Larry Summers Thinks About Global Warming and the Industrial Revolution in Asia
Heather Timmons reports:
Lawrence H. Summers, Harvard’s Former Lightning Rod, Is a Hit in Asia - New York Times: Summers['s]... views on the importance of Asia’s growth, the challenges of globalization and the danger of the United States’ huge trade deficit are widely promoted by policy makers and economists. He is eagerly solicited for lectures and keynote speeches.... On Tuesday, Mr. Summers spoke to an audience that overflowed a ballroom at the Taj Mahal Hotel in New Delhi, telling hundreds of economists, government officials and business executives that most of the action on global warming needed to “take place in the developing world.”
The industrial world was responsible for much of the problem, he said, but most of the solutions must come from the developing world, where emissions are growing the fastest and infrastructure is still unbuilt. The developing world should “demand” that it be compensated and supported for taking actions “in the interest of all,” he said.
“Larry is very stimulating intellectually and an ‘out of the box’ thinker,” said Isher Judge Ahluwalia, the chairwoman of the Indian Council for Research on International Economic Relations, the group that invited Mr. Summers to speak. “There is a wisdom in the way that he looks at problems which are global,” Ms. Ahluwalia said, adding that Mr. Summers listens to other people’s ideas, particularly when the topic is developing countries....
In a series of visits to China, India, Singapore and Hong Kong since early 2006, Mr. Summers has reiterated several themes that have special resonance in Asia, but have yet to be widely accepted in the United States. Among them are the idea that growth and changes in Asia are the most important thing to happen during our lifetimes, that the United States and Europe have not yet appreciated the impact of these changes and that the global imbalances from the United States’ current-account deficit — nearly $1 trillion in 2006 — could have severe consequences.
Mr. Summers has been sharply critical of current American fiscal policy and the way that Asia sustains borrowing by the United States by continuing to purchase government debt. During a visit to Mumbai in March last year, Mr. Summers warned the Reserve Bank of India of the United States’ “unsustainable and dangerous” current-account deficit. In Beijing this January, he asked hundreds of economists and policy makers at a Global Development Network conference to consider the fact that $2 trillion from developing Asia, invested in United States Treasury bills, was making a “zero real return.” Imagine instead, he said “all the opportunities in these countries for productive investment”...
From my perspective, perhaps the most interesting thing is that New YorK Times reporters like Heather Timmons find these ideas--that the developing world will wind up doing the bulk of global warming adjustment or else, that Bush-administration fiscal policy is insane, that the industrial revolution in Asia is a global game-changer, and that countries that hold their foreign exchange reserves in dollars are at the edge of a cliff--to be fresh and new, rather than things that they have been incorporating into their stories as obvious background for half a decade or more.
