Search

Begin New Search Political Geography Global Focus Publication Year within 10 Years

91. Build Carbon Removal Reserve to Secure Future of EU Emissions Trading

Author:
Wilfried Rickels, Mathias Fridahl, Roland Rothenstein, and Felix Schenuit
Publication Date:
05-2024
Content Type:
Policy Brief
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
• A carbon central bank (CCB) that translates carbon removals into allowances would transform the European Union Emissions Trading System (EU ETS) from a fiat allowance to a gold standard system, ensuring unchanged net emissions on the path to net-zero greenhouse gas (GHG) targets. • Meeting such expectations would require a CCB with a clear commitment to a net-zero GHG target, but also with the capacity to manage the market on the path to that target. • This requires a strong institutional framework, which could be achieved by integrating the CCB into the European Central Bank (ECB), building on its reputation and capacity. • Given the long lead time to set up such an institution, the European Commission should already take the first steps to fulfil the other requirement, namely building up a large carbon removal certificate (CRC) reserve, which would provide the CCB with the credibility to stabilize the market in the future. • To fill the CRC reserve, the EU should emulate the US approach by immediately initiating resultbased carbon removal procurement as a first key step of a sequential approach to integrated carbon removal into climate policy. • This could be achieved by developing a centralized procurement program, supporting existing procurement programs, such as Sweden’s or Denmark’s, and incentivizing additional EU member states to initiate procurement. • An important prerequisite for this is the ability to bank CRCs that are not yet eligible for compliance with near-term EU climate targets and use them in later crediting periods.
Topic:
Climate Change, European Union, Carbon Emissions, Net Zero, and Carbon Central Bank
Political Geography:
Europe and Global Focus

92. Sovereign Haircuts: 200 Years of Creditor Losses

Author:
Clemens M. Graf von Luckner, Josefin Meyer, Carmen M. Reinhart, and Christoph Trebesch
Publication Date:
06-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
We study sovereign external debt crises over the past 200 years, with a focus on creditor losses, or "haircuts". Our sample covers 327 sovereign debt restructurings with external private creditors over 205 default spells since 1815. Creditor losses vary widely (from none to 100%), but the statistical distribution has remained remarkably stable over two centuries, with an average haircut of around 45 percent. The data also reveal that “serial restructurings”, meaning two or more debt exchanges in the same default spell, are on the rise. To account for this trend toward serial renegotiation, we introduce the “Bulow-Rogoff haircut” – a cumulative measure that captures the combined creditor loss across all restructurings during a single debt crisis. Using this measure, we show that longer debt crises deliver larger haircuts and that interim restructurings provide limited debt relief. We further examine past predictors of the size of haircuts and identify “rules of thumb” applicable to future defaults. Poorer countries, first-time debt issuers, and those that borrowed heavily from external creditors all record significantly higher haircuts in case of a default. Geopolitical shocks – such as wars, revolutions, or the break-up of empires – deliver the deepest haircuts. Sovereign debt investment disasters are often linked to (geo-)political disasters.
Topic:
Monetary Policy, Financial Crisis, Geopolitics, Credit, Sovereign Debt, Emerging Economies, Debt Restructuring, and Sovereign Default
Political Geography:
Global Focus

93. International investment income: patterns, drivers, and heterogeneous sensitivities

Author:
Giovanni Donato and Cedric Tille
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Financial globalization has led to a large increase in international asset holdings. While the rise of associated dividend and interest flows has until now been muted by the decreasing trend in interest rates, this pattern could change, leading to a larger role of investment income flows in the balance of payments. We use a broad sample of countries to document the heterogeneous evolution of the various components of investment income flows, with a rising role of FDI and equity income, especially in advanced economies. We then assess the impact of various variables on yields with a panel analysis. Various drivers have highly heterogeneous effects across investment categories and country groups, often impacting the yields on both assets and liabilities. This translates into substantial heterogeneity in the response of countries’ income balance, due to different compositions of asset and liabilities. This heterogeneity is amplified if we consider country-specific estimates in complement to the panel ones. Focusing on the impact of changes in interest rates, we find that higher rates only had a limited impact in the 2013 taper tantrum, investment income balances are likely to benefit from higher US rates in the current phase of higher rates, with offsetting effects of higher domestic rates.
Topic:
International Trade and Finance, Foreign Direct Investment, Financial Markets, Investment, Interest Rates, and Financial Integration
Political Geography:
Global Focus

94. Beyond Borders: Do Gender Norms and Institutions Affect Female Businesses?

Author:
Holger Görg and Ina C. Jäkel
Publication Date:
08-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
In this paper, we investigate whether gender norms and institutions act as a constraint to the performance of female businesses. We exploit novel and unique micro data on start-ups in Denmark, which we combine with information on individual-level characteristics of the entrepreneur as main decision maker of the firm. We overcome the challenge of disentangling norms and institutional biases against women from other constraints and hurdles that female businesses might face by exploiting detailed trade data. In this trade context, we study the relative performance of firms across markets with varying institutions, while controlling for other factors that affect female businesses uniformly across all markets. We provide evidence that gender inequality and institutional biases against women in trade partner countries play an important role in explaining gender differences in export and import behaviour. We also perform an event study of a concrete policy change in a destination market – the introduction of quotas for the share of females on the boards of directors in Norway – and how it has affected the gender gap in trade participation.
Topic:
Globalization, International Trade and Finance, Inequality, Startup, Gender, Opportunity, and Firm Internationalization
Political Geography:
Global Focus

95. When the Exception Overtakes the Rule: COVID-19, Security Exemption Clauses, and International Investment Agreements

Author:
Kayla Maria Rolland
Publication Date:
02-2024
Content Type:
Journal Article
Journal:
The Goettingen Journal of International Law
Institution:
The Goettingen Journal of International Law
Abstract:
In the trade and investment law regimes built in the post-war period, “security exemption clauses” were included within trade and investment agreements as a safety valve, permitting States to deviate from their commitments in the event that their security interests were implicated. Initially, these clauses were understood to be narrowly limited to instances of war and interstate conflict. With the rise of the national security state in the decades since, however, the concept of security interests has ballooned to encompass an ever-growing set of issues, with some fearing that the rules may become irrelevant. This has been particularly facilitated through “third generation” security exemption clauses and their inclusion of self-judging language. The COVID-19 pandemic in particular adds a new dimension to this phenomenon. As a case study analysis of the text of the Chile-Hong Kong, China SAR bilateral investment treaty (BIT) will demonstrate, it may be feasible for States to invoke security exemption clauses to justify measures taken in response to the COVID-19 pandemic in some contexts, particularly with third generation, self-judging security exemption clauses. The expanding notions of security exemption clauses have significant implications for the investor-State dispute system as a whole.
Topic:
Security, International Law, International Trade and Finance, Treaties and Agreements, COVID-19, and International Investment Agreements
Political Geography:
China and Global Focus

96. A New Vision for Peace Operations

Author:
Eugene Chen
Publication Date:
10-2024
Content Type:
Special Report
Institution:
Center on International Cooperation (CIC)
Abstract:
Over the past eight decades, United Nations (UN) peace operations have demonstrated themselves to be valuable tools for prevention, peacemaking, peacekeeping, and peacebuilding. But they have also struggled to meet the expectations of their varied audiences, including the Security Council, host governments, and local populations. Many of these struggles stem from the supply-driven approach to how missions have been planned and deployed, which drives many of the shortcomings that are evident in missions today, such as sprawling mandates that are not focused on the political solutions necessary to resolve conflict, templated approaches to mission design and mandate implementation, and friction with other UN entities and organizations. Although these shortcomings are present throughout the mission lifecycle, they are particularly evident now with ongoing drawdowns and transitions in Mali, Sudan, Somalia, Iraq, and the Democratic Republic of the Congo (DRC) and as countries increasingly turn to alternatives to UN peace operations, such as peace enforcement and counterterrorism operations undertaken by regional organizations and ad hoc coalitions, despite their poor track record at fostering lasting peace. A new approach to peace operations is necessary to overcome these shortcomings, one that acknowledges that UN peace operations always operate in an environment alongside other actors and that no single entity or organization has the capacity and resources to tackle the full range of activities required to help a country towards sustaining peace. In advocating for a shift in the planning, design, and management of UN peace operations, this report provides ideas for how to implement recommendations from A New Agenda for Peace as well as considerations for the upcoming 2025 peacebuilding architecture review (PBAR). Elements of this approach can already be put into practice as part of transition contexts, where the Peacebuilding Commission and the General Assembly can play an important role in considering follow-on arrangements and how to provide countries with tailored packages of support to national prevention strategies. By allowing peace operations to better meet the expectations of key stakeholders such as the host government and Security Council while reducing friction with the UN country team and other actors, this new approach can help overcome the current crisis of confidence in UN peace operations and ensure that the UN can continue to play an important role in the maintenance of international peace and security in a time of increasing geopolitical contestation.
Topic:
Conflict Prevention, United Nations, Peacekeeping, and Peacebuilding
Political Geography:
Global Focus

97. Tipping the Scales: Towards a People-Centered Justice Approach to Resilience in Fragile Contexts

Author:
Jonathan Papoulidis, Swati Mehta, and Nate Edwards
Publication Date:
10-2024
Content Type:
Special Report
Institution:
Center on International Cooperation (CIC)
Abstract:
Once synonymous with food security, resilience has undergone a quiet revolution over the last decade, shifting from a sector silo to an emerging paradigm of engagement for donors and multilateral institutions. This paper traces the evolution and importance of this emerging resilience paradigm and the simultaneous rise of people-centered approaches to justice (PCJ). It argues that PCJ is a vital but missing element of the new resilience paradigm and key to its success. The paper proposes a conceptual framework for a PCJ approach to resilience and offers a few illustrative examples of how the framework might be applied to fragile contexts and beyond. The examples used are not prescriptive, but rather intend to offer grounding to what is otherwise a largely conceptual framework. The application of the framework will require additional resources, on-the-ground research, and comprehensive analysis. Ultimately, the paper argues that humanitarians, peacebuilders, resilience experts, and justice actors must work together to tip the scales of justice in favor of people’s resilience in fragile contexts.
Topic:
Displacement, Justice, and Resilience
Political Geography:
Global Focus

98. The Pact of the Future—Financing Issues

Author:
Betty N. Wainaina and Sarah Cliffe
Publication Date:
01-2024
Content Type:
Commentary and Analysis
Institution:
Center on International Cooperation (CIC)
Abstract:
Submissions for the Summit of the Future were requested at the end of 2023. CIC developed and submitted a short input on financing and the Sustainable Development Goals (SDGs). This note lays out our rationale and narrative concerning financing for development. Why is financing such a contentious issue? In part, this is because the events of the last few years have increased global financing needs—for pandemic recovery and preparedness, for climate, for social protection and economic development to overcome price shocks and other international pressures. In addition, global financing plays a role in escalating grievances about double standards. Double standards are, of course, a broader argument, from failure to coordinate COVID-19 vaccines to questions over different applications of international humanitarian and human rights law in Ukraine versus Palestine. Financing plays a role here, however, because of obvious inequities following COVID-19. HICs spent 24 percent of their gross domestic product (GDP) on stimulus and social protection programs in the first year of COVID-19; MICS could spend only 6 percent and LICS only 2 percent. Debt distress has risen dramatically in the last four years; 25 percent of emerging market countries are at high risk of default, while among low-income countries 60 percent are either at high risk of default or already in default. Some of the reasons financing paragraphs became contentious in recent resolutions are more process-based. Using the SDG Summit Political Declaration as an example, the draft text was too detailed in some respects and laid open challenges as to what should be decided in different governance structures. Some areas were insufficiently tailored to the current state of debate at the IFIs, G20, and other international platforms, risking being out of date at the time of publication. In some aspects, they were not specific enough, missing an opportunity to bring new ideas to the table. Last, they did not focus sufficiently on the core comparative advantage of a UN platform for these discussions, which is to link the achievement of the SDGs, global political stability, and peaceful international relations with financing.
Topic:
Development, Finance, Sustainable Development Goals, and Multilateralism
Political Geography:
Global Focus

99. Taking Stock of 2023 and Looking Ahead to 2024: How to Combine Realism with Hope?

Author:
Center on International Cooperation
Publication Date:
01-2024
Content Type:
Commentary and Analysis
Institution:
Center on International Cooperation (CIC)
Abstract:
The final months of 2023 were extraordinarily grim. The world had already weathered four years of repeated crises. The horrific attack on Israel carried out by Hamas on October 7 has resulted in a response by Israel in the Occupied Palestinian Territory (OPT) that has ignored all norms of international humanitarian and human rights law. This has resulted in an estimated 20,000+ deaths to date. CIC’s annual 2023-2024 analysis outlines takeaways from the previous year and key trends for the new year. Notably, it delves into major global conflicts impacting international peace, lesser-known trends, and economic disparities. Additionally, it explores prospects for 2024, including potential peace breakthroughs and advancements in revamping outdated multilateral approaches. In Russia’s invasion of Ukraine, Hamas’s brutal attack on Israel, and the appalling suffering caused by Israel’s attempt to wipe out Hamas in Gaza, it is evident that double standards have been applied in matters concerning human rights and that, despite the 75th anniversary of the Universal Declaration of Human Rights, societies still struggle to recognize the common humanity of their adversaries. At the same time, crises in other regions and long-term challenges, such as debt and socioeconomic pressures, struggle to garner any attention. This has spurred visceral political responses in many countries, turning inward and perhaps “sleepwalking” toward greater global catastrophe, as we have seen in the past in less interconnected times.
Topic:
Conflict, Peacebuilding, Russia-Ukraine War, October 7, and 2023 Gaza War
Political Geography:
Global Focus

100. Fragility, Conflict, and Violence at the World Bank—Recommendations for the Spring Meetings

Author:
Sarah Cliffe, Daniel Friedman, Betty N. Wainaina, and Céline Monnier
Publication Date:
04-2024
Content Type:
Commentary and Analysis
Institution:
Center on International Cooperation (CIC)
Abstract:
The World Bank Governors meet at the International Monetary Fund (IMF)-World Bank (WB) Spring Meetings this week to discuss progress on the World Bank’s Evolution Roadmap. Much of this discussion will focus on financing, including commitments to the hybrid facility and the prospects for the upcoming International Development Association (IDA) replenishment. Equally important, however, is whether and how the World Bank continues to play a leading role in international support to countries affected by fragility, violence, and conflict. In this piece, the authors provide recommendations for the International Monetary Fund and World Bank Spring Meetings 2024, considering how the World Bank Evolution Roadmap addresses conflict, fragility, and violence; and the importance for the Bank to maintain its financial allocations to prevention in the upcoming International Development Association round of financing.
Topic:
Development, World Bank, Conflict, Violence, IMF, and Fragility
Political Geography:
Global Focus