Tag: Policy

Climate Change: Environmental Risk, Security Risk

Posted on by Carlos Enrique
The Department of Defense has a plan for adapting to climate change. But will they be allowed to? Credit: Department of Defense

The Department of Defense (DoD) has issued a report detailing how it plans to adapt to climate change. Beyond impacting the logistics of moving military supplies and personnel around the world, the DoD expects that climate change will be an immediate threat to national security interests, causing “increased risks from terrorism, infectious disease, global poverty and food shortages.” (Davenport, 2014)

It is very telling when a reserved institution such as the DoD acknowledges the impact of climate change and is actively working to integrate the effects of climate change into its operations. Unfortunately, this is unlikely to sway the hearts and minds of the Republican leadership on Capitol Hill. The DoD’s opinions and decisions have minimal impact on elections, and there are considerable local and national interests that are invested in ignoring climate change.

There is one very bright spot, however. The DoD invests a considerable amount of money in the development and deployment of new technology, and so is a major driver of technological development in the United States. If it decides that alternative energy technologies are necessary to adapt to climate change, we can expect to see a significant boost for the alternative energy industry. This is more likely that it seems; transporting heavy liquid fuels around the world is both expensive and dangerous. There have been instances where American fuel trucks traveling through Pakistan were blocked by military leaders due to shifting sentiments between Pakistan and the United States.

Additionally, it is very telling that when removed from an elected position, even staunch Republicans like Hagel (at the time, Secretary of Defense) assert the importance of addressing climate change. Note that this is a particularly huge change in the case of Hagel, considering he was one of two Senators to block the United States from ratifying the Kyoto Protocol.

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Pentagon Signals Security Risks of Climate Change 

The report is the latest in a series of studies highlighting the national security risks of climate change. But the Pentagon’s characterization of it as a present-day threat demanding immediate action represents a significant shift for the military, which has in the past focused on climate change as a future risk.

Before, the Pentagon’s response to climate change focused chiefly on preparing military installations to adapt to its effects, like protecting coastal naval bases from rising sea levels. The new report, however, calls on the military to incorporate climate change into broader strategic thinking about high-risk regions — for example, the ways in which drought and food shortages might set off political unrest in the Middle East and Africa.

Financial Uncertainty in Europe Amidst Policy Debate

Posted on by Carlos Enrique
From left, Christine Lagarde, the International Monetary Fund chief; Jim Yong Kim, president of the World Bank; and President Alpha Conde of Guinea at the World Bank last week. Credit J. Scott Applewhite/Associated Press

There is a lively debate going on in global financial institutions, and the question seems to be “How much is too much?” Top economists at the International Monetary Fund, the European Central Bank, and the World Bank are debating about recent economic policy and its effects on global financial markets.

The primary concern is that loose financial policy is once again contributing to over-excited financial markets, leading to another asset bubble. National debt loads are increasing significantly and bond markets are quite active, in large part to low interest rates across the board. However, there is some decoupling from financial markets and national economic performance which is quite worrisome. The strength of a national bond does not seem to reflect the economic health of the country, which could lead to poor national investment and a banking crisis.

There is legitimate concern that raising rates would trigger another recession, and so there is reluctance to pull on that particular lever. There’s not much to be done about that, though, because interest rates must rise at some point. As the CEO of Morgan Stanley put it: “Rates are going up because the U.S. economy is doing better – and that is a good thing.”

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I.M.F. Warns of Global Financial Risk From Fiscal Policies

 Such a step, of course, would create even more of a global buying frenzy for eurozone government bonds, and earlier in the week Christine Lagarde, the chief of the I.M.F., warned that the strong performance of these instruments was not supported by the underlying economies in their countries.