Chronicles of Noura @ HKS:
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Chronicles of Noura @ HKS:
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The COP 29 summit in Baku, Azerbaijan, convened amidst unprecedented challenges, not just from the escalating impacts of climate change but also from shifting political landscapes. Often referred to as the "Finance COP," this gathering addressed crucial topics such as climate finance, carbon markets, adaptation strategies, and equitable transitions. Yet, the event highlighted stark divides between developed and developing nations, casting doubt on the future of global climate cooperation. New Collective Quantified Goal (NCQG) on Climate Finance The NCQG emerged as a cornerstone of COP 29, reflecting the financial disparities that challenge equitable climate action. Developing Nations' Advocacy
Despite extensive discussions, fundamental disagreements on quantum, scope, and structure of the NCQG were unresolved. While frameworks were advanced, the lack of consensus left critical gaps that will carry over to COP 30. Article 6: Carbon Markets and Cooperative Approaches Article 6 discussions aimed to operationalize mechanisms for global carbon markets under the Paris Agreement, addressing both market-based and cooperative approaches.
Adaptation, Loss and Damage, and Just Transitions While finance and mitigation dominated the agenda, other critical areas demanded attention:
Reflections on Global Climate Governance COP 29 highlighted the fragility of the global climate negotiation process. The election of Donald Trump and his renewed pledge to withdraw the United States from the Paris Agreement, coupled with Argentina’s abrupt exit from COP 29 negotiations, highlighted the challenges of sustaining collective action in an increasingly polarized world. Argentina's Exit: A Signal of Disregard
The simultaneous challenges posed by the U.S. and Argentina raise a pressing question: Will COP 30 mark the end of the COP process as we know it? The effectiveness of annual COPs is increasingly under scrutiny. The procedural inefficiencies and entrenched divides evident at COP 29 have fueled debates about whether this framework can deliver transformative action. While abandoning the COP process could risk decades of progress, reforms are imperative to ensure these summits remain relevant. A Way Forward
To safeguard the future of global climate governance, the following steps are critical:
Rebuilding Trust in Climate Governance The trust deficit that permeates climate negotiations is a direct consequence of unkept promises and perceived inequities in burden-sharing. Developing nations, already bearing the brunt of climate impacts, cannot afford to rely on commitments that lack follow-through. For global climate governance to succeed, trust must be restored through actions, not words. As COP30 approaches, the stakes could not be higher. Delivering on past pledges, aligning new commitments with the principles of CBDR-RC, and addressing the trust deficit head-on will determine whether the world can unite to confront this existential crisis. Without trust, the foundation of multilateral cooperation will crumble, leaving the future of climate governance—and the planet—in jeopardy. The choice is clear: rebuild trust through equitable, collective action or risk collective failure.
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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
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
On September 30, 2024, the Project on Middle Powers at Harvard Kennedy School, moderated by Professor Meghan O'Sullivan, hosted a fascinating discussion on the evolving global landscape. Panelists included notable experts such as Senem Aydin Duzgit, Bernard Haykel, and Moeed W. Yusuf, each offering unique perspectives on how middle powers are navigating the shifting dynamics of international relations, particularly amidst intensifying U.S.-China competition.
The Shifting Global Landscape O'Sullivan opened the session by framing the discussion around the transition from a unipolar to a multipolar world. The rise of China and the evolving role of the U.S. have altered the traditional geopolitical order, forcing middle powers to adopt strategic autonomy. These nations, while not aligning exclusively with the U.S. or China, are increasingly seeking to carve out independent paths that balance relationships with both superpowers. The concept of the “Thucydides Trap” – the fear that competition between rising and established powers inevitably leads to conflict – looms large in these discussions, as middle powers look to assert influence in the global order. Strategic Autonomy and Multi-Alignment Moeed Yusuf emphasized the importance of middle powers leveraging their collective strength. He described how certain countries, despite being pressured by both the U.S. and China, seek a multi-alignment strategy that enables them to benefit from both without being constrained by either. This balancing act, Yusuf argued, is crucial in today’s geopolitics, where smaller nations are increasingly playing pivotal roles in regional conflicts, energy transitions, and global governance. Technology, Energy, and Strategic Choices Bernard Haykel brought a compelling focus on technology, particularly artificial intelligence (AI), and its implications for middle powers like Saudi Arabia. He highlighted how nations with deep economic ties to China and security alliances with the U.S. face increasing challenges in maintaining this delicate balance. The development of AI, could force nations to choose between technological partnerships with the U.S. or China, impacting their future security and autonomy. Saudi Arabia, for instance, is looking to attract U.S. companies to develop AI infrastructure while maintaining oil trade relationships with China—a balancing act that might become increasingly difficult in the years ahead, he argues. Turkey's Navigation of a Multi-Polar World Senem Aydin-Duzgit discussed Turkey’s unique position as a member of NATO, a potential candidate for the European Union, and a close partner of Russia. Turkey’s ability to navigate multiple alliances in a multipolar world showcases how middle powers, through pragmatic and transactional relationships, can pursue strategic autonomy while aligning with different global actors. However, Aydin-Duzgit pointed out the challenges Turkey faces in balancing its deep economic dependence on Europe with its expanding ties to non-Western powers like Russia and China. Nigeria’s Role in a Changing World John Kayode Fayemi discussed Nigeria’s position as a rising power in Africa, with a population expected to surpass that of any country except China and India. Nigeria’s responsibility to represent the African continent on the global stage, particularly in peacekeeping and international governance, offers a unique form of middle power diplomacy. Fayemi argued that Nigeria’s pragmatic approach to U.S.-China relations allows it to engage both powers in ways that benefit its national interests while contributing to broader global stability. Southeast Asia: Pragmatic Engagement Joseph Liow spoke on Southeast Asia's response to U.S.-China competition, with Singapore exemplifying the pragmatic approach to navigating these global dynamics. Southeast Asian countries, according to Liow, must maintain relationships with both superpowers, using their economic ties to China while relying on the U.S. for security. The region’s strategy is one of calculated pragmatism, reflecting the broader trend among middle powers to engage both the U.S. and China without being pulled into binary choices. Middle Powers in 2040: A Positive Impact? The panel concluded by imagining the world in 2040 and discussing whether middle powers will have had a positive impact on resolving major global issues such as climate change, energy transitions, and international security. While middle powers do not form a unified bloc, their collective actions on key global challenges—ranging from the Saudi-Iran rapprochement to climate action—suggest that they will continue to shape the international order in significant ways. Strategic Autonomy and the Future The panel explored the future of strategic autonomy for middle powers. As countries like Saudi Arabia, Turkey, and Nigeria strive to maintain independence in a world dominated by great power rivalry, the question remains: Can they continue to navigate these relationships without being forced to choose sides? As the global order shifts, middle powers will play a crucial role in shaping the new international landscape, one defined not just by competition but by collaboration and shared responsibility. References O'Sullivan, Meghan. (Moderator). (2024, September 30). The Shifting Global Landscape: Middle Powers in a Multipolar World. Project on Middle Powers at Harvard Kennedy School. Panel discussion with Senem Aydin Duzgit, Bernard Haykel, Moeed W. Yusuf, John Kayode Fayemi, and Joseph Liow. Harvard Kennedy School, Cambridge, MA. OpenAI, ChatGPT. (2024, September). Used for conversational assistance, providing summaries and enhancing the style of writing. This post is based on my learnings from the course MLD 201 B: Exercising Leadership: The Politics of Change, taught by Tim O'Brien at the Harvard Kennedy School. Through this course, I am gaining a deeper understanding of leadership in the context of complex challenges. Drawing from foundational texts in adaptive leadership, group dynamics, power, and continuous learning, as well as the insightful readings selected by Tim O'Brien, these ideas are reshaping how I think about leadership, particularly when tackling global challenges such as climate change and energy transitions. These classes often provide an opportunity to reflect on personal leadership challenges, encouraging deeper learning by allowing individuals to 'sit with' the challenges and explore them from a fresh perspective.
The Shift Toward Adaptive Leadership In Leadership Without Easy Answers (1994), Ronald Heifetz introduces the concept of adaptive leadership, a model of leadership that recognizes the difference between technical and adaptive challenges. While technical challenges have known solutions, adaptive challenges require shifts in values, beliefs, and behaviors. Heifetz argues that adaptive leadership is about mobilizing people to face difficult realities, confronting deeply held assumptions, and guiding them through a process of learning and growth (Heifetz, 1994). A central element of Heifetz’s adaptive leadership framework is disequilibrium. Leaders must create a productive level of discomfort to push people out of their comfort zones and challenge their assumptions without overwhelming them (Heifetz, 1994). This productive tension encourages adaptive learning and innovation, which is especially relevant in the field of climate change, where technical solutions alone cannot address the deep-rooted behavioral and societal changes needed for long-term sustainability. Tim O’Brien’s inclusion of Heifetz’s work in this course has reinforced the importance of adaptive leadership in complex, high-stakes environments. O'Brien highlights that modern leadership requires more than providing solutions—it demands the ability to guide teams through discomfort, enabling them to develop new capacities to solve evolving problems. Embracing Conflict: Catalyst for Innovation and Growth David Williams, in Real Leadership (2005), emphasizes that conflict is not something to avoid but to embrace as a catalyst for innovation. Conflict, when managed effectively, can drive collective problem-solving by forcing groups to re-examine assumptions and rethink strategies. Williams argues that leaders must create environments where conflict leads to growth rather than paralysis, particularly in situations where adaptive challenges require new ways of thinking (Williams, 2005). Similarly, Smith and Berg, in Paradoxes of Group Life (1987), explain that conflict, while often uncomfortable, can ultimately strengthen teams if managed well. Groups that engage in conflict are able to tap into diverse perspectives, allowing for more robust problem-solving. However, groups also experience work avoidance, where they focus on peripheral tasks to avoid confronting more difficult, adaptive challenges (Heifetz, 1994). Leaders must ensure that their teams stay focused on the core issues rather than shying away from uncomfortable conversations. Tim O’Brien’s course brought these concepts to life by illustrating how conflict, when handled appropriately, can be transformative. He emphasized the importance of diagnosing the root causes of conflict and using it to foster learning and progress within organizations. This insight is crucial in multinational collaborations, such as the Think 20 (T20), a G20 engagement group, task forces I have worked with, where conflicting national priorities, as well as varying individual perspectives, must be navigated to achieve shared goals. The Power Paradox: Staying Open to Learning Jerry Useem’s article Power Causes Brain Damage (2017) explores a critical leadership paradox: as individuals gain power, they often lose the very qualities—like empathy and social awareness—that helped them succeed in the first place. Useem points out that power can dampen a leader’s ability to connect with others and understand their perspectives, which can lead to poor decision-making and a lack of responsiveness to the needs of their teams (Useem, 2017). Tim O’Brien’s focus on the power paradox during this course highlighted the need for leaders to remain self-aware as they rise in influence. Leaders must actively cultivate humility and seek diverse perspectives to counteract the isolating effects of power. One of the solutions discussed in the course is creating psychological safety, as outlined by Amy Edmondson in her work on learning from failure. Leaders who foster psychological safety encourage open dialogue, risk-taking, and the sharing of ideas, which allows teams to learn from their mistakes and innovate continuously (Edmondson, 2011).In my leadership journey, especially in international governance and sustainability, I’ve learned the importance of staying open to feedback and actively seeking diverse perspectives to remain connected to the needs of those I lead. This has been particularly critical in my work with climate policy, where understanding the viewpoints of various stakeholders is essential for creating inclusive, sustainable solutions. In positions of power, even intellectual power where ideas and positions go unchallenged, we risk losing the humility that comes from continuously seeking truth. The 'comfort' of settling into one’s own conclusions often leads to complacency—the very opposite of fostering innovation and offering fresh, forward-thinking ideas. Continuous Learning: Key to Adaptive Success In Mindset: The New Psychology of Success (2006), Carol Dweck outlines the difference between a fixed mindset (the belief that abilities are static) and a growth mindset (the belief that abilities can develop through effort). Leaders with a growth mindset are more likely to embrace challenges, learn from their failures, and adapt to changing circumstances. Dweck’s theory is particularly relevant to leadership in today’s complex environments, where continuous learning and adaptability are essential (Dweck, 2006). Sharon Daloz Parks, in Leadership Can Be Taught (2005), discusses Ronald Heifetz’s case-in-point teaching method, which helps students learn leadership by engaging with real-world tensions. This experiential approach to learning fosters resilience, adaptability, and the ability to lead in complex, uncertain environments (Daloz Parks, 2005). The emphasis on continuous learning in leadership, highlighted by both Dweck and Daloz Parks, is something that must be integrated into one's own leadership style. By fostering a culture of learning in teams, experimentation, risk-taking, and growth are encouraged—qualities that are essential for addressing the adaptive challenges we face. Tim O’Brien’s course reinforced the idea that leadership is about facilitating learning rather than providing all the answers. By guiding teams through adaptive challenges and fostering a growth mindset, leaders can ensure that their organizations remain resilient and innovative in the face of uncertainty. Climate Change as an Adaptive Challenge As I reflect on these readings and their integration into Tim O’Brien’s course, I see clear applications in my own leadership journey, particularly in the fields of climate and energy policy. Adaptive leadership is essential in these areas because the solutions are not merely technical—they require changes in societal behavior and attitudes. Leaders must create the conditions for learning, experimentation, and the constructive management of conflict to drive innovation and long-term success. For example, in climate negotiations, managing the conflicts that arise between countries with differing national priorities requires both empathy and the ability to guide groups through complex adaptive challenges. At the same time, we must remain aware of the power paradox, ensuring that we stay connected to diverse perspectives and maintain the humility to learn from others. Tim O’Brien’s course emphasized the importance of fostering a growth mindset in leadership, and to make it a priority to cultivate that mindset in teams. Encouraging risk-taking, learning from failure, and embracing continuous improvement will be crucial as we work to find sustainable solutions to the world’s most pressing challenges. As I continue to grow in my leadership journey, these insights will be invaluable. By fostering learning, embracing conflict, and staying open to diverse perspectives, I aim to contribute to creating more adaptive, resilient solutions for global challenges, particularly in the fields of climate change and energy transition. References Aggarwal-Schifellite, M., & Siliezar, J. (2020). "3 Takes on Dealing with Uncertainty." Harvard Gazette. Daloz-Parks, S. (2005). Leadership Can Be Taught. Harvard Business Review Press. Chapter 4. Dweck, C. S. (2006). Mindset: The New Psychology of Success. Ballantine Books. Fixed Mindset Vs. Growth Mindset. Edmondson, A. (2011). "Strategies for Learning from Failure." Harvard Business Review. Heifetz, R. A. (1994). Leadership Without Easy Answers. Harvard University Press. Introduction and Chapter 1. McGregor, J. (2017). "Voters Facing Economic Uncertainty." OpenAI, ChatGPT. (2024, September). Used for conversational assistance, providing summaries and enhancing the style of writing. O’Brien, J., & Pennock, M. (2002). When Students are the Case Protagonists. Harvard Business School Publishing. Plato. (1991). The Republic (A. Bloom, Trans.). Chapter 25: Allegory of the Cave, pp. 227-235. Basic Books. Richardson, K. A., & Tait, A. (2010). "The Death of the Expert?" Emergence: Complexity & Organization, 12(2), 87-97. Smith, K. K., & Berg, D. N. (1987). Paradoxes of Group Life. Jossey-Bass. Chapter 7, pp. 131-151. Useem, J. (2017). "Power Causes Brain Damage." The Atlantic. Williams, D. (2005). Real Leadership. Berrett-Koehler Publishers. Introduction and Chapter 1. Saudi Arabia's Strategic Role in Global Energy: Lessons from OPEC Simulation and Real-World Dynamics28/9/2024 Aldy, J. E. Course API 165: Energy and Environmental Economics and Policy. Harvard Kennedy School, Fall 2024. Team Saudi Arabia, Planet Alpha: Aashis Luitel, Lydia Glock, Noura Mansouri, Ruben Figueroa As part of the course API 165 "Energy and Environmental Economics and Policy" by Joe Aldy at Harvard Kennedy School, we were asked to run a two-week OPEC simulation. This exercise allowed us to step into the shoes of policymakers within the global oil cartel and grapple with the intricate challenges of managing oil supply, pricing, and market stability. The simulation offered a hands-on approach to understanding how OPEC nations collaborate—or defect—within the cartel, and how these decisions have far-reaching consequences for global energy markets. It closely mirrored real-life scenarios, particularly the role of Saudi Arabia as a key stabilizer within OPEC and in global oil markets more broadly. Participating in the OPEC simulation as part of Saudi Arabia’s delegation on Planet Alpha offered an exceptional learning experience, especially in navigating the complexities of cartel behavior, oil market dynamics, and strategic decision-making. The simulation allowed us to grapple with the challenges of coordinating production quotas among OPEC members and balancing short-term profitability with long-term sustainability. Here, I’ll reflect on the experience and the economic lessons learned along the way. Saudi Arabia's Role: Leading the Formation of an OPEC Cartel Saudi Arabia assumed a leadership position right from the beginning. Our strategy was simple yet bold: we proposed the formation of an OPEC cartel, inviting other key oil-producing countries to join forces in controlling production and stabilizing prices. Our objective was clear—to maximize profits for all member countries while safeguarding Saudi Arabia’s interests, given our significant oil reserves. One of the key dynamics we introduced was the creation of a structured approach for setting production quotas. Each country’s oil reserves and production costs were taken into account to distribute quotas in a way that aligned with their market share. By advocating for a strong cartel, we hoped to control global oil output, prevent market oversupply, and keep prices high enough to secure profitability for all. A Cooperative Approach, Initially During the early stages, we prioritized cooperation, closely monitoring other countries’ production levels. By building trust, we aimed to maintain alignment on quotas and communicate openly about any necessary adjustments. Coordination was crucial, and Saudi Arabia facilitated this by creating a WhatsApp group to ensure real-time communication among OPEC members. Through this group, we could quickly address any concerns and adjust strategies when needed. Our initial strategy included limiting production to maintain a price of at least $80 per barrel, a price guaranteed by the final stages of the simulation. This was inspired by several economic models we discussed during the OPEC meetings, particularly the work of Robert Pindyck, who explored the benefits of cartelization for resource-rich countries (See Appendix 1) . Shifting Strategies: From Collusion to Retaliation Despite our efforts to build trust and ensure compliance, some countries deviated from the agreed-upon quotas. Non-compliance among members began undermining the collective effort. To address this, Saudi Arabia issued a warning: if the quotas were violated again, we would retaliate by flooding the market with oil, driving down prices to punish those who overproduced. This threat proved effective in periods 2 and 3, as it led to an increase in our per-barrel revenue. However, coordination remained imperfect, and by period 4, further defection forced us to follow through on our threat. We flooded the market, contributing to a significant drop in oil prices. Our intention was to make it clear that defection would be costly for everyone involved. However, this strategy only led to greater defections from other countries, forcing us to rethink our approach. Maximizing Individual Profits Amidst Defection By period 5, it became clear that long-term cooperation was no longer viable. Saudi Arabia shifted focus to maximizing individual profits, overproducing in order to benefit from our low marginal costs, even if it meant accepting lower prices. Our revised strategy aimed to produce as much as possible while keeping prices above a critical threshold. In periods 5 and 6, this approach worked well, with relatively favorable prices and high production volumes ensuring substantial returns. However, when prices plummeted in period 7, we cut back production slightly to prevent losses. From there, we maintained a steady output level until the final period, prioritizing profitability despite fluctuating market conditions. Economic Models and Strategic Decision-Making Throughout the simulation, several economic models and theories guided our strategic decisions. Inspired by Pindyck’s work on the cartelization of exhaustible resources, we recognized that controlling production and ensuring compliance were key to maximizing long-term profits. Pindyck’s insights into the benefits of cartel behavior—such as controlling supply to maintain high prices—were evident in our initial strategy of quota enforcement (See Appendix 1). However, the simulation also highlighted the difficulty of sustaining long-term cooperation in the face of individual incentives to defect. This tension between collective action and individual profit-seeking became a central challenge, forcing us to continuously adapt our strategy in response to other countries’ behavior (See Appendix 2). Key Lessons Learned
Insights on OPEC Dynamics and Saudi Arabia's Role in Global Energy Stability In the simulation, the role of Saudi Arabia stood out as pivotal, echoing its real-world significance in stabilizing global oil supply, particularly in times of crisis. Saudi Arabia’s ability to quickly increase or cut oil production gives it considerable leverage to influence global oil prices. This aspect became even more pronounced during moments of defection, when member countries chose short-term gains over collective stability. Saudi Arabia, with the lowest marginal cost of production at $6 per barrel, responded by threatening to flood the market with oil—a tactic it has employed historically, as seen during the 2014-2016 oil price war. The 70% drop in oil prices from their 2014 highs to an average of $47 per barrel has heavily impacted oil producers. The price slump is due to factors such as an oil glut, lower demand, and the rise of U.S. shale extraction. The simulation also highlighted the tension between short-term energy security and long-term sustainability, although the climate and environment goals were not factored into the simulation, in the real-world, such a challenge exists and adds complexity to energy geopolitics. The Russia-Ukraine conflict has highlighted the growing priority of energy security, particularly in Europe, where countries are relying more on coal to replace Russian oil and gas, contradicting COP26 commitments (Mansouri, 2022). Saudi Arabia plays a dual role in this dynamic: on one hand, acting as a “safety valve” during energy crises by increasing oil production and continuing investments in oil, while on the other hand, reallocating its oil wealth to advance Vision 2030, which aims to diversify energy sources and reduce dependence on fossil fuels. Further, geopolitical dynamics continue shaping the global energy landscape. As alliances in the Middle East shift—partly due to the waning influence of the United States and the growing presence of Russia and China—Saudi Arabia has strategically positioned itself through multi-vector partnerships. The alliance between Saudi Arabia and Russia has significantly strengthened their influence over global oil markets, ensuring that they can collectively stabilize prices and mitigate volatility, even during periods of geopolitical upheaval like the Ukraine conflict. The economic impact of these decisions was also a crucial learning point. Saudi Arabia’s ability to capitalize on high oil prices, as it did during the price surge to over $130 per barrel in early 2022, strengthened its GDP growth and reinforced its economic dominance. The simulation emphasized how oil revenues remain critical for countries like Saudi Arabia, but also pointed to the importance of forward-looking strategies, especially in a world gradually shifting toward sustainable energy. The introduction of a new technology at $80 per barrel in the later stages of the simulation prompted difficult decisions about maintaining short-term oil revenues versus the sustainability of its oil reserves. In real life, this informs a nuanced strategy to delicately balance between carbon management technologies that would become readily accessible in the future and the rising marginal cost of depleting reserves. The simulation also touched upon the complexities of cartel behavior. Each member country weighed its self-interest against collective outcomes, leading to cycles of cooperation and defection. As highlighted by Pindyck's (1978) analysis on producer gains from cartelization, cartel members often find short-term temptations difficult to resist. However, Saudi Arabia's capacity to reestablish discipline within OPEC highlighted the country's central role as a stabilizer in global oil markets. By threatening to unleash its full production capacity, Saudi Arabia could realign defection-prone members, ultimately preserving the group's collective interests. In the article Almutairi et al. (2021) the significant role that OPEC’s management of spare capacity was analyzed, emphasizing its role in stabilizing oil prices and supporting the global economy. The authors examine how OPEC's reserve capacity has historically helped reduce oil price volatility, particularly during market events from 2001 to 2020. OPEC’s ability to maintain spare capacity as a buffer against supply and demand shocks creates substantial economic benefits, lowering the monthly volatility of oil prices from 17% to 11% over the period studied. The paper estimates that OPEC’s spare capacity adds an annual global economic value of $193.1 billion, largely by preventing severe supply disruptions and minimizing GDP losses. The paper examines three distinct subperiods—commodity boom (2001-2014), market-share campaign (2014-2016), and OPEC+ (2017-2020)—and shows that OPEC's spare capacity was particularly effective during the commodity boom and OPEC+ periods in reducing price fluctuations. However, during the market-share campaign, OPEC focused on protecting market share rather than stabilizing prices, which made the use of spare capacity less impactful. The rise of U.S. shale oil, known for being more price-responsive, is also discussed as a factor that might reduce OPEC's influence on global oil prices. However, the study concludes that, while shale oil helps stabilize prices, its smaller share of global supply limits its overall impact on diminishing the significance of OPEC's spare capacity. Ultimately, the OPEC simulation provided an invaluable lens through which to analyze Saudi Arabia's role as a stabilizer in global oil markets. Saudi Arabia’s geopolitical and energy strategies have evolved in response to the shifting global order, at the intersection of multipolarity and energy security concerns. The simulation brought insights into these tensions to life, showing how delicate the balance is between cooperation and defection, short-term and long-term goals, and geopolitical influences. It became clear how Saudi Arabia continues to play a critical role in global energy markets. Its leadership within OPEC and its ability to navigate both the current fossil fuel-dominated energy landscape and the transition to sustainability have positioned it as a key player in shaping global energy policy. As the world faces ongoing geopolitical and environmental challenges, Saudi Arabia’s decisions within OPEC will likely remain pivotal to global energy security as it continues to lead in managing global oil supply stability while advancing its Vision 2030 goals, its role in both the present energy landscape and the transition to a more sustainable future remains critical. References Aldy, J. E. Course API 165: Energy and Environmental Economics and Policy. Harvard Kennedy School, Fall 2024. Team Saudi Arabia, Planet Alpha: Aashis Luitel, Lydia Glock, Noura Mansouri, Ruben Figueroa Almutairi, H., Pierru, A., & Smith, J. L. (2021). The value of OPEC’s spare capacity to the oil market and global economy. OPEC Energy Review, 45(1), 29-43. https://doi.org/10.1111/opec.12199 DALL·E AI (2024). Image representing Saudi Arabia's strategic role in global energy: Lessons from OPEC simulation and real-world dynamics. Image generated using OpenAI's DALL·E model. Mansouri, N. Y. (2022). The Emerging Saudi Power Momentum: How the Conflict in Ukraine Shapes Saudi Energy Policy. In Energy Politics in the MENA Region: From Hydrocarbons to Renewables? (pp. 75-92). ISPI Report. Available at: https://www.ispionline.it/en/publication/energy-politics-mena-region-hydrocarbons-renewables-36797 OpenAI, ChatGPT. (2024, September). Used for conversational assistance, providing summaries and enhancing the style of writing. Pindyck, R. S. (1978). Gains to Producers from the Cartelization of Exhaustible Resources. The Review of Economics and Statistics, 60(2), 238-251. Retrieved from JSTOR. |
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