INTERECONOMICS, Vol 48, No. 2 · March/April 2013

Authors: Annette Bongardt, Francisco Torres, Carsten Hefeker, Pierre Wunsch, Christoph Hermann, Richard S. J. Tol and Daniel S. Hamermesh

Editorial: Carbon Tax: Still the Best Way Forward for Climate Policy

By Richard S. J. Tol

The price of carbon dioxide emission permits in the EU Emissions Trading System (ETS)
has fallen precipitously – from highs of €29 per tonne of CO2 in July 2008 to €4 per tonne
of CO2 in March 2013. This has caused concern among environmentalists, which is peculiar.
The emission targets are being met. The costs of compliance are low. We should

Forum: Convergence in the EU

By Annette Bongardt, Francisco Torres, Carsten Hefeker, Pierre Wunsch and Christoph Hermann

The EU has long viewed economic and institutional convergence as important goals, but
the results thus far have been decidedly mixed, and there remain several open questions:
How exactly should convergence be defi ned? How much convergence is necessary? What
steps can be taken to improve convergence in the EU, and how can success be defi ned?
Finally, how much convergence can be achieved by improving the economic performance in
underperforming regions, and how can convergence in the form of harmonisation towards
lower welfare levels be avoided?

Letter from America: President Obama and the Minimum Wage – A Politico-economic Bargain

By Daniel S. Hamermesh

The minimum wage in the United States has generated more political infi ghting compared
to its impact on the labor market than any other government policy affecting
workers. And economists, many of whom appear to have been driven as much by ideology
as by evidence, have been fi ghting the “Minimum Wage Wars” for many decades.
(I know – I’ve been a long-time soldier, perhaps even an offi cer, in these wars, although
I like to think that my comments have been driven solely by evidence!)

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