Energy Security – reconsidering endogenous energy resources development

Shahab Sabahi
Energy and Environment for Development – Policy Analysis Research Group

General notion agrees that economic growth, energy security and climate change are fundamental and interlinked challenges for the world. Having their impacts on human well-being, the clear understanding of their complex interplay has concerned both academics and public policymakers. Society’s and economics’ interest varies across countries and it implies that individual country may take on differently in addressing these interconnected issues. The common belief is that the tension of energy supply and environmental deterioration are the consequence of the economic growth. Modernized economies have long been powered by fossil energy sources. As productions and outputs have been boosted, the use of fossil energy sources has exponentially grown; it has consequently pumped more emissions to atmosphere and intensified Greenhouse Gas (GHG) emissions. Continuous fossil energy use negatively impacts the collective performance of an eco-socio-economic system which is triggered by climate change and the exhaustion of scarce fossil resources. Climate change and foreseeable rising fossil energy prices under increasing demands and increasing production and exploration costs make policymakers think over the serious use of alternative energy sources. If the scarcity of fossil energy and environment degradation are the serious threats to sustainable economic growth, it would be politically a persuasive case to see the development of renewable energy sources as an opportunity. It is a double-edge opportunity; it can cut pollutions in one hand and on the other hand can substitute for additional fossil energy demand thus economic growth remains intact. High fossil energy prices and renewable energy technology advancements will accelerate the substitution process as renewable energy becomes highly competitive and economically feasible.  

Free pollutions from fossil energy use and conventional energy technology lock-in are regarded as the market failures which need policy interventions. Developing endogenous renewable energy sources and other sort of clean energy seems to be a proper solution for tackling simultaneously the interconnected issues. This approach, however, requires heavy investments and changes in energy-economic systems, consumption patterns, and institutions.

 

Harmonizing interests and values: an application for international affairs

Shahab Sabahi
Energy and Environment for Development – Policy Analysis Research Group

On May 1st 2012, Janos Martonyi Hungary’s foreign minister gave a quasi-exclusive lecture in the centre for European Study, Chulalongkorn University – Thailand. How Hungary would respond to the forces from the world order shift was the main topic of his lectured. He initially outlined the current world’s powers structure and analyzed the possible shapes of the world structure through evolutionary process. Although he tried to not speculate the future, he ended the lecture with contemplating the possible positions of Hungary in the new world order and supported his hypothesises with the effect of Hungary’s recent foreign policies in regional and national level.

“Value-Based Foreign Policy” was the core of Hungary’s doctrine, Dr. Martonyi’s pointed out. By the “Value-Based Foreign Policy”, he meant that Hungary’s goals would not be selected on an ad hoc basis, but would be a function of the important value sources such as the UN Charter, the North Atlantic Treaty, the Treaty on the European Union and of course Hungary’s constitution.

Commitments are the prime source of values. As the definition suggests, a value-based approach requires policies are formulated within the framework of commitments made at the first place. As the number of commitments rises, policy choices become narrow.

It raises a question and I got it for Mr. Martonyi. How does Hungary harmonize her national interests and values if there would be a conflict between them? Today it is the case of the European Union, from Greece, Italy to Spain. As a competent politician, he answered my question that the value based approach, in the realm of foreign policy,  should not inherently limit Hungary’s relations with countries that do not fully respect the values her country adhere to. He continued that the competition between values and interests would be a perpetual challenge for societies. In effect it means that policy choice again remains a contextual, and values except core values such as human rights, can be altered.     

Concerning international relations, it would be an easy task to rhetorically speak on an international objective, but adopting a collective policy to reach that objective would be hard. Individual nation’s interests and contexts influence nation’s response to policies. Certainly the social structures and relations are manmade and the values (again except the core values such as human rights) are open to reasoned critique about what is the most reasonable to do. Should a commitment to manmade values be treated in completely contextual terms? Or should interests and values be harmonized before thinking about commitments?     

To harmonize interests and values, general practice is to run a pros and cons analysis which is conforming to rationality and reality of the relevant circumstances. If there would not be institutional humps, this approach creates value based interests which would be an optimistic outcome.  Priorities and institutions may cause deeper interests and values divergence which jeopardize the success of the harmonization process.  In fact, commitments beyond the core values, unlike options, bound the ability of adaptation and decrease the resilience level.

So a value-based policy is only a catchphrase, if one misses to recognize the origin of values. It reminds me this quote “G. Kennan believed that language helped make policy and that vague, expansive language would lead to vague, expansive policy” (Ideas Man by Nicholas Thompson)  

Loser and Winner in the game of change

Shahab Sabahi
Energy and Environment for Development – Policy Analysis Research Group

One of the recent discussions in the Strategic Planning Society brought forward the old dilemma of the change process and tries to address it however, in my view, in idealistic ways.

The discussion recognizes creation of loser and winner as the trouble of change. And it builds its premises based on this belief. I critique the discussion’s certainty and its proposition and argue that the marginal groups are driving forces of change and crucial to change’s success. The trouble appears when marginal groups become larger and more divided which is so-called polarization.         

Company boards, directors, legislators are presumed to be sane. It requires them to hurt no one when carrying out their responsibility which is to assure their systems steadily progress. Under the strain of change, they should respond, restructure, reallocate the scarce resources, and impose new regulations, to create fresh system resilience. By nature these processes rearrange resources and shatter the previous merit system. These processes create marginal forces (let’s call them winner and loser). The marginal forces are critical in the process of change. Both marginal forces, upper and lower average would be supporting the change, if they remain marginal. The problem appears when a system was polarized at the first place.

After the demise of communist and followed strong conductivity in the world, a polar-free world would be expected. Contrary, all systems are now thoroughly polarized and the question is WHY? (Foreign Affair Jan Feb 2012)

Polarization creates the sense of winner and loser in systems, and it should be addressed   

 In the context when change is inevitable, scarce resources, priority setting comes first. (the dilemma of judgment). What guides one’s decision making process is the principle of economic efficiency and cost-benefit analysis. Efficiency does not speak about distribution. However welfare economic theory posits grounds for working out distribution issue. In the case of change, in the race between efficiency and redistribution efficiency must triumph. In fact winners do not outnumber losers but they organized efficiently and share strong and clear interests along with compromise wherever it is needed (Mancur Oslon)       

Institutions and society's growth

Shahab Sabahi
Energy and Environment for Development – Policy Analysis Research Group

How and why do societies grow? What are the consequences of growth? Does growth follow deterministic patterns? Can growth path be imitated in another location with similar results? If so why then some countries are able to achieve economic growth and better standards of living for their populations while others are not. Most of my time has been spent in last two years to do research on this topic with particular focus on role of natural resources, capitals, environment, social institutions, individuals and states and the rule of law. 

These issues concern social scientists Old and  the current economics frameworks has been well identifying sources of economic growth in terms of educational achievements, technology, market organization but hasn’t really dug deeper into why markets are organized differently. Why is it that in some places there is investment into education, or adoption and embracing of new technologies, and in other places there is not? That is the point that economics alone fails to help for searching answers. It requires bringing political economy and institutions in the picture. The major theme that has been keeping me busy right now is to understand the roles of institutions, how institutions emerge, and why dysfunctional institutions arise in different places.

In terms of statistical institution structure and its sources of creation and survival are rather complicated. Social scientists acknowledge elements such as geographic limitations, ecology, weather, natural resources, security problems, etc. which contribute to economic development and growth in much of the world. These scholars are essentially talking about elements that are outside of human control. But history tells us events that humans intentionally changed the course of growth or even initiated it even in the ground of environmental limitation.

So it sounds that to achieve a clear understanding we should examine the roles of institutions and how these social structures can provide leverage and influence in a way that mitigate the impact of various inherent environmental limitations. .