Subsidies vs Taxes & Dispersion of Scientific Information

This is a brief reflection on two of the points raised last class. Makena’s “Should we subsidize renewables or tax carbon emitters to promote energy transition?” and Pachauri’s statement on the importance of disseminating scientific information to influence official decisions on climate issues.

Regarding Makena’s, the political cost of subsidizing an economic sector is normally much less than increasing taxes since subsidies do not directly impose a fiscal burden on taxpayers and not rarely unscrupulously distribute resources among comrades strengthening the status quo. From an economic standpoint, subsidy artificially stimulates local production shifting dangerously the balance between supply and demand and oftentimes disregarding global market volatility. In Brazil, most cars were filled up with sugarcane ethanol after 1973 oil crisis. But when sugar mill owners demanded more financial incentives to offset losses by cheaper oil and higher sugar prices, the country’s national deficit increased dramatically forcing this command-control initiative to cease. Nowadays carmakers manufacture flexfuels but ethanol prices have been fluctuating due to cheaper oil, harvest uncertainties, and exponential demand.

Taxation directly affects demand. As the government decides to expand its fiscal policy, less resource is left out in consumers’ pockets and voters tend not to re-elect representatives limiting personal savings. Nevertheless, restricting demand by increasing prices of carbon-related products is economically acceptable taking into account that energy suppliers will be then forced to invest in research and development of alternatives to remain market competitive. These market adjustments are expected to lead the economy to an equilibrium in which sellers make more profit and consumers enjoy alternatives without price pressure. This ideal economic and environmental scenario, however, only becomes a reality if the market operates close to capacity and if one assumes that political interests do not play any role whatsoever in economic decisions. The WTO’s nitty-gritty commercial battles reveal that the current economic system - as well as 21st century political decision-making – still borrows nation-state principles from mid 1600s.

As for Pachauri’s statement highlighting IPCC’s efforts in disseminating scientific information to strengthen contemporary effort in addressing the origins and the effects of historic climate change, I believe that the panel is on the right track by encouraging social scientists to engage in observations and data analysis of cumulative greenhouse gases. Economists, for example, could design models demonstrating that tackling global warming actually spurs economic growth and development in the short term. Research questions would evolve on the assumption that the effective use of renewables improves overall well-being by keeping costs at minimum levels in comparison with future expenses. Translating this academic explanation into an appealing message to the lay public is the following challenge. Images and sounds are powerful ways of constructing visible and tangible scenarios.

So, in order to drive positive changes and shape collective behavior apart from expensive law enforcement, IPCC staff could adopt unorthodox strategies and start mingling with producers, writers, and artists. As mostly of the world population watch movies, contemporary communication dilemma seems to be defining which type of vision makes us sympathize with others’ plight evoking immediate action: an apocalyptical “Inconvenient Truth” or a thoughtful “Waste Land”?

Testimony and Policy-Making

Testifying is the opportunity that constituents enjoy to voice their concerns during legislature process. Both writing and oral deliveries must be concise, logical, and passionate.

Enlisted arguments for or against a bill must include facts, figures, quotation from authority as well as lessons learned and best practices from other localities.

During oral delivery, it is important to follow protocol, maintain eye contact, stick to time allotted, conclude summarizing main ideas, and only answer questions that one is sure about. Saying “I do not know but will get back to you as soon as I find this information” is highly recommended to avoid uncertainty and contradictions.

Delivering testimonies does not only represent high civic engagement but mainly an instrument that constituents should make use of to help policy-makers make informed decisions and ensure that the enforcement of public policies will benefit the collectivity.

More on testimony and legislature process can be watched on the funny videos below.

http://www.youtube.com/watch?v=k1T75jBYeCs
http://www.youtube.com/watch?v=mEJL2Uuv-oQ

Lobby and Policy-Making

I have recently had a class about lobbying.

Honestly, my shallow and previous understanding of this activity was to be less community and more “money-oriented”.

Now, I still suspect that money - or "gift exchange"- plays an important role throughout legislature processes but also admit the importance of this activity to reinforce democratic values.

Lobby is commonly defined as having someone advocating a given cause among policy and decision-makers.

Lobbyists are hired based on their procedural knowledge, language ability, and relationships cultivated.

Private companies, for instance, pay them to mitigate damage that a bill may have on profit.

Non-governmental organizations rely on lobbyists to reach legislators by providing factual information on a certain issue. This initiative has proven to be more persuasive than presenting thousands of lists with millions of signatures of angry constituents.

The main point, however, to appreciate the work done by lobbyists is the provision of accurate figures that they introduce to policy-makers in the process of turning bills into laws.

Even well-prepared and hard worker representatives cannot be familiar with every topic they are required to read and vote. Lobbyists, from both sides – in favor and against a given bill – are the ones that decision-makers expect to hear in straightforward testimonies the advantages and disadvantages of a bill from different groups’ standpoints.

As legislators receive organized information, they are able to analyze more critically the issue on display and writing legal compositions that later on will feature more balance among the groups mostly affected by this regulation whenever enforcement is required.

Lobby, therefore, constitutes an activity that the more it is carried out by competent professionals, the more informed decisions public authorities make, and the more communities and other groups enjoy rights protected by the rule of law.

PS. Lobbyists also play an important role in helping local leaders to organize the social network of their communities. They also ensure that decision and policy-makers hear and address collective concerns in a timely manner.