Chronicles of Noura @ HKS:
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Chronicles of Noura @ HKS:
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This post is based on the API 165 Paper Debrief presentation, where my colleague Hannah Wang and I explored the pivotal question of whether carbon offsets genuinely contribute to emissions reductions. Carbon offsets are often viewed as a crucial solution to help entities meet greenhouse gas (GHG) reduction targets by compensating for emissions through investments in renewable projects. However, an in-depth analysis by Raphael Calel, Jonathan Colmer, Antoine Dechezleprêtre, and Matthieu Glachant in their study, Do Carbon Offsets Offset Carbon?, raises questions about the true environmental benefits of these offsets, particularly in the context of wind power projects funded under the Clean Development Mechanism (CDM) in India.
Research Question and Core Concern The primary question is whether carbon offsets, particularly those generated through CDM wind power projects, truly yield net emissions reductions. The study delves into whether these offsets promote environmental gains or merely support “Blatantly Inframarginal Projects” (BLIMPs) — projects that would have proceeded even without CDM subsidies. Economic and Policy Context Carbon markets like the CDM, established under the Kyoto Protocol, have enabled developed countries to achieve part of their emissions reduction targets by funding projects in developing nations. India, a significant beneficiary of CDM support, showcases the potential and pitfalls of such offsets, especially in the wind energy sector. By 2030, CDM is projected to generate approximately 10.65 billion carbon offsets, an amount nearly equivalent to the total emissions of the U.S. and Europe combined in 2019. Yet, the critical challenge remains ensuring that these offsets genuinely result in additional, permanent emissions reductions to support global climate goals effectively. Methodology and Key Findings The authors use a counterfactual analysis to distinguish between “marginal” projects — those genuinely dependent on CDM subsidies — and inframarginal ones that would have proceeded regardless. Key elements of the analysis include:
Policy Implications and Recommendations These findings highlight the need for policymakers to reassess and refine carbon offset programs to ensure that subsidies exclusively support projects that would not proceed otherwise. Upcoming updates in COP 29 to offset mechanisms, such as the operationalization of Article 6.4 of the Paris Agreement, present a valuable opportunity to integrate stricter additionality checks, improve transparency, and incorporate more sophisticated methods for offset allocation. Future innovations could include satellite-based monitoring and blockchain technology for transaction verification, improving accuracy and accountability. Conclusion: Toward Genuine Climate Mitigation This analysis highlights an essential insight for the future of carbon markets: true climate action demands mechanisms that precisely allocate resources where they are most needed. Ensuring carbon offsets lead to real reductions is vital in avoiding a counterproductive outcome where well-intended climate policies inadvertently allow emissions to rise. References
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Jacinda Ardern was a special guest in our MLD 355 Public Narrative class, taught by Professor Marshall Ganz, and her reflections on leadership offered powerful insights into what it means to lead with empathy, humility, and deep connection. Her response to the Christchurch mosque shootings in 2019 remains a profound example of how leadership, when anchored in compassion and vulnerability, can guide a nation through tragedy and foster healing and unity.
The Power of Empathy and Human Connection One of the most powerful aspects of Jacinda Ardern’s leadership, as discussed in the class, is her embodiment of empathy. In the immediate aftermath of the Christchurch mosque attacks, where 51 people tragically lost their lives, Ardern’s response was marked by her decision to stand shoulder to shoulder with the Muslim community, not just as a leader but as a fellow human being. She visited the victims’ families, wearing a hijab as a sign of solidarity, and expressed her sorrow. “It was the most humbling experience of my life that in the aftermath of something so horrific, there was no anger on their part,” Ardern reflected. The lack of bitterness in the wake of such violence, she noted, left a lasting impact on her as a leader, emphasizing the incredible power of forgiveness and solidarity. Leadership in Vulnerability: Embracing Imperfection During the class discussion, Ardern shared how her approach to leadership challenges the conventional notion that leaders must appear invulnerable. Instead, she humanizes herself, admitting mistakes and acknowledging that she, too, is fallible. “When you make a mistake, it’s easier for them to see that actually, you’re not that far away from where they are, and they make mistakes too,” Ardern said. This openness builds trust and fosters a connection between leader and citizens that is far more powerful than authority alone. Her ability to connect through vulnerability makes it difficult for others to dehumanize her. In this way, she has shown that authenticity and relatability strengthen a leader’s bond with their community, especially in moments of crisis. Humility and Gratitude: A Mutual Exchange At the heart of Jacinda Ardern’s reflection on her leadership during the Christchurch tragedy is the theme of humility. The gratitude expressed by the Muslim community—those most deeply affected by the violence—was perhaps the most humbling aspect of her experience. Instead of anger, the community offered thanks to Ardern and New Zealanders for their compassion and support. This exchange of gratitude speaks volumes about the transformative power of empathy-driven leadership. By leading with compassion and refusing to respond to hatred with anger, Ardern set the stage for a collective healing process that helped unite the nation against extremism and violence. The grace with which the Muslim community responded to their tragedy reinforced Ardern’s belief in the importance of listening and being present in leadership. Leadership as a Force for Unity and Healing Jacinda Ardern’s response to the Christchurch attacks was not just about offering words of comfort—it was about taking decisive action rooted in empathy and a commitment to safety. Shortly after the attacks, she introduced sweeping gun reform legislation in New Zealand, signaling that leadership must be backed by tangible actions that reflect the values of justice and protection for all citizens. In her speeches during the National Remembrance Service, Ardern called for unity across all races, creeds, and backgrounds, emphasizing that violence and extremism have no place in New Zealand. Her leadership was not only about guiding a nation through grief but also about ensuring that the narrative of unity and peace would prevail in the face of hatred. Grace in Times of Crisis: A New Leadership Paradigm Ardern’s leadership during the Christchurch tragedy also highlighted the importance of collective healing. By standing with the Muslim community, she exemplified how a leader can act as a bridge, enabling a nation to confront loss and emerge stronger. In the face of unspeakable tragedy, she chose a redemptive response, helping New Zealanders move forward with hope, resilience, and a renewed sense of purpose. Lessons for Aspiring Leaders Jacinda Ardern’s leadership offers invaluable lessons for anyone aspiring to make a difference. Her focus on empathy, humility, and accountability serves as a reminder that true leadership is not about power, but about service. It is about showing up, even in the most difficult moments, with compassion and a commitment to the values that bind us together as human beings. As we continue to navigate complex challenges in the world, the lessons of Jacinda Ardern’s leadership will continue to resonate. Her approach teaches us that leadership is not just about making the right decisions—it is about bringing people together, healing wounds, and building a future rooted in empathy, trust, and hope. On October 22, 2024, the JFK Jr. Forum at Harvard Kennedy School held an extraordinary discussion between former Greek Prime Minister George Papandreou and Professor Ron Heifetz. The setting was symbolic, just steps from our MLD 201 B classroom taught by Professor Tim O'Brien, where we immerse ourselves in Heifetz’s leadership principles. This event was an opportunity to witness how those theories translate into real-world leadership, exemplified by Papandreou’s reflections on navigating the Greek financial crisis, his diplomatic efforts with Turkey, and his leadership within the EU.
Papandreou, a student of Heifetz, brought the adaptive leadership framework to life through his ability to create 'holding environments'—safe spaces for addressing complex, emotionally charged issues, facilitating transformative dialogue, and fostering progress. His reflections on fostering human connection with adversaries, even removing assistants from the room to establish direct communication, offered profound insights into the relational aspect of leadership. He emphasized that leadership is often about confronting deep historical wounds not to perpetuate conflict but to learn and move forward. As he spoke, I was reminded of another Heifetz student, Jamil Mahuad, who negotiated peace between Ecuador and Peru using the same adaptive principles. Both leaders demonstrated how adaptive leadership goes beyond theory to drive real-world change, tackling entrenched conflicts and navigating systemic challenges. During the forum, I revisited Heifetz’s concept of "getting on the balcony," a metaphor for stepping back to gain a broader perspective. Papandreou’s ability to view Greece’s crisis within the larger context of European unity and democracy perfectly illustrated this principle. Leadership, as Papandreou demonstrated, isn’t just about quick fixes but about creating conditions for long-term adaptive work—spaces where people can reflect, learn, and grow. This resonated deeply with our MLD 201 B lessons, where we discuss the complexities of leadership as more than technical solutions but rather the ability to guide people through discomfort and uncertainty. Papandreou’s story reinforced the idea that true leadership requires balancing stability with disruption, helping people face difficult truths while ensuring progress. The forum felt like an artful "dance on the balcony"—engaging with real-world issues on the ground while observing the bigger system at play. It was a powerful reminder that leadership is about balancing action and reflection, and that the most meaningful change often comes from spaces where leaders allow themselves to both lead and observe. This conversation not only brought Heifetz's theories to life but served as a heartfelt reminder that leadership is a deeply human process, grounded in relationships, learning, and the courage to face difficult truths. For those of us aspiring to lead with impact, the lessons from Papandreou and Heifetz will undoubtedly guide us in navigating the complexities of leadership in an ever-evolving world. On October 15, 2024, an engaging discussion at the John F. Kennedy Jr. Forum brought together two distinguished voices on global affairs—Wendy Sherman, former Deputy Secretary of State, and Meghan O'Sullivan, Director of the Belfer Center for Science and International Affairs. This session delved into the pressing issues that the next U.S. president will face. Embracing the Unexpected in Leadership Wendy Sherman’s personal journey, from her early career as a social worker to becoming a key diplomat, was a reminder that leadership is often a path of unexpected turns. Her career shift was unplanned, yet it became a calling that has shaped U.S. diplomacy for decades. Sherman emphasized that rigid five-year plans might lead to missed opportunities. She encouraged an openness to life’s unpredictability, especially for those aspiring to leadership, stating, "You might miss the most amazing opportunities if you stick too closely to a plan." This is a lesson in adaptability that seems more relevant than ever in today’s fast-changing global landscape. Rebuilding Alliances in a Post-Pandemic World Reflecting on her tenure in the Biden-Harris administration, Sherman emphasized the difficulties of rebuilding alliances after a fractious period. The pandemic had devastated global cooperation, supply chains, and economies, but it also highlighted the importance of international collaboration. Sherman shared that Biden’s team made restoring alliances a key priority, especially in light of China’s growing economic and military competition. The pandemic, as she recalled, was a moment that tested diplomacy to its core—how quickly nations could respond, share vaccines, and ensure collective recovery. The Challenges of a Trump Administration As the discussion shifted toward U.S. leadership, there was a looming concern about the potential return of the Trump administration. In the context of global governance and climate action, this is especially worrying. I posed the question: “How do you foresee the next administration shaping climate policy, both for managing domestic energy transitions but also impacting global climate governance?” Sherman’s response was clear: Trump’s return would not only endanger the U.S. but also pose a significant threat to global stability. “He is reckless,” she remarked, His administration’s withdrawal from international agreements, such as the Paris Climate Accord, and a general disregard for multilateral cooperation could lead to setbacks in climate action and diplomacy. The stakes are high, and under his leadership, global climate governance could regress at a time when it is most needed. Climate Policy and the Next Administration
In response to my question about climate policy, Sherman expressed cautious optimism. She noted that while Harris or any non-Trump candidate would likely make more progress than past administrations, the reality remains that the energy transition will not happen overnight. Managing domestic energy transitions while leading global climate governance will be one of the defining challenges for the next president. "The U.S. cannot do it alone," Sherman stressed, reiterating the importance of global partnerships and a collective response to climate change. We must work with allies to ensure a sustainable future, as our economies and ecosystems are inextricably linked. Conclusion As the session concluded, it became apparent that the next president will face an unforgiving inbox, filled with pressing global challenges—ranging from the war in Ukraine to the urgent need for climate action and the escalating conflicts in the Middle East. Leadership in these times, she reminded us, requires not only resilience but also compassion and a willingness to do hard things. Her personal journey, filled with unexpected turns, serves as a reminder that the most impactful leaders are those who are prepared to embrace life’s unpredictability while remaining committed to the greater good. Today, the Mason Fellows had the honor of a special visit from former Mason Fellow (1989) and the former president of Ecuador, Jamil Mahuad. His name in Arabic, "Jamil," meaning beautiful, and "Mahuad," meaning compensated, perfectly encapsulates his rich and transformative life journey. Mahuad’s story is one of resilience, leadership, and the compensation of hard-won victories amidst adversity. His visit was an invaluable learning experience for all, as he shared insights from his extraordinary career in diplomacy, leadership, and global peace. Mahuad, a Nobel Peace Prize nominee in 1999, is most renowned for his role in negotiating a historic peace treaty between Ecuador and neighboring Peru. This peace agreement, which ended over a century of territorial conflict, stands as one of the most remarkable examples of innovative diplomacy in modern history. The conflict had long been fueled by competing claims over a border area in the Amazon, and past efforts to resolve it had repeatedly failed. Yet, Mahuad’s leadership and the fresh approach he brought to the negotiation table, supported by some of the brightest minds from Harvard, led to a solution that was as creative as it was effective. The breakthrough in the Ecuador-Peru peace negotiations came through a novel approach that separated property rights from sovereign rights. Traditionally, territorial disputes hinge on sovereignty, with one nation claiming full control over contested land. However, Mahuad and his team, after countless hours of intense negotiations and consultations with experts from Harvard, reframed the issue. They proposed that Peru would retain sovereignty over the disputed area while Ecuador would gain property rights to a small symbolic portion of the land. This compromise allowed both countries to claim a form of victory: Peru maintained territorial sovereignty, while Ecuador gained a symbolic but important stake. This solution, rooted in innovative diplomacy, was a game-changer. It broke the deadlock that had lasted for generations and showed how creative thinking, paired with strategic diplomacy, can resolve even the most intractable conflicts. The successful negotiations involved extensive support from Harvard’s experts, whose intellectual contributions helped shape a solution that honored both nations’ histories, emotions, and needs. As Mahuad reflected on the negotiations, he emphasized the delicate balance between politics, symbolism, and diplomacy. He remarked, “A human being is fatally forced to choose,” quoting philosopher José Ortega y Gasset. This quote highlights the weight of leadership decisions that Mahuad carried throughout the peace process. His willingness to innovate and take risks—while navigating national pride, historical grievances, and international pressure—demonstrated profound leadership in action. Phases of Leadership: Peaks and Valleys Mahuad also reflected on the inevitable peaks and valleys of leadership, which he illustrated through a personal "life map" of his own journey. From being re-elected as mayor of Quito to becoming president, from signing the historic peace treaty to facing political persecution and a coup d'état, Mahuad’s career is a testament to the highs and lows that every leader faces. As he reminded his audience, “To everything there is a season”—an acknowledgment that both success and hardship are integral to the leadership journey. Even in the face of extreme adversity, such as the stroke and political persecution he endured, Mahuad has demonstrated what it means to take action and persevere. He echoed the words of Theodore Roosevelt: “It is not the critic who counts… The credit belongs to the man who is actually in the arena… who errs, who comes short again and again, because there is no effort without error and shortcoming.” Mahuad’s message to future leaders is clear: true leadership is about stepping into the arena, embracing failure as part of the process, and continuing to fight for what is right. The Importance of Surrender and Taking Responsibility One of the most profound messages from Mahuad’s talk was the idea of “surrender”—not in the sense of giving up, but in accepting life’s difficulties and adapting to the circumstances. This message of surrender was not about defeat but about resilience in the face of overwhelming odds. Moreover, Mahuad spoke about leadership as a responsibility to deliver difficult truths. Quoting Ronald Heifetz, Mahuad emphasized that "exercising leadership is the capacity to deliver disturbing news and raise difficult questions in a way that people can absorb." He understood that leadership is not about avoiding hard conversations, but about confronting them head-on and inspiring others to take action rather than ignoring or rejecting the message. Courage, Integrity, and Vision Reflecting on his own career and the broader principles of leadership, Mahuad posed the timeless questions from John F. Kennedy: “Were we truly men of courage? Were we truly men of judgment? Were we truly men of integrity? Were we truly men of dedication?” These questions serve as a moral compass for any leader, challenging them to uphold the values of courage, integrity, and dedication in their actions. Mahuad also encouraged future leaders to dream beyond the present, quoting Robert F. Kennedy: “There are those who look at things the way they are, and ask why? I dream of things that never were, and ask why not?” This call to visionary leadership invites us to challenge the status quo and imagine a better future, just as Mahuad did during his time in office and continues to do in his ongoing global work. A Lasting Legacy Jamil Mahuad’s legacy transcends the boundaries of politics. It is a legacy of perseverance, moral courage, and visionary leadership. His journey teaches us that leadership is not just about success but about how we rise from failure, how we navigate through adversity, and how we choose to take action when faced with difficult circumstances. Reflecting on Ortega y Gasset’s words, “I am I and my circumstances,” Mahuad shared how personal identity is shaped by the challenges and environments in which we find ourselves. His leadership during Ecuador’s economic turmoil and the peace negotiations with Peru exemplifies the complexity of navigating between personal values and external pressures. Mahuad’s capacity to make hard decisions during moments of crisis, while remaining steadfast in his commitment to peace, underscores the essence of true leadership. Takeaways
I walked away from Jamil Mahuad’s talk with a sense of pride, hope, and deep inspiration. He shared a powerful quote: "Our feet are not as important as our steps," which resonates with the mindset we live by at Harvard Kennedy School: "Ask what you can do." His reflections not only honored his own incredible journey but also prepared us for the path ahead in the Mason Program and beyond. Reflecting on his time after Harvard, Mahuad spoke of the stark contrast between preparation at Harvard and real-world challenges, saying, “After spending two days with those who make history, I return to those who suffer from it.” His words resonate with the reality that, while we may be ready to “drive a Ferrari” after our transformative time here, the world may hand us “taxis” instead—reminding us to use our assets wisely while being aware of our limitations. He also imparted a profound lesson on courage, stating that “Courage is the obedience to serene judgment,” beautifully capturing the balance between triumph and regress in leadership. His journey is a testament to navigating those peaks and valleys with grace, reminding us that the true measure of leadership lies in our ability to endure, to adapt, and to keep moving forward, one profound step at a time. This post is based on an assignment we had to submit for API 165, Energy and Environmental Economics and Policy taught by Joe Aldy, on evaluating the Social Cost of Carbon (SCC) and Target-Consistent Pricing (TCP).
As the world continues to find ways for addressing the challenges of climate change, the debate around carbon pricing intensifies. Two key approaches dominate discussions: the Social Cost of Carbon (SCC) and Target-Consistent Pricing (TCP). Both frameworks offer valuable insights, but their underlying assumptions, methodologies, and conclusions diverge in important ways. In this post, I explore these two approaches, uncover their strengths and limitations, and suggest how we can move forward to design more effective climate policies. What Is the Social Cost of Carbon? The Social Cost of Carbon (SCC) is a tool used by economists to put a price on the damages caused by emitting one additional ton of CO2 into the atmosphere. It essentially tells us how much climate change is going to cost society in terms of things like reduced agricultural productivity, increased mortality rates, and the destruction of property due to extreme weather events. Governments and policymakers use SCC to evaluate the costs and benefits of climate policies. Integrated Assessment Models (IAMs), such as DICE, FUND, and PAGE, are the main tools for calculating SCC. These models try to balance the costs of reducing emissions with the economic damage caused by climate change (Pizer et al., 2014). While widely used, these models are often criticized for oversimplifying the complexities of climate change, particularly when it comes to dealing with uncertainty and catastrophic risks (Stern et al., 2022). The Problem with Relying Solely on SCC Despite its widespread use, the SCC approach has its shortcomings. One of the main criticisms is that it relies on "discount rates," which help economists figure out how much future climate damage is worth today. A high discount rate lowers the present value of future damages, which can justify weaker climate policies. On the other hand, a low discount rate places a higher value on future generations' well-being, supporting stronger action (Aldy et al., 2021). The debate around discount rates reflects deeper ethical questions about how we value the future and what kind of world we want to leave behind. Another issue with SCC is the challenge of accounting for deep uncertainty. Climate change involves not only risks we can predict but also extreme events we can't foresee or quantify, such as catastrophic sea-level rise or the collapse of ecosystems. These "fat-tail" risks aren't adequately captured by traditional IAMs, which focus on expected utility and average outcomes (Stern et al., 2022). This means that SCC, in many cases, may underestimate the true risks of climate change. A New Approach: Target-Consistent Pricing (TCP) TCP, on the other hand, offers a more goal-oriented solution. Instead of trying to calculate the economic cost of each ton of CO2, TCP sets carbon prices based on what is needed to achieve a specific climate goal, such as net-zero emissions by 2050. Kaufman et al. (2020) propose the Near-Term to Net Zero (NT2NZ) approach, a specific type of TCP, which focuses on setting carbon prices that reflect the cost of staying within the near-term trajectory required to meet long-term climate targets. This approach is aligned with international agreements like the Paris Agreement, which seeks to limit global temperature increases to 1.5–2°C. TCP has the advantage of providing policymakers with clearer, actionable guidance. Instead of dealing with the complexities of estimating long-term climate damages (which are subject to great uncertainty), TCP focuses on the immediate policy actions needed to meet specific climate goals. SCC vs. TCP: Where Do They Diverge? While both SCC and TCP aim to guide climate action, their methods and philosophies diverge significantly.
Bridging the Gap: A New Way Forward Both SCC and TCP have their strengths and weaknesses. SCC gives us a way to measure the economic impacts of climate change, but it’s riddled with uncertainties and ethical dilemmas. TCP is more pragmatic, offering a clear path to meeting climate goals, but it lacks the rigorous theoretical foundation of SCC. To truly advance climate policy, we need to bridge the gap between these two approaches. One way forward is to integrate the best aspects of both: using SCC to inform the broader economic context while adopting the NT2NZ approach to set actionable, near-term targets. This hybrid framework could provide a more comprehensive roadmap for policymakers, balancing economic efficiency with the urgent need to tackle climate change head-on. Conclusion As we refine the ways we address climate change, it’s clear that no single approach can solve the problem. The Social Cost of Carbon offers valuable insights into the long-term economic damages of climate change, while Target-Consistent Pricing gives us a practical path forward. By combining these approaches, we can design more effective policies that not only optimize economic outcomes but also ensure we meet critical climate goals. This is the challenge of our time: balancing the costs of today with the risks of tomorrow. And as we continue to refine these models, we must remember that the future depends on the decisions we make now. References
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