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The BP Foundation has awarded a five-year, $7.5 million grant to Stanford University's Program on Energy and Sustainable Development to support research on modern energy markets. The foundation is funded by BP, one of the world's largest energy companies.

The gift follows the BP Foundation's initial grant of $1.8 million over three years, which was pledged in 2004 in support of the program.

"BP's support has allowed our program to study the world's most pressing energy problems, such as global warming, energy poverty and the prospects for the world oil market," said program director and Stanford law Professor David G. Victor. "In addition to BP Foundation support, we learn from BP's experience as an energy company because they operate in all the markets where we do research--such as in China and India."

"BP Foundation believes the work undertaken at Stanford deals directly with global issues that are key to meeting the world's growing energy needs," said Steve Elbert, chairman of the BP Foundation. "The drive to research and implement strategies to further understand today's energy markets is important work, and we are proud to partner again with Stanford."

The Program on Energy and Sustainable Development, part of the Freeman Spogli Institute for International Studies, concentrates on the legal, political and institutional dimensions of how societies derive value from energy. The BP Foundation grant is part of a rapid expansion of Stanford's research and teaching on energy issues, much of which focuses on the technical aspects of energy systems.

All of the program's research is public and published openly, including on its website. The gift from the BP Foundation, as well as all similar gifts to support the program's research, includes special provisions that assure the research program's independence in setting its research agenda.

The agreement with Stanford is one in a series of BP partnerships with universities in the United Kingdom, the United States and China, representing a total commitment of more than $600 million. The program at Stanford complements work on similar topics at Princeton University, Tsinghua University and Imperial College, among others.

Founded in 2001, the Program on Energy and Sustainable Development focuses on the "political economy" of modern energy services--the interaction of political, institutional and economic forces that often dominate energy markets. It collaborates with the Stanford Law School and other university departments and schools, including economics, engineering and earth sciences. About half of the program's resources are devoted to research partnerships in key developing countries, including Brazil, China, India, Mexico and South Africa. Program researchers have examined the emergence of a global business in natural gas, reforms of electric power markets and the supply of modern energy services to low-income rural households in developing countries.

The program's other major sponsor is the Electric Power Research Institute in Palo Alto, Calif., a research consortium that includes most of the world's largest electric companies.

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Most reduction fisheries that produce fishmeal and fish oil have already reached or exceeded sustainable catch levels and will be placed under further pressure as the aquaculture industry grows. At the same time that research into alternative sources of nutrition for piscivorous aquaculture species is progressing, several laws and regulations are taking shape that address the issue of aquaculture feed practices, including the U.S. National Offshore Aquaculture Act (H.R. 2010, S. 1609), the California Sustainable Oceans Act (SB 201), and the development of organic aquaculture standards by the National Organic Standards Board (NOSB). Other nations with expanding aquaculture industries are also beginning to take notice of this issue and are investigating alternative feed sources.

At this pivotal time, the Stanford meeting will bring together a small group of forward-thinking researchers, environmental non-profits, aquaculture producers, feed developers, and others who are striving toward sustainable feed solutions. The goal is to develop recommendations and a guiding direction for achieving sustainable feed inputs, incorporating current science, economics, and policy. The meeting seeks to:

  • Analyze current and future feed demands in the marine aquaculture sector. What percentage of fishmeal and fish oil inclusion is typical in feeds, and how much can that percentage be reduced?
  • Assess the role of conventional fishmeal and fish oil and alternative sources of nutrition, such as krill, algae, other microbes, terrestrial plants, by-catch, and seafood and poultry processing wastes, both now and in the future. What are the prospects for continued use of wild-caught fish and how can these conventional feed sources be used more responsibly? What are the environmental impacts of each of the resources? What is the state of scientific knowledge, development, and availability of alternatives? How will market dynamics impact the transition from fishmeal and fish oil to alternative proteins and oils?
  • Identify research needs and areas of high promise. Discuss how to encourage the research, development, and use of sustainable, alternative feed ingredients in aquaculture.

We hope the meeting will facilitate the cross-fertilization of ideas on sustainable feeds from people in different sectors and begin to provide some clarity and direction useful to policymakers. Although many experts have acknowledged the problem of increasing feed demands, and while alternative feed sources are a growing research field, there are few specific recommendations on how to achieve sustainable feed inputs. From the discussion at this workshop, we intend to produce specific recommendations to guide legislation and regulation on feeds, with the goal of improving the sustainability of aquaculture feed practices.

FSE - Stanford University

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In the debates surrounding genetically modified organisms in the food supply, the issue of labeling has become ever more salient. The EU is developing regulations to require labeling and traceability for all foods containing or derived from GMOs. Other countries, including Australia, Brazil, Japan, New Zealand, Russia, South Korea and Thailand are also in the process of developing voluntary labeling guidelines. In January of 2000, 130 countries adopted the Cartagena Protocol on Bio-safety which calls for bulk shipments of GMO commodities, such as corn or soybeans that are intended to be used as food, feed or for processing, to be accompanied by documentation stating that such shipments "may contain" living modified organisms and are "not intended for intentional introduction into the environment." Will these labeling systems prevent trade disruptions and enhance the international trading system established by the WTO? Or will they act as non-tariff barriers that obfuscate consumer decisions and lead to greater expense, confusion and ultimately to new trade wars?

Any GMO labeling debate must take into consideration the political, economic, legal, operational and administrative aspects of such labeling. The political considerations include the maintenance of confidence in the food system and how policy makers balance the demands of domestic constituencies against their various international obligations, such as under WTO Technical Barriers to Trade Agreement. The economic questions focus on a cost/benefit analysis of segregation and identity-preservation and whether labels provide information or capture a premium for producers. The legal issues include the possible challenge of discrimination in trade and the extent of liability under domestic law for misleading or incorrect labels. Operational adn administrative questions center on whether to make labels mandatory, whether to take a product or process approach, how feasible and costly are particular approaches and whether it is necessary it is necessary to require full traceability.

The workshop will be hosted by the European Forum of the Institute for International Studies at Stanford University. The goal of the workshop is to make a significant contribution to the ongoing policy debate. Participants will include academic, government and private sector specialists and bring expertise in economics, law and political science.

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Bertin Martens Professor, Mercatus Center Speaker George Mason University
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Branko Milanovic is lead economist in the World Bank research group and visiting professor at the School for Advanced International Studies at Johns Hopkins University. Previously, he was a World Bank country economist for Poland and a research fellow at the Institute of Economic Sciences in Belgrade, Yugoslavia. He received his Ph.D. in Economics in 1987 from Belgrade University.

Milanovic is an expert in economies in transition, income distribution, and globalization.

Recent publications include: Worlds Apart: Measuring International and Global Inequality (Princeton, 2005); Income and Influence: Social Policy and Emerging Economies, with Ethan Kapstein (Russell Sage, 2002); Inequality and Poverty During the Transition From Market Economy (World Bank, 1998).

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Branko Milanovic Lead Economist Speaker World Bank
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Daniel C. Sneider
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In April 2007, a delegation of scholars from Shorenstein APARC visited Shanghai, Hangzhou, and Beijing, fulfilling the center's mission to carry its work "into Asia." The delegation met senior officials from government and business and held wide-ranging exchanges with Chinese scholars and policymakers at leading universities and research institutions. The conversation ranged from China's development strategy to the current state of relations between China and its longtime rival and neighbor, Japan. Daniel Sneider, Shorenstein APARC's associate director for research, recalled the busy trip for FSI's regular newsletter, Encina Columns, (page 8).

Walking down a side street in Shanghai's French Concession, a partially preserved corner of that city's gloried and turbulent past, visitors come upon an ivy-covered house that served as the headquarters for the Shanghai branch of the Communist Party in the 1940s. Here the spartan quarters of Mao's second in command, Zhou Enlai, are carefully preserved, the narrow beds and wooden desks evoking a simpler, revolutionary China.

A short ride away, across the murky waters of the Huangpu River, monuments to the new China are being erected in what was farmland less than two decades ago. The Pudong New Area, with its clusters of highrise office towers and multi-story shopping malls, is emblematic of the rush to wealth and economic power that now drives China.

These were among the images from a visit to China by a delegation of scholars from the Walter H. Shorenstein Asia-Pacific Research Center from April 8-14, 2007. Though time was short, the group managed to visit Shanghai, Hangzhou, and Beijing.

Fulfilling Shorenstein APARC's mission to carry its work "into Asia," the delegation met senior officials from government and business and held wide-ranging exchanges with Chinese scholars and policymakers at leading universities and research institutions. The conversation ranged from China's development strategy to the current state of relations between China and its longtime rival and neighbor, Japan.

The delegation was led by Shorenstein APARC director and professor of sociology Gi-Wook Shin and by professor of political science Jean C. Oi, who has launched the center's new China studies program. The group included Shorenstein distinguished fellow Ambassador Michael H. Armacost, associate director for research Daniel C. Sneider, and senior program and outreach coordinator Neeley Main. In Beijing, Freeman Spogli Institute director Coit Blacker joined the delegation, as did Shorenstein APARC's Scott Rozelle.

The trip started in Shanghai, a dynamic center of finance and industry that has drawn in many Stanford graduates. State-owned enterprises such as Baosteel, one of the world's largest steel producers, are in the midst of becoming players in the global marketplace. From Baosteel's sprawling complex of docks, blast furnaces, and rolling mills along an estuary of the Yangtze River, products are now being dispatched around the world. In a meeting, the leadership of the Baosteel Group expressed an eagerness to tap into the educational and training opportunities offered at Stanford University.

Shanghai is not only the business capital but also a political center, rivaling Beijing. The Shanghai Institute for International Studies is an unofficial foreign relations arm of the Shanghai government. Shanghai Institute scholars are also players in national policy debate on many key issues facing China, such as relations with Taiwan, with Japan, and even with the Korean peninsula.

The scholars presented their views on a wide range of issues, from the preparations for the 17th Congress of the Communist Party this coming fall to emerging structures of regional integration in East Asia. Professor Xu Mingqi, who is also a senior leader of the Shanghai Academy of Social Sciences, explained that China's development strategy is shifting toward a more balanced approach. Whereas local government officials previously were pressed to meet targets for GDP growth, foreign investment, and export volume, now they must also raise employment levels, close the growing income gap, and provide social security.

Hangzhou, considered one of the most beautiful cities in China, is a two-hour drive south of Shanghai. The modern roadway passed a tableau of the suburbanization of this part of China's countryside, with multi-story brick homes mushrooming amidst the fields. The delegation arrived at Zhejiang University, considered among the best of China's provincial higher educational institutions and growing rapidly in size and scope.

The Shorenstein APARC delegation met with faculty members from Zhejiang's social science departments, who briefed the delegation on their research work in areas such as distance education, international relations, Chinese history, even a school of Korean studies. Zhejiang is also the site of a new research institution, the Zhejiang Institute for Innovation (ZII), founded by Stanford engineering graduate Min Zhu, a Silicon Valley entrepreneur who is determined to bring the lessons of Stanford and the valley to his home province and his undergraduate alma mater. ZII aims to foster applied research that can tie the university to the vibrant entrepreneurial culture of Zhejiang province. Shorenstein APARC researchers may soon be carrying out fieldwork in this laboratory of change, based at ZII.

Beijing, however, is still the place that matters most in China, not only in the realm of government but also when it comes to academic scholarship. The delegation met with two of Shorenstein APARC's longtime corporate affiliates in China: PetroChina, the state-owned oil and gas giant, and the People's Bank of China. Shorenstein APARC dined with a lively group of Chinese journalists, organized by former Stanford Knight fellow Hu Shuli, the editor of Caijing Magazine, considered China's leading independent business publication.

The substantive task was to forge new ties with key research institutions. The current state of China's development strategy was again on the agenda when the delegation met with senior officials from the National Development and Reform Commission (NDRC), formerly China's State Planning Commission. Alongside the NDRC, the delegation met as well with the leadership of an offshoot of China's State Council, the China Development Research Foundation, which is doing important work in promoting good governance in areas such as poverty alleviation, nutrition, and budgeting. Those conversations were echoed later in our meetings with scholars from Peking University's School of Government.

Shorenstein APARC's own China program, as Oi explained, is focused on understanding the tensions that arise as China grapples with the consequences of its rapid economic development. Out of the meetings in Beijing, an ongoing dialogue has begun, to be advanced this summer with a visit from a NDRC delegation and in the fall with an international conference at Stanford on China's Growing Pains.

The delegation also engaged in frank and useful exchanges on a variety of international relations issues. We had an extended meeting with scholars and leaders of the China Reform Forum (CRF), a think-tank associated with the Communist Party's Central Party School, the premier institution for training party leaders and officials. The CRF is credited with authoring important concepts such as the foreign policy doctrine of China's "Peaceful Rise." These discussions were followed by a visit and exchange with scholars from Peking University's widely respected School of International Studies.

The scholars shared analysis of the current state of the North Korean nuclear negotiations, as well as evaluating the outcome of Chinese Premier Wen Jibao's visit that week to Japan. Over dinner with CRF Vice Chairman Ding Kuisong, the conversation turned to the American presidential politics and the future direction of U.S. foreign policy.

Professors Blacker, Shin, and Oi also met with senior officials of Peking University, as part of an ongoing dialogue about cooperation between these two premier institutions of higher education.

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Abstract of Seema Jayachandran's "Applying the Odious Debts Doctrine while Preserving Legitimate Lending":

Odious debts are debts incurred by the government of a nation without either popular consent or a legitimate public purpose. While there is some debate within academic circles as to whether the successor government to a regime which incurred odious debts has the right to repudiate repayment, in the real world this is currently not an option granted legitimacy either by global capital markets or the legal systems of creditor states. There are compelling reasons to reform the law of odious debts to allow for such a repudiation in citizens of a tyrant to repay their oppressor's personal debts, but the burden of odious-debt servicing can perpetuate the cycle of state failure which has direct national security consequences. In addition, a properly designed odious debt reform could function as an alternative sanctions mechanism to trade sanctions with fewer harmful implications for the general population of the targeted state. Classical proponents of odious debt reform advocate for recognition of a legal rule under which successor governments could challenge the validity of debts incurred by prior regimes against the odious debt legal standard in a judicial-style forum. We make the case for an alternative "Due Diligence" model of reform which provides far greater ex ante certaining for lenders both as to which investments from subsequent invalidation. The Due Diligence Model also solves certain time-consistency problems inherent to the Classical model.

Seema Jayachandran is assistant professor of economics at Stanford University. She received her PhD in economics from Harvard University. She specializes in development economics, labor economics, and political economy.

Sponsored by the Program on Global Justice and the Stanford Humanities Center

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Seema Jayachandran Assistant Professor of Economics Speaker Stanford University
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Abstract

This paper presents a matched pair case study of two factories supplying Nike, the world's largest athletic footwear and apparel company. These two factories have many similarities - both are in Mexico, both are in the apparel industry, both produce more or less the same products for Nike (and other brands) and both are subject to the same code of conduct. On the surface, both factories appear to have similar employment (i.e., recruitment, training, remuneration) practices and they receive comparable scores when audited by Nike's compliance staff. However, actual labor conditions exist between these two factories. What drives these differences in working conditions? What does this imply for traditional systems of monitoring and codes of conduct? Field research conducted at these two factories reveals that beyond the code of conduct and various monitoring efforts aimed at enforcing it, workplace conditions and labor standards are shaped by very different patterns of work organization and human resource management policies.

Richard Locke is professor of political science at Massachusetts Institute of Technology (MIT). He is also faculty director of the MIT Sloan Fellows program and co-director of the MIT Italy program. His research focuses on economic development, comparative labor relations, and political economy.

Sponsored by the Program on Global Justice and the Stanford Humanities Center

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Richard Locke Professor of Political Science, Director of Sloan Fellows Program, and Co-director of Italy Program Speaker Massacusetts Institute of Technology
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Fabrice Murtin will be a postdoctoral fellow with Stanford's Center for the Study of Poverty and Inequality. He has a Ph.D. in Economics from Paris-Jourdan Sciences Économiques and, from 2005-2007, served as visiting researcher at the London School of Economics.

He will discuss his paper, written with Christian Morrisson, "Education Inequalities and the Kuznets Curves: A Global Perspective Since 1870."

Abstract

This paper presents a new dataset on educational attainment (primary, secondary and tertiary schooling) at the world level since 1870. Inequality in years of schooling is found to be rapidly decreasing, but we show that this result is completely driven by the decline in illiteracy. Then, we turn to inequality in human capital and focus on Mincerian production function that accounts for diminishing returns to schooling. It explains the negative cross-country correlation between Mincerian returns to schooling and average schooling contrary to other functional forms. As a result, we show that world human capital inequality has increased since 1870, but does not exceed 10% of world income inequality. Next, we analyse the relationships between the national distributions of income and schooling. We show that human capital within countries exhibits the inverted U-shaped curve with respect to average schooling, namely a "Kuznets curve of education." We find that the usual Kuznets curve of income inequality is significant both in pooled and fixed-effects regressions over the period 1870-2000, and is robust to the inclusion of other variables in the regression such as schooling and human capital inequality. However, the "Kuznets effect" associated to GDP per capita is 4 times smaller in magnitude than the externality of average schooling favouring the decrease of income inequality within countries since 1870.

Cosponsored by the Political Theory Workshop.

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Fabrice Murtin Postdoctoral Fellow Speaker Center for the Study of Poverty and Inequality, Stanford University
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The BP Foundation has awarded a five-year, $7.5 million grant to Stanford University's Program on Energy and Sustainable Development to support research on modern energy markets. The foundation is funded by BP, one of the world's largest energy companies.

The gift follows the BP Foundation's initial grant of $1.8 million over three years, which was pledged in 2004 in support of the program.

"BP's support has allowed our program to study the world's most pressing energy problems, such as global warming, energy poverty and the prospects for the world oil market," said program director and Stanford law Professor David G. Victor. "In addition to BP Foundation support, we learn from BP's experience as an energy company because they operate in all the markets where we do research--such as in China and India."

"BP Foundation believes the work undertaken at Stanford deals directly with global issues that are key to meeting the world's growing energy needs," said Steve Elbert, chairman of the BP Foundation. "The drive to research and implement strategies to further understand today's energy markets is important work, and we are proud to partner again with Stanford."

The Program on Energy and Sustainable Development, part of the Freeman Spogli Institute for International Studies, concentrates on the legal, political and institutional dimensions of how societies derive value from energy. The BP Foundation grant is part of a rapid expansion of Stanford's research and teaching on energy issues, much of which focuses on the technical aspects of energy systems.

All of the program's research is public and published openly, including on its website (http://pesd.stanford.edu/). The gift from the BP Foundation, as well as all similar gifts to support the program's research, includes special provisions that assure the research program's independence in setting its research agenda.

The agreement with Stanford is one in a series of BP partnerships with universities in the United Kingdom, the United States and China, representing a total commitment of more than $600 million. The program at Stanford complements work on similar topics at Princeton University, Tsinghua University and Imperial College, among others.

Founded in 2001, the Program on Energy and Sustainable Development focuses on the "political economy" of modern energy services--the interaction of political, institutional and economic forces that often dominate energy markets. It collaborates with the Stanford Law School and other university departments and schools, including economics, engineering and earth sciences. About half of the program's resources are devoted to research partnerships in key developing countries, including Brazil, China, India, Mexico and South Africa. Program researchers have examined the emergence of a global business in natural gas, reforms of electric power markets and the supply of modern energy services to low-income rural households in developing countries.

The program's other major sponsor is the Electric Power Research Institute in Palo Alto, Calif., a research consortium that includes most of the world's largest electric companies.

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