why do policies with huge benefit-cost ratios not get adopted?
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Governance: 4 Questions and Some Answers David G. Victor University of California, San Diego India-California Air Pollution Mitigation Program (ICAMP) 22 October 2013. Why do policies with huge benefit-cost ratios not get adopted? . 1. What is the organization of political interest groups? . - PowerPoint PPT PresentationTRANSCRIPT
Governance:4 Questions and Some Answers
David G. VictorUniversity of California, San Diego
India-California Air Pollution Mitigation Program (ICAMP)22 October 2013
Why do policies with huge benefit-cost ratios not get adopted?
1. What is the organization of political interest groups?
The public as an interest group
• Highly decentralized and thus difficult to organize
• Key roles for NGOs and the press
2. Who Owns the Enterprises that Must Change Behavior?
Industries that tend to be state-dominated
• High value extraction (mining, oil & gas)• Visible public benefits (electricity, water and
sewerage, trash collection, public transport)• Convenient locales for corruption (e.g.,
banking)• USA is highly unusual in extremely low level of
state ownership
7
Figure 1NOC Share of Booked Oil Reserves
7
NOCs 87%
Other IOCs (9%)
Major IOCs (4%)
Source: 2008 Energy Intelligence Report. Note: 2006 liquid reserves.
Total: 1.38 trillion barrels oil equivalent, excluding oil sandsSource: Energy Intelligence Report (2008) and BP (2011)
Tensions in Ownership
• Privately held firms– Organized around private interest, but..– Responsive to credible regulation and efficient
• State-owned enterprises– Often organized for public interest, but…– Often managed incompetently.
3. When policy making fails, who acts?
Some backstops
• California:– Federal Clean Air legislation– State CARB– Public petition process– Elections?
• India:– Supreme Court– Elections?
4. Will Exogenous technological surprise “fix” governance failures?
U.S. CO2 emissions from Electricity
19731975
19771979
19811983
19851987
19891991
19931995
19971999
20012003
20052007
20092011
0
500
1000
1500
2000
2500
3000
Year
Mill
ion
Met
ric T
ons o
f CO
2
Coal
Gas
Oil
Oil and Natural Gas Prices:Three Markets
Sources: Heren and BP via BP Statistical Review of World Energy 2012
1980 1985 1990 1995 2000 2005 2010 20150
2
4
6
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JapanEuropeanUSCrude oil
US $
/mm
btu
May 2012 Issue of Foreign Affairs…