Adverse Selection in an Opt-in Emissions Trading Program: The Case of Sectoral Crediting for Transportation
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Sectoral crediting mechanisms such as sectoral no-lose targets have been proposed as a way to provide incentives for emission reductions in developing countries as part of an international climate agreement, and scale up carbon trading from the project-level Clean Development Mechanism to the sectoral level.
Countries would generate tradable emission credits (offsets) for reducing emissions in a sector below an agreed crediting baseline. However, large uncertainties in the regulator's predictions of the counterfactual business-as-usual baseline are likely to render sectoral no-lose targets an extremely unattractive mechanism in practice, at least for the transportation case study presented here. Given these uncertainties, the regulator faces a tradeoff between efficiency (setting generous crediting baselines to encourage more countries to opt in) and limiting transfer payments for non-additional offsets (which are generated if the crediting baseline is set above business-as-usual).
The first-best outcome is attainable through setting a generous crediting baseline. However, this comes at the cost of either increased environmental damage (if developed country targets are not adjusted to account for non-additional offsets), or transfers from developed to developing countries that are likely to be too high to be politically feasible (if developed country targets are made more stringent in recognition that many offsets are nonadditional). A more stringent crediting baseline still generates a large proportion of non-additional offsets, but renders sectoral no-lose targets virtually irrelevant as few countries opt in.
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Program on Energy and Sustainable Development
NNPC and Nigeria's Oil Patronage Ecosystem
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Nigeria depends heavily on oil and gas, with hydrocarbon activities providing around 65 percent of total government revenue and 95 percent of export revenues. While Nigeria supplies some LNG to world markets and is starting to export a small amount of gas to Ghana via pipeline, the great majority of the country's hydrocarbon earnings come from oil. In 2008, Nigeria was the 5th largest oil exporter and 10th largest holder of proved oil reserves in the world according to the U.S. Energy Information Administration. The country's national oil company NNPC (Nigerian National Petroleum Corporation) sits at the nexus between the many interests in Nigeria that seek a stake in the country's oil riches, the government, and the private companies that actually operate the vast majority of oil and gas projects.
Through its many divisions and subsidiaries, NNPC serves as an oil sector regulator, a buyer and seller of oil and petroleum products, a technical operator of hydrocarbon activities on a limited basis, and a service provider to the Nigerian oil sector. With isolated exceptions, NNPC is not very effective at performing its various oil sector jobs. It is neither a competent oil company nor an efficient regulator for the sector. Managers of NNPC's constituent units, lacking the ability to reliably fund themselves, are robbed of business autonomy and the chance to develop capability. There are few incentives for NNPC employees to be entrepreneurial for the company's benefit and many incentives for private action and corruption. It is no accident that NNPC operations are disproportionately concentrated on oil marketing and downstream functions, which offer the best opportunities for private benefit. The few parts of NNPC that actually add value, like engineering design subsidiary NETCO, tend to be removed from large financial flows and the patronage opportunities they bring.
Although NNPC performs poorly as an instrument for maximizing long-term oil revenue for the state, it actually functions well as an instrument of patronage, which helps to explain its durability. Each additional transaction generated by its profuse bureaucracy provides an opportunity for well-connected individuals to profit by being the gatekeepers whose approval must be secured, especially in contracting processes. NNPC's role as distributor of licenses for export of crude oil and import of refined products also helps make it a locus for patronage activities. Corruption, bureaucracy, and non-market pricing regimes for oil sales all reinforce each other in a dysfunctional equilibrium that has proved difficult to dislodge despite repeated efforts at oil sector reform.
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Economic Modernization in Late British India: Hindu-Muslim Differences
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The Muslims of South Asia made the transition to modern economic life more slowly than the region’s Hindus. In the first half of the twentieth century, they were relatively less likely to use large-scale and long-living economic organizations, and less likely to serve on corporate boards. Providing evidence, this paper also explores the institutional roots of the difference in communal trajectories. Whereas Hindu inheritance practices favored capital accumulation within families and the preservation of family fortunes across generations, the Islamic inheritance system, which the British helped to enforce, tended to fragment family wealth. The family trusts (waqfs) that Muslims used to preserve assets across generations hindered capital pooling among families, and they were ill-suited to profit-seeking business. Whereas Hindus generally pooled capital within durable joint family enterprises, Muslims tended to use ephemeral Islamic partnerships. Hindu family businesses facilitated the transition to modern corporate life by imparting skills useful in large and durable organizations.
Timur Kuran is Professor of Economics and Political Science, and Gorter Family Professor of Islamic Studies at Duke University. His research focuses on social change, including the evolution of preferences and institutions. He has just completed a book, The Long Divergence (Princeton University Press, forthcoming 2010), on the role that Islam played in the economic rise of the Middle East and, subsequently, in the institutional stagnation that accompanied the region's slip into a state of underdevelopment. Some of the archival work on which this book was based will be published, also in 2010, as a ten-volume bi-lingual set entitled Kadı Sicilleri. Among Kuran's earlier publications are Private Truths,(Harvard University Press, Işığında 17. Yüzyıl İstanbul'unda Ekonomik Yaşam / Economic Life in Seventeenth-Century Istanbul, as Reflected in Court Registers Public Lies: The Social Consequences of Preference Falsification 1995) and Islam and Mammon: The Economic Predicaments of Islamism (Princeton University Press, 2004), each translated into several languages, including Turkish.
Link to paper: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1656038
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Timur Kuran
Professor of Economics and Political Science
Speaker
Duke University
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Earn-Key Joo of Samsung Electronics broadening his global perspective at Shorenstein APARC
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While Samsung's headquarters are based in Seoul, the larger research and development and operational offices are located in Suwon, a city in close proximity to Seoul. Samsung is the current leader of the global electronics market, manufacturing everything from televisions to refrigerators, and semiconductors to mobile phones. It is especially strong in the LED television, color monitor, memory chip, and LCD panel product sectors. Samsung is now trying to advance in the mobile phone market with the introduction of its Galaxy S smartphone, which is available in the United States.
Joo is currently researching ways for Samsung to maintain its market lead. Even as the current leader, he said, market changes could affect the company's success. Joo is studying the case of Sony, a previous electronics market leader, and the factors that led to the loss of its position. His advisor for the project is Gi-Wook Shin, director of Shorenstein APARC and the Korean Studies Program.
In addition to his research project, Joo is taking advantage of his time at Stanford University to improve his English-language skills. He is proficient at reading English, and is using the opportunity to strengthen his speaking ability. He also hopes in the coming months to attend more events, especially in order to learn about the systems of other companies. Joo has already participated in site visits to Cisco, the Federal Reserve Bank of San Francisco, and Palo Alto Utilities.
Joo, who has previously not had the experience of living abroad and has had few opportunities to engage with people from other countries, says, "This is a very good time for me to widen my global perspective." He wants to interact as much as possible with the other fellows-who come from diverse work sectors and different countries in Asia-to exchange information, including best practices, based on each fellow's unique professional experience.
After he returns to Korea, Joo plans to take some of the information he has gained from his research and his exchange of knowledge with other fellows and share it with different development and marketing teams at Samsung, in addition to applying it in his own job. Samsung, Joo believes, is in need of creativity now and he is exploring ways it can develop this in its employees.
In between research and company visits, Joo has been able to spend valuable time with his family, which has traveled with him from Korea. They are planning to visit as many places as possible in the United States and have already visited Yellowstone National Park and are planning a trip to Alaska.
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Corporate Affiliates Program welcomes 2010-2011 fellows to Stanford
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As the new academic year is about to get underway, the Corporate Affiliates Program of Shorenstein APARC welcomes its new class of fellows for the 2010-2011 academic year:
- Minoru Aosaki, Ministry of Finance, Japan;
- Wataru Ishii, Shizuoka Prefecture, Japan;
- Earn Key Joo, Samsung Electronics, Republic of Korea;
- Toshifumi Kadowaki, Sumitomo Corporation, Japan;
- Takeshi Kondo, Mitsubishi Electric, Japan;
- Yuichi Moronaga, Ministry of Economy, Trade and Industry, Japan;
- Makoto Murata, Kansai Electric Power Company, Japan;
- Pradnya Palande, Reliance Industries, India;
- Seung Gun Park, Samsung Electronics, Republic of Korea;
- Puangthong Pawakapan, the Asia Foundation / Chulalongkorn University, Thailand;
- Oshie Sato, Sumitomo Corporation, Japan;
- Naoki Takeuchi, Development Bank of Japan, Japan;
- Hirofumi Takinami, Ministry of Finance, Japan;
- Sonya Vasudeva, Reliance Industries, India; and
- Eiichi Yamamoto, Japan Patent Office, Japan.
During their stay at Stanford University, the fellows will audit classes, study English, and conduct individual research projects, which they will then present about at the end of the year. They will have the opportunity to consult with Shorenstein APARC's scholars and attend events featuring visiting experts from around the world. The fellows will also participate in special events and site visits to gain a first-hand understanding of business, society, and culture in the United States.
The Corporate Affiliates website will feature interviews with of each of the 2010-2011 fellows throughout the coming year.
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China 2.0: The Rise of a Digital Superpower (October 2010)
中文版--Chinese version available here
China 2.0 Beijing Overview Videos Now Online!
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The Stanford Program on Regions of Innovation and Entrepreneurship (SPRIE) will host China 2.0 in Beijing on October 18-19, 2010 at the Grand Millennium Hotel in Beijing's central business district. (This event builds on the successful inaugural China 2.0 conference in Silicon Valley at Stanford University on May 24-25
China 2.0 will focus on the leaders driving China's continued ascendance as a "digital superpower" and analyze the strategies they are adopting for success.
China 2.0 is the preeminent new media forum about the dynamic PRC digital landscape that combines the right mix of strategic thinking, practical application and networking.
Fritz Demopoulos, CEO, Qunar.com
The agenda is available here. Please note this event will utilize simultaneous Chinese-English interpretation for the convenience of all participants.
China 2.0 Beijing will feature Internet & e-commerce CEOs and senior executives from China and the US, including members of Stanford's alumni network.
The conference will open with a special session reuniting the two scientists who established the first connection between China and the Internet in 1993: Xu Rongsheng, Institute of High Energy Physics in Beijing and Les Cottrell, Stanford Linear Accelerator Center (SLAC).
Keynote addresses will be given by:
- James Ding, Managing Director, GSR Ventures
- Bill Huang, General Manager, China Mobile Research Institute
- Victor Koo, CEO, YouKu
- John Liu, Vice President, Google
- Shen Haoyu, Senior Vice President--Operations, Baidu
- Brian Wong, Global Head of Sales, Alibaba
The China 2.0 event was bang up-to-date with content and stimulating debate from key players in the Chinese market. The organization was very professional bringing together China players and interested parties from the Bay Area.
--Graham Kill, CEO, Irdeto and CTO, Naspers
Format
China 2.0 is a highly engaging and interactive forum, featuring extensive video material, dynamic panel presentations and Q&A. We also have developed a China 2.0 application which is available now at the Apple Application store, for both iPad and iPhone/iTouch devices.
Final agenda (printable version here):
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Monday, October 18, 2010 |
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| 8:30 - 9:00 | Registration |
| 9:00 - 9:15 |
Welcome Remarks from China 2.0 Co-Chairs |
| 9:15 - 9:45 | Special Feature: How the Internet Came to China—and China to the Internet Short video and reunion (via Cisco TelePresence) of the two scientists who established the first connect between China & the Internet in 1993. Les Cottrell, Stanford Linear Accelerator Center (SLAC), Stanford University |
| 9:45 - 10:25 | Keynote Speech: Victor Koo, CEO, Youku (Stanford MBA '94) |
| 10:25 - 10:45 | Break |
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10:45 - 12:00 |
Mobile 2.0: Apps & Ads |
| 12:00 - 12:40 | Keynote Speech: James Ding, Managing Director, GSR Ventures |
| 12:40 - 1:45 | Hosted Lunch: CBD International Restaurant (lobby level of Grand Millennium Hotel) |
| 1:45 - 2:25 | Keynote Speech: Bill Huang, General Manager, China Mobile Research Institute |
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2:25 - 3:45 |
Shopping 2.0: Consumer e-Commerce in China |
| 3:45 - 4:05 | Break |
| 4:05 - 4:35 | Global Media Industry Outlook: Joel Budd, Media Editor, The Economist (London) |
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4:35 - 5:55 |
Games Market Outlook |
| 5:55 - 6:00 | Wrap and Day 2 Outline by China 2.0 Co-chairs, Marguerite Gong Hancock and Duncan Clark |
| Tuesday, October 19, 2010 | |
| 8:30 - 9:00 | Registration |
| 9:00 - 9:05 | Welcome Remarks by China 2.0 Co-Chairs, Marguerite Gong Hancock and Duncan Clark |
| 9:05 - 9:45 | Keynote Speech: John Liu, Vice President, Google |
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9:45 - 10:45 |
The Outlook for Trans-Pacific Entrepreneurship and Innovation—Indigenous & International? |
| 10:45 - 11:00 | Break |
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11:00 - 12:00 |
Marketing 2.0 |
| 12:00 - 12:40 | Keynote Speech: Brian Wong, Head of Global Sales, Alibaba |
| 12:40 - 1:45 | Hosted Lunch: CBD International Restaurant (lobby level of Grand Millennium Hotel) |
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1:45 - 3:00 |
Social Networking |
| 3:00 - 3:40 | Keynote Speech: Shen Haoyu, Senior Vice President-Operations, Baidu |
| 3:40 - 4:00 | Break |
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4:00 - 5:00 |
TV 2.0: The Future of TV & Three Network Convergence in China |
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5:00 -6:15 |
Fueling China 2.0 |
| 6:15 | Apple iPad Lucky Draw & Close by China 2.0 Co-Chairs Marguerite Gong Hancock and Duncan Clark |
The first China 2.0 provided a great selection of topics and speakers who knew their specialties and made focused presentations--with very little overlap and repetition among panels, always a challenge at such conferences. Well-organized, well-moderated, with a smart audience that asked good questions.
-Gady Epstein, Beijing Bureau Chief, Forbes Magazine
Sponsors
The China 2.0 Beijing conference is made possible by its generous sponsors:
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Media Participants
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Official PR Partner
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Photos
Photos from the May event are available on SPRIE's Flickr page.
Videos
China 2.0 achieved the balance of giving a clear overview to the China newcomers but still bringing insights to market participants about other sectors. Great conference and surely the start of a successful series.
--Olivier Glauser, Managing Director, Steamboat Ventures
Overview videos for China 2.0 are available here. If you are trying to view the videos from within China, they are accessible on BDA's website.
Hakan Eriksson speaks on infrastructure at China 2.0
Videos from China 2.0 (May 2010) are now avallable at iTunes University (do a power search for "China 2.0" in the title field).
Grand Millennium Hotel, Beijing, China
Conferences
Seize the Day, Seize the Data: Tech-Enabled Moments of Opportunity in Closed Societies
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The abrupt fall of an authoritarian regime often surprises the world with apparent suddenness. Given the right moment of opportunity, skillfully applied pressure can prove a thuggish regime surprisingly brittle. However, these moments are prepared through a long struggle for democratic rights within a closed society. Technology can help create these openings, organize activists, document abuses and share information in the moment that the eyes of the world are watching.
Being prepared to seize the day requires more than tech, though: activists and citizens are most effective in political groups, using good organizing approaches. International development organizations, funders, academics, tech companies and others can help, but must consider the entire terrain - political, human, social and technical - in their efforts because liberation technology can land people in jail - or worse. Savvy authoritarians have inherent advantages in this "cat-and-mouse" game.
This talk addresses the role of technology in fragile democracies and closed societies from NDI's perspective as implementers of democracy strengthening programs.
Chris Spence is Chief Technology Officer at the National Democratic Institute. In this capacity he manages NDI's work in employing the use of Information and Communication Technologies (ICTs) to promote and strengthen democracy around the world through NDI programs, and has done so since 1996. Mr. Spence was the first staff person to specialize in ICTs for democratic development at NDI, and during his tenure with NDI has overseen ICT programs in dozens of countries around the world in all of NDI's program areas and positioned the Institute as a leader in the use of ICTs in democratic development. Areas of specialization include ICT and e-governance projects, including working with legislatures, local government, election monitoring, political parties and civil society organizations in developing countries and emerging democracies.
Mr. Spence brings to NDI a combination of information technology and international relations expertise. He started his technology career in 1986 in Silicon Valley with positions in several companies including Oracle Corporation, Netscape Communications and Triad Systems.
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Chris Spence
Chief Technology Officer
Speaker
National Democratic Institute
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