The Federal Reserve recently announced it was skipping another interest rate increase for the first time in 15 months to assess the impact of its efforts to quash inflation.
Apparently, one of the reasons for the pause was disagreement among the 12 members of the Federal Open Markets Committee about what to do next. The hawks—who want to raise rates at least twice more this year—argue that inflation is still above the Fed’s target of 2% to 3%, and that core inflation (sans volatile gas and food prices), remains stubbornly high at 5.3% year-over-year.
Other committee members want to leave things where they stand for now. They point out that consumer prices rose a modest 4% in May from 12 months earlier—the smallest increase in more than two years—and that the full impact of the central bank’s 10 previous rate hikes is still not known.
But despite their differing views on interest rates, both the hawks and the doves on the FOMC think the Fed has the economy heading for a soft landing, in which inflation levels are reduced without sending the economy into a tailspin.
INDEPENDENT SCHOOL DISTRICTS WORKING TOGETHER TO MAXIMIZE STUDENTS’ COLLEGE AND CAREER PATHWAYS
EXECUTIVE SUMMARY
Nearly 1 in 5 U.S. students attend rural schools. That’s about 9.3 million kids. Yet, during policy discussions, rural schools’ unique challenges are often eclipsed by those of their urban and suburban counterparts. This report is a case study of an innovative, replicable public education experiment at three rural Texas high schools called the Rural Schools Innovation Zone (RSIZ). This first-of-its-kind experiment is a collaboration between three rural school districts focusing on college attainment and career pathways for the 21st-century job market.
It is proving so successful that the Texas state legislature passed a bill designating funding to incentivize more school districts to adopt the model. The bill became law on June 2, 2023. Texas’ significant step forward for equity and rural workforce development deserves national attention.
By raw numbers, Texas is responsible for educating more rural students than any other state, given its vast metropolises, but it isn’t even among the top 10 states with the largest percentage of rural students. The 2018-2019 Report of the Rural Schools and Community Trust found that rural public schools account for more than half of schools in 12 states. In Vermont (55%) and Maine (54%), more than half of students live in non-metro areas. In 18 other states, rural students account for 30% to 49% of the student population. Those states are spread through every geographic region in the country. More American students attend rural schools than the largest 85 school districts combined.
And, rural schools are becoming more diverse, gaining more English as a second language (ESL) and special education students in recent years, while seeing White rural students decrease by 3%. Today, nearly one-in-three rural students are non-White.
While rural demographics are changing, rural poverty is stubborn. According to the most recent estimates from the 2019 American Community Survey, the non-metro poverty rate was 15.4% in 2019, compared with 11.9% in metro areas. Poverty is more severe for rural children and minorities. Almost 23% of rural children under the age of 18 live in poverty, compared to just under 17.7% of non-rural children. According to the U.S. Department of Agriculture, 30.7% of rural Black Americans, 29.6% of American Indian/Alaska natives, and 21.7% of rural Hispanic Americans live in poverty, compared to 12.7% of White rural citizens. The Rural School and Community Trust report found that nationwide, the communities surrounding schools in rural districts on average had a household income of just 2.68 times the poverty line.
Those statistics point to the urgency of the need to improve school systems that serve rural students. Providing regionally relevant career and technical education (CTE) is especially important, as 42% of rural Americans say finding a job is a major concern, while only 39% of them are willing to move from home to find work. Innovating to provide rural high school students with equitable access to college and/or career readiness opportunities for regionally available jobs is a national imperative that requires us to think in new ways and to try new things. Traditional, one-size-fits-all school districts must yield to more flexible programming.
This is why it is worthy to discuss the successful experiment just codified into state law in Texas. The goal of this case study is to explain and publicize the initiative, called the Rural Schools Innovation Zone (RSIZ), in the hopes that other states with significant rural populations may consider it as a tool for combating challenges, including institutional stagnation, isolation, underfunding, and generational poverty, that prevent rural school students from graduating college or career ready.
The report is organized into the following sections:
• Presenting the Rural Schools Innovations Zone (RSIZ) as a 21st-century model for expanding career pathways and preparation, including early credit and industry certification components;
• Quantifying the challenges rural schools experience;
• Understanding the RSIZ career pathways and early college “academies”;
• Designing and implementing the RSIZ collaboration between three independent school districts:
– Structuring the governance and leadership framework;
– Aligning career pathways to the local economy;
– Student recruitment;
– Student outcomes
• Operating the RSIZ:
– Finance and funding streams;
– Human capital;
– Scheduling and transportation;
– Data sharing;
• Codifying the RSIZ collaborative and conclusion.
After one presidential defeat, two impeachments, two criminal indictments and, possibly, two more to come, Donald Trump has learned nothing. He still insists he won the 2020 election – by a landslide – and that he’s the victim of a vast deep-state conspiracy bent on his destruction.
It’s hard to believe: A plainly delusional 77-year old is making a third run for the White House on an explicit platform of wreaking revenge on his political enemies. Yet somehow he’s outpacing his saner Republican rivals and, in some polls, is even with President Joe Biden.
This is nuts, and it poses a riddle for Biden and the Democrats: Why aren’t they 20 points ahead? Why can’t they rally a solid majority of Americans to protect our constitutional democracy against an incendiary demagogue?
Part of the answer lies in Trump’s hold on white working-class voters, who believe he’s fighting to preserve their idea of America. Another is found in Democrats’ leftward march over the past two decades, which has made it hard for them to win across America’s pragmatic center.
2023 marks the 15th anniversary of the creation of the App Economy, which has played a significant role in the United Kingdom’s economic growth. Today, the Progressive Policy Institute (PPI) released a new report “The UK App Economy: 2023” finding that the App Economy is responsible for 667,000 jobs in the United Kingdom as of May 2023. That accounts for roughly 20% of the total net gain in U.K. jobs since 2008, when the Apple App Store and the Android Market, precursor to Google Play, first opened.
Report authors Michael Mandel, Vice President and Chief Economist, and Jordan Shapiro, Director of the Innovation Frontier Project, outline the new estimates of the job growth created by the App Economy, as well as how the App Economy has provided a route into the digital workforce for people who come from varied backgrounds.
“The App Economy has helped drive job growth in the United Kingdom for the past 15 years,” said Dr. Michael Mandel.“These positive trends seem to be continuing and it’s important to continue to expand the digital workforce to reflect these new opportunities.”
As digital jobs continue to grow, so does the demand for new digital skills. But supply for these skilled jobs continues to lag as workforce shortages persist across the tech industry. To address this issue, Taylor Maag, Director of Workforce Policy at the Progressive Policy Institute, released a new report titled “Closing the Digital Skills Gap: Unveiling Insights for Four Countries.” The report outlines the barriers confronting workers who want to acquire skills and examines four countries’ efforts to address the digital skill divide.
By the numbers:
667,000 jobs in the U.K. App Economy, up 75% since 2019
Across Europe and the U.S., job requirements for digital skills have increased by 50%
On Tuesday evening, PPI and its Mosaic Project will host a panel event with the British Computer Society and Women Who Code London, celebrating the 15th anniversary of the app economy and discussing these new reports.
Read and download the “UK App Economy” report here and the “Closing the Digital Skills Gap” report here.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C., with offices in Brussels, Berlin and the United Kingdom. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
What is the future of the U.K. App Economy? According to the Progressive Policy Institute’s latest estimate, the United Kingdom App Economy includes 667,000 jobs.
None of these jobs existed 15 years ago, when Apple first opened the App Store on July 10, 2008, in the middle of the global financial crisis. Android Market (which later became Google Play) was announced by Google shortly after. These app stores created a new route through which software developers could write programs for smartphones. These mobile applications — called “apps” — could then be distributed to the rapidly growing number of smartphone users around the world.
The jobs generated by the app stores became an important part of the recovery from the financial crisis of 2008-2009, the subsequent economic expansion and the response to the pandemic. More than that, app development became a key route by which young people can develop tech skills and became an integral part of the digital economy.
This report describes some important aspects of the U.K. App Economy. We also give some examples of App Economy jobs and skills development.
Just decades ago, the internet was an entirely new concept, but it’s become second nature for billions of people and is now embedded into daily life across the world. While the internet is old news, there are recent technologies like blockchain, artificial intelligence (AI), and the cloud that have gone from niche, specialized roles in the global economy to the mainstream. This rapid and widespread digitalization has changed the nature of work, and as a result, digital skills are now regarded as essential for the modern workforce — across Europe and the U.S., job requirements for digital skills have gone up by 50%.
While this transformation has been underway for decades, the pandemic accelerated it. Not only did the crisis change how businesses operate and the way we work, but it also influenced people’s reliance on technology. Individuals and businesses were suddenly dependent on the internet, their smartphones, and their mobile applications for critical daily activities like work, shopping, and communication with loved ones. A 2022 report from PPI found that the App Economy became an increasingly indispensable part of the U.S. economy during the pandemic. Existing mobile applications were able to respond to soaring demand without significant outages and app developers were also able to quickly create new apps to meet the human and economic needs.
Additionally, this year’s World Economic Forum Jobs report — which lifted up perspectives from 803 companies that collectively employ more than 11.3 million workers across 27 industry clusters and 45 economies across the world — found that technology adoption will remain a key driver of business transformation for the next five years, with over 85% of organizations identifying that increased adoption of new and frontier technologies and broadening digital access will be priorities for their organization. Eighty-six percent of companies surveyed also stated that digital platforms and apps are the technologies most likely be incorporated into their operations in the next five years.
It’s clear the reliance on technology from individuals and business is not going away anytime soon and will continue to grow as emerging technologies and solutions are developed and adopted. To keep pace with this demand — while also ensuring business has the skilled talent to remain competitive — digital and tech-related skills will be increasingly necessary for workers to succeed in the global labor market.
While demand for digital skills is growing, unfortunately supply is lower than it needs to be. Workforce shortages persist across the tech industry with employers struggling to find skilled talent that is prepared for digital roles. And this gap continues to widen. A 2021 Rand Corporation report found that the global digital skills gap was widening due to the following factors: tech talent outpacing an already short supply (in fact, 54% of American workers believe technology will advance faster than workforce skills); high costs and disorganized approaches to traditional education that increase barriers to learning; access to digital infrastructure and skills limited by socio-economic status (76% of global workers don’t feel they have the resources needed to learn digital skills).
These findings highlight the barriers confronting workers who want to acquire digital skills. The report also estimates that because of digital skills gaps, 14 of the G20 countries could miss out on $11.5 trillion in cumulative GDP growth. Policymakers around the world need to tackle this problem, both to ensure their industries and businesses can keep pace with the rate and scale of technological innovation, but also to ensure current and future workers will have more opportunities to develop the skills needed to succeed in changing labor markets.
As Labour starts to set out its policy agenda for the next election, Anoosh Chakelian speaks to one of the people who helped shape it.
Claire Ainsley worked in Starmer’s policy team from 2020 to 2022 – before that she was at the Joseph Rowntree Foundation, and is now a director at the Progressive Policy Institute. They discuss how radical or conservative Starmer needs to be to win the election, what lessons can be learned from other centre-left successes around the world, and how to build a broad coalition with working-class and middle-class voters.
As crypto assets have gained mainstream popularity, most industry leaders have been vocal about the need for a defined regulatory framework for decentralized finance in the United States. Now, in lieu of a successful legislative effort from Congress, the SEC has taken matters into its own hands. Crypto exchange platforms Coinbase and Binance are both facing lawsuits filed by the SEC as of last week, with the agency alleging that the companies are guilty of operating unlicensed securities trading platforms in the United States.
The suits represent a sort of regulation by enforcement, penalizing exchange platforms that have struggled to find where they exist in the current financial system. It is the responsibility of the SEC to protect investors where necessary and, with a robust history of fraud, the industry has not done its credibility any favors. However, considering the dynamism of still-developing crypto markets, the SEC must ensure that their aggressive enforcement efforts, absent clear laws or guidance from Congress, don’t throttle the entire crypto industry, effectively punishing good actors alongside the bad ones while paralyzing innovation.
The cases against Coinbase and Binance rest on a hotly disputed question: Do crypto assets qualify as a security under U.S. financial regulation, and if so, which ones? The SEC seems to think yes in many cases, with Chair Gary Gensler leading the charge toward defining them as such. But even in the eyes of the SEC not every crypto asset is a security, and the lack of clear legal definitions makes it impossible for exchanges to ensure complete compliance laws not written with crypto in mind.
In the past, courts have applied the Howey test, a common framework for determining whether an asset is a security, to crypto assets. The test has four basic requirements. A security is defined in instances in which there (1) must be investment of money, (2) in a common enterprise, (3) with reasonable expectation of profit, (4) derived from the efforts of others. Under this test, it is generally agreed upon that Bitcoin and Ethereum are decentralized enough — meaning that they are detached from any collective effort or organization promoting them — that they are not considered securities. But in other cases, such as Balestra v. ATBCOIN LLC, courts have determined that certain crypto coins do in fact qualify as securities, because the model of the organization behind the coin acted more like a centralized investment fund than a decentralized system.
Though they have lost momentum since the last congressional session, efforts have been made to codify the differences between an asset’s classification as a security or commodity. Senators Lummis and Kirsten Gillibrand’s Responsible Financial Innovation Act, for example, established that under the Howey test some assets should qualify as securities based on their level of decentralization. But the bill did not pass–and without clear lines being drawn by Congress, it has been up to companies and the SEC to provide their own guesses as to which is which. While the SEC’s stance has been made clear, there is also currently no way for crypto exchanges to register with the SEC, meaning these companies couldn’t avoid these suits even if they happen to independently arrive at the same conclusions as the agency.
Within this uncertain environment, Coinbase has been adamant that based on the Howey Test crypto assets are not securities, as explained in their February 2023 blog post on the matter. This is consistent with the company’s many statements insisting their compliance with the law to the best of their abilities, though this a moot point if their legal interpretation doesn’t match the one now touted by regulators.
With legislation stalled in the United States and slow rollout of regulation in the European Union, the recent filings by the SEC represent some of the first widespread attempts for a government to act on defining crypto assets around the globe. As such, the SEC should do so in a way mindful of the impact it will have on crypto’s ability to innovate in U.S. markets. Without policy changes, crypto exchanges will be left with three options if the SEC finds success with its recent filings: shut down crypto exchanges in the US entirely, find another legal avenue to register with the SEC, or only allow trading of coins which have been accepted as being decentralized enough to not qualify as a security–likely excluding everything but Bitcoin and Ethereum.
The crypto space has not been without its problems, but current efforts by the SEC may undermine the ability for an honest, robust industry to thrive in the United States. Though crypto trading platforms should be held to a high level of scrutiny to protect investors, the SEC must balance this with an approach that still allows Congress to move forward with legislative efforts to regulate the industry in a way that both provides guidance and preserves crypto’s innovative potential.
In August of last year, President Biden announced an ambitious plan to wipe out more than $400 billion of student loan debt for the nation’s borrowers. Individuals with incomes below $125,000 (and couples with combined incomes below $250,000) could receive up to $10,000 of loan forgiveness, with former Pell Grant recipients receiving up to $20,000. Speaking about his plan less than a week before the midterm elections, the president made it clear who he was trying to help.
“I want to state again who will benefit most: working people and middle-class folks,” he declared in a speech at Central New Mexico Community College (CNMCC).
Given the skyrocketing costs of higher education, some borrowers — particularly those with low incomes and those who were scammed by for-profit colleges — genuinely need assistance. But portraying student loan forgiveness as a working-class issue is highly misleading. In fact, data on student borrowing shows that debt relief benefits few working-class families, most of whom never attended college in the first place.
This paper dives deeply into the evidence on the economic impact of student loan forgiveness. As the paper shows, proposals from political progressives to forgive all student loan debt (or large amounts such as $50,000 of debt) overwhelmingly benefit affluent Americans. President Biden departed from these more elitist proposals, yet his decision to forgive even a more limited amount is still puzzling. At a time when the economic returns to education are rising and the Democratic Party is losing noncollege voters, it makes little sense to target government aid to people who attended college.
The noncollege workers who do not benefit from the President’s plan are certainly in greater need of support than student loan borrowers.
The paper goes on to examine the question of why the Democratic Party — traditionally the party of working-class people — has become so focused on canceling student loans. One possibility is that Democratic lawmakers are ensconced in a D.C. bubble. The nation’s highest student loan balances are found in Washington, and these borrowers would benefit more from President Biden’s forgiveness plan than borrowers in 49 out of 50 states. In short, many in the party establishment seem to be conflating the problems of highly educated college graduates — an elite class of Americans — with those of working-class people.
This is not to deny that the cost of college has become a significant problem in recent decades. Over the past 19 years, consumer prices have risen 59%, and per capita personal incomes have doubled (in nominal dollars). By contrast, prices for college textbooks have risen 122%, and college tuition (net of grant aid) has gone up 124%.6 This means that a typical family would have found it more difficult to finance a college education in 2022 than in 2003. Some students understandably forego college entirely, while those who attend are stuck with high bills.
Unsurprisingly, many households have turned to the student loan system. Between the first quarter of 2003 and the fourth quarter of 2022, student loan debt held by consumers increased from $392 billion to $1.6 trillion (in inflation-adjusted dollars).7 Student loans also rose from 3.3% of all consumer debt to 9.4% over the same period.
However, the financial burdens of college do not justify widespread student debt relief. If funded through higher taxes, the costs of student loan cancellation will be borne by taxpayers; if funded through higher borrowing, loan cancellation will increase economic demand, thereby raising prices for consumers. Either way, the cost of student debt cancellation will fall on members of the general public, most of whom do not have four-year degrees.
There are better ways of helping working-class Americans. As the Progressive Policy Institute (PPI) has advocated, the government should invest more in apprenticeships, job training, and career pathways for noncollege workers, who generally have lower wages than college-educated workers. Lawmakers should also dramatically increase the size of the Pell Grant (thus helping students from low-income families) and craft policies aimed at reducing administrative bloat at universities (which would reduce expenses and thus tuition). These policies would boost the employment and wages of noncollege workers while also making college more affordable for ordinary families.
It’s no secret that Democrats have lost support among working-class voters in recent elections. Forgiving student debt only reifies the image of Democrats as beholden to the interests of the educational elite. Until the party puts forth pragmatic solutions to the pocketbook issues facing ordinary people, they are likely to continue losing ground among the exact voters Democrats claim to support.
FACT: 13.4 billion COVID vaccinations and boosters have been delivered since December 2020.
THE NUMBERS: World under-five mortality rate, per 1,000 births* –
2021
38
2010
52
2000
76
1990
93
1980
132
* World Health Organization for 1990-2021; World Bank World Development Indicators for 1980.
WHAT THEY MEAN:
Trade Fact series editor Ed Gresser, testifying at the House Judiciary Committee last week on COVID-19, the WTO’s intellectual property rights (“TRIPS”) agreement, and the WTO members’ decision to authorize a temporary waiver of some patent rules last summer, was asked whether the COVID pandemic had definitively “ended.” Having been down with a (very mild) COVID bout the previous week, his answer was (i) a rueful but clear “no.” But (ii) with mass vaccinations — 82% of Americans, 70% of the world — the danger COVID posed to life and health has been greatly diminished. So (iii) the Biden administration’s decision to declare the “public health emergency” phase of the pandemic over was the right call.
To get to this point, in three years the world’s science, industry, pharmacies, clinics, and hospitals have moved from:
(a) Not quite a standing start (though close to it): as of early 2020, scientists had some knowledge of coronaviruses generally, and could make use of mRNA and nanotech technologies developed in the 1970s and 1980s and first used in development of an Ebola virus, but had no knowledge of the actual COVID-19 virus before its isolation in December 2019; to
(b) A safe, effective, and transportable vaccine by December 2020; and then
(c) Manufacturing, logistical, and primary-care delivery systems at a scale needed for a patient population comprised of “the whole human race” by mid-2021; and finally
(e) Delivery of 13.4 billion actual vaccinations and booster shots — almost two for everyone in the world — as of mid-2023.
Thus a landmark achievement in a very short time for policy, science, manufacturing, logistics, and public health providers worldwide. Pulling back a bit, the speed in this case was exceptional. But as a large-scale achievement of policy, production, delivery, and public health it wasn’t entirely unique. In fact, it is one with many precedents, and is part of a larger story of remarkable successes in vaccination generally. Polio is a particularly striking case, with complete eradication of the disease now achingly close. Here’s a count of polio cases worldwide over the last 25 years:
1988
350,000 cases
2010
650 cases
2020
6 cases
Measles presents a second example: an easily transmissible disease mostly affecting children, for which large-scale vaccinations began with a U.S. launch in March of 1963, and deaths have dropped by 95% over the last generation, from 2.6 million deaths a year to 600,000 in 2000, 210,000 in 2010, and 128,000 in 2021. Likewise deaths of neo-natal tetanus, after campaigns to vaccinate pregnant women and guarantee antiseptic standards in poor-country maternity clinics, have dropped from 787,000 in 1988 to 309,000 in 2000 and 25,000 in 2018 (the last year for which data is available).
Overall, the invention of new treatments and medicines, worldwide vaccination campaigns, and improving primary-care delivery have helped cut world under-five mortality rates from 132 per 1,000 children in 1980, to 78 per thousand in 2000, and 32 per thousand in 2020, or in overall terms by 70%.
Against this background, the success of the vaccination program for COVID-19 is, again, a remarkable success of focused policy in emergencies, scientific research and development, manufacturing and logistics technologies, and delivery systems. Its speed has been particularly impressive (and the Trade Fact series editor is appropriately grateful). But it’s especially heartening to see that this is not something entirely unique, but more like a representative case in the larger vaccine story.
* More precisely, the Judiciary Committee’s Subcommittee on the Courts, Intellectual Property, and the Internet.
FURTHER READING:
COVID-19:
Gresser on WTO intellectual property rules as supporters of research, exceptions in emergency situations, and the Biden administration’s reasonable choices.
… and from the House Judiciary’s Subcommittee on Courts, Intellectual Property and the Internet, the hearing video and testimonies.
Chad Bown of the Peterson Institute for International Economics maps the international science, manufacturing, and logistical “supply chains” which created COVID-19 vaccines.
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
The United States and the European Union have recently implemented ambitious domestic greenhouse gas reduction programs. But reducing global emissions will not be possible unless China and other middle-income emitting countries cut their emissions. And the different approaches the EU and U.S. have taken create a risk of policy and trade conflicts that divert both from the larger goal of limiting world emissions.
Report authors Paul Bledsoe, Strategic Advisor at PPI and a former Clinton White House climate official, and Ed Gresser, Vice President and Director for Trade and Global Markets and former Assistant U.S. Trade Representative for Trade Policy and Economics, lay out a policy framework where the U.S., EU, and other G7 countries set emissions standards for high-carbon industries, and impose a fee applying to both local production and imported goods with high emissions rates. This trade agreement would help countries meet their emissions goals, avoid imposing trade penalties on each other, and give China and other large emitting, middle-income countries incentives to follow suit.
“The Alliance for Clean Trade (ACT) proposes that the U.S. and our G7 allies ban together to create powerful trade incentives for China and other nations to cut their emissions, so global emissions can fall and we can prevent the worst of climate change impacts,” said Paul Bledsoe. “Without new economic incentives to reduce emissions, our world will see dangerous climate impacts and rising household costs that will soon swamp our ability to adapt and protect public safety at home and around the world. Our framework helps provide a pragmatic, yet ambitious way forward, while also complying with World Trade Organization rules.”
“The world has just had a shining example of U.S.-Europe-Asian collaboration to develop new technologies and products needed to meet a worldwide threat in the case of the COVID-19 vaccines. We need a similar collaborative effort to meet the challenge of climate change, and to induce the large middle-income economies that are the source of new net emissions to become more efficient,” said Ed Gresser. “This paper is an effort to outline such a program, through trade incentives based on common charges for over-production of carbon in the highest-emissions industrial sectors.”
The framework seeks to address three major problems with current policies and other proposals:
The framework creates powerful economic incentives for China and other large emitting, middle-income countries to cut emissions since they now export to the U.S., EU and other allied countries without penalty for higher CO2 emissions.
The framework also harmonizes increasingly disparate climate policies among US, EU and G7 allies for trade purposes, using low emissions intensity by sector as the key metric.
The framework complies with World Trade Organization principles of national treatment and non-discrimination, avoiding the risk that proposals currently being considered in the U.S. Congress might violate U.S. trade obligations, but without requiring widespread U.S. carbon pricing.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C., with offices in Brussels, Berlin and the United Kingdom. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
A low-emissions trade deal to help the United States, the European Union, and their allies harmonize approaches to the clean energy transition and incentivize China and other nations to reduce emissions.
EXECUTIVE SUMMARY
After many years of discord and false starts, the United States, the European Union, and most other major developed economies are implementing ambitious domestic greenhouse gas emissions reduction programs. U.S. and EU emissions, respectively the world’s secondlargest and third-largest flows of carbon dioxide into the atmosphere, are likely to continue to fall sharply as a result.
But their efforts won’t be enough. To avert a disastrous rise in global temperatures, the larger, necessary goal is to reduce global emissions. For this, however, China — whose emissions are now greater annually than the U.S., EU, and all other developed countries combined — must reduce its emissions, and so must other major middle-income emitting countries. So far, that isn’t happening.
Here’s a program that can help: An Alliance for Clean Trade (ACT) that minimizes climate and trade policy conflict among low-emissions economies including the U.S. and EU, accelerates the reduction of emissions in some of their major industrial sectors, and creates strong economic incentives for others, including eventually China, to reduce their own emissions.
The core idea is for the U.S. and EU, joined by other G7 countries and eventually OECD nations, to set emissions standards for high-carbon industries, and impose a fee applying to both local production and imported goods with emissions rates above an agreed emissions intensity standard. This would help them meet their emissions goals, avoid counterproductive rivalries and imposition of trade penalties on one another, and give China and large emitting, middle-income countries incentives to do the same.
Today, the Progressive Policy Institute (PPI) announced that Mitchell Taylor has been hired as a Congressional Policy Fellow to support the Blue Dog Coalition. Taylor will be placed in the office of Congresswoman Mary Peltola (AK-AL), the recently named Blue Dog Coalition Co-Chair for Policy and Legislative Strategy, and will provide critical policy, communications, and administrative support for the 10-member coalition.
The Blue Dog Coalition is led by Congressman Jared Golden (ME-02), Co-Chair for Administration, and Congresswoman Marie Gluesenkamp Perez (WA-03), Co-Chair for Communications and Outreach, in addition to Congresswoman Peltola. Together, these Democrats represent the three most GOP-leaning districts in the House Democratic caucus.
“I am excited to join the Blue Dog team and look forward to helping its members advance common sense policy solutions,” said Mitchell Taylor. “After starting my career working in the Senate, this PPI fellowship opportunity will allow me to take on an expanded policy portfolio in the House and provide support to this exciting group of members who are committed to breaking gridlock and getting things done.”
Prior to joining the Blue Dog Coalition as a PPI Congressional Policy Fellow, Taylor worked in the office of U.S. Senator Jerry Moran (R‑KS). Taylor is also a member of the DC New Liberals, a local chapter of the Center for New Liberalism, a grassroots organization fighting for center-left, pragmatic policies.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
The Blue Dog Coalition is an official caucus in the U.S. House of Representatives comprised of fiscally-responsible Democrats, who are leading the way to find common sense solutions. The Blue Dogs are dedicated to pursuing fiscally-responsible policies, ensuring a strong national defense for our country, and transcending party lines to get things done for the American people. Learn more about the Blue Dogs by visiting https://bluedogcaucus-golden.house.gov/.
Dunn Street founder and Community Organiser Stephen Donnelly was joined by Director of the Project on Center-Left Renewal at the Progressive Policy Institute, Claire Ainsley.
Claire joins the show to discuss the Project on Centre-Left Renewal and how it aims to make center-left parties more competitive and improve their governing performance.
She also discusses her journey into politics and towards working for the Progressive Policy Institute.
Like the lawyer he is, Keir Starmer seems to be calmly and methodically building a conclusive case for Labour’s return to power after a 13-year absence.
True, he’s gotten a big assist from Boris Johnson’s downfall and the ensuing succession chaos among the Tories. But Starmer has deftly steered Labour away from the reefs of doctrinaire socialism — which contributed greatly to its shattering 2019 defeat — and back toward its “home port” among working-class voters.
Why should an American observer from a center-left think tank in Washington take such a keen interest in Labour’s ups and downs?
FACT: Seven countries have ratified the WTO fishery subsidies agreement.
THE NUMBERS: Fishery subsidies (2018 estimates*) –
World
$35.4 billion
Asia
$19.5 billion
China only
$7.5 billion
Europe
$6.4 billion
EU members
$3.8 billion
U.S./Canada/Mexico
$4.4 billion
U.S.
$3.4 billion
South/Central America
$2.0 billion
Africa
$2.1 billion
Oceania
$0.8 billion
* Sumaila et al.
WHAT THEY MEAN:
A year ago at the WTO’s 12th Ministerial Conference in Geneva, the 164 WTO members “reached consensus” — WTO-speak for agreeing on something with no holdouts — on the first new multilateral trade agreement in a decade. This is the “Agreement on Fishery Subsidies,” a trade/environment accord that “prohibits support for illegal, unreported and unregulated (IUU) fishing, bans support for fishing overfished stocks, and ends subsidies for fishing on the unregulated high seas.”
Where does it stand a year later? Some context first, on fish, ships, and money:
Fish: Last year’s fishery market, according to the UN’s Food and Agriculture Organization in State of World Fisheries and Aquaculture 2022, totaled about $406 billion at “first sale” (i.e. price on the dock, rather than on the plate) with $151 billion of this from exports. “Capture” marine fishing (i.e., caught from a boat as opposed to farmed) produced about 80 million tons of seafood, a total which has been roughly stable for the last 25 years. (The freshwater catch came to 10 million tons, and aquaculture about 88 million tons.) To put these figures in context, the human race collectively weighs about 500 million tons.
The top fishing countries by the FAO’s tally are China, Indonesia, Peru, India, and Russia, with the U.S., Vietnam, Japan, Bangladesh, and Norway next. Together, these ten countries catch about half the global “capture fishing” total. China alone, at 13 million tons, makes up about a seventh of the combined marine and freshwater catch, and (see below) is also the largest provider of fishery subsidies. Estimates for the sustainability of this catch often read the data differently, but express similar pessimistic messages. FAO says that “the fraction of fishery stocks within biologically sustainable levels decreased to 64.6% in 2019” (from nearly 90% as of 1974), or in more detail that 35.4% of world fisheries are overfished, 57.3% are at maximum yield, and only 7.2% are “underfished.” The view of the NGO Oceana (not necessarily contradictory in factual terms, but different in emphasis) is that only 17% of fisheries are currently able to produce more fish, and over 80% “cannot withstand additional fishing”.
Ships: The FAO’s report counts 4.1 million fishing vessels on the water in 2022, topped by 2.7 million in Asia and 1 million in Africa. Most are very small, and the total includes 1.5 million sailing or rowing boats. About 45,000, though, are large factory-type ships of lengths over 25 meters and weight above 100 tons. To put this in context, UNCTAD’s World Maritime Review 2022 reports that the world’s cargo fleet comprises 102,899 ships of more than 100 tons. Navies operate about 10,000 boats, while wealthy individuals and businesses sail around in about 10,800 pleasure yachts. So all told, FAO’s figure suggests that about a third of the world’s big ships are large fishing vessels.
It would be nice to think that these large fishing ships are professionally managed and less likely to be involved in IUU or other destructive fishing practices than small boats. But this is not so. One notorious individual case, that of the Vladivostok 2000 — a converted oil tanker said in media reports to be the world’s largest factory fishing vessel — is an example. At 228.6 meters in length and 49,400 tons, it is about twice as large as UNCTAD’s 21,700-ton average for major cargo ships, and can process half a million tons of fish a year. V2K was blacklisted by the South Pacific Regional Fisheries Management Organization as an IUU vessel ten years ago (under its earlier name Damanzaihao) but continues in operation and is en route this week in the Sea of Okhotsk, traveling from Russia’s Maritime Province to Sakhalin Island.
Subsidies: Estimates of the scale of fishery subsidies are currently about $35.4 billion (as of 2018) — that is, nearly a tenth of “first sale” and a quarter of export value. A detailed look from a research group finds these subsidies heavily concentrated in Asia, where China pumps $7.5 billion into fishery fleets each year and other Asian states add $13 billion more. North America and Europe combine for $8 billion; Latin, Africa, and Pacific subsidies are modest by comparison, combining for a value of about $5 billion. About 80% of subsidies go to large boats and fleets, and 20% to smaller boats and artisanal fisheries. By function, $22 billion goes to ramp up the size of fishing fleets, and $7 billion to subsidize fuel.
Back now to the WTO. Last June’s agreement caps fully 24 years of official negotiating, dating back to the Clinton administration’s adoption of fishery subsidy reduction as a WTO cause in the late 1990s. So, quite an accomplishment for governments, activists, scientists, and responsible industry. On the other hand, reaching a consensus on the text was a milestone rather than a final act, and (setting aside big implementation and enforcement jobs), still has two steps to go:
(1) Ratifications and acceptances: The agreement requires ratification by two-thirds of the WTO’s 164 members to go into effect. Only then will countries be required to start cutting back their fishing-fleet enhancement, fuel, and other subsidy budgets. Seven countries have ratified so far: the United States, Canada, Iceland, the Seychelles, Singapore, Switzerland, and the United Arab Emirates.
(2) Unsettled issues: Finally, the agreement has a “provisional” quality, as it left some issues unsettled last year. WTO members need to settle these to make it permanent. Especially notable among them is treatment of subsidies related to overcapacity. Once in force the agreement will last only for four years and self-terminate if these remaining questions aren’t settled in future talks.
FURTHER READING:
Counting fish and boats:
FAO’s State of World Fisheries and Aquaculture 2022 reports on fish take, fleets and employment, sustainability and more. A sample, breaking down the 80 million tons of sea catch:
67 million tons of fish, led by anchovies, Alaska pollock, and skipjack tuna;
5.6 million tons of crustaceans, mostly varieties of shrimp and crab;
5.9 million tons of mollusks, topped by squid;
0.5 million tons of edible jellyfish, sea urchins, sea cucumbers, and miscellaneous other sea life.
Rashid Sumaila et al. in Science Direct tabulate a worldwide $35.4 billion in fishery subsidies by region, purpose, large vs. small ships, and more.
Final thought from the researchers:
“[In the past decade] no real progress to eliminate capacity-enhancing subsidies has been made. For example, fuel subsidies are still the largest subsidy type being provided by countries. This is not good news as this subsidy is the most directly linked to overfishing. A concerted effort by all countries to discipline these subsidies via the WTO or other mechanisms is crucial. … The fact that countries that fall within the high HDI [“high development index,” a UN index of wealth] group, including Russia and China, provided 87% of total global subsidies is telling. It is clear that to discipline subsidies and safeguard marine fisheries, these countries will need to step up.”
Oceana reports that $5.3 billion worth of subsidies, or a fifth of the world total, go to support fleets operating in other countries’ water.
And a list, regularly updated, of 352 vessels blacklisted by Regional Fisheries Management Organizations for IUU fishing.
ABOUT ED
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
