Despite Stay, America’s Economy and Climate Need the Clean Power Plan

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WRI – Yesterday, the U.S. Supreme Court paused implementation of the Clean Power Plan (CPP) to allow an appeals court to consider a legal challenge from a number of states, corporations and industry groups. That case is being expedited, and a decision is expected by the fall.

Importantly, the Supreme Court’s decision to grant a temporary stay was not based on the legal merits of the CPP, which calls for emissions reductions throughout states’ power sectors. Experts agree that the CPP is on solid legal ground and will prevail. Indeed, previously the Supreme Court not only upheld the EPA’s authority to regulate carbon pollution under the Clean Air Act (which the Clean Power Plan builds upon), the Court found the agency had the obligation to do so to protect Americans’ health.

We expect yesterday’s ruling to be only a temporary time out as the CPP heads to full implementation. As the legal case proceeds, the EPA has indicated it will continue to help states put in place the plans and tools they need to comply with the rule, and the Obama administration has committed to continue taking aggressive steps to reduce emissions and lead in the fight against climate change.

Clean Power Plan: Smart, Balanced and Beneficial

The benefits of the plan are clear, far-reaching and worth fighting for. The CPP offers a smart, balanced approach that will cut dangerous pollution as it drives innovation, creates new job opportunities and improves public health. The CPP is one of the most important near-term tools the United States can use to help reach its goal of reducing emissions 26-28 percent below 2005 levels by 2025. In addition, the plan will make our air safer to breathe by reducing Americans’ exposure to particulate matter and ground-level ozone, benefiting our health and the economy by an estimated $25 billion to $65 billion – far more than the $7 billion to $9 billion cost of compliance, according to the EPA.
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Industrial Policy: A Guide for the Perplexed

Uri Dadush | February 01, 2016

ocppc – For the purpose of this short note, industrial policy is defined as government intervention in a specific sector which is designed to boost the growth prospects of that sector and to promote development of the wider economy. I exclude from this definition horizontal policies, such as investment in education, reinforcement of the rule of law and property rights, and so on, even though these horizontal policies can affect different sectors differently and so can be part of an industrial policy. I do so for the sake of brevity and because the importance of horizontal policies is widely understood, and there is much less controversy surrounding them than around sectoral interventions. To sharpen the focus further, I also exclude interventions at the sectoral level which aim to achieve other objectives than growth and employment, such as improving environmental and safety standards, as these interventions aim to correct well-recognized market failures and are also relatively uncontroversial.

Industrial policy so defined takes many shapes, including regulatory reform, subsidies, protection, and direct government ownership of enterprises, and it has a checkered past. Its heyday was in the 1950s and 1960s, a period characterized by post-war recovery, rapid growth, decolonization, and import substituting industrialization (ISI). Following the ideas of Hirschman (1958)dynamic industrial sectors paying high wages and exhibiting strong backward linkages received special attention. While many developing countries did well during this phase, their inability to sustain growth following the oil shocks and inflation of the 1970s, the international interest rate hikes and Latin American debt crisis that followed, severely discredited ISI. Drawing on the example of a small number of successful “Asian tigers”, a new “outward-oriented” model of industrial policy became increasingly accepted. This entailed systematic promotion of key manufacturing export sectors which could exploit large world markets, but which also required imports of state-of-the-art machinery, the know-how of foreign investors, and maintenance of a competitive exchange rate (Dani Rodrik, Middle East Development Journal, 2008). Encouraged by some international organizations such as UNIDO and UNCTAD, many developing countries, for example, Brazil and India, continue to practice this model today, or at least, attempt to do so.

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