Economics of climate change

The Stern review is the most comprehensive economic based report into the impacts of climate change, it also explores possible actions which need to be taken and the consequences of taking no action. Lord Stern is British economist.

The Stern Review states "our actions over the coming few decades could create risks of major disruption to economic and social activity, later in this century and in the next, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century. And it will be difficult or impossible to reverse these changes."

One of the considerations of climate change action by Stern is that developing nations should have the opportunity to reach the same level of living standards as developed nations.

Stern recently updated his report to say that 2% of GDP needs to be invested to avoid the worst impacts of climate change.

Stern Review

Check out this SlideShare Presentation:

Stern Review

Investigation into medical devices

A good example of the ability of self regulation to control its own behaviour has been llustrated via a recent investigation into medical devices. Trips to Germany, payment for a polo festival, doctors flown to the airport in a helicopter to avoid peak hour traffic and extraordinarily large consultancy fees. All of these behaviours have been found to exist in Australia as the pharmaceutical companies attempt to influence the purchase and supply of medical devices to patients/ consumers. Whilst the regulation of the goods themselves is controlled by the Therapeutic Goods Administration (TGAct 1989 and recent Therapeutic Goods Am (Medical Devices) 2002 the adverse situations which occur need to be reported by the supplier . The figures below show the increase in injuries and casts questions on this self regulated system.

Medical devices include a wide range of products such as medical gloves, bandages, syringes, condoms, contact lenses, in vitro diagnostic devices, disinfectants, X-ray equipment, surgical lasers, pacemakers, dialysis equipment, baby incubators, heart valves. Some of these are actually placed inside a patient and most would be reluctant to challenge a doctor about the brand specified of a pacemaker. To read the articles see the following links
Drug Mone hurts our credibility 7th Sept 09
Meals, trips used to sway choice of devices 7th Sept '09
Kicbacks, kickoffs at World Cup 8th Sept'09

The most telling criticism is to the SMH from a doctor.

Regulation needed to make device advice transparent

News that the medical devices industry is paying millions to doctors for entertainment and ''consultancy'' fees should come as no surprise, given we have heard it all before with the pharmaceutical industry (''Meals, trips and transport used to sway doctors over implants'', September 7). The latter industry self-regulates via a code with holes in it that one could drive a semitrailer through.

Both the pharmaceutical and devices industries have a duty to do everything they can within the law to make a profit for their shareholders. They do it through influencing doctors. We doctors are human and, like everyone else, we are influenced by marketing and money. The effect is that taxpayers pay for drugs and devices that at best are the most expensive choices and at worst lead to unnecessary deaths.

When will the Federal Government step in to regulate this dangerous and inefficient system?

Tim Woodruff President, Doctors Reform Society, Richmond (Vic)

Supply is important for the long term

Whilst supply side economics has taken a temporary back seat at present it will need to return in importance for Australia to shake off the underlying issues that existed prior to the recession. That is the recession we didn't have, although we are still in it. The issues of competition, low savings, underlying inflation due to skills shortage, infrastructure and a appreciation in the $A all will serve to lower our international competitiveness.
Sidenote why is the $A about to appreciate? Well the financial markets are already predicting that by the end of the year our interest rates will have risen by 0.5 and a further 1.0 next year to slow inflation. If you compare our interest rates to the rest of the world there is already a major differential. This means that if our cash rate moves first it will attract investors and speculators, leading to lower returns for our exporters.

So as Gittins has pointed out recently in PM won't be a great leader the Rudd government needs to make some hard decisions and why not now? Politically there is no serious competition and secondly the time is ripe when the economy is in the need of injections. The article points out 5 areas that Rudd has already considered; competition, innovation, skills, infrastructure and tax reform. There is debate whether all of these involve micro reform however there is a need for change.
In light of this as Henderson (Rudd will need reform for recovery) points out that flexibility is key to future growth. It is of particular interest to compare this article to Gittins' No such thing as a free market. to see a contrasting view regarding the direction of labour and financial regulation.
Which one do you believe is the direction Australia should take? It would be great to see some responses to hear your thoughts???

p.s if you are after some more reading on micro policy and another viewpoint check out Mr. Woods (VCE link to your right) in Topic 4- micro and Topic 3- Allocation of resources.