February 2009 Dispatch - Gender Inequality in Earnings in Industrialized East Asia
Since 2005, research teams comprised of participants from across East Asia have been working on a collaborative survey project known as the East Asian Social Survey (EASS).1 The participating research teams include the Chinese General Social Survey (CGSS) from Hong Kong University of Science and Technology and Renmin University in China; Osaka University of Commerce in Japan (JGSS); SungKyunKwan University in Korea (KGSS); and the Taiwan Social Change Survey (TSCS) at the Academia Sinica, Taiwan. The plan of the project is to conduct a survey with different topics for every two years. The first EASS survey, which focused on Family, was conducted in 2006. KGSS had now integrated the data that the four research teams compiled by the end of 2008. This data set is now ready for research use, both by members of the teams and by other interested parties. The topic for the 2008 survey is Globalization and Culture.
During the past two decades, the export-oriented economies of Japan, Korea, and Taiwan experienced strong economic growth and rising income levels. More women entered the labor markets and obtained better-paid jobs. However, in the regions surveyed, men and women often do not equally share in economic prosperity and there still exists a sex gap in earnings. A paper recently co-written by this author and Paula England,2 using the 2006 EASS data, may be the first attempt to explore the size of the sex gap, the factors that explain the gap, and the variations among Japan, Korea, and Taiwan.3
To explain the disparity between the pay of men and women in the survey nations, we used regression analysis to predict the hourly wage from various characteristics, using separate regressions for men and women in each nation. Then we assessed how much human capital factors may contribute to the sex gap in pay. For each factor, there are two estimates of how much it explains, reflecting whether we use male or female slopes, or rates of return. The table below summarizes some of the paper’s preliminary findings. The last row of the table shows that the sex wage gap is highest in Korea, with Japan coming in second place. In Taiwan, women earned about 82 percent of what men earned. For comparison, in the United States in 2003, the comparable wage ratio of female-over-male was 79.4 percent.
What factors might explain the sex gap in earnings? In Japan, the table shows (20 percent for the make slope and 34 percent for the female slope) that education is a key factor—notably, women are less likely to be college graduates. Another key factor is that women are more likely to work in contingent or temporary jobs than in permanent, full-time employment. In the Korea case, the difference between the male or female slopes is small, and 37 percent (male) to 32 percent (female) of the gap is explained, again, by education, as fewer Korean women have completed college than men. In Taiwan, a much lower share (6 percent for men and to 0 percent for women) is explained, mainly due to potential work experience, followed by employment status. In Taiwan, women actually have more education than men, as more women than men have completed college. This education imbalance supports our finding that the sex gap is largest in Korea, where women are less educated than men, and smallest in Taiwan, where the reverse is true.
Human capital factors (education and potential work experiences) seem to explain smaller proportions in the societies with a smaller gap. On the one hand, if we were to attribute all the elements of the gap not explained by mean differences in our supply-side measures to be sex discrimination, this would imply that a higher portion of Taiwan’s (albeit smaller) gap can explained by pay discrimination. On the other hand, women in Japan and Korea are disadvantaged, both in their educational achievements and their opportunities for regular employment. The contingent or part-time jobs that these women do pay less per hour than do the permanent or full-time jobs in which their male counterparts are employed. The EASS survey indicates, thus far, that economic prosperity and advancement in human capital factors may not naturally bring about sex equality in earnings.
Notes
1 More information on the EASS can be found at http://www.eass.info.
2 Chin-fen Chang and Paula England "Gender Inequality in Earnings in Industrialized East Asia," to be presented at the Beijing RC28 Meeting, Renmin University, Beijing, China, May 14-16, 2009.
3 In this paper, we excluded Chinese data because the other three societies are more comparable to one another in terms of their economic development.
The New Transatlantic Agenda
Ambassador Eliasson sets out the current status of Europe-US relations and acknowledges the wide range of daunting problems the world must face today. He emphasizes the need for an enhancement of the transatlantic relationship, as well as the need for multilateral cooperation. Mr. Eliasson also reinforces the importance of a continued awarenesss of the economy, the environment, and ethics.
Synopsis
Although unsure whether there will in fact be a new transatlantic agenda, Ambassador Eliasson repeatedly highlights that it is crucial that it does happen if we are to challenge the ‘huge’ issues of today. Mr. Eliasson notes the current financial climate and its possible effects on the social and political spheres as worrying. He also expresses particular concern at what he calls ‘fortress building,’ which involves protectionism and intolerance. Mr. Eliasson goes on to explain that as it stands, current US-Europe relations are dominated by mutual interest on security and the economy. However, to Mr. Eliasson, this relationship is marred by several issues. Inside the EU, democracy is in a predicament with politicians being accountable nationally while the issues are international. Moreover, Mr. Eliasson feels that the nature of the US and Europe relationship is not representative of the responsibility it should carry by being the most prosperous regions of the world.
How is this transatlantic relationship to move forward? If we are to arrive at what Mr. Eliasson describes as ‘scenario 1,’ which involves long term thinking, regulation, an emphasis on ethics, and a realization of interdependence in an internationally cooperative system, then Mr. Eliasson argues this requires reform. Mr. Eliasson argues it is urgent not to separate politics and economics. In dealing with a financial crisis, we must employ a multilateral approach and learn lessons for the future, particularly not fearing international regulation in a globalized economy. Mr. Eliasson also explains we can avoid this protectionist ‘fortress building’ by embracing ‘multipolarity.’ Mr. Eliasson underscores the importance of tolerance and good governance as central to progress. In addition, Mr. Eliasson reinforces that the problems of today are on such a massive scale that they must be dealt with internationally, as well as regionally and in the private sector.
Dealing with such issues, which involve collective engagement in Afghanistan and a cooperative approach in Africa, is what Mr. Eliasson believes must be added as a ‘third pillar’ to the US and Europe’s relationship. Mr. Eliasson also stresses concrete action on poverty by the US and Europe as central to this effort. In particular, he places emphasis a program for education of women and the establishment of clean water access. Mr. Eliasson believes that such efforts, which would add a pivotal ethical dimension to the transatlantic agenda, would enhance the reputation of democracy across the globe through concrete action.
In engaging with the audience in a question-and-answer session, one of the most emphasized subjects was diplomatic standards for international relations. Mr. Eliasson strongly reinforced the notion that the transatlantic agenda should stand with clear ethical standards. Other issues addressed included Iran's nuclear capabilities, religion, and the role of Russia.
About the Speaker
Ambassador Jan Eliasson was until July 1, 2008 Special Envoy of the United Nations Secretary-General for Darfur. Previously, Jan Eliasson was President of the 60th session of the United Nations General Assembly 2005-2006. He was Sweden’s Ambassador to the United States, 2000-2005. Mr. Eliasson was Minister for Foreign Affairs of Sweden in 2006.
Mr. Eliasson served from 1994 to 2000 as State Secretary for Foreign Affairs, a key position in formulating and implementing Swedish foreign policy. Earlier, 1988-1992, he was Sweden’s Ambassador to the United Nations in New York. During this period, he also served as the Secretary-General’s Personal Representative for Iran/Iraq.
In 1992, Mr. Eliasson was appointed the first United Nations Under-Secretary-General for Humanitarian Affairs and was involved in operations in Somalia, Sudan, Mozambique and the Balkans. He also took initiatives on landmines, conflict prevention and humanitarian action.
1980-1986, Mr. Eliasson was part of the UN mediation missions in the war between Iran and Iraq, headed by former Prime Minister Olof Palme. In 1993-94 Mr. Eliasson served as mediator in the Nagorno Karabakh conflict for the Organization for Security and Co-operation in Europe (OSCE). He has been Visiting Professor at Uppsala University and Göteborg University in Sweden, lecturing on mediation, conflict resolution and UN reform.
During his diplomatic career, Mr. Eliasson has been posted to New York (twice) Paris, Bonn, Washington (twice) and Harare, where he opened the first Swedish Embassy in 1980. He served as Diplomatic Adviser to the Swedish Prime Minister 1982-1983, and as Director General for Political Affairs in the Swedish Ministry for Foreign Affairs 1983-1987.
Mr. Eliasson has authored and co-authored numerous articles and books and is a frequent lecturer on foreign policy and diplomacy. He is recipient of honorary doctorate degrees from i. a. American University, Washington, D.C., Uppsala University and Göteborg University, Sweden. He has been decorated by a number of Governments.
He is the Chairman of the Anna Lindh Memorial Fund of Sweden and is Member of the Advisory Group to the International Committee of the Red Cross (ICRC), Geneva.
Born in Göteborg, Sweden, in 1940, Mr. Eliasson was an exchange student in the United States 1957-1958. He graduated from the Swedish Naval Academy in 1962 and earned a Master’s degree in Economics and Business Administration in 1965.
Oksenberg Conference Room
Enhancing South Korea's Security: The U.S. Alliance and Beyond
Two decades ago, South Korea appeared on the path to greatly increased security. The Cold War was ending, fundamentally improving South Korea’s regional security environment. While retaining an alliance with the United States, South Korea was able to normalize relations with all of its neighbors except North Korea. It outpaced North Korea economically, technologically, politically, diplomatically, and militarily. Enjoying a dynamic democracy and firmly committed to the free market, South Korea seemed destined to grow only stronger vis-à-vis North Korea as the leading Korean state and to be well-positioned to preserve its security and integrity against much larger neighbors.
Today, however, South Korea unexpectedly faces a new constellation of significant threats to its security from both traditional and non-traditional sources.
- North Korea has developed and tested a nuclear device and has continued to improve the capabilities of its long-range ballistic missiles. Despite economic collapse, North Korea still fields one of the world’s largest conventional militaries. The North Korean regime continues to monopolize information to the North Korean people, clouding the prospects for North-South reconciliation.
- China’s rise presents not only opportunities but also challenges for South Korean security. Russia’s resurgence is a very recent phenomenon that has not been explored in depth. Despite converging attitudes and interests in many respects, historical grievances continue to limit security and diplomatic cooperation between South Korea and Japan.
- The United States is focused on combating terrorism and managing the rise of China, while South Korean public opinion is divided about North Korea and the alliance with the United States.
- Global developments—financial crises, economic recession, energy shortages, pollution, and climate change—are also testing South Korea. The ROK has one of the world’s lowest birth rates; the resulting dearth of young people and the aging of society will have major implications for South Korea’s long-term security.
This closed workshop will examine the above issues from the viewpoint of enhancing South Korea’s security in coming decades.
This workshop is supported by the generous grant from Koret Foundation.
Bechtel Conference Center
Byung Kwan Kim
Shorenstein APARC
Stanford University
Encina Hall E301
Stanford, CA 94305-6055
General (retired) Byung Kwan Kim is the inaugural Koret Fellow for 2008-09 academic year. He was the Deputy Commander of ROK-US Combined Forces Command and the Commander of Ground Component Command.
Koret Fellowship was established by the generous support from Koret Foundation to bring leading professionals in Asia and the United States to Stanford to study United States-Korea relations. The fellows will conduct their own research on the bilateral relationship, with an emphasis on contemporary relations with the broad aim of fostering greater understanding and closer ties between the two countries.
Gi-Wook Shin
Gi-Wook Shin is the William J. Perry Professor of Contemporary Korea in the Department of Sociology, senior fellow at the Freeman Spogli Institute for International Studies, and the founding director of the Korea Program at the Walter H. Shorenstein Asia-Pacific Research Center (APARC) since 2001, all at Stanford University. In May 2024, Shin also launched the Taiwan Program at APARC. He served as director of APARC for two decades (2005-2025). As a historical-comparative and political sociologist, his research has concentrated on social movements, nationalism, development, democracy, migration, and international relations.
In Summer 2023, Shin launched the Stanford Next Asia Policy Lab (SNAPL), which is a new research initiative committed to addressing emergent social, cultural, economic, and political challenges in Asia. Across four research themes– “Talent Flows and Development,” “Nationalism and Racism,” “U.S.-Asia Relations,” and “Democratic Crisis and Reform”–the lab brings scholars and students to produce interdisciplinary, problem-oriented, policy-relevant, and comparative studies and publications. Shin’s latest book, The Four Talent Giants, a comparative study of talent strategies of Japan, Australia, China, and India to be published by Stanford University Press in the summer of 2025, is an outcome of SNAPL.
Shin is also the author/editor of twenty-seven books and numerous articles. His books include The Four Talent Giants: National Strategies for Human Resource Development Across Japan, Australia, China, and India (2025); Korean Democracy in Crisis: The Threat of Illiberalism, Populism, and Polarization (2022); The North Korean Conundrum: Balancing Human Rights and Nuclear Security (2021); Superficial Korea (2017); Divergent Memories: Opinion Leaders and the Asia-Pacific War (2016); Global Talent: Skilled Labor as Social Capital in Korea (2015); Criminality, Collaboration, and Reconciliation: Europe and Asia Confronts the Memory of World War II (2014); New Challenges for Maturing Democracies in Korea and Taiwan (2014); History Textbooks and the Wars in Asia: Divided Memories (2011); South Korean Social Movements: From Democracy to Civil Society (2011); One Alliance, Two Lenses: U.S.-Korea Relations in a New Era (2010); Cross Currents: Regionalism and Nationalism in Northeast Asia (2007); and Ethnic Nationalism in Korea: Genealogy, Politics, and Legacy (2006). Due to the wide popularity of his publications, many have been translated and distributed to Korean audiences. His articles have appeared in academic and policy journals, including American Journal of Sociology, World Development, Comparative Studies in Society and History, Political Science Quarterly, Journal of Asian Studies, Comparative Education, International Sociology, Nations and Nationalism, Pacific Affairs, Asian Survey, Journal of Democracy, and Foreign Affairs.
Shin is not only the recipient of numerous grants and fellowships, but also continues to actively raise funds for Korean/Asian studies at Stanford. He gives frequent lectures and seminars on topics ranging from Korean nationalism and politics to Korea's foreign relations, historical reconciliation in Northeast Asia, and talent strategies. He serves on councils and advisory boards in the United States and South Korea and promotes policy dialogue between the two allies. He regularly writes op-eds and gives interviews to the media in both Korean and English.
Before joining Stanford in 2001, Shin taught at the University of Iowa (1991-94) and the University of California, Los Angeles (1994-2001). After receiving his BA from Yonsei University in Korea, he was awarded his MA and PhD from the University of Washington in 1991.
Stanford Next Asia Policy Lab (SNAPL)
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David Straub
No longer in residence.
David Straub was named associate director of the Korea Program at the Walter H. Shorenstein Asia-Pacific Research Center (Shorenstein APARC) on July 1, 2008. Prior to that he was a 2007–08 Pantech Fellow at the Center. Straub is the author of the book, Anti-Americanism in Democratizing South Korea, published in 2015.
An educator and commentator on current Northeast Asian affairs, Straub retired in 2006 from his role as a U.S. Department of State senior foreign service officer after a 30-year career focused on Northeast Asian affairs. He worked over 12 years on Korean affairs, first arriving in Seoul in 1979.
Straub served as head of the political section at the U.S. embassy in Seoul from 1999 to 2002 during popular protests against the United States, and he played a key working-level role in the Six-Party Talks on North Korea's nuclear program as the State Department's Korea country desk director from 2002 to 2004. He also served eight years at the U.S. embassy in Japan. His final assignment was as the State Department's Japan country desk director from 2004 to 2006, when he was co-leader of the U.S. delegation to talks with Japan on the realignment of the U.S.-Japan alliance and of U.S. military bases in Japan.
After leaving the Department of State, Straub taught U.S.-Korean relations at the Johns Hopkins University's School of Advanced International Studies in the fall of 2006 and at the Graduate School of International Studies of Seoul National University in spring 2007. He has published a number of papers on U.S.-Korean relations. His foreign languages are Korean, Japanese, and German.
Benjamin Self
Shorenstein APARC
Encina Hall, Room E301
Stanford University
Stanford, CA 94305-6055
Ben Self is the inaugural Takahashi Fellow in Japanese Studies at the Walter H. Shorenstein Asia-Pacific Research Center. Prior to joining the Center in September 2008, Self was at the Henry L. Stimson Center as a Senior Associate working on Japanese security policy beginning in 1998. While at the Stimson Center, he directed projects on Japan-China relations, fostering security cooperation between the U.S.-Japan Alliance and the PRC, Japan’s Nuclear Option, and Confidence-Building Measures. Self has also carried out research and writing in areas such as nuclear non-proliferation and disarmament, ballistic missile defense, Taiwan’s security, Northeast Asian security dynamics, the domestic politics of Japanese defense policy, and Japan’s global security role.
From 2003 until 2008, Ben was living in Africa—in Malawi and Tanzania—and is now studying the role of Japan in Africa, including in humanitarian relief, economic development, conflict prevention, and resource extraction.
Self earned his undergraduate degree in Political Science at Stanford in 1988, and an M.A. in Japan Studies and International Economics from Johns Hopkins University Paul H. Nitze School of Advanced International Studies. While there, he was a Reischauer Center Summer Intern at the Research Institute for Peace and Security (RIPS) in Tokyo. He later worked in the Asia Program at the Woodrow Wilson International Center for Scholars, and was a Visiting Research Fellow at Keio University on a Fulbright grant from 1996 until 1998.
Don Keyser
Shorenstein APARC
Stanford University
Encina Hall E301
Stanford, CA 94305-6055
Donald W. Keyser retired from the U.S. Department of State in September 2004 after a 32-year career. He had been a member of the Senior Foreign Service since 1990, and held Washington-based ambassadorial-level assignments 1998-2004. Throughout his career he focused on U.S. policy toward East Asia, particularly China, Taiwan, Hong Kong, Japan and the Korean Peninsula. Fluent in Chinese and professionally conversant in Japanese, Russian and French, he served three tours at the American Embassy in Beijing, two tours at the American Embassy in Tokyo, and almost a dozen years in relevant domestic assignments. In the course of his career, Keyser logged extensive domestic and foreign experience in senior management operations, conflict resolution, intelligence operations and analysis, and law enforcement programs and operations. A Russian language major in college and a Soviet/Russian area studies specialist through M.A. work, Keyser served 1998-99 as Special Negotiator and Ambassador for Regional Conflicts in the Former USSR. He sought to develop policy initiatives and strategies to resolve three principal conflicts, leading the U.S. delegation in negotiations with four national leaders and three separatist leaders in the Caucasus region.
Keyser earned his B.A. degree, Summa Cum Laude, with a dual major in Political Science and Russian Area Studies, from the University of Maryland. He pursued graduate studies at The George Washington University, Washington, D.C., from 1965-67 (Russian area and language focus) and 1970-72 (Chinese area and language focus). He attended the National War College, Fort McNair, Washington (1988-89), earning a certificate equivalent to an M.S., Military Science; and the National Defense University Capstone Program (summer 1995) for flag-rank military officers and civilians.
Jong Seok Lee
Shorenstein APARC
Stanford University
Encina Hall E301
Stanford, CA 94305-6055
Dr. Jong Seok Lee was the Minister of Unification, and the Chairman of the Standing Committee of the National Security Council in Korea. He is currently a Senior Fellow at Sejong Institute in Korea. He has published books on North Korea-China relations, contemporary North Korea, and Korea unification.
Daniel C. Sneider
Stanford University
Encina Hall, Room E301
Stanford, CA 94305-6055
Daniel C. Sneider is a lecturer in international policy at Stanford's Ford Dorsey Master’s in International Policy and a lecturer in East Asian Studies at Stanford. His own research is focused on current U.S. foreign and national security policy in Asia and on the foreign policy of Japan and Korea. Since 2017, he has been based partly in Tokyo as a Visiting Researcher at the Canon Institute for Global Studies, where he is working on a diplomatic history of the creation and management of the U.S. security alliances with Japan and South Korea during the Cold War. Sneider contributes regularly to the leading Japanese publication Toyo Keizai as well as to the Nelson Report on Asia policy issues.
Sneider is the former Associate Director for Research at the Walter H. Shorenstein Asia-Pacific Research Center at Stanford. At Shorenstein APARC, Sneider directed the center’s Divided Memories and Reconciliation project, a comparative study of the formation of wartime historical memory in East Asia. He is the co-author of a book on wartime memory and elite opinion, Divergent Memories, from Stanford University Press. He is the co-editor, with Dr. Gi-Wook Shin, of Divided Memories: History Textbooks and the Wars in Asia, from Routledge and of Confronting Memories of World War II: European and Asian Legacies, from University of Washington Press.
Sneider was named a National Asia Research Fellow by the Woodrow Wilson International Center for Scholars and the National Bureau of Asian Research in 2010. He is the co-editor of Cross Currents: Regionalism and Nationalism in Northeast Asia, Shorenstein APARC, distributed by Brookings Institution Press, 2007; of First Drafts of Korea: The U.S. Media and Perceptions of the Last Cold War Frontier, 2009; as well as of Does South Asia Exist?: Prospects for Regional Integration, 2010. Sneider’s path-breaking study “The New Asianism: Japanese Foreign Policy under the Democratic Party of Japan” appeared in the July 2011 issue of Asia Policy. He has also contributed to other volumes, including “Strategic Abandonment: Alliance Relations in Northeast Asia in the Post-Iraq Era” in Towards Sustainable Economic and Security Relations in East Asia: U.S. and ROK Policy Options, Korea Economic Institute, 2008; “The History and Meaning of Denuclearization,” in William H. Overholt, editor, North Korea: Peace? Nuclear War?, Harvard Kennedy School of Government, 2019; and “Evolution or new Doctrine? Japanese security policy in the era of collective self-defense,” in James D.J. Brown and Jeff Kingston, eds, Japan’s Foreign Relations in Asia, Routledge, December 2017.
Sneider’s writings have appeared in many publications, including the Washington Post, the New York Times, Slate, Foreign Policy, the New Republic, National Review, the Far Eastern Economic Review, the Oriental Economist, Newsweek, Time, the International Herald Tribune, the Financial Times, and Yale Global. He is frequently cited in such publications.
Prior to coming to Stanford, Sneider was a long-time foreign correspondent. His twice-weekly column for the San Jose Mercury News looking at international issues and national security from a West Coast perspective was syndicated nationally on the Knight Ridder Tribune wire service. Previously, Sneider served as national/foreign editor of the Mercury News. From 1990 to 1994, he was the Moscow bureau chief of the Christian Science Monitor, covering the end of Soviet Communism and the collapse of the Soviet Union. From 1985 to 1990, he was Tokyo correspondent for the Monitor, covering Japan and Korea. Prior to that he was a correspondent in India, covering South and Southeast Asia. He also wrote widely on defense issues, including as a contributor and correspondent for Defense News, the national defense weekly.
Sneider has a BA in East Asian history from Columbia University and an MPA from the John F. Kennedy School of Government at Harvard University.
Thomas Fingar
Freeman Spogli Institute for International Studies
Stanford University
Encina Hall, C-327
Stanford, CA 94305-6055
Thomas Fingar is a Shorenstein APARC Fellow in the Freeman Spogli Institute for International Studies at Stanford University. He was the inaugural Oksenberg-Rohlen Distinguished Fellow from 2010 through 2015 and the Payne Distinguished Lecturer at Stanford in 2009.
From 2005 through 2008, he served as the first deputy director of national intelligence for analysis and, concurrently, as chairman of the National Intelligence Council. Fingar served previously as assistant secretary of the State Department’s Bureau of Intelligence and Research (2000-01 and 2004-05), principal deputy assistant secretary (2001-03), deputy assistant secretary for analysis (1994-2000), director of the Office of Analysis for East Asia and the Pacific (1989-94), and chief of the China Division (1986-89). Between 1975 and 1986 he held a number of positions at Stanford University, including senior research associate in the Center for International Security and Arms Control.
Fingar is a graduate of Cornell University (A.B. in Government and History, 1968), and Stanford University (M.A., 1969 and Ph.D., 1977 both in political science). His most recent books are From Mandate to Blueprint: Lessons from Intelligence Reform (Stanford University Press, 2021), Reducing Uncertainty: Intelligence Analysis and National Security (Stanford University Press, 2011), The New Great Game: China and South and Central Asia in the Era of Reform, editor (Stanford University Press, 2016), Uneasy Partnerships: China and Japan, the Koreas, and Russia in the Era of Reform (Stanford, 2017), and Fateful Decisions: Choices that will Shape China’s Future, co-edited with Jean Oi (Stanford, 2020). His most recent article is, "The Role of Intelligence in Countering Illicit Nuclear-Related Procurement,” in Matthew Bunn, Martin B. Malin, William C. Potter, and Leonard S Spector, eds., Preventing Black Market Trade in Nuclear Technology (Cambridge, 2018)."
China and the World
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Carbon Capture and Storage at Scale: Lessons from the Growth of Analogous Energy Technologies
Carbon capture and storage (CCS) is a promising technology that might allow for significant reductions in CO2 emissions. But at present CCS is very expensive and its performance is highly uncertain at the scale of commercial power plants. Such challenges to deployment, though, are not new to students of technological change. Several successful technologies, including energy technologies, have faced similar challenges as CCS faces now. In this paper we draw lessons for the CCS industry from the history of other energy technologies that, as with CCS today, were risky and expensive early in their commercial development. Specifically, we analyze the development of the US nuclear-power industry, the US SO2-scrubber industry, and the global LNG industry.
We focus on three major questions in the development of these analogous industries. First, we consider the creation of the initial market to prove the technology: how and by whom was the initial niche market for these industries created? Second, we look at how risk-reduction strategies for path-breaking projects allowed the technology to evolve into a form so that it could capture a wider market and diffuse broadly into service. Third, we explore the "learning curves" that describe the cost reduction as these technologies started to capture significant market share.
Our findings suggest that directly applying to CCS the conventional wisdom that is prevalent regarding the deployment and diffusion of technologies can be very misleading. The conventional wisdom may be summarized as: "Technologies are best deployed if left in the hands of private players"; "Don't pick technology winners" or "Technology forcing is wrong"; and "Technology costs reduce as its cumulative installed capacity increases". We find that none of these readily applies when thinking about deployment of CCS.
Through analyzing the development the analogous industries, we arrive at three principal observations:
- First, government played a decisive role in the development of all of these analogous technologies. Much of the early government role was to provide direct backing for R&D work and demonstration projects that validated the technological concepts. For example, the US government directly supported for over two decades most of the basic science and engineering research in both SO2 scrubbers and nuclear power. Most of the demonstration projects were significantly underwritten by government as well; the Japanese government was the principal backer of LNG technology through its promises to buy most of the world's LNG output over many years. Direct government support created the niche opportunities for these technologies.
- Second, diffusion of these technologies beyond the early demonstration and niche projects hinged on the credibility of incentives for industry to invest in commercial-scale projects. In each of the historical cases, government made a shift in its support strategy as the technology diffused more widely. In the early phase (when commercial uncertainties were so high that businesses found it extremely risky to participate in more than small, isolated projects) success in achieving technology diffusion required a direct role for government. But as uncertainties about the technology's performance reduced and operational experience accumulated, direct financial support became less important, and indirect instruments to lower commercial risk rose in prominence. Those instruments included tax breaks, portfolio/performance standards, purchase guarantees, and low-interest-rate loans linked to specific commercial-scale investments. It is conceivable that such incentives could have been supplied by non-governmental institutions, such as large firms or industry associations, but the three analogs point strongly to a governmental role-perhaps because only government action was viewed as credible. (In the United States, many of the key decisions to support new technologies were crafted at the state level, such as through rate base decisions to allow utilities to purchase nuclear plants.)
- Third, the conventional wisdom that experience with technologies inevitably reduces costs does not necessarily hold. Risky and capital-intensive technologies may be particularly vulnerable to diffusion without accompanying reductions in cost. In fact, we find the opposite of the conventional wisdom to be true for nuclear power in the US (1960-1980) and global LNG (1960-1995). Costs increased as cumulative installed capacity increased. A very rapid expansion of nuclear power plants in the US around 1970 led to spiraling costs, as the industry had no chance to pass lessons from one generation of investment to the next-a fact evident, for example, in the failure to standardize design and regulation that would allow firms to exploit economies of scale. For natural gas liquefaction plants, costs stayed high for decades due to a market structure marked by little competition among technology suppliers and the presence of a single dominant customer (Japanese firms organized by the Japanese government) willing to pay a premium for safety and security of supply. The same attributes that allowed LNG to expand rapidly-namely, promises of assured demand made credible by the singular backing of the Japanese state-were also a special liability as the technology struggled to compete in other markets. The experience with SO2 scrubbers was more encouraging-costs declined fairly promptly once industrial-scale investment was under way. But that happened only after sufficient clarity on technological performance and capability of FGD systems had been established. What followed was a strict performance standard-in the form of a government mandate, imposed by environmental regulators-that effectively picked FGD as a technology winner. The guaranteed market for FGD led to serious investment, innovations, and learning-by-doing cost reductions. We do not argue that this technology-forcing approach was economically efficient but merely underscore that rates of diffusion of FGD technology akin to what is imagined for CCS technology today were possible only under this technology-forcing regulatory regime.
As CCS commercialization proceeds, policymakers must remain mindful that cost reduction is not automatic-it can be derailed especially by non-competitive markets, unanticipated shifts in regulation, and unexpected technological challenges. At the same time, there may be some inevitable tradeoffs, at least for a period, between providing credible mechanisms to reduce commercial risk, such as promises of assured demand for early technology providers, and stimulating market competition that can lead to lower costs. History suggests that government-backed assurances are essential to creating the market for capital-intensive technologies; yet those very assurances can also create the context that makes it difficult for investors to feel the pressure of competition that, over successive generations of technology, leads to learning and lower costs.
We are also mindful that our history here-drawn on the experience of three technologies that have been successful in obtaining a substantial market share-is a biased one. By looking at successes we are perhaps overly prone to derive lessons for success when, in fact, most visions for substantial technological change actually fail to get traction.
Book Launch: Power and Responsibility: Building International Order in an Era of Transnational Threats
On March 17 the Freeman Spogli Institute for International Studies will host a book launch for a pathbreaking new book, Power and Responsibility: Building International Order in an Era of Transnational Threats, co-authored by Stephen Stedman, Senior Fellow, FSI and Director of the Ford Dorsey Program in International Policy Studies, Bruce Jones, Co-Director of the Center on International Cooperation, New York University, and Carlos Pascual, Director of Foreign Policy Studies, the Brookings Institution. Power and Responsibility has been produced by the Managing Global Insecurity Project, a multi-year, multi-continent collaboration between the Brookings Institution, NYU's Center on International Cooperation, and Stanford's Freeman Spogli Institute, seeking to coalesce the best thinking on international security affairs today.
As the authors note, the post-World War II fabric of global security, designed and maintained by the United States, has dangerously frayed. Built for a different age, current international institutions are ill-equipped to address today's pressing transnational security challenges-- such as climate change, nuclear proliferation, civil strife, and terrorism, which are beyond the power of any one state to address.
Revitalizing the institutions of cooperation will require a new conceptual foundation for global security. The "national sovereignty" of the twentieth century must give way to "responsible sovereignty" - a principle requiring nations not only to protect their own people, but also to cooperate across borders to safeguard common resources and tackle common threats. Achieving this will require American leadership and commitment to a rule-based international order.
With timely and hard-hitting recomendations, Power and Responsibility seeks to galvanize more effective global action against transnational threats and to build the political support networks needed to reform and revitalize international institutions.
Following an introduction by Coit D. Blacker, the Olivier Nomellini Professor in International Studies and Director, the Freeman Spogli Institute, all three authors will comment on key ways that revitalized institutions and commitments could address issues topping the foreign policy agendas of the U.S. and its global partners.
A book signing and reception will follow the authors' commentary.
Bechtel Conference Center
Stephen J. Stedman
CDDRL
Encina Hall, C152
616 Jane Stanford Way
Stanford, CA 94305-6055
Stephen Stedman is a Senior Fellow at the Freeman Spogli Institute for International Studies (FSI) and the Center on Democracy, Development and the Rule of Law (CDDRL), an affiliated faculty member at CISAC, and professor of political science (by courtesy) at Stanford University. He is director of CDDRL's Fisher Family Honors Program in Democracy, Development and Rule of Law, and will be faculty director of the Program on International Relations in the School of Humanities and Sciences effective Fall 2025.
In 2011-12 Professor Stedman served as the Director for the Global Commission on Elections, Democracy, and Security, a body of eminent persons tasked with developing recommendations on promoting and protecting the integrity of elections and international electoral assistance. The Commission is a joint project of the Kofi Annan Foundation and International IDEA, an intergovernmental organization that works on international democracy and electoral assistance.
In 2003-04 Professor Stedman was Research Director of the United Nations High-level Panel on Threats, Challenges and Change and was a principal drafter of the Panel’s report, A More Secure World: Our Shared Responsibility.
In 2005 he served as Assistant Secretary-General and Special Advisor to the Secretary- General of the United Nations, with responsibility for working with governments to adopt the Panel’s recommendations for strengthening collective security and for implementing changes within the United Nations Secretariat, including the creation of a Peacebuilding Support Office, a Counter Terrorism Task Force, and a Policy Committee to act as a cabinet to the Secretary-General.
His most recent book, with Bruce Jones and Carlos Pascual, is Power and Responsibility: Creating International Order in an Era of Transnational Threats (Washington DC: Brookings Institution, 2009).
Solving the Global Leadership and Talent Equation
Come hear four successful entrepreneurial leaders share insights about the crucial element of talent for start-ups in a global environment: how to build a team, recruit the best people, and manage across borders. Draw on their wealth of experiences: they have founded, funded and led many firms, pioneered technologies and business practices, led start-ups and Fortune 500 firms, and recruited and mentored scores of company leaders.
After the panel discussion there will be a question and answer period, followed by Chinese appetizers and networking.
This event is open to students, the Stanford community and the general public and is part of Entrepreneurship Week at Stanford University. You can see the entire line-up of Entrepreneurship Week events at eweek.stanford.edu.
About the panelists
Eric Benhamou
David Chao
Kyung Yoon
Michael Zhao
Bechtel Conference Center