Saturday Links 13-Oct-2018: Khashoggi murder and crude oil, IPCC climate economics, Harvard as elite finishing school

Here’s my list of links for this week, with commentary.

1. Khashoggi murder and Crude Oil. Michael Brendan Dougherty notes: “Saudi Arabia is partly a country, partly an organized-crime family, and partly an institution of radical religious entrepreneurism.” Saudi’s are starving 7 million people in Yemen, and have been exporting jihadism for decades. So why has the Saudi murder of journalist Jamal Khashoggi, complete with audio recording, drawn so much attention? Partly it’s due to a quote attributed to Stalin: A single death is a tragedy; a million deaths is a statistic. But the structural aspect seems neglected. The US-Saudi alliance was built on two foundations: guns and oil. With the end of the cold war, then the failure of two gulf wars, the value of having Saudi Arabia as a military ally has greatly declined. As for oil? Let’s go to the charts.

US crude oil production (blue line) flipped up around 2010, as fracking kicked into gear. The US is now producing more crude oil than it imports for the first time since the mid-1990s.

image source: wikipedia

And the just this year, the US is now producing more crude oil than Saudi Arabia:

image source: US Energy Information Administration

The point here is a key driver for a military ally in the Middle East was oil. But fracking removed that driver. And longer term, climate change should make us more aligned to anything that reduces our consumption of  fossil fuels. Which a break in Saudi relations won’t hurt.

This seems like a political opportunity. Whichever US political party flips on the Saudi’s first may gain from it, though it’ll probably induce the other party to dig in. Though one may hope they both flip. Either way, the larger context around Khashoggi’s murder seems under reported. We seem overdue for a strategic break with Saudi Arabia.

2. IPCC report and economics. The IPCC released a new report on climate change. Here’s a pretty good article:

We have just 12 years to make massive and unprecedented changes to global energy infrastructure to limit global warming to moderate levels, the United Nation’s climate science body said in a monumental new report released Sunday.

“There is no documented historic precedent” for the action needed at this moment, the Intergovernmental Panel on Climate Change (IPCC) wrote in its 700-page report on the impacts of global warming of 2.7 degrees Fahrenheit, or 1.5 degrees Celsius.

From rising sea levels to more devastating droughts to more damaging storms, the report makes brutally clear that warming will make the world worse for us in the forms of famine, disease, economic tolls, and refugee crises. And there is a vast gulf between the devastation from 1.5°C, what’s considered the moderate level of average warming, and 2°C.

Two things can simultaneously be true: 1) climate change is an environmental catastrophe of the first order, 2) the economic impact of climate change will be moderate. Point #1 is clear. Here’s Bjorn Lomborg on point #2:

The European Union promises to cut emissions 80% by 2050. With realistic assumptions about technology, and the optimistic assumption that the EU’s climate policy is very well designed and coordinated, the average of seven leading peer-reviewed models finds EU annual costs will reach €2.9 trillion ($3.3 trillion), more than twice what EU governments spend today on health, education, recreation, housing, environment, police and defense combined. In reality, it is likely to cost much more because EU climate legislation has been an inefficient patchwork. If that continues, the policy will make the EU 24% poorer in 2050.

Trying to do more, as the IPCC urges, would be phenomenally expensive. It is important to keep things in perspective, challenging as that is given the hysterical tone of the reaction to the panel’s latest offering. In its latest full report, the IPCC estimated that in 60 years unmitigated global warming would cost the planet between 0.2% and 2% of gross domestic product. That’s simply not the end of the world.

As context, world economic growth is running about 3-4% a year. So as Tyler Cowen notes “If climate change cost ‘only’ 4 percent of GDP on a one-time basis, then the world economy could make up those costs with less than a year’s worth of economic growth. In essence, the world economy would arrive at a given level of wealth about a year later than otherwise would have been the case.” And to be fair to Cowen, he immediately adds “Unfortunately, that is not the right way to conceptualize the problem.” And “is it so crazy to think that climate change might erode international cooperation all the more? The true potential costs of climate change are just beginning to come into view.”

My point here is the economics of climate change are under discussed, partly because a moral cause like climate change doesn’t want to frame things in terms of dollars and economics. But also because the economic story itself is not all that bad. At least in isolation. Furthermore I’m not sure the tactic of avoiding the econ conversation is helping to convert those in denial.

And lest I be misunderstood, I’m very strongly in favor of the same policy solution as other good econ policy wonks, very large carbon taxes immediately! The environmental catastrophe is more than enough justification. Also, as Cowen points out, reaction to climate change may be politically destabilizing, even if the economics alone are not.

3. Yascha Mounk on political correctness. Mounk dives into some survey data showing 80 percent of the US believe “political correctness is a problem in our country.” I found it worth a read. Also see his twitter thread. As a counter, Matt Yglesias has a solid reply. Yglesias argues political correctness is a loaded negative term, so everyone says they dislike it, even when they agree with particular policies that might be labelled as politically correct. This debate will continue. Every now and then it’s worth catching up on it. And Yascha Mounk post is done well enough it’s worth a read.

4. Harvard as elite finishing school. Harvard is getting sued for discriminating against Asians. Razib Khan has a post framing Harvard admissions as a proxy war for who enters the elite political ruling class. Looking at it from a purely power dynamics point of view, Khan concludes: 1) “Harvard and the other Ivies will find a way to continue to cap the number of Asian American students”, and 2) “the alienation of the successor to the ‘Eastern Establishment’ from the large numbers of moderate and conservative whites will be a long-term problem in terms of the maintenance of its grip on power.” Khan’s point #1 about capping the number of Asians strikes me as obviously true. His point #2 is that if “diversity” means excluding admission of most white conservatives, then Harvard risks losing it’s broader legitimacy as the foremost elite finishing school. Less sure of #2, but the point is well made. link

5. Juanita Broaddrick’s rape accusation against Bill Clinton from 1998. What’s striking is Broaddrick telling her story on a podcast in 2018 is far more convincing than she was when she told the exact same story in 1998. Broaddrick had physical evidence of Bill Clinton’s rape, and told several friends about it at the time. When Hillary Clinton met her later (from wikipedia):

Broaddrick says Bill Clinton did not speak to her at the event, but Hillary Clinton approached her, took her hand, and said “I just want you to know how much Bill and I appreciate what you do for him.” When Broaddrick moved her hand away, she says, Hillary Clinton held on to her and said, “Do you understand? Everything that you do.” Broaddrick says she felt nauseated and left the gathering. Broaddrick says she interpreted the incident as Hillary Clinton thanking her for keeping quiet.

You can take this as progress of a kind. Something that in 1998 wasn’t disqualifying for a president, or for his spouse for that matter, is now disqualifying. Or you can be dissatisfied this incident didn’t receive it’s due. Either way, times have changed. I believe for the better.

6. Saved you a click. This is where I put one sentence summaries of posts which are interesting, though perhaps not working worth clicking through to read in full. But click away as you like.

 

And that’s all for this week. Thank you for reading!

One thought on “Saturday Links 13-Oct-2018: Khashoggi murder and crude oil, IPCC climate economics, Harvard as elite finishing school

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