Global inequality and global warming need to be addressed, Dollar says.

David Dollar: I think the two big challenges for the world are the global environment, and also global inequality. So you've got a lot of developing countries like China and India that are doing well and reducing poverty; but there are a lot of parts of the developing world that are just not participating in globalization, getting left further and further behind. So I think global environment and global inequality are the big issues. I think the human species definitely has the potential to solve these problems. For the environment, the key will be technological change. And getting the technological change depends primarily on incentives. So if we want to control greenhouse gas emissions, I think we need some kind of global ceiling on the emissions, and then I think some kind of system of tradable permits to get the most efficient way of meeting those global targets. So I think it is very easy for an economist to design a system that would radically reduce greenhouse gas emissions. And then I predict that lots of private companies all over the world will invent new technologies, you know, more efficient solar power, new ways of doing things.  technological advance that it really brought the human race to where it is, so the potential is there to address all the big global environmental issues through technological change. Now the reason why I put the adjective cautious  and there are days when I feel more pessimistic is it really will take political cooperation . . . Probably political is too shallow a word. It would talk a real commitment from a lot of people in the world to recognize that this is a problem. And it may not have its big effects for 20 or 30 years in the case of global warming; but we don't get on the right track now, 20 or 30 years from now we're going to have a very significant problem. Kind of mobilizing people now to care, and to get their governments to sign up to some kind of global agreement that seems very difficult. So sometimes I'm pessimistic because it appears to take a crisis to galvanize people. And in some global issues, by the time we get to the crisis, it's gonna be a little bit late for taking action. So I think the potential is there, but there are times when I feel a little bit pessimistic about whether people are gonna be mobilized to do these things.

Recorded on: 7/3/07