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Biden did not campaign on international economic cooperation per se; US presidential candidates never do. But he has pledged to immediately reverse Trump’s monumentally short-sighted decisions to withdraw the US from the World Health Organization and the 2015 Paris climate agreement.
Pandemic diseases such as Covid-19 are a classic example of an international externality that individual governments can’t adequately address on their own. International cooperation is a far more effective way to investigate local disease outbreaks and warn of global dangers; coordinate research, development, production and distribution of vaccines or treatments; and agree on procedures for restricting or quarantining cross-border travellers. The WHO is not perfect, but it is obviously needed now.
Likewise, the global climate crisis is the archetypal global externality. A ton of carbon dioxide emitted anywhere has the same greenhouse effect everywhere. National regulation cannot by itself correct the misalignment of incentives, owing to the free-rider problem across governments. Hence the need for an international accord like the 2015 Paris climate agreement.
Biden and other world leaders must also tackle the deepest global recession since the 1930s. Beyond measures to address the pandemic itself, advanced economies must agree above all on joint fiscal stimulus, as they did at the 1978 Bonn summit of G7 leaders and at the 2009 G20 meetings under the leadership of the UK’s then prime minister, Gordon Brown.
Source: The Guardian
Keyword: Biden set to announce economics team as US braces for post-holiday Covid surge – live updates | US news