Capital Going Research Articles

Optimal control of a global model of climate change with adaptation and mitigation

<p style='text-indent:20px;'>The economy-climate interaction and an appropriate mitigation policy for climate protection have been treated in various types of scientific modeling. Here, we specifically focus on the seminal work by Nordhaus [<xref ref-type="bibr" rid="b14">14</xref>, <xref ref-type="bibr" rid="b15">15</xref>] on the economy-climate link. We extend the Nordhaus type model to include optimal policies for mitigation, adaptation and infrastructure investment studying the dynamics of the transition to a low fossil-fuel economy. Formally, the model gives rise to an optimal control problem consisting of a dynamic system with five-dimensional state vector representing stocks of private capital, green capital, public capital, stock of brown energy in the ground, and carbon emissions. The objective function captures preferences over consumption but is also impacted by atmospheric <inline-formula><tex-math id="M1">\begin{document}$ \mathrm{CO}_2 $\end{document}</tex-math></inline-formula> and by mitigation and adaptation policies. Given the numerous challenges to climate change policies the control vector is eight-dimensional comprising mitigation, adaptation and infrastructure investment. Our solutions are characterized by turnpike property and the optimal policies that accomplish the objective of keeping the <inline-formula><tex-math id="M2">\begin{document}$ \mathrm{CO}_2 $\end{document}</tex-math></inline-formula> levels within bound are characterized by a significant proportion of investment in public capital going to mitigation in the initial periods. When initial levels of <inline-formula><tex-math id="M3">\begin{document}$ \mathrm{CO}_{2} $\end{document}</tex-math></inline-formula> are high, adaptation efforts also start immediately, but during the initial period, they account for a smaller proportion of government's public investment.</p>

Pollution and Carbon Reduction Effect of OFDI in China and Its Mechanism

Under the "Going out" strategy and the Belt and Road Initiatives, the trade in goods and services and flow of production factors between China and the rest of the world have become more frequent, and the total amount of outward foreign direct investment (OFDI) is considerable and growing significantly. Therefore, along with the extensive economic growth and the substantial growth of foreign investment, the environmental impact of OFDI has become noteworthy. Here, through theoretical analysis and logical deduction, three possible pathways of the impact of OFDI in China on the environment were presented as hypotheses, which included the industrial structure, the technological innovation progress, and the economic-scale expansion. Using Chinese provincial data from 2004 to 2019, an environmental load index including main environmental pollutant emissions and carbon emissions was constructed. Taking this as the dependent variable, an intermediary effect method was constructed to analyze the home pollution and carbon reduction effect and the influence mechanism of OFDI in China. The results showed that ① OFDI in China reduced the environmental load, and each 1% increase in OFDI reduced the environmental load by 0.051%-0.076%. ② The OFDI in China reduced the environmental load by advancing the industrial structure and technological innovation progress, and a 1% increase in OFDI resulted in a 0.060% and 0.006% reduction in environmental load through their indirect effects, respectively, whereas OFDI increased the environmental load by 0.009% through the path of economic-scale expansion. The contributions of leading environmental load changes mediated by advancing industrial structure, technological innovation progress, and economic-scale expansion were 65.9%-84.5%, 6.6%-8.5%, and -12.7%- -9.9%, respectively, and the contribution of OFDI directly driving the environmental load to change was 19.7%-37.4%. Based on this, policy recommendations, including promoting Chinese enterprises and capital going abroad, encouraging relatively disadvantaged domestic industries to explore foreign markets, strengthening reverse technology spillover effects, and forming a sustainable low-carbon development mode, have been proposed.

CHINESE CAPITAL GOES GLOBAL: THE BELT AND ROAD INITIATIVE AND BEYOND

AbstractThe Belt and Road Initiative (BRI), and China's state-led model for economic globalization more generally, have attracted controversy: Are state-led overseas investment and lending driven by strategic motives or market rationale? How have the recipient economies reacted to the influx of Chinese capital? This special issue sheds light on these questions by first outlining the fragmented state system driving the BRI, a system featuring both Beijing's strategic logic at the top and market considerations in policy implementation. The role of the state is unpacked further in China's globalizing coal industry and in the growth of Chinese industry export to BRI countries. Finally, the issue explores the mechanisms behind public backlash and political pushback facing China in Zambia and Australia. As the COVID-19 pandemic continues to shift China's relationship with the world, this special issue contributes to a more nuanced understanding of themodus operandiof Chinese capital going global.

Comments: Shale Enters a New Phase

Editor's column US crude oil production will reach a record level of 12.29 million B/D in 2019, increasing faster than expected both this year and in 2020, according to the latest US Energy Information Administration (EIA) forecast. Output will rise to 13.29 million B/D next year. Similarly, the International Energy Agency predicted last month that US shale oil production will continue to reshape world energy markets, with the US accounting for 85% of the increase in global oil production to 2030. US output will rise to 19 million B/D over the next decade, wresting additional market share from OPEC producers and Russia, according to the agency’s annual World Energy Outlook. But while shale will continue to affect global markets, some believe this predicted rate of growth may be optimistic. There are already signs that producers are curtailing spending and production in the major shale basins as they are under increasing pressure to focus more on capital discipline and returns rather than production growth. In contrast to the EIA and IEA, consultancy IHS Markit sees much slower growth in US shale next year, just a 440,000 B/D increase, with output flat in 2021. “Going from nearly 2 million B/D annual growth in 2018, an all-time global record, to essentially no growth by 2021 makes it pretty clear that this is a new era of moderation for shale producers,” said Raoul LeBlanc, IHS Markit vice president for North American unconventionals. “This is a dramatic shift after several years where annual growth of more than 1 million B/D was the norm.” IHS Markit predicts prices for West Texas Intermediate (WTI) crude to hover in the $50/bbl range and that capital spending will drop by 10% this year, 12% in 2021, and 8% in 2022, from $102 billion in 2019 to $83 billion in 2022. Prices need to be about $65/bbl for producers to be able to both increase production significantly while also satisfying shareholder expectations, it said. In the meantime, producers are focusing more on completing wells than drilling new ones, which is a more economical way of boosting output. There were 7,740 drilled but uncompleted wells in the seven major US shale regions at the end of September, according to the EIA, compared with 8,800 in January. After years of producing all out, pushing US oil and natural gas production to record levels, shale producers are pulling back. Although output has skyrocketed, particularly in places such as the Permian Basin, financial results have not. Mergers and bankruptcy filings are common, and investors have become reluctant to lend capital. Natural gas companies in particular are hurting, and they are promising more capital discipline and lower production going forward. During third-quarter earnings calls, Chesapeake Energy, EQT, Callon Petroleum, Cimarex, and Diamondback Energy all signaled flat to lower spending and production. Chesapeake’s CEO had to re assure investors of the company’s financial health a week after the company said in a third-quarter earnings filing that it had “substantial doubt” of its ability to continue as a going concern. “I don’t think OPEC has to worry that much more about US•shale growth long term,” Pioneer Natural Resources Scott Sheffield told investors last month.

Learning from Bogotá: Pedagogical Urbanism and the Reshaping of Public Space by Rachel Berney

Reviewed by: Learning from Bogotá: Pedagogical Urbanism and the Reshaping of Public Space by Rachel Berney Juan P. Galvis Rachel Berney Learning from Bogotá: Pedagogical Urbanism and the Reshaping of Public Space. Austin, Texas: University of Texas Press, 2017. xiv + 174. Maps, photographs, illustrations, notes, references, index. $40.00 cloth (ISBN 978-1-4773-1104-2). For some time, geographers have noted important global trends in urban development. These trends include the increasing importance of the scale of the city as a space of governance, the intensifying urbanization of the Global South, and the increasingly rapid international circulation of urban policy models. Rachel Berney’s Learning from Bogotá is situated at the intersection of these three trends. Berney sets out to explain what happened in the Colombian capital going back to the mid-1990s to make it a globally-referenced model of urban governance today. Writing mainly for an urban planning audience, Berney positions the book at “the intersection between design, public policy and urban studies” (p. xii), thus combining considerations of planning and design with analysis of policy goals and principles, as well as socio-historical context. Learning from Bogotá focuses on public space, which Berney positions as crucial for the city’s transformation. By approaching this transformation as a political process, the book is a welcome departure from scholarship that frames public space planning as just a series of technical interventions. While Learning from Bogotá helps us understand the political nature and contradictions of Bogotá’s urban planning process, the book is often too centered on celebrating the achievements of particular mayors, losing sight of the larger political context. The book focuses on the years between the mid-1990s and early 2000s, with Enrique Peñalosa and Antanas Mockus—”the public space mayors,” as Berney calls them—playing the leading roles. She follows their interventions in public spaces by analyzing a series of projects illustrative of the mayors’ overall approach to public spaces. Berney argues that these “public space” administrations advanced a set of principles that give political coherence to their interventions. She uses the concept of “pedagogical urbanism” to understand their approach. While this concept is not formally defined in the book, Berney suggests that what sets the public space mayors apart is how they highlighted public space as key for social interaction as well as a policy instrument. Public space is pedagogical as citizens learn about each other and internalize messages from the local state about proper behavior. The book argues that [End Page 217] pedagogical urbanism in Bogotá also serves to showcase governmental competency and bolster civic pride about a beautiful, functioning city. In the first chapter, Berney describes a pre-1990s dystopian scenario that sets up Bogotá’s subsequent transformation. Berney does well in the first and third chapters to contextualize Bogotá’s story but rarely departs from the celebratory trope of a city rescued from despair and mismanagement by effective, efficient, and visionary leaders. In this way, she runs the risk of presenting a teleological story that exaggerates the difficulties leading to an inevitable crisis, which is then solved by the fateful intervention of the public space mayors. The emphasis on the visionary “super-mayor” and the inspired designer is much more prevalent in architectural and urban planning literatures. But this does not make it any less frustrating for geographers. Learning from Bogotá promises to frame design or planning interventions as part of a larger political project. However, the argument advanced in chapter 2 implies that the success of the public space mayors was to be found in their independence from political party structures. In highlighting mayoral detachment from politics, the book seems to endorse a type of technocratic intervention inspired by the leaders’ “moral authority … vision, sense of responsibility [and] skills” (p. 139). In stressing this story, these chapters distract from the goal of clearly delineating and critically assessing the substance of Bogotá’s “pedagogical urbanism” and its concrete effects on the ground. Indeed, an opportunity is lost to assess the political nature of the public space mayors’ purported technocratic independence. In fact, such characterization of Bogotá’s public space mayors, and Peñalosa in particular, is misleading at best. Pe...

Optimal Control of a Global Model of Climate Change with Adaptation and Mitigation

The Integrated Assessment Model (IAM) has extensively treated the adverse effects of climate change and the appropriate mitigation policy. We extend such a model to include optimal policies for mitigation, adaptation and infrastructure investment studying the dynamics of the transition to a low fossil-fuel economy. We focus on the adverse effects of increase in atmospheric CO2 concentration on households. Formally, the model gives rise to an optimal control problem of finite horizon consisting of a dynamic system with five-dimensional state vector consisting of stocks of private capital, green capital, public capital, stock of brown energy in the ground, and emissions. Given the numerous challenges to climate change policies the control vector is also five-dimensional. Our solutions are characterized by turnpike property and the optimal policy that accomplishes the objective of keeping the CO2 levels within bound is characterized by a significant proportion of investment in public capital going to mitigation in the initial periods. When initial levels of CO2 are high, adaptation efforts also start immediately, but during the initial period, they account for a smaller proportion of government's public investment.

Optimal Control of a Global Model of Climate Change with Adaptation and Mitigation

The Integrated Assessment Model (IAM) has extensively treated the adverse effects of climate change and the appropriate mitigation policy. We extend such a model to include optimal policies for mitigation, adaptation and infrastructure investment studying the dynamics of the transition to a low fossil-fuel economy. We focus on the adverse effects of increase in atmospheric CO2 concentration on households. Formally, the model gives rise to an optimal control problem of finite horizon consisting of a dynamic system with five-dimensional state vector consisting of stocks of private capital, green capital, public capital, stock of brown energy in the ground, and emissions. Given the numerous challenges to climate change policies the control vector is also five-dimensional. Our solutions are characterized by turnpike property and the optimal policy that accomplishes the objective of keeping the CO2 levels within bound is characterized by a significant proportion of investment in public capital going to mitigation in the initial periods. When initial levels of CO2 are high, adaptation efforts also start immediately, but during the initial period, they account for a smaller proportion of government's public investment.

Solution-Driven Finance: The New Way of 'Impact First' Why Serving Organic Lobster on Titanic Won't Do the Trick

The resounding successes in raising ever increasing amounts of capital for impact investing have never calmed the critics who maintain that much of this capital has nothing in common with an impact investing approach. These critics say that behind the figures is hidden a disguised form of return-driven investment strategies. How come the supposedly noble objectives of directing massive capital towards impact investing have not overcome the divide between the true features of impact investing and its perception in the eyes of its stakeholder community? The disconnect between, on one side, the impact investment capital raised and on the other, the impact that is needed to overcome the societal challenges we are currently facing is of concern: Whilst we are celebrating the ever-growing amount of capital going into so-called impact investing, we tend to overlook the limited impact this capital is actually having. We may very well raise an amount of USD 13 to 20 trillion USD, equivalent to what is needed to meet the SDGs. But how can we overcome the fact that most of these funds will seek risk/return profiles that can only be found in mainstream instruments targeted at some 40 countries which show political stability, functioning capital markets, high credit ratings and economic prosperity, while the bulk of challenges to be met in order to reach the SDGs lie in the 140 remaining countries, with high political end economic volatility, low safety standards, often unreliable legal systems etc. This article suggests a new form of “impact first” investing: rather than applying merely a negative screening filter that seeks to identify within a pool of random impact investment opportunities those that happen to meet a given risk/return profile, the focus needs to be on funding concrete impact solutions: Once identified, impact solutions shall be translated into financial instruments which combine the risk/return profiles of a sufficiently large spectrum of investors in order to get a given impact solution funded. DFIs, in applying their technical knowledge in funding projects in all types of sectors and their skills for developing innovative hybrid financial instruments can play a major role in this and prove their subsidiarity to the private sector. For players in the financial services industry, such new impact investing approach creates unprecedented opportunities to improve their competitiveness through the intelligence of their products. Finally, an investment approach targeted at concrete impact solutions, which are not only part of a two-dimensional investment decision but are actually placed at the very heart of the design of the financial instrument itself, would render a large portion of the debate on impact metrics redundant.

Stock Returns And Volatility İn An Emerging Equity Market. Evidence From Kenya

This study investigates volatility pattern of Kenyan stock market based on time series data which consists of daily closing prices of NSE Index for the period 2ndJanuary 2001 to 31st December 2014. The analysis has been done using both symmetric and asymmetric Generalized Autoregressive Conditional Heteroscedastic (GARCH) models. The study provides evidence for the existence of a positive and significant risk premium. Moreover, volatility shocks on daily returns at the stock market are transitory. We do not find any significant leverage effect. Introduction of the new regulations on foreign investors with a 25% minimum reserve of the issued share capital going to local investors (in 2002), introduction of live trading, cross listing in Uganda and Tanzania stock exchange (in 2006) and change in equity settlement cycle from T+4 to T+3 (in 2011) significantly reduce volatility clustering. The onset of US tapering increase the daily mean returns significantly while reducing conditional volatility.

Exploring the alternative sources of revenue for funding of public higher education in least developed countries - implications for National University of Lesotho

Education is central to the development of human capacity of any country through shaping the citizenry for meaningful participation in the economy especially the knowledge-based economy. Funding of education, especially higher education, has been a subject of debates globally for quite a whilst especially since the adoption of basic education policy on 'free primary' education in many countries. Public universities in Africa continue to rely almost exclusively on grants from governments as their source of funding which depend very heavily on the will of such governments irrespective of the budgetary demands. Conceivably, these grants barely suffice the operational demands of such institutions leading to the common blame of too high a percentage of capital going to salaries with only traces going to operations. This paper is aimed at exploring the alternative sources for funding for public higher education institutions in Lesotho with emphasis on the National University of Lesotho. It concludes by providing some recommendations both at national and institutional level for higher institutions in Lesotho.

Is Marketing Management a Tool for Privatizing Education?

Marketing, is usually described as those activities of a small corporate organization that have a direct impact on the acceptance by the customers of the organization’s product...The basic thesis of this paper is that the marketing concept can be applied in a diffused environment, even as complicated an activity as urban transportation in a complex metropolitan area with several organizations producing services (Kottler, 1972: 11). We can add to this, by saying that the basic thesis of the paper is that the marketing concept can be applied in an environment as complicated as education, and thus harvest the fruits of this post modern way of dealing with it. In order to understand what led us to the post modernistic way of shaping up the given status of education, we will go a bit further and analyze the relationship between globalization and postmodernism, education and globalization, the state model and the social movements, and capitalism. From a postmodern perspective, postmodernism is defined as the cultural logic of the late capitalism. What we now call late capitalism is actually the product of the free market, of the capital going from hand to hand all around the world, desperately asking for entrepreneurs educated according to the demands of the market, for more democratic states, for open, well educated minds, for more freedom, more respect on human individual rights, more private, individual initiatives. "The phenomenon of globalization is based on the transformation of capitalism…", what we already have mentioned as late capitalism (Morrow & Torres, :98).

Economic Development and Development Economics (Presidential Address)

To state that development economics is about economic development is now considered beyond debate. But opinions differ about what constitutes economic development and its proper index; in particular whether the growth of per capita income adequately captures its flavour. Thus, instead of being regarded, a La Lewis, as just a synonym for capital accumulation going above a certain critical level, development economics is now also required to respond to such challenges as raising the quality of life that people succeed in achieving by living longer; by being more literate in addition to being more prosperous; and, environmentally speaking, by making the development process sustainable. Indeed, our discipline is being asked to encompass an ever wider set of problems and venture into domains where it has not entered before: namely, the choices that people make; the economic and political freedoms they enjoy; the heavy incidence of poverty among the least privileged in the society, including the rural poor; the unjust social and economic structures that must be changed; the regulatory framework that needs to be evolved to enable the market to work-hopefully in the interest of the society. What complicates matters even more is that to be able to address many of these issues, development economics must transcend the self-imposed boundaries of strict positivism and acquire an overarching ethical vision. If mainstream economics is (rightly) regarded as a difficult science, development economics is even more so.

The Great Depression and the Third World with special reference to India

During the Great Depression of 1873-96 the only real industrialized countries were Great Britain and the Netherlands. While the share of Britain in the imports of Canada declined from 49.9% to 33% between 1867-71 and 1892-6 the share in the imports of India increased between the 2 dates from 69.2% to 71.9%. While Britains share in Canadian exports increased from 31.4% to 54.9% her share in Indian exports declined from 52.5% to 33.2%. Britains position worsened in the affluent white colonies but improved in the poorer colonies. Generating an export surplus with colonial dependencies through tribute and trade was an important means of transferring capital from Britain to the colonies of European settlement. The long-drawn-out process of demonetization of silver also contributed to extracting a surplus out of India and China. Indias exports became more diversified and made Indias external balance important to the stability of Britains imperial balance and of the gold standard. Food grains became an important Indian export from 1870 onwards. India had to bear the brunt of residual adjustments when industrial capitalism was being consolidated at the center. Much of the transfer was in the explicit form of a tribute. With capital going to the industrialized countries and migrants going to the Third World countries severe shocks in the form of famines resulted in the overtaxed economies of the less industrialized nations.

Price of Capital, Income, and Demand for Labor in Developing Countries

Below equilibrium interest rates typify parts of the capital market in most less developed countries. There has been considerable discussion of whether they have contributed to the low labor absorption in these countries' modern sectors (especially manufacturing), and of the corollary proposition that increasing them would raise the demand for labor. This new conventional wisdom seems usually to be based on the proposition that the representative firm will choose a higher L /K ratio the higher is the price of capital; it contrasts with what we may call the traditional practitioners' view, favoring low rates.1 While the latter view is seldom presented in a theoretically persuasive framework, it is true that a low interest rate could raise the demand for labor if, for example, (a) it leads to greater total capital formation or (b) it leads to a greater share of capital going to firms with above-average labor-capital ratios. This paper analyzes the effect of a below equilibrium rental price of capital on the aggregate demand for labor (and, parenthetically, on income distribution) in a simple static one good model with two sets of firms, one of which has favored access to credit.