Countries need to adopt the Paris climate deal and a ‘third way’ to rescue development
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Speaking on Day Two of the World Government Summit 2017, Prof Joseph Stiglitz, Nobel Laureate in Economics & Professor at Columbia University, proposed taxes on countries failing the Paris climate deal, and eradication of inequality.
“The international community should be at the point where we need cross-border taxes on any country that isn’t addressing its role in climate change," he said. "There should be sanctions if you walk away from Paris; otherwise, it's an unfair competition."
Stiglitz also urged the world to address inequality.
“The trickle down economics theory has been discredited, it never happened if not we would all be doing well, instead some say it’s trickling up."
He continued: "President Trump, and it is disturbing he refuses to appoint one single economist to his cabinet, is blaming globalisation for that.
In reality, the growing consensus is that globalisation played a role maybe in the eighties and nineties, but doesn’t explain what has been going on in the last two decades.
“We rather changed the rules of the economic game, with the result that we have more inequality and a very weak GDP. You can’t make a long-term investment into capital and people, if you’re focusing on short-term profits, that’s why growth has slowed."
An unfettered market reigned between 1990 and 2008, including poor enforcement of competition laws, higher prices creating a lower standard of living, and weak bargaining powers of workers reducing minimum wages. A lack of corporate governance rules led to profits flowing out rather than being reinvested.
This model was broken, according to Stiglitz.
“In the 21st century, we need more equal market distribution, access to health and education for all, reversing the unfettered market. We have the elements, I am optimistic each country will experiment and find their ‘third' way.” he concluded.