The World Next Week: Congress Goes Lame Duck, Greece’s Parliament Votes on a Budget, and California Auctions Carbon Pollution Allowances

The World Next Week podcast is up. Bob McMahon and I discussed what the lame duck Congress will do now that President Barack Obama has won a second term; Greece’s vote on a yet another austerity package; and California’s upcoming auction of carbon pollution allowances.

[audio: http://www.cfr.org/content/publications/media/editorial/2012/20121108_T…]

The highlights:

• After two years of campaigning and more than $6 billion spent on ads, events, and strategists, Election 2012 yielded—the status quo. President Obama gets a second term, Democrats hold onto the Senate, and Republicans retain control of the House of Representatives. Now the two parties must confront the issue they have been kicking down the road for the past year: the approaching “fiscal cliff.” Economists predict that going over the fiscal cliff could shave up to five percentage points off the U.S. gross domestic product. You don’t need to be a PhD to know that would be bad. That doesn’t mean that the two ends of Pennsylvania Avenue will find a reasonable compromise, however. The next two months will be rocky.
• The Greek parliament meets next week to vote on a new austerity package. The argument for pulling the belt a little bit tighter is that it will unlock a fresh influx of aid to keep the Greek economy going. But even if Greek parliamentarians vote for belt tightening, many economists still don’t see how Greece will remain part of the eurozone over the long term. A “Grexit” from the eurozone would send shockwaves not just through Europe but through the entire international financial system.
• Hurricane Sandy prompted considerable talk about the need for the United States to confront the reality of climate change. While Washington, DC prefers to ignore the issue, California is set to hold the nation’s largest ever auction of carbon pollution allowances as part of its cap-and-trade program. The auction will not be a game changer by itself. But it does highlight how action at the state and local level can be a way to reduce emissions of heat-trapping gases while national and multilateral efforts continue to falter.
• Bob’s Figure of the Week is 31. My Figure of the Week is Barack Obama. As always, you’ll have to listen to the podcast to find out why.

For more on the topics we discussed in the podcast check out:

The U.S. Congress returns for a lame duck session: USA Today writes on the consequences of re-electing a divided Congress. CNN reports that Speaker of the House John Boehner predicts a temporary solution to postpone spending cuts. Reuters predicts that the lawmakers will wait until the February or March deadline to resolve the debt-limit debate. Bloomberg claims that the Republican House will only be more motivated to push for a smaller government.

Greek parliament votes on critical budget: Bloomberg Businessweek outlines the proposed budget and identifies its supporters and opponents. The New York Times reflects on the consequences of the austerity package. USA Today describes the extent of the protests taking place in Greece. Reuters reports on the sentiments of Greek civilians participating in protests.

California auctions carbon pollution allowances: The Washington Post comments on the change in state policy on climate and energy issues. The Los Angeles Times outlines the specifics of the auction as well as California’s cap-and-trade system. Reuters describes the auction’s potential financial impact on Californian businesses. Bloomberg Businessweek warns that a rule change in California’s carbon market may cause potential carbon bidders to reconsider.