Word: globalization
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Dates: during 2000-2009
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...currently create and use them. In the first study, a team of researchers led by Jerry Melillo of the Marine Biological Laboratory in Woods Hole, Mass., projected the effects of a major biofuel expansion over the coming century and found that it could end up increasing global greenhouse-gas emissions instead of reducing them. In the second paper, another team of researchers led by Tim Searchinger of Princeton University uncovered a potentially damaging flaw in the way carbon emissions from bioenergy are calculated under the Kyoto Protocol and in the carbon cap-and-trade bill currently being debated in Congress...
...that's not how it works under Kyoto, which simply exempts all CO2 emissions that come from using biofuels. CO2 emissions resulting from deforestation or other changes in the way we use land are not evaluated at all. The result is a huge, if accidental error in the existing global carbon accounting system - and one that now stands to be repeated in the cap-and-trade bill up for debate in Congress. "It's a very, very large loophole," says Searchinger, who had done pioneering work on problems of biofuels. "We're just effectively ignoring what happens on land...
Given how limited the impact of the Kyoto Protocol has been, the effects of that error have been modest so far. But if the U.S. adopts a cap-and-trade system with the same mistake, or if the world agrees to a truly global successor to Kyoto, the blowback could be enormous. As long as biofuels are incorrectly treated as 100% carbon neutral, they'll represent an economical way for companies to offset their greenhouse-gas emissions and comply with a tightening carbon cap. One study estimates that if the world were to meet a 50% "cut" in global greenhouse...
...haphazard exit from stimulus measures, with countries going their separate ways, could pose its own set of problems. In this era of globalization what one government does in one corner of the world can have a knock-off effect on economies in another corner. For example, countries that raise interest rates ahead of others could end up attracting money from foreign investors seeking a higher return, potentially draining funds away from economies that are still badly in need of investment. Or if too many governments turn off the stimulus tap too quickly, global demand could fall sharply. "An unruly rush...
...some economists believe that a coordinated global exit strategy, especially in regard to monetary policy, will ultimately happen, but by default. The Federal Reserve holds so much influence in the world economy that other central banks might be wary of deviating too far from its policy. "The nature of the coordination is not that bankers sit around a table and do things together," says the University of Leuven's De Grauwe. "The nature is that some of the big guys make a move and force everyone to move." In the global recovery, as in the downturn, everyone may sink...