Run: on the medieval origins of Spain's economic geography. Link.