fbpx The new geopolitics of energy with Meghan O'Sullivan | Harvard Kennedy School

April 7, 2023

How has the rapidly changing global order affected the global pursuit of a net-zero economy? What are the implications for geopolitics of this drive to move away from fossil fuels? Watch this Wiener Conference Call with Meghan O’Sullivan, who was recently appointed director of the Belfer Center for Science and International Affairs, on the new geopolitics of energy.

Wiener Conference Calls recognize Malcolm Wiener’s role in proposing and supporting this series as well as the Wiener Center for Social Policy at Harvard Kennedy School.

- [Announcer] Welcome to the Wiener Conference call series. These one hour on the record phone calls feature leading experts from Harvard Kennedy School who answer your questions on public policy and current events. Wiener conference calls recognize Malcolm Wiener's role in proposing and supporting this series, as well as the Wiener Center for Social Policy at Harvard Kennedy School.

- Good day everyone, welcome. I'm Ariadne Valsamis from the Office of Alumni Relations and Resource Development at Harvard's Kennedy School, and I'm very pleased to welcome you to this Wiener conference call. These calls are kindly sustained by Dr. Malcolm and Mrs. Carolyn Wiener, whose vision for this series and support of the school have been transformative. We're deeply grateful, today we welcome Megan O. Sullivan, who's the Gene Kirkpatrick professor of the Practice of International Affairs at the Kennedy School. As of this coming July, she will lead the school's Belfor Center for Science and International Affairs. Professor O'Sullivan has served in multiple senior policymaking roles in the US federal government, providing her wise counsel to national security officials in both Republican and Democratic administrations. As a current member of US Secretary of State, Anthony Blinker's, foreign Policy Advisory Board, professor O'Sullivan makes recommendations on US foreign policy and diplomacy. Between 2004 and 2007, she was special assistant to President George W. Bush and later Deputy National Security Advisor for Iraq and Afghanistan. In 2013, she was vice chair of the all party talks in Northern Ireland. Her scholarship examines topics at the intersection of geopolitics, science, markets and policy with a special focus on large changes in the energy system. Given the significant expertise, we are deeply fortunate that she's agreed to speak today with the Kennedy Schools alumni and friends, professor O'Sullivan.

- Good morning, it's great. Or actually good afternoon as of just a few minutes ago, I'm really pleased to be here on one of the Wiener conference calls, which obviously are a great opportunity to speak to many people who value what we do here at the Kennedy School and who support and guidance is instrumental to our work. So as was just mentioned, I'm going to be talking today about geopolitics and the energy transition, and I'd like to begin by sharing my screen, which I'll do as I speak. This is a set of slides which are not designed to impress you. They're simply designed to keep you with me as I walk through a little bit of a complex argument. This is something that I'm developing, I'm working on a book on this topic and I'm trying to hone my argument. So you're a little bit of a Guinea pig audience, but I'm really looking forward to getting feedback on it. So hopefully this works and you can see my screen very nicely. So first, this is just to talk about obviously an issue that is front and center of the minds of people in this community, in the policy community and among our students. I would say the amount of time that I've spent teaching at the Kennedy School about energy and climate, there's been a huge shift in student interest obviously, but I want to talk about it from a different perspective than most of the conversations that you may be part of on the energy transition. And I'll talk about it in two different ways. Again, the energy transition, just so we're on the same page, is commonly defined as the transition away from a carbon intensive fuel-based economy towards a global economy that is net zero, net zero carbon emissions, which is different than necessarily shifting away from fossil fuels. It's actually shifting away from carbon intensive energy. And there is also the, the prospect for fossil fuels being decoupled from carbon emissions at some point in the future. But how I want to talk about this differently is really in two ways, one, I want to talk about the energy transition is also encompassing the whole idea of energy security. So we naturally think it's about climate security and it is, but it's also about energy security. And this past year with the geopolitical developments and the war in Ukraine has really emphasized something that I always believe was true, but now is front and center of policymaker's mind, which is basically that when push comes to shove, if energy security is challenged at the same time climate security is challenged. If the two are not compatible, then the desire to satisfy energy security needs wins out. What's the first thing that Europeans did when faced with an energy crisis? In the wake of the invasion of Ukraine, they started importing more coal and subsidized energy consumption to the tune of $1 trillion for European consumers. These are two things you don't wanna do if you're trying to make an energy transition, but of course the, the imperative of maintaining energy security won out. So here we're just simply saying that we acknowledge that we have to meet these two imperatives simultaneously if we are to have hope of getting to net zero, otherwise the desire for energy security could undermine the political consensus for that. The second way that I am going to talk about energy transition that differs from a lot of the other conversations you may be part of is to talk about the energy transition as really being, being integrated into the geopolitical environment. So often we talk about technology and policy as being the two things that are necessary to advance the energy transition. And that is of course true, but the kind of the stepsister leg, third leg of the stool is geopolitics. That if we don't have the right understanding of the interaction between the energy transition and geopolitics, it is a huge impediment to getting to where we want to go. So with those two refinements to the traditional concept of energy security, I'm going to make a four part argument and see this is what I meant when I said my slides are like not overly sophisticated, they're just gonna keep you with me. The first part of the argument is that the energy transition is the imperative of the coming decades. The second part of the argument is that the geopolitical landscape in today's world, it is the fragmentation of the global economy in the global order is having an impact on the energy transition. So that's the first kind of part of this causal loop. The second argument is that the energy transition is also having a big impact on the geopolitical landscape. This is, you know, apparent when we think about the energy transition, not just as shifting from one source of energy to another, but remaking the entire global energy system, which is the backbone of the global economy. Like it's inconceivable that we could do something that dramatic and not have a big impact on geopolitics. So again, second argument, the geopolitical landscape influences the pace and scope of the transition. And the third argument is the reverse. The energy transition influences the geopolitical landscape. And then the fourth piece of this argument is that because of this interlocking nature of geopolitics and the energy transition, we have to think differently about the energy transition and what we're trying to achieve. We must have conscious energy transition policies that are crafted to be an ends and a means. So these policies are an ends in the sense they're part of what will enable us to get to net zero, but they're also can be a means, and this is a part that is a new, really new part of this argument here, is that essentially because of this intersection between geopolitics and the energy transition, the energy transition, if we think about it, and if we try to craft it, it can be a little bit of what I like to think of as an antidote to the fragmentation of the global geopolitical system that we're experiencing. So in some ways it's an end, it's a tool that could help us deal with some of these larger geopolitical problems. You know, not to saddle even more on our energy transition policy, but I think that is true. Okay, so with that, I'm just gonna go through them relatively quickly because I know we want to have a lot of time for conversation. I'm not going to delve deeply into any of this, but again, first part energy transition is the imperative of the decades. I won't dwell on this, but I think I just refer you to the IPCC report that just recently came out that said, you know, if for, for those of us who have adopted the idea that staying below or at 1.5 degrees of global warming since pre-industrial eras if that is what the earth requires to kind of avoid the worst parts of climate change, you know, we've already warmed 1.1 degrees. The expectation is we'll probably get to 1.5 by 2030, and if we continue on the current track we're on, we will probably get to at least these climate scientists anticipate we'll get to 3.2 degrees Celsius of warming within the end of this century. And that's a very different kind of earth if it is that much warmer. Someone said to me the other day, at various points in time, the earth was that much warmer, but it was a very different planet. Okay, the second part of this is the geopolitical landscape affecting the energy transition. If we had more time, I'd go through a number of historical examples where this has been true. So again, I'm not describing a dynamic that is entirely new. It is a dynamic that has existed for a long time. These are three examples. The middle one is just simply referring to Winston Churchill and before he was Prime Minister, he was first lord of the admiralty. And in that capacity, which is basically like Secretary of the Navy in the UK before World War I, he was getting very nervous about the rise in German naval capability. And so he made a geopolitical decision to transform, transform the UK naval fleet from burning on coal to burning on oil because it would be more competitive, it'd be faster, it'd be more efficient. This ended up having big implications for Britain's energy mix in a presaged, a period of energy transition from coal to oil, but it was driven by geopolitics. So this dynamic of geopolitics affecting an energy transition is not new. If we look at the last, you know, 30 or 40 years, what we now refer to affectionately as the post cold war order, this was a period characterized as we know by American primacy and then a movement towards a more multipolar global order. But it was largely a cooperative global environment and that you know, will, will for both these objectives of energy security and to a lesser extent climate security. It was good for energy security because over these past decades, the world was increasingly global and energy security needs have been always best addressed in the context of growing interdependence in functioning global markets for energy. And so energy security was well met by the last several decades and you had countries including China being fairly comfortable that the market would deliver the energy that was required for prosperity. It was a little bit more of a mixed bag for climate security because this integrating global environment where values were at the core of the integrative capacity of this global environment, you know, one of the values was not climate or reducing emissions for a variety of reasons we could go into, but that wasn't a driving force of the integrating global system. So we did get new cooperative mechanisms like the COP the conference of the parties, but we didn't get huge progress in the direction of climate security. Now we're in a totally different world. We're in a world of growing fragmentation where the risks and the the risks and forces in this new global environment are powerful and have big implications for the energy transition. Let me just take three, and again I'm gonna go through this quickly, but know that we will get to it in more detail during the exchange part of this conversation. So when I think about what are three things that are really characterizing the global order of today, this global order of fragmentation, the first I would say is de-globalization. I think there's a really interesting debate that many of my colleagues and I are engaged in about, you know, what direction are we going in, how severe is the shift away from globalization? But I think it's fair to say we are in a period where the integration of previous decade has slowed down and in some cases has even reversed. And this has affected the energy transition in a variety of ways, but in the most obvious ways it has challenged the supply chains that would help lubricate a faster energy transition. If we were designing a global system that was going to advance an efficient energy transition, it would be one where there are, there is a free flow of technologies, inputs, people, ideas, all of that would be unimpeded in an ideal world for the energy transition. And we're moving in an opposite way where we're looking to replicate a lot of these things within different borders. And that of course is going to be less efficient and slower. The second component that we're also well aware of in this new geopolitical environment is great power rivalry. And you know, I don't need to spend any bit of time arguing that this is a new dynamic in our environment because we're all acutely aware of it. And the top corner is just a picture of president's Putin and Xie meeting just a a few weeks ago. We're now in a situation where we have these two powers definitively interested in creating a different kind of global order that minimizes the influence of the United States. How does this affect the energy transition? Well it undermines global institutions And then the lower corner, there's a picture of cobalt. It also this great power rivalry could affect the, the pace of the energy transition by slowing down the distribution of critical materials. This is again, just one example, but as many people on this call will know, China is very dominant in the supply chain of minerals that are required throughout the value chain of energy transition. Electric vehicles, wind turbines, a whole range of things rely on critical minerals, the majority of which are processed and refined in China. And so China has leverage to slow or to affect the pace of the energy transition for geopolitical or other reasons. And then the last element of this current fragmenting geopolitical order I wanna emphasize is the tension between the developed and developing world. And this tension I think really has been with us for some time, really came to a very clear head during covid and the lack of equitable distribution of vaccines around the world. But this tension between the developed world and the developing world has an impact again on the possibilities for the energy transition in a variety of ways. I've included this graph here on the side of the screen just to highlight one, which is very important, which is coal. You can see that in the 2020 global energy mix. Coal is a huge component of it. And then if you shift and look at the other side of the graph at 2050, this is one one, you know, example of a potential global energy mix in a net zero capacity, there are a lot of difference in the scenarios that are floating around, but in every scenario there's one commonality and that is that there is virtually no coal. And so much of that coal that exists in the energy system today exists in the developing world. And getting that coal out of the global energy system is going to be extremely difficult where the relationships between the developed and the developing world are an under such strain. Okay, so that was the second piece of the argument. The third piece is simply, okay, we understand that the global environment is affecting our ability or has the potential to even more greatly affect our ability to transition in the energy sphere. Well what about the energy transition? It's also having an impact on geopolitics. And my argument here is because it's having an impact on geopolitics if left to its own devices, if not thought about consciously, my concern is that the energy transition is going to actually reinforce many of the negative dynamics that we're seeing in our global arena these days. So let me just take those three ones that I highlighted before, the great power rivalry, the de-globalization and the developed developing world tensions, and just explain how I think the energy transition can further exacerbate them. So first on the de-globalization, my sense is, you know, there are a lot of arrows going in multiple directions, but on the whole, the energy transition could well exacerbate or reinforce de-globalization. And that is because right now a lot of the world, a good proportion of the world's trade is in oil and gas international trade. And in a world that is net zero, that energy trade is going to look very different. The International Energy Agency says in a world of net zero energy trade is only about a third of what it would be if we stayed on our current trajectories. So we're going to have less global trade, it's going to look for a different, less global trade in energy, which is a big proportion of overall trade, and that trade is gonna be much more in, in critical minerals than in oil and gas. Another factor really potentially adding to the de-globalization component is the fact that we're going to have to electrify the global economy to a massive extent if we're going to get to net zero. And it turns out that electricity is usually generated within a country's own borders. There's some, you know, export and import of electricity Canada to northeastern United States a little bit here and there. But in general, most electricity is generated within the boundaries of the country in which the energy, the electricity is consumed. So if you compare statistics a few years ago, two-thirds of global oil and gas trade was across international boundaries where only like 3% of electricity was. So again, this is just potentially reinforcing de-globalization tendencies, the great power rivalry. We could spend a long time in this. I'll simply say that the energy transition, if mismanaged, which is almost inevitable, can give fodder to great power rivalry. And our best example, but certainly not the only one, is the war in Ukraine. That energy crisis is not because of the energy transition, but the energy transition contributed to uncertainty over the wisdom of investing in oil and gas and it constrained investment in growing supply of oil and gas. At the same time, the world was consuming, demanding more oil and gas every year. And so increasingly those two things came to tension, supply and demand constraints on supply and no constraints on demand growth. And that put traditional producers of energy and in this case Putin in a position of real geopolitical influence because those energy markets were so tight. And then finally the energy transition I think is really on track to exacerbate the tensions between the developed and the developing world. And here I have on the top a picture that's supposed to symbolize climate migration. The potential almost some would say the inevitability of large climate migrant forces is extremely high. Five years ago, the World Bank thought that there would be on the order of one point, sorry, 150 million climate migrants over the coming decades, these are people leaving their homes due to crises that are exacerbated by climate, whether it's drought or conflict in particular, the numbers. Now, I don't wanna cite the numbers now because they're from a whole variety of sources, but they're well beyond 150 million anticipated, which of course is a dwarfing current, current refugees, global refugees, which are already at an all-time high. And then the bottom is just to, to symbolize a lot of the, the real sense of injustice that is happening in the developing world around the question of how to deal with climate change. There is the unfortunate, irony isn't the right word, but there's the unfortunate reality that the countries that are bearing the worst brunt of climate change already are countries in South Asia and in sub-Saharan Africa. But those are the countries that have historically contributed the least carbon to the atmosphere. So to give you some numbers, the sub-Saharan Africa, again bearing the brunt of climate change, but has only contributed 2% of the carbon emissions in the global environment. Whereas the US has contributed about a quarter, Europe, about a quarter. So you've got, again, a continent that is suffering gravely from these changes already, but having very little responsibility for creating that. It has created a conversation that is very sensitive to hypocrisy and also a real sense of obligation on the part of the developed world that isn't really shared yet widely in the developed world. Okay, so you can see the dynamic that I'm describing. We've got a fracturing global environment, which is exacerbating the challenge of meeting our net zero goals. We have a move to net zero, which is reinforcing some of the worst elements of the fracturing global environment. So what do we do about it? And this is where I get to, to the last part of the argument, which I'm still developing. And again, I welcome thoughts and ideas from this audience now or at any time, but I think it really calls in us to think differently about our approach to the energy transition. And when we think about how we want to get to net zero, how we want to create the path to net zero, we need to think about two things differently than we have. The first is having to do with harnessing the dynamic of the global system. So I would say because climate change is essentially a global problem, it's a transnational problem. We all know carbon emissions don't know borders. It's a global problem. So our instinct has been for decades that we need to solve it through global cooperative institutions. And that's why we built the COP. That's why the UN is so involved because we think this is a problem that needs to be solved through cooperation. Certainly that's the ideal. But the reality is we're not in a cooperative global environment anymore. We were for 40 years, more or less. But we are now in an environment that is deeply characterized by competition. And if we want to get to net zero, we need to figure out how to harness that competition and create pathways for getting to net zero that tap into that competitive environment rather than hoping for a cooperative solution, which is likely to be evasive because it is out of whack with where the world sits these days. The second thing we want to do when we're thinking about the energy transition is we wanna think about it as an opportunity, not just a financial or business opportunity, which I think it is, but also as an opportunity to try to address some of those most disconcerting elements of our geopolitical system these days. So the energy transition hopefully can inoculate us against some of those trends. Let me just do my last slide, which talks a little bit about the specific kinds of policies that we may be thinking about. So first the objective again I talked about is harnessing the competitive dynamic to advanced climate goals and what would this look like? What we're starting to see it first industrial policy, the Inflation Reduction Act, the EU Green Industry Act. All of these things are things that are tapping into a competitive dynamic rather than being predominantly reliant on a cooperative joint global dynamic. And here are challenges. How do we ensure a race to the top rather than a race to the bottom? We also wanna think more about competing for talent. We wanna double down on investments that not just advance climate, but also advanced geopolitical advantage. And we need to find a way to create a competition for investments that are climate friendly in the developing world, I don't know exactly how to do that yet. I'm obviously not the only one thinking about it, but that is going to be where the most progress is going to be made is if we can view the developing world and the opportunities that are there for climate investments as a competitive race rather than as more of a desert and a place to avoid on the pushing back against the powers of fragmentation. I would say there are a couple of things that we want to think more deeply about. One is the tendency that we're seeing to home shore. We wanna bring everything home to protect ourselves against geopolitical vulnerabilities that isn't realistic in a lot of ways, that will reinforce deglobalization in very serious ways. But we might think more about the concept of friendshoring, which is not relying on our own economy to produce everything we need, but relying on a larger set of countries, maybe not the whole globe, but countries that maybe share our values in geopolitical positions a little bit more. We also need to think about when we're making climate clubs, which are groups that will approach climate and putting prices on carbon in particular, when we think about creating those, we need to really make sure that there is an on-ramp, that there is a way to make those clubs more inclusive rather than more exclusive. Because the idea is it should work like the European Union worked, which is essentially saying, okay, we're a club, there's special advantages to being in this club, but we want to expand this club. That's our desire and we're gonna provide you help and assistance to meet the criteria that is required for you to become a member. And then finally, for all of my talk about competition and harnessing that and fragmentation, I don't think we should give up on integration. We still should try to see how we can make exceptions for environmental and climate technologies and goods that might end up being carve outs out of what is otherwise a competitive environment. I have on the slide an environmental goods agreement, which is a trade negotiation that's been ongoing for quite some time that would simply say, let's get rid of tariffs on a certain set of goods that are necessary for the energy transition and we should keep, you know, keep driving on that way. Don't give up on cooperation, just don't depend on it. So I realize that I've given this talk in the shortest amount of time I've ever given it, which means that I have been speaking very, very rapidly. And for that I apologize, but hopefully that has given enough fodder for people to chime in with questions and ideas and again, commentary because this is very much a work in progress and one that can benefit from the thinking of a lot of wise people whom I know are on this call.

- Thank you so much. That was wonderful. We're gonna open the session up now for your questions. To ask a question, please use the hand raising feature, the virtual hand that you'll find on your Zoom tools. And please in Good Kennedy school fashion, keep your question brief and end it with a question mark. You'll be notified via the Zoom's chat feature when it's your turn to speak, and please be sure to unmute yourself when you hear from the staff. And finally, all of us on the call would appreciate it if you could state your Kennedy school affiliation. I'm gonna start things off by asking a pre-submitted question that was shared by Jorge Monte, I hope I am saying your name right, masters of Public Administration 2003. And he wants to know, can you discuss Professor O'Sullivan, how a global shift to net zero will affect the security and economies of smaller countries?

- Sure, thank you Jorge for that question, which is a great question, but one that doesn't lend itself to a quick answer. I'm gonna try to, to be pithy in interest of getting to lots of exchanges. I think the challenge there is there's so many different kinds of small countries and they will be affected in different ways by the shift to net zero. Let me just give a few examples of places that I think have distinct small countries that I think have distinct interests in net zero first and most obviously are like small island nations, which have existential challenges that are coming from climate change. And, you know, this is something that we're, we're all aware of and these, these nations do have out outsize influence in global climate talks because I think they, they galvanize the world to look and say, this is not a marginal issue for many people of the world. So if, you know, and the reality as many people on this call know is even if we do get to net zero, we're not going to be able to stop all the warming. A lot of the warming that is going to occur is already baked into the system. So many of these small island nations are going to have challenges even if we do get to net zero. But obviously their, the stakes they have in success are extremely high. There's another set of small countries that come to mind, and these are oil and gas producing countries. So take the United Arab Emirates, take Qatar, Ecuador, small countries whose economies are, you know, differently but heavily invested in the production of oil and gas. They're going to be affected by the shift to net zero in different ways. And in fact, even as a category, they have very different prospects. A country like the Emirates has made a lot of progress in diversifying their economy. Still oil and gas, oil really is very, very instrumental to their economy. But you know, 70% of their economy is not dependent directly on oil and gas exports. So I think some small countries have been thinking about the need to diversify their economies. Other countries are sort of doubling down on the idea that natural gas at least is gonna be with us for a very long time. You look at the economy of a place like Qatar and still other countries are going to suffer very seriously because their sources of revenue will diminish over time and their institutions have not been strong enough to help them diversify. So again, those small island, those small nations, very different. Finally, just a large category. When you say small nations, I think one way in which many of them might be affected, just I talked about de-globalization and electrification. I think in very small countries it'll be hard to meet all of those needs domestically. So there's likely to be some kind of regional arrangements. I can imagine that if you want to have a decarbonized electricity grid, that if you're a small country, it's highly likely that that grid will encompass many countries in your region. So if you are, you know, say you're in South America, you might end up needing to be part of a regional electricity grid, but that might require you to, to really improve some of your relationships with your neighbors. So it'll have an impact in that way. Anyway, I could go on, but those are the three things that come to mind. Just thinking about the impact on smaller countries, I think you're still on mute.

- I'm sorry about that. It's not zoom unless someone does that. So I'm glad I fulfilled the role. We do have a participant ready to ask their question. Please identify yourself, state your affiliation with the Kennedy School and ask your question.

- Hello, hi Megan.

- Hello,

- I'm Yara, MPA 2022. Very familiar with the topic and thank you so much Megan for this talk. So my question is, you talked about three things that the energy transition and geopolitics are sort of affecting, which are the de-globalization, the great power competition and the, the gap between developed and developing countries. And it can go both ways, like the energy transition can either affect them negatively, but can also affect them positively. If we cooperate, we can reduce de-globalization even with the great power competition. And there is a lot to do in the developing countries that can bring us further together than split us apart. My question is how, in terms of policies, what policies can countries adopt to make the change in the positive manner and affect all these negative trends positively with relation to energy? Thank you.

- Thank you Yara. And I would just like to acknowledge that you were so useful in being part of the research surrounding the geopolitics of energy work at the Belfor Center when you were here just just last year. So it's great to see, see your name and to hear your voice. So I think you're right. I mean, you're getting at the, the entire argument that I'm making here is that I'm describing a dynamic, but I don't think it is inevitable. I think if we are, you know, if we are conscious about some of the policies, it can address not only the need to increase our climate security, but can also drive deficits in our geopolitics. So, you know, in terms of policies, I got at some of the policies in, in the last slide that I think are instrumental here. But, and I, you know, to add to, to the list and to some of you know, what you were intimating at, I think a very big area is the area of how to get financing, adequate financing to the developing world for clean energy projects. And this is something that many, many smart people are grappling with. And I do feel like the conversation has changed for the better over the course of the last year. I do think, you know, a couple of years ago it was all about, you know, how much public money can we get to go to the developing world to fund climate projects? A little bit of like, can this be a response to China's belt and road initiative? Now there's a sense, yes, there's an important role for public money, but that there's no amount of public money that's gonna be sufficient to fund the, the level of investment that's needed in the developing world. We're talking about more than a trillion dollars a year and potentially much more than a trillion dollars a year into the clean energy economies of the developing world every year out to 2050. And so there's no government that's gonna provide that. It will need to be done by the private sector. So the much more interesting and practical and potentially beneficial conversations are about this blended energy finance and how to use public sector money to de-risk some of the investments in the developing world. Because right now there's a lot of money, if you have a clean energy project in Europe or in California or somewhere in the United States, there's a lot less money if you have a clean energy project in the developing world because of the, the additional risks that often go along with them, whether they're currency risks or geopolitical risks. And so, you know, using public money not as the main funder but as a catalyst for private money, I think is, it has to be the way to go. And I'm hopeful that the global conversation is moving in that direction and you know, we have new leadership coming into the World Bank that I think really understands this and we'll make it a priority.

- Thank you, we have our next question. Please identify yourself and state your affiliation and ask your question.

- Right, now, I'm Lehmann Li, Kennedy School, MPP. You actually point out about the energy industry emphasizing natural gas as almost like a bridge to clean energy economy, but as many people may know, natural gas is one of the largest contributors to the emissions of methane and methane is over 80 times, has over 80 times the effect on global warming as carbon dioxide. How would you reconcile this geopolitical need to increase natural gas with the energy climate effect of methane emissions?

- Great, another really good question, and I don't know your background Lehmann but if you have more color to add to my answer, I welcome you to do that because you point out two realities about natural gas having a substantial role in the energy transition, maybe less so in the final energy mix, but still, I mean really any scenario looking at a global net zero energy mix has a significant amount of natural gas. So there's two things I would say in terms of the prescription one, there's, there's the reality that carbon capture is a big part of any successful scenario, literally. This is again, across multiple scenarios. So carbon capture is going to need to be better developed and that the, it's gonna have to be commercialized if we're going to be able to reach net zero. So there's some of the natural gas that will need to be coupled with that going forward. But the other piece, which I think you mentioned the methane in particular, which is really interesting and very important for the reasons you point out about its potency. The good news is that the world has made really interesting and significant advancements in how we identify and monitor methane emissions, which of course are invisible and there are well-known steps that can be taken to diminish methane. So you can still produce natural gas, but you can diminish the, the methane associated with it pretty effectively. And I actually was speaking with a colleague just earlier this week, I'm trying to remember what date is it Friday earlier this week talking about how one provision of the IRA is actually putting a price on methane emissions and that this could be the basis for some kind of global effort to create, I mentioned this climate club idea, but to, to create basically a band of countries that penalize other countries that don't tackle their methane emissions. And if that's the case and, and if that is coupled with assistance in technology and other things for getting down methane emissions, then this is potentially an effective way to reign in methane emissions. But you know, at the same time, not necessarily stopping some of the natural gas production that will be required at least for the transition.

- Thank you, Jill. I believe you are the participant ready to ask your question next. Please identify yourself, state your affiliation and ask your question.

- Jill Wagner, MPA too back in the day when it was called that, and I'm really following up kind of on this methane question, but on the bigger question of trash, because I live in Minnesota, have family down in Iowa and we are really doing the happy dance over the fact of all of these windmills producing, you know, renewable energy and adding income for farmers in, in this area. That said, they're already started these wind turbine graveyards where they put the turbines that have been created and are no longer useful but they've got like a 300 year decomposition kind of timeline, so what are we doing about the trash? Because also in this neck of the woods we have landfills that are throwing off methane gas kind of thing. But no one's really, in my opinion, you know, we've got a trash issue in the long run, not necessarily today, but we have to address it today. So what's your insights?

- Yeah, thank you Jill. It's at this point in the conversation that I've decided to embrace, you know, the idea of acknowledging that we're wandering quite far from my expertise on geopolitics, which is not to say that this isn't a really important issue, but I don't, I don't have particular insights except in one regard. There is increasing talk and I think a real necessity as you point out to figure out what the role of recycling is in the energy transition. There are lots of imperatives that are moving people in the direction to really try to make investments into this. One is what you're describing the, I like how you put it with mill graveyards, but that, that's certainly, it's a very real problem. The second is this critical mineral piece that I mentioned and if we can somehow make these minerals less of, you know, finite commodities and ones that can be recycled, that will alleviate a lot of the geopolitical vulnerability that we feel if in fact supply chains continue to be dominated by one country or another. I think there's a scope for recycling to solve both of these kinds of problems. Not entirely, I would say, you know, off the margins of it. But you know, the last thing I would say, Jill, you know, again going to higher level than, than being as prescriptive as I wish I could be for you, is the reality that 10 years ago when we were talking about the energy transition, there was not as much of an appreciation that not only were there going to be geopolitical considerations tied to it, but that also there are negative externalities with going green, right? That there are a lot of the problems that we've struggled with in terms of permitting pipelines and why permitting pipelines can be so politically difficult, you know, are so true for permitting windmills and solar farms and other things too. And so, you know, coming up with the problem of waste, you know, this is something that is not just about wastewater from fracking, it's also about wastewater from renewable or, or sorry, waste from renewable sources. So a lot of the issues that people thought would be solved by a transition in net zero have just come back to confront us in just in different forms.

- Thank you, that's really helpful though, that at least it is maybe not front and center on the table. It is on the table.

- Yeah.

- Thank you so much. I wanna invite Eric, please state your affiliation and ask your question.

- Yeah, thanks very much Eric Mielke, who I'm a MPA from 2010 and a former research fellow in the Belfor center as well. So I think a lot of things have happened in the last 12 months and it's easy to be pessimistic when you look at the geopolitics. But actually on the policy front, I think there's been a lot of progress and I was particularly intrigued by your reference to these sort of global rates to the top on the policy front. And I'm keen to hear what you think, whether that was something that was by design or as it seems to me perhaps a little bit more by accident and by no means given. And I'm particularly keen to understand what you think in terms of this continuing and expanding more geographically and what are some of the risks that it might reverse. So quite a complex question. I hope it makes sense.

- Okay, so the first piece, you know, I'll agree with you on the, on the point about there's been a lot of progress in the, in the last year on this particular issue. I think as I mentioned at the beginning, some of the initial reactions to the energy crisis I think moved us away from the energy transition. But I think over the medium and long term, we'll look back at this year and you know, this definitively say this was an inflection point in the energy transition because of the, you know, just the realization of the geopolitical vulnerabilities that came with the dependence on Russian energy has, you know, spurred policy revisions that I think are going to be lasting and very substantial and in the United States. I think that this will play out over a period of time, but it has been very useful and now there's a geopolitical imperative to the energy transition that didn't exist in the same poignant way before and that at least in the United States tends to bring in a more conservative, more republican supporter in the mix that has often not been an advocate of a faster energy transition. So I think it's gonna change the politics in way that are ways that are going to be helpful. Your question about is this, you know, was there was the race to the top accidental or intentional? I would say one, and again, I'm gonna try to be a little pithy here knowing we still have some questions. I'd say one we don't yet know if it is actually going to be a race to the top. I think there's some good indications that it will be, but we don't yet know. There's still a lot of things that need to play out to ensure that's the case. And two, I don't know, it's hard to say, so this is only my one person's judgment, but my sense was there wasn't the full appreciation of the two political dimensions of the IRA when it was passed. I mean, you had President Biden go to Sharm el-Sheikh in November right after the passage of the IRA, really thought that he was gonna show up there in the world, was gonna congratulate him on finally, you know, shepherding a very significant piece of climate legislation through the United States Congress and instead found everybody angry at him thinking that it's not enough or that it's gonna harm their own economies or this or that. So I think, I think if you know that if it does end up being a race to the top, it won't entirely be accidental. But I think the, you know, coming right out of the blocks, there was a big surprise that this was going to be met by different actors as negatively as it has been met. And lastly you had a three part question lastly about how, how the war may play out in a way that's going to influence the energy transition. Again, you, it sounds like you may be from Europe, so you may have an even better sense of this than I, but my feeling is I'm still concerned about the next 12 months, that's the timeframe you mentioned that a lot of the energy challenges that Europe met in a way that exceeded expectations are going to represent themselves in the coming winter in a way that are going to be even more difficult to tackle. And I could go into this in great length, but essentially, you know, president Putin or Putin, I don't even feel like I wanna call him president, but Putin, you know, really I think still believes that the unity of Europe is something that is not a given and the energy piece is going to be difficult even if Europe has another warm winter in part because it won't have Russian gas to reconstitute its inventories as it actually did in 2022. In part because last year when Europe was competing heavily for global LNG and we did see this huge shift where Europe went from, you know, just constituting one fifth of global LNG trade to over a third in a one year period, it drew LNG, it liquified natural gas away from many parts of the world that ended up suffering South Asian particular, but it wasn't competing with China because China's economy was growing at a slower pace than it had in decades. That's gonna change this year. Now there's going to be, it's a year that very little additional LNG capacity is coming online, Europe's gonna be competing for it and so is China. And so I think that is going to make it even more difficult and some of the things that really haven't made it, at least into the American news in the next couple weeks are going to change. Germany in part was able to get off of Russian energy in a spectacular way, completely unanticipated in part because it kept on its nuclear power. But in the next two weeks, by April 15th, the agreement is that it's going to shut off those nuclear power plants. So there are just going to be continued challenges that I think won't allow us to declare this, this particular challenge associated with war is one and done.

- Thank you so much. I know we only have a few minutes left. I wanna quickly get in one last question, Monte, the floor is yours. Please ask your question.

- Mon Monte McMurchy, Toronto, Canada, HKS alum decades ago. My question comment, transformative versus transactional are, our social, civic, civil, political, economic, political publics able to ameliorate? And if so, why? If so, why not? And it goes back to your cardinal comment in terms of Britain shifting from coal powered battleships to oil, which changed things in consequential ways, not even known by then the, the Lord or of the admiralty. Thank you.

- Great, thank you Monte for that question. So you're asking like do I think our societies have the capacity to transform to the extent that's required? If I get you correctly,

- Correct.

- Yeah. You know, I would not be at HKF if I were not an optimist. So I am an optimist. I believe in the power of policy. I believe in civic action and I think that's something we're gonna see more and more of around this issue. And you know, it, you know, this is not a fantastic moment for my country's politics, but I am a believer in America's ability to tackle its toughest problems and to regenerate itself. And I think this is going to, you know, this is one of the challenges, but I think there are so many upsides to this that if we only look at it from a risk perspective, we're missing the full picture. It goes back to what I was saying about, or actually I was saying to someone earlier today about just the interdisciplinary nature of working on this issue that makes it, I think so special, but so conducive to the work that we do at the Kennedy School because we need to bring in so many different perspectives in terms of transformational Monte, you said that you were a student a long time ago, which is, it's still possible you were one of my students 'cause I now feel like I've been here a long time. But I would say the shift in our student body around these issues really suggests to me that there will be a shift in American politics as a result. Whether it will come in time enough for us to meet the goals that the world has espoused on a particular timeline, I think is very much open to question. But this, as I've tried to describe to Republicans who I worked for, I worked on Governor Romney's presidential campaign and Governor Jeff Bush's campaign, this is not a republican democratic issue. This is a generational issue and republicans who don't appreciate that are risking that the party will be a party of older people and eventually no people because this is an issue that young people care about in a way that it trumps you know, many, many, many, many other issues. And so a party and a, a politician that doesn't address this and doesn't take it seriously and doesn't take the need for transformation seriously is not one that I think is gonna have a long-term future in our country. So I am optimistic that we will find ourselves able to make this transformation, but I think it's gonna be really hard and it's already been hard and I think we're just really beginning

- Thank you for that. And thank you for this wonderful call. We can see how lucky we are to have you teaching our students and leading our research. Professor O'Sullivan. I wanna thank everybody who called in today to apologize to the folks whose questions we didn't get to and give a very, very big, huge thank you again to Professor O Sullivan. This was the last Wiener conference call of the academic year. So we will wish you a very good summer and please watch your inboxes for the fall invitations and join us then. And please also check the Wiener conference call website for the schedule. We very much look forward to having you back with us. Have a good summer everyone.

- Thank you everyone. Thank you. Have a good weekend.