Diplomacy & Defense Think Tank News

10 years after the onset of the Arabellion, one of the few positive outlooks is on Joe Biden’s presidency. A Biden/Harris administration offers potential for perhaps subtle but potentially catalytic changes for the MENA region. With the incoming administration, Germany and Europe will find a partner who is interested in addressing the root causes of conflict in the Middle East and North Africa (MENA) and in building more sustainable social contracts in the different countries after the current pandemic. Undoubtedly Biden will have to focus first on domestic challenges such as managing the effects of the Corona pandemic, dealing with a massive polarisation between the political camps, reviving growth, reducing the excessive influence of the arms lobby and repairing US diplomacy and development policy. In the MENA region, he will try to revise some of the decisions taken by President Trump. The controversial appointment of Reema Dodin, a Palestinian American, as part of his legislative affairs team that shapes presidential policies, alongside plans to repeal Trump’s “Muslim Ban” suggests the potential for bold new agendas – both domestically and with respect to the MENA region.

Challenges for peace and development have increased in the MENA region since the last change of power in the US four years ago. This is partly due to Trump’s refusal to deliver on foreign policy: he did nothing to mediate in conflicts (for example in Yemen, Libya, Syria) but frankly strengthened regional powers and tolerated their involvement in these conflicts and the violations of international law and human rights. Critically, Trump has not inspired MENA countries to nurture inclusive transitions towards more participatory and egalitarian social contracts.

The next US administration will follow a different strategy for MENA but it will probably not be able to engage too heavily in the region, making Europe’s enhanced engagement a welcome contribution to defusing conflict in that region. The Biden administration will be quite busy with the post-pandemic, social and economic reconstruction in its own country, even with continuing domestic political blockade by a presumably Republican Senate in Congress and already excessively high foreign debt. Hence, it will hardly be willing to commit itself financially or militarily in the MENA region beyond the current state of contribution. Pending on re-joining an improved Nuclear Deal with Iran (‘JCPOA+’), President-elect Biden is probably going to discontinue Trump’s ‘unsmart’ sanctions against Iran: Implicitly aiming at the collapse of the Ayatollah regime, the sanctions actually strengthen the hardliner group in Iran. In Iraq, Biden might continue to pursue innovative foreign policy approaches as he did before, under Obama, by promoting the devolution of power in Iraq into federal or even independent states: one for the Kurds in the North and one for the rest of the country. Such approaches have potentially valuable transferability for other countries damaged by external intervention, such as Libya. But his position on many other issues is not yet clear – he may well seek to reset relations with Saudi Arabia and backtrack on intervention in Yemen.

In view of the mandate from the electorate, a Biden administration will undoubtedly cause less harm in the region than the Trump era but it will not be able to undo all the damage done so far. In addition, it remains an open question if the US will be a partner for autocrats, reformers, or both. Biden will need to build a reliable, principled approach to working with allies, mending relationships and taking decisions in the interests of sustainable transformation for the region – at the heart of which lies inclusive and responsive social contracts. He will not, and, given domestic economic challenges, he cannot revert to policing the region as earlier presidents have done.

Bearing this analysis in mind, a new German government from autumn 2021 will need to step up in terms of foreign, alliance and development policy vis-à-vis the MENA region. Together with the EU, Germany is already the largest donor in efforts to stabilise the quagmire around the Syria crisis and in Iraq, and Germany is crucially pivoting to support more sustainable post-conflict orders in the region. Together with a more coherent EU Southern Neighbourhood policy, and an increasingly rules-based US policy, MENA region citizens my regain inspiration and resilience against malignant domestic and external powers. More crucially, the region may find formidable obstacles removed that better enable Arab Spring aspirations, now a decade on, to be realised.

10 years after the onset of the Arabellion, one of the few positive outlooks is on Joe Biden’s presidency. A Biden/Harris administration offers potential for perhaps subtle but potentially catalytic changes for the MENA region. With the incoming administration, Germany and Europe will find a partner who is interested in addressing the root causes of conflict in the Middle East and North Africa (MENA) and in building more sustainable social contracts in the different countries after the current pandemic. Undoubtedly Biden will have to focus first on domestic challenges such as managing the effects of the Corona pandemic, dealing with a massive polarisation between the political camps, reviving growth, reducing the excessive influence of the arms lobby and repairing US diplomacy and development policy. In the MENA region, he will try to revise some of the decisions taken by President Trump. The controversial appointment of Reema Dodin, a Palestinian American, as part of his legislative affairs team that shapes presidential policies, alongside plans to repeal Trump’s “Muslim Ban” suggests the potential for bold new agendas – both domestically and with respect to the MENA region.

Challenges for peace and development have increased in the MENA region since the last change of power in the US four years ago. This is partly due to Trump’s refusal to deliver on foreign policy: he did nothing to mediate in conflicts (for example in Yemen, Libya, Syria) but frankly strengthened regional powers and tolerated their involvement in these conflicts and the violations of international law and human rights. Critically, Trump has not inspired MENA countries to nurture inclusive transitions towards more participatory and egalitarian social contracts.

The next US administration will follow a different strategy for MENA but it will probably not be able to engage too heavily in the region, making Europe’s enhanced engagement a welcome contribution to defusing conflict in that region. The Biden administration will be quite busy with the post-pandemic, social and economic reconstruction in its own country, even with continuing domestic political blockade by a presumably Republican Senate in Congress and already excessively high foreign debt. Hence, it will hardly be willing to commit itself financially or militarily in the MENA region beyond the current state of contribution. Pending on re-joining an improved Nuclear Deal with Iran (‘JCPOA+’), President-elect Biden is probably going to discontinue Trump’s ‘unsmart’ sanctions against Iran: Implicitly aiming at the collapse of the Ayatollah regime, the sanctions actually strengthen the hardliner group in Iran. In Iraq, Biden might continue to pursue innovative foreign policy approaches as he did before, under Obama, by promoting the devolution of power in Iraq into federal or even independent states: one for the Kurds in the North and one for the rest of the country. Such approaches have potentially valuable transferability for other countries damaged by external intervention, such as Libya. But his position on many other issues is not yet clear – he may well seek to reset relations with Saudi Arabia and backtrack on intervention in Yemen.

In view of the mandate from the electorate, a Biden administration will undoubtedly cause less harm in the region than the Trump era but it will not be able to undo all the damage done so far. In addition, it remains an open question if the US will be a partner for autocrats, reformers, or both. Biden will need to build a reliable, principled approach to working with allies, mending relationships and taking decisions in the interests of sustainable transformation for the region – at the heart of which lies inclusive and responsive social contracts. He will not, and, given domestic economic challenges, he cannot revert to policing the region as earlier presidents have done.

Bearing this analysis in mind, a new German government from autumn 2021 will need to step up in terms of foreign, alliance and development policy vis-à-vis the MENA region. Together with the EU, Germany is already the largest donor in efforts to stabilise the quagmire around the Syria crisis and in Iraq, and Germany is crucially pivoting to support more sustainable post-conflict orders in the region. Together with a more coherent EU Southern Neighbourhood policy, and an increasingly rules-based US policy, MENA region citizens my regain inspiration and resilience against malignant domestic and external powers. More crucially, the region may find formidable obstacles removed that better enable Arab Spring aspirations, now a decade on, to be realised.

This paper examines two potential mechanisms – access to credit and reduction in relational risks – through which social trust can affect R&D investments. Social trust can increase R&D investments by expanding firms' access to external finance with which they can use to fund promising R&D projects. It can also increase R&D investments by reducing relational risks that expose firms to ex-ante and ex-post holdups or expropriation risks. Using industry-level data on R&D investment intensities in 20 OECD countries, I test these mechanisms by evaluating whether more external finance dependent and relational risk vulnerable industries exhibit disproportional higher R&D investment intensities in trust intensive countries. The results indicate that external finance dependent industries and relational risks vulnerable industries experience relatively higher R&D investment intensities in trust-intensive countries. Therefore, the results underline access to external finance and reduction in relational risks as causal pathways linking social trust and R&D investments.

This paper examines two potential mechanisms – access to credit and reduction in relational risks – through which social trust can affect R&D investments. Social trust can increase R&D investments by expanding firms' access to external finance with which they can use to fund promising R&D projects. It can also increase R&D investments by reducing relational risks that expose firms to ex-ante and ex-post holdups or expropriation risks. Using industry-level data on R&D investment intensities in 20 OECD countries, I test these mechanisms by evaluating whether more external finance dependent and relational risk vulnerable industries exhibit disproportional higher R&D investment intensities in trust intensive countries. The results indicate that external finance dependent industries and relational risks vulnerable industries experience relatively higher R&D investment intensities in trust-intensive countries. Therefore, the results underline access to external finance and reduction in relational risks as causal pathways linking social trust and R&D investments.

This paper examines two potential mechanisms – access to credit and reduction in relational risks – through which social trust can affect R&D investments. Social trust can increase R&D investments by expanding firms' access to external finance with which they can use to fund promising R&D projects. It can also increase R&D investments by reducing relational risks that expose firms to ex-ante and ex-post holdups or expropriation risks. Using industry-level data on R&D investment intensities in 20 OECD countries, I test these mechanisms by evaluating whether more external finance dependent and relational risk vulnerable industries exhibit disproportional higher R&D investment intensities in trust intensive countries. The results indicate that external finance dependent industries and relational risks vulnerable industries experience relatively higher R&D investment intensities in trust-intensive countries. Therefore, the results underline access to external finance and reduction in relational risks as causal pathways linking social trust and R&D investments.

Zur Unterstützung im Survey Management im Bereich der Migrantenstichproben suchen wir für die Bearbeitung von migrationsspezifischen Aufgaben ab dem 1. März 2021

eine studentische Hilfskraft (w/m/div)
für 8 Wochenstunden

Event Video 
Photos

jQuery(document).ready(function(){jQuery("#isloaderfor-azjwtp").fadeOut(2000, function () { jQuery(".pagwrap-azjwtp").fadeIn(1000);});}); Download the Report

On December 17th, IPI together with the Dutch Ministry of Foreign Affairs cohosted a virtual policy forum on “The Accountability System for the Protection of Civilians in UN Peacekeeping.”

Protecting civilians from violence is a priority mandate for most current UN peacekeeping operations. The UN has established a robust normative framework to guide and professionalize the implementation of protection mandates in the field, and missions have developed a number of tools, mechanisms, and activities to strengthen their posture and preparedness to deliver on this core objective.

On a number of occasions, however, UN missions have failed to prevent or respond to attacks and abuse targeting civilians despite being aware of the risk, receiving adequate warning, or being in the immediate proximity of the incident. While many investigations have highlighted shortcomings in performance and called for more accountability, most have remained confidential, and the actions taken to address these failures have often escaped the public eye.

After two decades of policy developments to clarify the roles and responsibilities of peacekeepers to protect civilians and numerous efforts to refine operational approaches in the field, stronger accountability is urgently needed. IPI has undertaken a comprehensive research project to map and evaluate existing accountability tools and mechanisms at the UN, shift the debate around accountability beyond confrontational narratives, and build a culture of positive and proactive accountability for all actors involved in peacekeeping operations’ efforts to protect civilians.

This policy forum provided an opportunity to present the main findings and recommendations of the policy paper authored by IPI’s Senior Fellow Dr. Namie Di Razza. Panelists discussed the recent efforts undertaken by the UN Secretariat, missions, and member states to promote performance accountability in peacekeeping, analyze the remaining gaps, and explore the way forward.

Opening Remarks
H.E. Ms. Yoka M. G. Brandt, Permanent Representative of the Netherlands to the UN
Ms. Bintou Keita, Assistant-Secretary-General, UN Department of Peace Operations and Department of Political and Peacebuilding Affairs

Speakers:
Dr. Namie Di Razza, IPI Senior Fellow and Head of Protection of Civilians
Mr. El-Ghassim Wane, Professor of International Affairs, Elliott School of International Affairs
Mr. Ludovic Grenouillon, Senior Military Strategic Partnership Officer, Office for Peacekeeping Strategic Partnership, UN Department of Peace Operations
Mr. Andrew Leyva, Permanent Mission of the United States to the UN
Mr. Yasser Halfaoui, Permanent Mission of Morocco to the UN

Moderator:
Mr. Jake Sherman, IPI Senior Director of Programs

.content .main .entry-header.w-thumbnail .cartouche {background: none; bottom: 0px;} h1.entry-title {font-size: 1.8em;}

Insgesamt waren die vergangenen 12 Monate im Bereich der EU-Entwicklungspolitik und der Humanitären Hilfe geprägt von zwei inhaltlichen Debatten: Zum einen von der Debatte über die zukünftige Ausrichtung und Mittelbeschaffung der EU in diesen Politikfeldern und zum anderen von der Debatte, wie die EU am besten zur globalen Bekämpfung der Covid-19-Pandemie beitragen kann und wie sie zukünftig auf die langfristigen sozio-ökonomischen Folgen der Pandemie reagieren muss. Auch in Zukunft werden diese Aushandlungsprozesse über die Gestaltung der Entwicklungszusammenarbeit und Humanitären Hilfe sowie ihres Verhältnisses zu anderen Bereichen der EU-Außenbeziehungen ein Wesensmerkmal dieser Politikfelder bleiben. Gleichzeitig zeigt dieser Umstand jedoch auch die Anpassungsfähigkeit an veränderte Erwartungen und politische Rahmenbedingungen auf, die in Zeiten multipler Krisen neue Zielvorgaben und Lösungsansätze erfordern.

Insgesamt waren die vergangenen 12 Monate im Bereich der EU-Entwicklungspolitik und der Humanitären Hilfe geprägt von zwei inhaltlichen Debatten: Zum einen von der Debatte über die zukünftige Ausrichtung und Mittelbeschaffung der EU in diesen Politikfeldern und zum anderen von der Debatte, wie die EU am besten zur globalen Bekämpfung der Covid-19-Pandemie beitragen kann und wie sie zukünftig auf die langfristigen sozio-ökonomischen Folgen der Pandemie reagieren muss. Auch in Zukunft werden diese Aushandlungsprozesse über die Gestaltung der Entwicklungszusammenarbeit und Humanitären Hilfe sowie ihres Verhältnisses zu anderen Bereichen der EU-Außenbeziehungen ein Wesensmerkmal dieser Politikfelder bleiben. Gleichzeitig zeigt dieser Umstand jedoch auch die Anpassungsfähigkeit an veränderte Erwartungen und politische Rahmenbedingungen auf, die in Zeiten multipler Krisen neue Zielvorgaben und Lösungsansätze erfordern.

Insgesamt waren die vergangenen 12 Monate im Bereich der EU-Entwicklungspolitik und der Humanitären Hilfe geprägt von zwei inhaltlichen Debatten: Zum einen von der Debatte über die zukünftige Ausrichtung und Mittelbeschaffung der EU in diesen Politikfeldern und zum anderen von der Debatte, wie die EU am besten zur globalen Bekämpfung der Covid-19-Pandemie beitragen kann und wie sie zukünftig auf die langfristigen sozio-ökonomischen Folgen der Pandemie reagieren muss. Auch in Zukunft werden diese Aushandlungsprozesse über die Gestaltung der Entwicklungszusammenarbeit und Humanitären Hilfe sowie ihres Verhältnisses zu anderen Bereichen der EU-Außenbeziehungen ein Wesensmerkmal dieser Politikfelder bleiben. Gleichzeitig zeigt dieser Umstand jedoch auch die Anpassungsfähigkeit an veränderte Erwartungen und politische Rahmenbedingungen auf, die in Zeiten multipler Krisen neue Zielvorgaben und Lösungsansätze erfordern.

Die EU-Kommission hat die Übernahme des Fitnesstracker-Herstellers Fitbit durch Google genehmigt. Dazu ein Statement von Wettbewerbsökonom Tomaso Duso, Leiter der Abteilung Unternehmen und Märkte am Deutschen Institut für Wirtschaftsforschung (DIW Berlin):

Dass die EU-Wettbewerbshüter die Übernahme von Fitbit durch Google genehmigt haben, ist bedauernswert und ein äußerst schlechtes Signal für den Wettbewerb auf digitalen Märkten in Europa. Die Warnungen vieler ÖkonomInnen, DatenschützerInnen, RechtswissenschaftlerInnen und Verbraucherorganisationen wurden damit in den Wind geschlagen. Sie haben zurecht davor gewarnt, dass die Übernahme den VerbraucherInnen bei Krankenversicherungen und medizinischen Dienstleistungen schaden und Googles marktbeherrschende Stellung bei Daten vergrößern könnte. 

Die EU sieht diese Gefahr nicht, doch die vorläufigen Argumente sind wenig überzeugend: Die Warnung vor einem Wettbewerbsvorteil für Google im Bereich der digitalen Gesundheitsversorgung wird zurückgewiesen, da „der Bereich der digitalen Gesundheitsversorgung in Europa noch im Entstehen begriffen ist und viele Akteure in diesem Bereich tätig sind“. Aber genau das ist das Problem: Dieser Sektor entsteht gerade und kann riesig werden. Auch nur eine kleine Chance für Google, ihn zu monopolisieren oder zumindest eine marktbeherrschende Stellung in diesem Bereich zu erreichen, hätte eine Absage der Übernahme gerechtfertigt. Und das ist nicht der einzige problematische Punkt. Zwar gibt es einige Auflagen und Bedingungen, unter anderem was die Nutzung von Daten betrifft – und diese werden von einigen Kommentatoren sogar als besonders mutig erachtetet. Doch erstens sind sie sehr schwer zu überwachen und zweitens in einem solch dynamischen Markt vielleicht schon bald von der Realität überholt.

Mit ihrer nicht sehr mutigen Entscheidung hat die EU-Kommission eine große Chance vertan, Spitzenreiter bei der Durchsetzung der Wettbewerbspolitik in digitalen Märkten zu bleiben. Und wir werden weiter darauf warten müssen, dass ein erstes Mal eine Fusion von Big-Tech-Unternehmen, fast 1 000 in der letzten Dekade, durch eine Kartellbehörde blockiert wird.

Download the Report Download Case Studies: South Sudan, Democratic Republic of the Congo, Central African Republic, and Darfur. *Outlined tools can be activated in exceptional circumstances Author

Namie Di Razza, Head of IPI’s Protection of Civilians

Namie Di Razza joined IPI as a post-doctoral fellow in October 2016. She works on UN peace operations and protection of civilians with IPI’s Brian Urquhart Center for Peace Operations. Prior to…

Read more articles →


Email: dirazza@ipinst.org

Download Detailed Factsheets:
1. Force commander’s evaluation
2. OMA evaluation
3. Police evaluation
4. Risk premium
5. OPSP
6. Special investigation
7. OIOS
8. BOI
9. JPT/JAM/JET
10. Mission evaluation
11. CPAS
12. AAR
13. Medals
14. Conduct and discipline
15. Compact
16. e-Performance

Over the last two decades, UN peacekeeping operations have striven to protect civilians from physical violence. The protection of civilians (POC) is now based on a clear normative and policy framework, and its practical implementation relies on a number of innovative tools, tailored and multidimensional approaches, and the more proactive posture of peacekeepers. On a number of occasions, however, UN missions have failed to prevent or respond to threats despite being aware of the risk, receiving adequate warning of an attack, or being in the proximity when abuses were committed. Numerous reports and investigations into these incidents have highlighted shortcomings in performance and called for more accountability. Despite institutional ambitions, however, there is still limited accountability for the actors involved in protecting civilians.

To help address this challenge, IPI undertook a project to map how existing accountability mechanisms in the UN could be applied to peacekeeping missions with POC mandates. Through a combination of desk research and key informant interviews, IPI developed a set of tools to help guide the UN and its member states in building a robust, multi-actor, multilayer “system of accountability for POC.” These tools include:

• A policy paper analyzing the concept of accountability, identifying accountability mechanisms that exist and those that are needed, reviewing recent initiatives by the UN Secretariat and member states to strengthen accountability mechanisms for POC, and recommending steps that could be taken to strengthen these mechanisms further;
• An interactive graphic of the accountability mechanisms that can be or have been used to ensure accountability for the implementation of POC mandates by peacekeeping operations, with detailed fact sheets on each of these; and
• Case studies on how UN accountability tools have—or have not—been used in response to specific POC incidents in four different UN peacekeeping missions.

Collectively, these tools point to the need for a culture of active accountability for all actors, based on a shared willingness and commitment to assume responsibility and be answerable for the effective delivery of protection mandates. Toward this end, the policy paper offers the following recommendations:

• Working toward a more cohesive accountability structure by streamlining processes, improving coordination between accountability structures, broadening the scope of accountability tools to include all POC stakeholders, enhancing planning for POC, and tracking POC responses.
• Strengthening independent, dedicated, and transparent accountability tools by using more independent investigative teams, strengthening the role of the Office for Peacekeeping Strategic Partnership, providing dedicated resources for POC accountability, and striking a balance between transparency and politics.
• Enforcing consequences by following up on shortcomings in performance and considering POC in the force generation and selection processes, as well as going beyond punitive measures by developing incentives.

Detailed Factsheets for Selected Mechanisms (Click on each mechanism below for their detailed factsheet – desktop only)

*Outlined tools can be activated in exceptional circumstances .cartouche { display: none; } /* hide title */ .wp-post-image { /* constrain title image */ max-width: 70%; min-height: initial !important; } ul.subnav.nav { /* hide the nav buttons */ display: none; } a[href$="pdf"]:last-of-type:after { /* don't display "PDF" after the links in the margin */ display: none!important; } a img {display:block; Margin: 0 auto;} .wp-image-15635 { display: block; } /* show image at top of text */ html>body{ background-image:none; background: #d0e2fd; } .entry-content { color: black; } .content .main .entry-content a:not(.btn) { color: #0059de; } .pre-header-wrap .page:before { background-image:none; }

The effects of capital controls on international trade have not been thoroughly examined empirically. Using bilateral industry-level export data across a large number of countries, this paper evaluates how capital controls affect exports. We identify the effect of capital controls on export activities by exploiting the variation in capital controls across countries and variation in external finance dependence across industries. While we find that capital controls adversely affect total exports, analyses of the export margins indicate that the export distorting effect of capital controls works by deterring single and multiple export market entries by exporters, reducing export intensities of exporters, and the range of goods exporters can ship to each market destination. Further analysis in the paper reveals that the export distorting effects of capital controls is invariant of whether the restriction is on inward or outward capital controls, although the relative impact of inward capital control is higher. We also find that capital controls distort exports in OECD and non-OECD countries, although the effect is higher for non-OECD countries. We discuss the policy implications of the findings.

The effects of capital controls on international trade have not been thoroughly examined empirically. Using bilateral industry-level export data across a large number of countries, this paper evaluates how capital controls affect exports. We identify the effect of capital controls on export activities by exploiting the variation in capital controls across countries and variation in external finance dependence across industries. While we find that capital controls adversely affect total exports, analyses of the export margins indicate that the export distorting effect of capital controls works by deterring single and multiple export market entries by exporters, reducing export intensities of exporters, and the range of goods exporters can ship to each market destination. Further analysis in the paper reveals that the export distorting effects of capital controls is invariant of whether the restriction is on inward or outward capital controls, although the relative impact of inward capital control is higher. We also find that capital controls distort exports in OECD and non-OECD countries, although the effect is higher for non-OECD countries. We discuss the policy implications of the findings.

The effects of capital controls on international trade have not been thoroughly examined empirically. Using bilateral industry-level export data across a large number of countries, this paper evaluates how capital controls affect exports. We identify the effect of capital controls on export activities by exploiting the variation in capital controls across countries and variation in external finance dependence across industries. While we find that capital controls adversely affect total exports, analyses of the export margins indicate that the export distorting effect of capital controls works by deterring single and multiple export market entries by exporters, reducing export intensities of exporters, and the range of goods exporters can ship to each market destination. Further analysis in the paper reveals that the export distorting effects of capital controls is invariant of whether the restriction is on inward or outward capital controls, although the relative impact of inward capital control is higher. We also find that capital controls distort exports in OECD and non-OECD countries, although the effect is higher for non-OECD countries. We discuss the policy implications of the findings.

Carbon taxes are an economically effective and efficient policy measure to address climate change mitigation. However, they can have severe adverse distributional effects. Recycling parts of the fiscal revenues to vulnerable, lower income households through cash transfers (social assistance) is an option to also overcome associated political difficulties. This paper simulates the distributional impacts of such a combined policy reform in Peru. In a first step, we assess the distributional impacts of varying carbon tax rates. In a second step, we evaluate different scenarios of recycling revenues through existing or expanded transfer schemes towards vulnerable households. The results indicate that a national carbon tax, without compensation, would increase poverty but have no significant impact on inequality. When tax revenues are recycled through transfer schemes, however, poverty would actually decrease. Depending on the amount to be redistributed and the design of the cash transfer scheme, our simulations show a proportional reduction in the poverty headcount of up to around 17%. In addition, the paper underlines how crucial it is to go beyond aggregate measures of poverty to better identify losers from such reform; and assure that the “leave no one behind” principle of the Sustainable Development Goals (SDGs) is addressed.

Carbon taxes are an economically effective and efficient policy measure to address climate change mitigation. However, they can have severe adverse distributional effects. Recycling parts of the fiscal revenues to vulnerable, lower income households through cash transfers (social assistance) is an option to also overcome associated political difficulties. This paper simulates the distributional impacts of such a combined policy reform in Peru. In a first step, we assess the distributional impacts of varying carbon tax rates. In a second step, we evaluate different scenarios of recycling revenues through existing or expanded transfer schemes towards vulnerable households. The results indicate that a national carbon tax, without compensation, would increase poverty but have no significant impact on inequality. When tax revenues are recycled through transfer schemes, however, poverty would actually decrease. Depending on the amount to be redistributed and the design of the cash transfer scheme, our simulations show a proportional reduction in the poverty headcount of up to around 17%. In addition, the paper underlines how crucial it is to go beyond aggregate measures of poverty to better identify losers from such reform; and assure that the “leave no one behind” principle of the Sustainable Development Goals (SDGs) is addressed.

Carbon taxes are an economically effective and efficient policy measure to address climate change mitigation. However, they can have severe adverse distributional effects. Recycling parts of the fiscal revenues to vulnerable, lower income households through cash transfers (social assistance) is an option to also overcome associated political difficulties. This paper simulates the distributional impacts of such a combined policy reform in Peru. In a first step, we assess the distributional impacts of varying carbon tax rates. In a second step, we evaluate different scenarios of recycling revenues through existing or expanded transfer schemes towards vulnerable households. The results indicate that a national carbon tax, without compensation, would increase poverty but have no significant impact on inequality. When tax revenues are recycled through transfer schemes, however, poverty would actually decrease. Depending on the amount to be redistributed and the design of the cash transfer scheme, our simulations show a proportional reduction in the poverty headcount of up to around 17%. In addition, the paper underlines how crucial it is to go beyond aggregate measures of poverty to better identify losers from such reform; and assure that the “leave no one behind” principle of the Sustainable Development Goals (SDGs) is addressed.