Marketplace of Ideas
Here’s an update on some economics-related news making headlines this week:
- The 2014 Climate Summit at the United Nations brought the potential economic ramifications of global climate change into the news headlines this week. In a Wall Street Journal op-ed, U.N. Secretary General Ban Ki-Moon opined that the event was a success, paving the way for a global climate agreement next year and getting the finance and business committees involved in the effort. Among the private-sector initiatives announced, nearly 40 companies signed an agreement to slow deforestation, and the Rockefeller Brothers Fund, a philanthropic organization fueled by John D. Rockefeller’s Standard Oil wealth, announced that it will divest of assets tied to fossil fuel companies. On the government side, the European Union committed to push greenhouse gas emissions 40 percent below 1990 levels by 2030, and France contributed $1 billion to a fund that helps developing countries adapt to climate change. As for the U.S. contribution, Politico described President Obama’s Summit speech as “forceful but largely detail-free,” with no firm commitments on green house gas emissions but a mandate to promote environmental sustainability as part of international development initiatives. The Wonkblog notes that most countries are missing their targets for reducing green house gas emissions, and the progress that has been made is widely seen as inadequate. The perception that such efforts are costly and hinder economic growth are at least partly to blame, but a new study suggests those perceptions may be misguided. The Economist has the full rundown here. The Guardian has an interactive map illustrating which countries are most responsible for fossil fuel extraction and emission, and which leave the biggest carbon footprint with their consumption.
- Free homes for the homeless. That’s the approach of a widely lauded Utah program called Housing First, which has reduced chronic homelessness in the state by 74 percent since it kicked off in 2005. Similar programs, which were promoted by the second Bush Administration, have popped up in cities nationwide, but Utah’s is the only statewide effort. On The New Yorker’s Financial Page this week, James Surowiecki points out that Housing First is also seen as a success because it has saved quite a bit of tax payer money: The previous approach of using temporary shelters cost more than $20,000 per year per homeless person in Utah, while permanent housing costs just $8,000 per person, including administrative costs. Why the difference? While the standard approach aims to get homeless people “housing ready” before placing them in permanent residences, it turns out it is easier to help people overcome mental-health and substance issues, and to find a job, when they already have a stable place to live. Some critics have argued that the program hasn’t been very successful in curing people of drug addiction, but proponents say that is not its primary goal. Salt Lake City’s Deseret News opines that the program raises serious questions about how “safety nets” impact people. Do they undermine personal responsibility, or do they bolster it by mitigating risks?
- Wal-Mart is getting into the health care business. The discount retail chain will begin offering $4 check-ups for its employees at a dozen stores in Georgia, Texas, and South Carolina by the end of the year. Why is it focusing the program in the South? A spokesperson for the chain says the areas chosen have high rates of chronic illness but a dearth of doctors. Wal-Mart anticipates that healthier employees will lead to cost savings through reduced absenteeism. But it is also looking to save money on doctor visits and insurance premiums, by cutting out the middleman. Customers of Wal-Mart can also get a check-up at the in-store Care Clinics, but they have to pay $40—still a cost savings for those insured but with a high copay. Why is the price so low? One reason is that the check-ups will be performed by nurse practitioners, not doctors. The low price could have implications for other health-care providers, especially if the program is launched nationwide. According to Forbes, “Wal-Mart’s potential as a disruptive innovator in healthcare is essentially peerless.”