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PESD affiliated faculty Burton Richter argues in Roll Call that the climate bill passed by the US House of Representatives misses the mark on several fronts, especially in its inadequate funding for long-term research. The Senate must do better.

Will climate change finally wake us from our energy lethargy? Three times in the past 36 years, our nation has suffered from oil shocks and done little to implement lasting policies that could avoid them in the future. We took some small steps in the 1970s and 1990s, but ultimately we failed to close the deal.

Today, we are more dependent than ever on imported oil - two-thirds of our total consumption in 2008 came from other nations compared to one-third in 1973. And today we face the recognized threat of climate change, which will affect the entire world dramatically in the coming decades - unless we and other nations reduce the production of greenhouse gases, primarily carbon dioxide.

For our oil dependence, we took half-measures. Will we do better on climate change? The House version of the climate bill, which passed by a narrow margin, offers some hope, but it misses the mark on several accounts. To satisfy various interests - some legitimate, others selfish - drafters of the legislation compromised away a number of crucial provisions. The big question now: Will the Senate make it better or worse?

The House gives away too many of the emission allowances that are central to cap-and-trade; places too much emphasis on renewables, which are not as ready for the big time as their advocates claim; gives too little emphasis to natural gas and nuclear power, both of which could play a large role in replacing coal; does not fund the necessary long-term research, development and demonstration program that President Barack Obama proposed; and places far too little emphasis on energy efficiency, which is easy to implement and saves money in the long run.

The Senate can do better. It should start by including in the legislation the president's Clean Energy Technology Fund, an investment of $15 billion per year over 10 years to develop affordable, low-emission energy technologies that could be used by the developing world as well as by rich countries. The provision wasn't included in the House bill, and I am one of 34 Nobel Laureates who recently wrote to the president, urging him to try to get Congress to include the fund in a final climate bill.

A stable funding mechanism for basic and applied research, development and demonstration is critical to developing the technologies we will need to greatly cut emissions in a cost-effective manner. The Senate should set aside at least 5 percent of all emission allowances for the Clean Energy Technology Fund, and for purposes of stability of funding, provide support for the full lifetime cost of a competitively selected project at the time the award is made.

Current technologies are a good start, but they are not up to doing the entire job. For example, we have no effective way to store energy from intermittent sources to smooth out the variations of wind and solar output that hugely complicate their use on a large scale.

Another challenge is the use of hydrogen fuel cells to store energy from intermittent sources and use it for transportation. The present cells use so much platinum as a catalyst that the entire yearly world supply of platinum is not enough to supply the fuel cells needed for U.S. auto production, much less the world's.

Our very expensive corn ethanol program is at best a marginal reducer of emissions, and if the effects of land-use changes are included, is positively harmful. There are more advanced biofuels that might actually do some good, but they, too, need more research and a lot more development and demonstration.

Nuclear power, a safe source available 24/7, is being slowed by concern about the lack of a permanent repository for spent nuclear fuel. There is no intermediate-term problem because spent fuel can be stored safely at reactor sites for many years. In the interim, we can do the research and development that might allow us to reduce the volume of waste in a way that is proliferation-resistant.

Energy efficiency is an easy, low-cost way to reduce emissions. There are many ways to improve efficiency in power generation, transportation and buildings that would benefit from the president's fund. Some things don't even need research and development, like an energy audit before the sale of any building that would tell the buyer how to save with simple upgrades that pay for themselves through reduced utility bills. Unfortunately, the House failed to include a provision for the audits, bowing to the National Association of Realtors, which seems to want buyers to know as little as possible.

Tackling climate change is not mission impossible. Deploying today's technologies and supporting the research and development for tomorrow's will put us on the right path toward achieving energy security and mitigating climate change.

Burton Richter is a Nobel Laureate (Physics, 1976), member of the National Academy of Sciences, and a past president of both the American Physical Society and the International Union of Pure and Applied Physics. He is the Paul Pigott professor emeritus at Stanford University and the former director of the Stanford Linear Accelerator Center, one of the Department of Energy's science laboratories.

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The capture and permanent storage of CO2 emissions from coal combustion is now widely viewed as imperative for stabilization of the global climate.  Coal is the world’s fastest growing fossil fuel.  This trend presents a forceful case for the development and wide dissemination of technologies that can decouple coal consumption from CO2 emissions—the leading candidate technology to do this is carbon capture and storage (CCS). 

China simultaneously presents the most challenging and critical test for CCS deployment at scale.   While China has begun an handful of marquee CCS demonstration projects, the stark reality to be explored in this paper is that China’s incentives for keeping on the forefront of CCS technology learning do not translate into incentives to massively deploy CCS in power plant applications as CO2 mitigation would have it.  In fact, fundamental and interrelated Chinese interests—in energy security, economic growth and development, and macroeconomic stability—directly argue against large-scale implementation of CCS in China unless such an implementation can be almost entirely supported by outside funding.  This paper considers how these core Chinese goals play out in the specific context of the country’s coal and power markets, and uses this analysis to draw conclusions about the path of CCS implementation in China’s energy sector. 

Finally, the paper argues that effective climate change policy will require both the vigorous promotion and careful calculation of CCS’s role in Chinese power generation.  As the world approaches the end of the Kyoto Protocol in 2012 and crafts a new policy architecture for a global climate deal, international offset policy and potential US offset standards need to create methodologies that directly address CCS funding at scale.  The more closely these policies are aligned with China’s own incentives and the unique context of its coal and power markets, the better chance they have of realizing the optimal role for CCS in global climate efforts.

 

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Program on Energy and Sustainable Development Working Paper #88
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Varun Rai
Gang He
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Project development is particularly challenging in “frontier” environments where alternative technologies, conflicting laws and agencies, and uncertain benefits or risks constrain the knowledge or decisions of participants.  Carbon capture and storage (“CCS”) projects by means of geologic sequestration are pursued in such an environment.  In these circumstances, entrepreneurs can seek to employ two distinct types of tools:  the game-changer, being an improvement to the status quo for all those similarly situated, generally achieved through collective or governmental action; and the finesse, being an individualized pursuit of an extraordinary project that is minimally affected by a given legal, business or technological obstacle.  These techniques are illustrated in the case of CCS as to ownership of property rights, carbon dioxide (“CO2”) transportation economics, liability for stored CO2 following the closure of injection wells, inter-agency and federal-state conflicts, competing technologies, and uncertain economic or legal incentives.  The finesse and the game-changer should also be useful concepts for creative solutions in other applications.

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Program on Energy and Sustainable Development, Working Paper #87
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Few regions rival the Korean Peninsula in strategic importance to U.S. foreign policy. For half a century, America has stationed tens of thousands of troops in South Korea to defend its ally from the threat of North Korean aggression. South Korea, in turn, is critical to the defense of Japan, another ally and the linchpin of American interests in East Asia. The rise of a nuclear-armed North has upped the ante.

Yet despite the stakes, the two Koreas have registered only episodically on the radar of the United States. The troubling gap between American perceptions of the peninsula and its strategic importance remained an unexplored phenomenon until now. First Drafts of Korea breaks new ground in examining how the American mass media shape U.S. perceptions of both Koreas and, as a result, influence U.S. foreign policy.

Beginning with a detailed analysis of American newspaper coverage of Korea between 1992 and 2003, the book features essays by Western journalists and senior U.S. officials with firsthand experience on the peninsula over the past two decades. These include frank accounts of the unique frustrations of covering Kim Jong-il's North Korea, undoubtedly the most closed and media-unfriendly nation on earth.

Addressing topics ranging from the democratization of South Korea in the 1980s to today's deteriorating nuclear crisis, the book's distinguished contributors offer unique insights into American media coverage of the peninsula and its impact on policymaking in Washington. What emerges is a complex, shifting portrait of two rival nations sharing one peninsula whose future remains inextricably linked to the global security interests of the United States.

Desk, examination, or review copies can be requested through Stanford University Press.

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The U.S. Media and Perceptions of the Last Cold War Frontier

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Donald Macintyre
Daniel C. Sneider
Gi-Wook Shin
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Pharmaceutical policies are interlinked globally and at the same time deeply rooted in local culture. Prescribing Cultures examines how pharmaceuticals and their regulation play an important and often contentious role in the health systems of the Asia-Pacific.

The first section of this timely book analyzes pharmaceutical policy in China, Korea, Japan, Thailand, Taiwan, Australia, and India. The second section focuses on two cross-cutting themes: differences in "prescribing cultures" and physician dispensing; and the challenge of balancing access to drugs with incentives for innovation.

The book's contributors discuss important issues for U.S. policy. These include such hot-button topics as drug imports from Asia, regulation of global supply chains to assure drug safety and quality, new legislation to encourage development of drugs for neglected diseases, and the impact that decisions about pricing, regulation, and bilateral trade agreements have on access to medicines at home and abroad. In Prescribing Cultures, pharmaceutical policy reveals the economic trade-offs, political compromises, and historical trajectories that shape health systems.

Prescribing Cultures also illustrates how cultural legacies shape and are shaped by the forces of globalization, and thus will be of interest to students and scholars well beyond the confines of health policy.

Desk, examination, or review copies can be requested through Stanford University Press

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Karen Eggleston
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India has been famous for arguing that it (and the rest of the developing world) should incur no expense in controlling emissions that cause climate change. The west caused the problem and it should clean it up. That argument is increasingly untenable — both in the fundamental arithmetic of climate change, which is a problem that is impossible to solve without developing country participation, and in the political reality that important western partners will increasingly demand more of India and other developing countries. India’s own public is also demanding more.

The Indian government has outlined a broad plan for what could be done, but the plan still lacks a strategy to inform which efforts offer the most leverage on warming emissions and which are most credible because they align with India’s own interests.

This paper offers a framework for that strategy. It suggests that a large number of options to control warming gases are in India’s own self-interest, and with three case studies it suggests that leverage on emissions could amount to several hundred million tonnes of CO2 annually over the next decade and an even larger quantity by 2030. (For comparison, the Kyoto Protocol has caused worldwide emission reductions of, at most, a couple hundred million tonnes of CO2 per year.) We suggest in addition to identifying self-interest — which is the key concept in the burgeoning literature on “co-benefits” of climate change policy — that it is also important to examine where India and outsiders (e.g., technology providers and donors) have leverage.

One reason that strategies offered to date have remained abstract and difficult to implement is that they are not rooted in a clear understanding of where the Government of India is able to deliver on its promises (and where Indian firms have access to the needed technology and practices). Many ideas are interesting in theory but do not align with the administrative and technological capabilities of the Indian context. As the rest of the world contemplates how to engage with India on the task of controlling emissions it must craft deals that reflect India’s interests, capabilities and leverage on emissions. These deals will not be simple to craft, but there are many precedents for such arrangements in other areas of international cooperation, such as in accession agreements to the WTO.

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Economic and Political Weekly
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Varun Rai
David G. Victor
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Coal is the major primary energy which fuels economic growth in China. The original Soviet-style institutions of the coal sector were adopted after the People's Republic of China was founded in 1949. But since the end of 1970s there have been major changes: a market system was introduced to the coal sector and the Major State Coalmines were transferred from central to local governments. This paper explains these market-oriented and decentralizing trends and explores their implications for the electric power sector, now the largest single consumer of coal.

The argument of this paper is that the market-oriented and decentralizing reforms in the coal sector were influenced by the changes in state energy investment priority as well as the relationship between the central and local governments in the context of broader reforms within China’s economy. However, these market-oriented and decentralizing reforms have not equally influenced the electric power sector. Since coal is the primary input into Chinese power generation, and power sector reform falls behind coal sector reform, the tension between the power and coal sectors is unavoidable and has raised concerns about electricity shortages.

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Program on Energy and Sustainable Development, Working Paper #86
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Donald K. Emmerson
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Jim Castle is a friend of mine. I have known him since we were graduate students in Indonesia in the late 1960s. While I labored in academe he went on to found and grow CastleAsia into what is arguably the most highly regarded private-sector consultancy for informing and interfacing expatriate and domestic investors and managers in Indonesia. Friday mornings he hosts a breakfast gathering of business executives at his favorite hotel, the JW Marriott in the Kuningan district of Jakarta.

Or he did, until the morning of July 17, 2009. On that Friday, shortly before 8am, a man pulling a suitcase on wheels strolled into the Marriott's Lobby Lounge, where Jim and his colleagues were meeting, and detonated the contents of his luggage. We know that the bomber was at least outwardly calm from the surveillance videotape of his relaxed walk across the lobby to the restaurant.

He wore a business suit, presumably to deflect attention before he blew himself up. Almost simultaneously, in the Airlangga restaurant at the Ritz Carlton hotel across the street, a confederate destroyed himself, killing or wounding a second set of victims. As of this writing, the toll stands at nine dead (including the killers) and more than 50 injured.

On learning that Jim had been at the meeting in the Marriott, I became frantic to find out if he were still alive. A mere 16 hours later, to my immense relief, he answered my e-mail. He was out of hospital, having sustained what he called "trivial injuries", including a temporary loss of hearing. Of the nearly 20 people at the roundtable meeting, however, four died and others were badly hurt. Jim's number two at CastleAsia lost part of a leg.

The same Marriott had been bombed before, in 2003. That explosion killed 12 people. Eight of them were Indonesian citizens, who also made up the great majority of the roughly 150 people wounded in that attack - and most of these Indonesian victims were Muslims. This distribution undercut the claim of the country's small jihadi fringe to be defending Islam's local adherents against foreign infidels.

But if last Friday's killers hoped to gain the sympathy of Indonesians this time around by attacking Jim and his expatriate colleagues and thereby lowering the proportion of domestic casualties, they failed. Of the 37 victims whose names and nationalities were known as of Monday, 60% were Indonesians, and that figure was almost certain to rise as more bodies were identified. The selective public acceptance of slaughter to which the targeting of infidel foreigners might have catered is, of course, grotesquely inhumane.

Since Susilo Bambang Yudhoyono was first elected president in 2004, Indonesia's real gross domestic product has averaged around 6% annual growth. In 2008 only four of East Asia's 19 economies achieved rates higher than Indonesia's 6.1% (Vietnam, Mongolia, China and Macau). In the first quarter of 2009, measured year-on-year, while the recession-hit economies of Malaysia, Singapore and Thailand all shrank, Indonesia's grew 4.4%. In the first half of 2009, the Jakarta Stock Exchange soared.

The economy is hardly all roses. Poverty and corruption remain pervasive. Unemployment and underemployment persist. The country's infrastructure badly needs repair. And the economy's performance in attracting foreign direct investment (FDI) has been sub-par: The US$2 billion in FDI that went to Indonesia in 2008 was less than a third of the $7 billion inflow enjoyed by Thailand's far smaller economy, notwithstanding Indonesia's far more stable politics.

Nevertheless, all things considered, the macro-economy in Yudhoyono's first term did reasonably well. We may never know whether the killer at the Marriott aimed to maximize economic harm. According to another expat consultant in Jakarta, Kevin O'Rourke, the day's victims included 10 of the top 50 business leaders in the city. "It could have been a coincidence," he said, or the bombers could have "known just what they were doing".

Imputing rationality to savagery is tricky business. But the attackers probably did hope to damage the Indonesian economy, notably foreign tourism and investment. In that context, the American provenance and patronage of the two hotels would have heightened their appeal as targets. Although the terrorists may not have known these details, the Ritz-Carlton Hotel Company is an independently operated division of Marriott International, Inc, which owns the JW Marriott brand, and both firms are headquartered on the outskirts of Washington DC.

Second-round revenge against the Marriott may also have played a role - assaulting a place that had rebuilt and recovered so quickly after being attacked in 2003. Spiteful retribution may have influenced the decision to re-attack the Kuta tourist area in Bali in 2005 after that neighborhood's recovery from the bomb carnage of 2002. Arguable, too, is the notion that 9/11 in 2001 was meant to finish the job started with the first bombing of the Twin Towers in 1993. And in all of these instances, the economy - Indonesian or American - suffered the consequences.

Panic buttons are not being pushed, however. Indonesian stock analyst Haryajid Ramelan's expectation seems plausible: that confidence in the economy will return if those who plotted the blasts are soon found and punished, and if investors can be convinced that these were "purely terrorist attacks" unrelated to domestic politics.

Sympathy for terrorism in Indonesia is far too sparse for Friday's explosions to destabilize the country. But they occurred merely nine days after Yudhoyono's landslide re-election as president on July 8, with three months still to go before the anticipated inauguration of his new administration on October 20. That timing ensured that some would speculate that the killers wanted to deprive the president of his second five-year term.

The president himself fed this speculation at his press conference on July 18, the day after the attacks. He brandished photographs of unnamed shooters with handguns using his picture for target practice. He reported the discovery of a plan to seize the headquarters of the election commission and thereby prevent his democratic victory from being announced. "There was a statement that there would be a revolution if SBY wins," he said, referring to himself by his initials.

"This is an intelligence report," he continued, "not rumors, nor gossip. Other statements said they wished to turn Indonesia into [a country like] Iran. And the last statement said that no matter what, SBY should not and would not be inaugurated." Barring information to the contrary, one may assume that these reports of threats were real, whether or not the threats themselves were. But why share them with the public?

Perhaps the president was defending his decision not to inspect the bomb damage in person - a gesture that would have shown sympathy for the victims while reassuring the population. He had wanted to go, he said, "But the chief of police and others suggested I should wait, since the area was not yet secure. And danger could come at any time, especially with all of the threats I have shown you. Physical threats."

Had Yudhoyono lost the election, or had he won it by only a thin and hotly contested margin, his remarks might have been read as an effort to garner sympathy and deflect attention from his unpopularity. The presidential candidates who lost to his landslide, Megawati Sukarnoputri and Jusuf Kalla, have indeed criticized how the July 8 polling was handled. And there were shortcomings. But even without them, Yudhoyono would still have won. In this context, speaking as he did from a position of personal popularity and political strength, the net effect of his comments was probably to encourage public support for stopping terrorism.

One may also note the calculated vagueness of his references to those - "they” - who wished him and the country harm. Not once in his speech did he refer to Jemaah Islamiyah, the network that is the culprit of choice for most analysts of the twin hotel attacks. Had he directly fingered that violently jihadi group, ambitious Islamist politicians such as Din Syamsuddin - head of Muhammadiyah, the country's second-largest Muslim organization - would have charged him with defaming Islam because Jemaah Islamiyah literally means "the Islamic group" or "the Islamic community".

One may hope that Din's ability to turn his Islamist supporters against jihadi terrorism and in favor of religious freedom and liberal democracy will someday catch up to his energy in policing language. Yet Yudhoyono was right not to mention Jemaah Islamiyah. Doing so would have complicated unnecessarily the president's relations with Muslim politicians whose support he may need when it comes to getting the legislature to turn his proposals into laws. Nor is it even clear that Jemaah Islamiyah is still an entity coherent enough to have, in fact, masterminded last Friday's attacks.

Peering into the future, one may reasonably conclude that the bombings' repercussions will neither annul Yudhoyono's landslide victory nor derail the inauguration of his next administration. Nor will they do more than temporary damage to the Indonesian economy. As for the personal aspect of what happened Friday, while mourning the dead, I am grateful that Jim and others, foreign and Indonesian, are still alive.

Donald K Emmerson heads the Southeast Asia Forum at Stanford University. He is a co-author of Islamism: Contested Perspectives on Political Islam (Stanford University Press, November 2009) and Hard Choices: Security, Democracy, and Regionalism in Southeast Asia (Stanford/ISEAS, 2008).

Copyright 2009 Asia Times Online (Holdings) Ltd. All rights reserved.

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In an interview with Boston's WBUR90.9, Donald K. Emmerson, the director of the Southeast Asia Forum at Stanford University, discusses theories connecting the recent deadly hotel bombings in Jakarta with Indonesia's July 8 presidential election. Emmerson says Jemaah Islamiyah - a militant Islamist group suspected in the attack - may be trying to focus on foreigners to reduce any public backlash against the violence by targeting "a hotel that is symbolic of foreign investment," but that it is difficult to find a clear motive for the attacks. "I frankly think that these are fanatics, deeply committed to some form of an Islamic state. At that level, if you believe in jihad so deeply, maybe reasonable explanations fall short of the mark."

In an interview with Boston's WBUR90.9, Donald K. Emmerson, the director of the Southeast Asia Forum at Stanford University, discusses theories connecting the recent deadly hotel bombings in Jakarta with Indonesia's July 8 presidential election.  Emmerson says Jemaah Islamiyah - a militant Islamist group suspected in the attack - may be trying to focus on foreigners to reduce any public backlash against the violence by targeting "a hotel that is symbolic of foreign investment," but that it is difficult to find a clear motive for the attacks. "I frankly think that these are fanatics, deeply committed to some form of an Islamic state. At that level, if you believe in jihad so deeply, maybe reasonable explanations fall short of the mark."

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Pharmaceutical policies are interlinked globally, yet deeply rooted in local culture. The newly published book Prescribing Cultures and Pharmaceutical Policy in the Asia-Pacific, edited by Karen Eggleston, examines how pharmaceuticals and their regulation play an important and often contentious role in the health systems of the Asia-Pacific.

In this colloquium, contributors to Prescribing Cultures discuss how the book analyzes pharmaceutical policy in China, Korea, Japan, Thailand, Taiwan, Australia, and India, focusing on two cross-cutting themes: differences in “prescribing cultures” and physician dispensing; and the challenge of balancing access to drugs with incentives for innovation.

As Michael Reich of Harvard University says in his Forward to Prescribing Cultures,

“The pharmaceutical sector…promises great benefits and also poses enormous risks.… Conflicts abound over public policies, industry strategies, payment mechanisms, professional associations, and dispensing practices—to name just a few of the regional controversies covered in this excellent book.

The tension between emphasizing innovation versus access -- a topic of hot debate on today’s global health policy agenda -- is examined in several chapters…

This book makes a special contribution to our understanding of the pharmaceutical sector in China… Globalization is galloping forward, with Chinese producers pushing the pace at breakneck speed. More and more, our safety depends on China’s ability to get its regulatory act together…”

The colloquium features presentations by Naoko Tomita (Keio University), Anita Wagner (Harvard University), and Karen Eggleston (Stanford FSI Shorenstein Asia-Pacific Research Center). They will give specific examples of how pharmaceutical policy serves as a window into the economic tradeoffs, political compromises, and historical trajectories that shape health systems, as well as how cultural legacies shape and are shaped by the forces of globalization.

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Anita Wagner Speaker Harvard University
Naoko Tomita Speaker Keio University

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Senior Fellow at the Freeman Spogli Institute for International Studies
Center Fellow at the Center for Health Policy and the Center for Primary Care and Outcomes Research
Faculty Research Fellow of the National Bureau of Economic Research
Faculty Affiliate at the Stanford Center on China's Economy and Institutions
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Karen Eggleston is a Senior Fellow at the Freeman Spogli Institute for International Studies (FSI) at Stanford University and Director of the Stanford Asia Health Policy Program at the Shorenstein Asia-Pacific Research Center at FSI. She is also a Fellow with the Center for Innovation in Global Health at Stanford University School of Medicine, and a Faculty Research Fellow of the National Bureau of Economic Research (NBER). Her research focuses on government and market roles in the health sector and Asia health policy, especially in China, India, Japan, and Korea; healthcare productivity; and the economics of the demographic transition.

Eggleston earned her PhD in public policy from Harvard University and has MA degrees in economics and Asian studies from the University of Hawaii and a BA in Asian studies summa cum laude (valedictorian) from Dartmouth College. Eggleston studied in China for two years and was a Fulbright scholar in Korea. She served on the Strategic Technical Advisory Committee for the Asia Pacific Observatory on Health Systems and Policies and has been a consultant to the World Bank, the Asian Development Bank, and the WHO regarding health system reforms in the PRC.

Director of the Asia Health Policy Program, Shorenstein Asia-Pacific Research Center
Stanford Health Policy Associate
Faculty Fellow at the Stanford Center at Peking University, June and August of 2016
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