How Obama Can Slow the Rising of the Oceans with World Bank Appointee

clinton-summers-world-bank-president

Over the next few weeks, President Obama has a fateful personnel decision to make, and one that will influence the world’s climate, in a way that he has been unable to do through the recalcitrant billionaire-funded opposition congress in the US.

World Bank President Robert Zoellick, a Bush-appointee, will step down in June, and President Obama is responsible for proposing the selection of his replacement.

The World Bank made $57 billion in loans in the last fiscal year, and much more in carbon credits that create private financing of renewable energy – and its focus is on the developing world. It can either invest in dirty coal in developing regions in North Africa, or in renewable energy development.

(Some examples I’ve  covered here – World Bank Grants Egypt 1.2 Billion Egyptian Pounds For Wind,World Bank to Fund Massive Grid Expansion To Link Desertec Could Morocco be First to Get 42% Solar? and World Bank to Fill in till Global Climate Deal?)

So the leadership of the World Bank is crucial at a time in world history when decisions about how the last two billion get their energy will decide whether or not “this was the moment when the rise of the oceans began to slow and our planet began to heal” as candidate Obama promised.

The two possible replacements being touted in the press are Secretary of State Hillary Clinton – who has said she does not want the post, and Larry Summers – who has said nothing, but has allowed his friend, Timothy Geithner to tout him for the post, from within the administration.

Summers has racked up considerable ill-will during his brief tenure till 2011 with this administration, as a result of his handling of the bank bailouts, as Obama’s first director of the National Economic Council. But even worse, is the evidence of some astoundingly insensitive arrogance while VP of the World Bank in 1991.

The Memo
DATE: December 12, 1991
TO: Distribution
FR: Lawrence H. Summers
Subject: GEP

‘Dirty’ Industries: Just between you and me, shouldn’t the World Bank be encouraging MORE migration of the dirty industries to the LDCs [Less Developed Countries]? I can think of three reasons:

1) The measurements of the costs of health impairing pollution depends on the foregone earnings from increased morbidity and mortality. From this point of view a given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.

2) The costs of pollution are likely to be non-linear as the initial increments of pollution probably have very low cost. I’ve always though that under-populated countries in Africa are vastly UNDER-polluted, their air quality is probably vastly inefficiently low compared to Los Angeles or Mexico City. Only the lamentable facts that so much pollution is generated by non-tradable industries (transport, electrical generation) and that the unit transport costs of solid waste are so high prevent world welfare enhancing trade in air pollution and waste.

3) The demand for a clean environment for aesthetic and health reasons is likely to have very high income elasticity. The concern over an agent that causes a one in a million change in the odds of prostrate cancer is obviously going to be much higher in a country where people survive to get prostrate cancer than in a country where under 5 mortality is is 200 per thousand. Also, much of the concern over industrial atmosphere discharge is about visibility impairing particulates. These discharges may have very little direct health impact. Clearly trade in goods that embody aesthetic pollution concerns could be welfare enhancing. While production is mobile the consumption of pretty air is a non-tradable.

Whether it was satirical as he claims, or not, it is evidence that this is not a man with the vision needed for uch a crucial post at this time in history, by contrast with Clinton.

Unfortunately, Secretary Clinton has oft expressed a desire to leave the world stage at the end of this term as Secretary of State, and has many times reiterated that she is not interested.

“I think after 20 years – and it will be 20 years – of being on the high wire of American politics and all of the challenges that come with that, it would be probably a good idea to just find out how tired I am,” she told reporters last month.

But, while Summers “has expressed interest in the position and has supporters inside the administration, the position would be Clinton’s if she sought it”, according to “some people” quoted by Bloomberg News, “who spoke on condition of anonymity about the private conversations”.

Bloomberg is a reputable source. If they can’t name a source, I have to assume Obama himself is desperately begging Hillary with this unusually unsourced leak to Bloomberg.

Because this is a real chance to begin to do for the planet what can no longer be done as mere President of the extremely disunited states of America.

Related stories:

Facebook Comments

Comments

comments

Leave a Reply

Your email address will not be published. Required fields are marked *

seventeen − fifteen =