Electricity
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PESD visiting scholar Pär Holmberg from the Research Institute of Industrial Economics (IFN), Stockholm led this Energy Working Group talk.

Holmberg discussed (1) the multi-unit auction used in wholesale electricity markets where producers sell their electricity to retailers and large consumers, (2) a theoretical model of producers' strategic bidding behavior and (3) how bids are influenced by contracts and the market design.

The presentation was based on his paper "The Supply Function Equilibrium and its Policy Implications for Wholesale Electricity Markets", which was co-authored with David Newbery (University of Cambridge, UK).

 

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Pär Holmberg is an Associate Professor in Economics and has a PhD in Electric Power Engineering. He is working at the Research Institute of Industrial Economics (IFN), Stockholm, and is an associate of the Electricity Policy Research Group, University of Cambridge. Pär's research focuses on wholesale electricity markets, especially strategic bidding behavior in electricity auctions.

Encina Hall East

Pär Holmberg Speaker Research Institute of Industrial Economics (IFN), Stockholm
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This conference brought together more than 100 participants from all segments of the energy industry. 

Frank led a panel discussion on the state of Financial Transmission Rights (FTR) and Virtual Trading in wholesale electricity markets and gave a presentation on the design of structured energy hedging instruments for retail electricity consumers with interval meters.

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Reducing carbon-dioxide emissions is primarily a political problem, rather than a technological one. This fact was well illustrated by the fate of the 2009 climate bill that barely passed the U.S. House of Representatives and never came up for a vote in the Senate. The House bill was already quite weak, containing many exceptions for agriculture and other industries, subsidies for nuclear power and increasingly long deadlines for action. In the Senate, both Republicans and Democrats from coal-dependent states sealed its fate. Getting past these senators is the key to achieving a major reduction in our emissions.

Technological challenges to reducing emissions exist, too. Most pressing is the need to develop the know-how to capture carbon dioxide on a large scale and store it underground. Such technology could reduce by 90 percent the emissions from coal- fired power stations. Some 500 of these facilities in the U.S. produce 36 percent of our CO2 emissions.

But these plants aren’t evenly spaced around the country. And therein may lie the key to addressing the political and technological challenges at the same time. If the federal government would invest in carbon capture and storage, it could go a long way toward persuading politicians in every state to sign on to emission reductions.

I’ll get to the specifics of the technology shortly. But first, consider how the costs of emission reduction fall hardest on certain parts of the country: A carbon tax levied on all major sources of released CO2, the approach favored by most of the environmental community, would make energy from coal-fired power plants cost more. To make a significant difference, such a tax would have to amount to $60 a ton.

Midwest Carbon Footprint

As a result, gasoline prices would rise 26 percent, and natural gas for household usage by 25 percent, nationwide. Rich and urbanized states could probably tolerate this. The West Coast, with its hydroelectric power, and the Northeast, which relies to a large extent on natural gas, could most easily absorb the associated increase in energy costs.

But the price of energy in the rural, Midwestern states would more than quadruple because of their large carbon footprint. Midwesterners get most of their electricity from coal; they drive relatively long distances to get to work, shopping and entertainment; and rural homes and buildings use more energy for heating and cooling.

One carbon-tax proposal now being considered is a “cap and dividend” plan that would send the tax revenue back to all U.S. citizens equally. But that would also favor the rich states that are less dependent on driving and coal.

It would be more helpful for the coal-dependent states if the federal government would use revenue from a carbon tax to help develop the technology for carbon capture and storage.

And that brings us to the technological challenges: No plant of any size with the capacity for CCS yet exists, but it has been demonstrated to work at small scales. Three different processes for capturing the CO2 are being tested, and scaling them up for 500-megawatt or 1,000-megawatt facilities should be possible.

For two years, the Mountaineer plant in New Haven, West Virginia, has been capturing and storing a tiny amount of its CO2 -- 2 percent of it -- but plans to build a full-scale carbon-capture plant here have been abandoned. Because Congress has dropped any idea of imposing a tax on carbon emissions, the investment doesn’t make sense.

A large plant in Edwardsport, Indiana, was being constructed with the expensive gasification process that makes it easy to add carbon-capture facilities, but it, too, has been shelved.

China may finish its large demonstration carbon-capture plant before the U.S. gets any model up to scale. Others are planned in Europe, and a small one is operating in Germany. This plant has been unable to get permission for underground storage, so it is selling some of its CO2 to soft-drink companies and venting the rest.

Subterranean Storage

Storing captured CO2 is eminently possible, too. For 15 years, the Sleipner facility in Norway has been storing 3 percent of that country’s CO2 underneath the ocean floor, with no appreciable leakage. Algeria has a similar facility, the In Salah plant, operating in the desert.

One storage strategy under consideration in the U.S. is to inject captured CO2 into huge basalt formations off both the east and west coasts. Inside the basalt, the carbon gas would gradually turn into bicarbonate of soda.

There are other ways to dispose of carbon dioxide. It has been used for enhanced oil recovery for many decades without any danger, and has been effectively stored in depleted oil reservoirs. (The gas is dangerous only in high concentration.)

It remains uncertain how much of the captured CO2 might leak during storage. Even if this were as much as 10 percent, however, it would mean that 90 percent of it would stay underground.

As CCS technology develops, it will have to be made more efficient so that it uses less energy. As it is, the capture phase is expected to require that a power plant burn 20 percent to 25 percent more coal than it otherwise would.

The technological challenges may explain why energy companies haven’t lobbied for subsidies to develop CCS. The electric-energy sector isn’t known for innovation and risk- taking. Just look at the U.S.’s outdated power grid.

But the federal government could pay for the subsidies through a tax on carbon. Such a levy would have other advantages, too: It would raise the cost of energy to reflect the damage that burning coal and oil now do to the environment, and spur the development of renewable sources.

If states with large carbon footprints can’t accept such a tax, the CCS subsidies could be paid from the general fund. The cost to build coal-fired power plants with CCS technology is estimated to be about $5 billion to $6 billion -- about the price of a single nuclear power plant. The total price for the U.S.’s 500 large plants would be $250 billion. That’s as much as the planned modernization and expansion of our missile defense system over 10 years.

But it would slash our carbon emissions by at least 20 percent. There is no other politically possible way to cut CO2 as much, and as quickly -- in a decade or two. And devastating climate change is far more likely than a missile attack.

U.S. investment in CCS technology could also induce China and Europe to follow suit. And this would allow the world time for renewable-energy technologies to mature -- to the point where we could do away with coal burning altogether.

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Charles Perrow

Assistant Professor at Carnegie Mellon University

Hamburg Hall Office 3016
H. John Heinz III College
Carnegie Mellon University
5000 Forbes Ave.
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PhD

Akshaya Jha joined PESD in the summer of 2010 and left PESD in the summer of 2015. He is currently an assistant professor of economics and public policy at Carnegie Mellon University. His current fields of interest include Energy/Environmental Economics and Industrial Organization, with Econometric theory as a secondary field.


At PESD, Akshaya performed economic analysis regarding the determinants of market interaction in bid-based electricity markets using data from a variety of settings. He is currently examining the effects of output price regulation on input fuel procurement for U.S. electricity generation. In other work with Frank Wolak, he is also quantifying the impacts of financial traders on California's wholesale electricity markets.

He received his Bachelors of Science from Carnegie Mellon University in Economics and Statistics in 2009.

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Stephen Smith
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Prince Moulay Hicham Ben Abdallah was interviewed in the September/October issue of the French journal Le Débat, providing his unique insight on the Arab Spring events as a member of the Moroccan royal family and scholar at the Center on Democracy, Development, and Rule of Law. Ben Abdallah candidly discusses the dynamic political and social underpinnings of the revolutions and makes dramatic predictions about the potential for democracy to take root in Arab states. The bottom line - nothing will go back to the way it used to be.

Interview by Stephen Smith

This is translated from the French version that appeared in the French journal, Le Débat.

There is no one better able to provide a more informed perspective on the upheavals in the Arab world than Prince Moulay Hicham ben Abdallah El Alaoui. The first cousin of the King of Morocco, Mohammed VI, and heir to a long Pan-Arab line through his Lebanese mother, he is also a research fellow at Stanford University's Center on Democracy, Development, and the Rule of Law in California. In 1994, he established the Institute for the Transregional Study of the Contemporary Middle East, North Africa and Central Asia at Princeton University, where he went to college. He also directs the Foundation for Social Science Research on North Africa and the Middle East which bears his name. Born in Rabat in 1964, Moulay Hicham settled in the United States in 2002 for the reasons he explains below.

Stephen Smith. – You bring a number of qualifications to your views on the Arab world: as a member of the royal family of Morocco, as the "red prince" either loved or hated by the media, and also as a Stanford University researcher and sponsor of a research foundation focusing on North Africa and the Middle East. So tell us, on behalf of whom and in what role do you speak?

Moulay Hicham. – Nobody invents himself. I belong to Morocco's ruling family through my father, Moulay Abdallah Ben Mohammed El Alaoui, and I am very proud to be part of a monarchy that joined with the people to put an end to colonialism. Through my Lebanese mother, Lamia el-Solh, I belong to one of the Arab world's great nationalist families, a family planted across the entire region. But my "familiarity" with the Arab world does not come just from my parentage. After I finished Princeton, I pursued research on transitioning from authoritarianism to democracy. At present, I am a Consulting Professor at Stanford. In short, it’s a whole package. I grew up in the palace alongside my cousin, who became King Mohammed VI. I spoke up to King Hassan II very early on, while learning a great deal from him, and while accompanying my father – when he served as his brother’s personal representative– on diplomatic missions abroad. After my uncle died, I continued to maintain publicly that the Makhzen -- that is, the patronage network that effectively runs Morocco -- needed to perish for the monarchy to thrive and serve Moroccans. I also came out against the caliphate, that is, against a monarchy under the "Commander of the Faithful," which mixed political and religious prerogatives. I still believe and defend all of that, both because of what I am and because of what I have made of myself. Of course, no one is self-invented. But I am also the product of my journey and of my study. One can be whole, at least I hope so.

S. S. – What does the "Arab Spring" mean to you? And, for starters, is the right name being used?

M. H. – I'm not sure it is. I would rather talk about an "Arab Awakening," because spring is a season, thus ephemeral and cyclical. And I do not believe the Arab world can reverse course and go back to sleep. But no matter what term is used, we need to get rid of culturalist prejudices about "the Arabs” and ahistorical readings of Islam. Ever since Leibniz and, following him, Ernest Renan, spoke of the fatum mahometanum, we were not far from believing that an immutable form of despotism was built into the genes and religion of the Arab world. Good riddance! An oppressed Arab is first and foremost someone who, like any other oppressed person, seeks to become emancipated. Of course, we need be intellectually honest: if a tidal wave of democratization is breaking across the Arab world, we have to explain its relevance within the context. If it isn't "Arabness" mixed with Islam, what is it? I don't have a ready-made answer. No doubt, it's a cluster of factors, including a particular kind of political archaism/throwback arising, first, from colonization, followed by a decolonization defined by the "catastrophe" – the nakba – that was the establishment of Israel in Palestine; there is also an economy based on oil rents, which sharpen geopolitical rivalries and foster the betrayal of the elites. Add to that a generous helping of "Orientalism," and we're probably not far from a stew simmering until the lid blows.

S. S. –For some time, everybody has been eating humble pie about having spoken, in the past, about the "Arab street," a term one now sees as a mere culture-based prejudice. Isn't that paradoxical, right when so many Arabs are actually taking to the streets?

M. H. – Yes, it turns things on their head, but I can understand how people would be ready to abandon the cliché about the sleeping volcano that the "Arab street" was supposed to be. That’s true for us as well, who see the Arab street – al shariai al arabi – as the opposite extreme from the Rais, king, or omnipotent "sultan." The street now needs to turn into public forum -- that is, a public opinion that doesn't sweep away everything in its path, but rather expresses itself in a steady, organized fashion, because, henceforth, governments will have to take into account the will of the governed. To stick to the metaphor: the devastating flood must become a canal that irrigates democracy.

S. S. – For the time being, the street does not speak the language of institutional politics and expresses itself instead in the – moral – register of indignation. In concrete terms, how can "the Dignity Revolution" be achieved?

M. H. – Politics, for its part, needs its share of dreaming. When people want to create a new order, they don't use hackneyed words. The vocabulary of socialism and liberalism cannot convey the dream spilling into the streets of the Arab world – nor, in fact, can the language of religion, which is not the least we have learned from the events taking place since the start of the year. With these events, we enter the field of indignation or, rather, the of a dignity to be restored after a long series of degradations: endless reigns, predatory police states, trampled rights, and mock kingdoms, not to mention the doublespeak about the Palestinians, our favorite victims, whom our dictators have used as a pretext to turn around and victimize us. Dignity – karama – has become the new value to which we refer. What could be easier to understand? Of course you are right to say that taking to the streets over and over again is useless if these marches do not lead to the halls of power in the end. But how? In Tunisia, they are in the process of seeking the way, day by day. In Egypt, the army has joined the people, but we still don't know if it was to confiscate the Tahrir Square victory or bring it to completion. In Syria, demonstrators are confronting part of the armed forces, with the possibility of a widespread insurrection. In Morocco, the February 20 Movement – and it may not be by chance that the common denominator is limited to a date... –, the slogan "Freedom, dignity, social justice," and mobilizing "until all demands are met" need to move from speech to action, because telling the truth is not enough to bring about change.  Finally, Libya is a case apart and, I fear, will remain so, due in part to outside intervention. Is it possible to impose democracy manu militari, By external intervention, without, perforce, betraying the message of popular sovereignty being proclaimed?

This is a question that can no longer be ducked, ever since Iraq was invaded in 2003 under the banner of democracy as a corollary of regime change – however harmful the regime brought down under such circumstances. In Libya as in Iraq, this raises the issue of national unity. Unfortunately, bombing "Gaddafi's country" to turn it into a democracy, may well split Libya itself back into its three former components: Tripolitania to the west, Cyrenaica to the east and Fezzan in the great desert south.

S. S. – Through an extreme simplification harking back to Lenin's definition of communism in 1920's Russia as "Soviets plus electricity," the Arab Spring has been explained by the press as "social networks plus youth." So, first of all, what do social networks have to with a revolt for democracy?

M. H. – It is clear what reporters mean by that: the cyber-revolution would favor democracy because social networks are per se "democratic," allowing anyone to make connections while eluding the usual gatekeepers, starting with reporters themselves, and outwitting the censors. Only, it's not that easy. First, access to the Internet and, even more so, to social networks such as, for example, Facebook, is still far from universal in the Arab world. While 40% of Moroccans and a third of Tunisians have access to the Internet, only 21% do in Syria, with 10% in Yemen. A quarter of Tunisians use Facebook, but only 9% of Egyptians, and so few Syrians and Yemenis that they are statistically insignificant. Next, in particular, while digital media function "democratically," their content is not necessarily democratic – and nor, therefore, are the results of networking at the electronic speeds that dazzle all of us. Since 2009, Harvard University has been doing an in depth study on the Arab blogosphere – titled Mapping the Arabic Blogosphere: Politics, Culture, and Dissent – by indexing some 35,000 sites and examining 4,000 of them closely. The authors, in their conclusions, warn against the illusion of a "techno-democracy." For technology changes the rules of the game, but does not predetermine its winner. History is also instructive: nobody would claim that the telegraph lit the fuses all at once in Tunisia, Libya and Egypt in 1919, or that The Voice of the Arabs – the famous short wave radio station in Cairo – explains the Pan-Arabism of the 1960's. Technology merely served – efficiently – to relay Woodrow Wilson's fourteen points for "making the world safe for the democracy" in the first case, and in the second, Nasser's charisma. And nothing would have happened if local players had not seized upon the ideas of either of them.

S. S. – So new media are a condition rather than a cause. And what about youth or, more specifically, the age pyramid of a given population?

M. H. – A country's demographic profile is significant but, once again, things are not so simple. Contrary to what is being said and written pretty much everywhere, the Arab world's population – except for the Gaza Strip and Yemen – is not exceptionally young, at least not relative to populations south of the Sahara. So, if the number of young people – chebab – was in and of itself a condition favoring the advent of democracy, sub-Saharan Africa would be a paradise of the popular will. Of course, there is a large number of youth in the fifteen to thirty age group in the Arab world, the result of a very high birth rate until the end of the twentieth century that is now arriving on the job market – where it can't find work, at least not work of adequate quantity or quality. Yet the same age group is much larger in sub-Saharan Africa, where, let it be noted, the World Bank presents this profusion as a future "demographic bonus" – this after having promised a  “demographic gift” to the Arab world twenty years ago. However, no matter how precious this human capital may be in absolute terms, it only becomes a “gift” or “bonus” if it can become invested in a society. Which takes us back to governance. Without good governance, the young find themselves out of work or, worse, lapse into violence. While the young need democracy to thrive, it is not a given that democracy prospers in a country with a particularly young population. In fact, studies show pretty much the opposite: you need a certain demographic maturity for democracy not just to take hold, but to last over the long term. Tunisia has the structural advantage of being a country with a median age of twenty-nine. All other things being equal, Tunisia has a greater chance of becoming a lasting democracy than, let's say, Yemen, where the median age is only eighteen. For the simple reason that it is not easy to run institutions when eight out of ten inhabitants are under thirty and expect opportunities to “succeed” from their elders, who are few in number. Lastly, I would like to mention that the UNDP’s excellent reports on human development in the Arab world focused on three structural impediments: not just poor governance, but inappropriate education of our young and the – far from resolved – issue of the emancipation of women. In the present euphoria, let us not forget what we had already understood while the horizon was still gray.

S. S. – You just mentioned sub-Saharan Africa. Do you find it striking that commentators on the “Arab Spring” are far more likely to mention the revolutions of 1789 and 1848, or the fall of the Berlin Wall in 1989, rather than the democratization wave south of the Sahara twenty years ago, after the end of the Cold War?

M. H. – Any comparison can be enlightening. However, Westerners tend to seek parallels in their own history, which they continue to view as the universal model, and the Arabs, who readily complain about discrimination, would be offended to be told they were following Black Africa... However, history does not repeat itself. But it would be productive to ask why the end of the Cold War allowed the liberation of sub-Saharan Africa, but not the Arab world? The importance of petroleum? The shadow cast by the Israeli-Palestinian conflict? Whatever the reason, we have a lot to learn from democratization south of the Sahara. Political pluralism is often limited to reducing the number of single party states, so to speak, and only a handful of countries have become fully democratic, while pseudo-democracies prevail in most States, with presidents serving multiple terms and popular elections that are decided in advance. At the other end of the spectrum, a handful of countries have even experienced, after their spring of democracy, an autumn of restored authoritarianism.  It would be reckless to deny that there is also a risk of unfinished, and even wayward or misguided transitions in the Arab world. Finally, the sub-Saharan experience serves as a warning about the fable of the bad prince and the good people. It’s a fable. Democrats are few and far between, not only at the helm of our States, but in the opposition, parties, associations, and bases as well.

S. S. – Concerning geopolitics at the end of the Cold War: the “Arab Spring” is a odd assortment of homemade revolutions. Anything extending beyond borders tends to lose speed, from Pan-Arabism to Jihadism, not to mention the last hegemon which, for a long while, served as the greatest foil, namely America. Even the centrality of the Palestinian problem seems to be in doubt.

M. H. – The Palestinian issue will come galloping back and take center stage again, but not as the political toy, not to say diversion, it once was. This said, I agree that nationhood, while a product of colonization, is raising its standard. Literally, too, because people are demonstrating everywhere under their national colors. Although not as a chauvinist-type of nationalism but, rather, a patriotism reviving the social bond whittled away by decades of authoritarianism. They are “making” community, but not a Pan-Arab or a religion-based, borderless community, and even less so an international jihadist one. Ossama bin Laden was politically dead; the Americans didn’t need to kill him. Political Islam, however, is more complex: the fundamentalists’ purpose was to target the nation-state they and might someday find a way forward to participation, if a consensus were built around democratic rules. Many Islamists – in Tunisia, Egypt and no doubt also Morocco – understand perfectly well that nobody is looking for a new authoritarianism, and that what they have to offer needs to be adapted to the political market. Reconverting the Islamists will be all the easier because in order to resist repression, they have often joined social networks for solidarity. I don’t want to speculate idly, but it is not out of the question for the Arab world to experience a Muslim democracy, just as Europe experienced, and continues to experience, a Christian democracy.

S. S. – Meanwhile, the dustbin of history is filling up helter-skelter: Pan-Arabism, global jihad, a hypnotic fixation on the West...

M. H. – Not everything ends up in the dustbin, but it is true that “all-inclusive” projects no longer hold an appeal. Pan-Arabism is not dead. To wit: we are presently experiencing a democratic Pan-Arabism, both joyfully and painfully. But historical Pan-Arabism is now seen for what it was, that is, a quest for unanimism, and, therefore, a false quest for modernity. Nevertheless, let us not forget the contexts in which past ideologies emerged. Pan-Arabism was a response to colonialism’s dividing to conquer, just as, later on, petroleum served as an economic weapon for resisting the dictates of the Cold War. Lastly, borderless jihadism in its Al-Qaeda guise, and what I would call the “Occidentalism” of the Arab world, were also branded by a dialectics of enclosure. Orientalism caricatured us – so we caricatured back. As for Ossama bin Laden’s jihad, would it have taken on the same dimensions if the Global War on Terrorism – George W. Bush’s GWOT – had not turned it into something larger than life? I believe these are legitimate questions that we can now ask.  But, in any case, we are no longer wedged between the authoritarian anvil, on the one hand, and the Islamist or American hammer, on the other. The Arab world has a triple liberation in its sights. It is no longer alienated by Al-Qaeda's terrorism or the political agenda of the neo-conservatives, who have lost their power in Washington. The Arab world has also begun to rid itself of its autocrats and, paradoxically, it is finally able to acknowledge that foreign domination may not have been so much the cause as, to a great extent, the consequence of its weakness.

S. S. – You have already alluded to that: the armed forces are playing a central role in bringing democracy to the Arab world.

M. H. – Indeed. However, there are a multitude of possible outcomes. First, is there any army capable of influencing the course of events? In Tunisia, the army, compared to the Ministry of the Interior and its 155,000 agents, looked like a lightweight. Next, the army needs to be either professional, consist of conscripts, or backed up by paramilitary units, each of which would lead to radically different outcomes. In Egypt, a nineteenth century witticism about Prussia raises the question of whether it is a state with an army, or an army with a state. In any case, the Egyptian army is also an important economic player. The wheeling and dealing of its top officers will affect the on-going transition. In Syria, the Republican Guard, on the front lines against the protestors, is dominated by Alaouites, that is, by the minority in power, unlike the rest of the Army, whose composition reflects the majority in the Syrian population, over three quarters of whom are Sunni. Finally, in several Arab countries, the army is not one institution among others, to which a new role could easily be attributed in place of its old one. I am thinking, for example, of Algeria, as well as Jordan. In both cases, the army is an historical component of the state. One cannot be conceived of without the other. It is a given that they form an indivisible whole. Obviously, that complicates the equation.

S. S. – Is this why until now Algeria has remained on the sidelines of the present movement?

M. H. – Probably, but there are at the least two other strong reasons. First, the nine years of bloody civil war, between 1992 and 2001, remain piercingly fresh in everyone's memory – after that kind of shared trauma, you don't take risks. Second, as in most countries of the Arabian peninsula, petroleum money plays a buffer role. Petrodollars are a way to pay off discontent, at least in part, for a certain time. Until when? You're quite right to specify "for the time being."

S. S. – In non-petroleum producing countries, the major stumbling block is the economy. To the protestors, democracy epitomizes prosperity. The "Arab awakening" you mentioned earlier is likely to be hard.

M. H. – Right, because the link between public liberties and economic performance is not one of cause and effect, even though I think that in the end only economic actors freed from repressive constraints can and will want to give their best. However, in the short-term, the upheaval of the old order and the ferment peculiar to transitions will inevitably disrupt economic life. Tourists go elsewhere and investors remain on the sidelines while waiting for things to sort themselves out. At the same time, a rise in openly expressed demands weighs on the costs of production. Finally, you have to be realistic relative to the discourse of the industrialized countries. Not only has their support of democratization of the Arab world sometimes been hesitant but, in addition, it will remain verbal. There will be no equivalent to a Marshall Plan. In the midst of a financial crisis, when 20,000 Tunisian refugees were all it took for the Schengen area to close in on itself, what Western office-holder is going to risk making austerity worse in his or her country to promote Arab democracy? I would add, in all sincerity, that I am only halfway sorry about it, if at all. For our countries, this is a blessing in disguise, that is, an unintended benefit. As long as our institutional capabilities remain limited, a "democracy premium" would produce the same effect as any other source of income: it would feed corruption. In fact, this is the only thing I don't want to see democratized... Egypt, which has received forty billion dollars from the Americans since 1978 as a "separate peace dividend”, is a good illustration of my fears.

S. S. – In your country, Morocco, you are more than a committed observer. You are part of the problem. Do you also hope to be part of solution, or even the solution itself?

M. H. – Neither. Besides, I don't really see how I could be part of the problem, except for having earlier raised the issues which are now out in the open, while it would still have been easy to solve them. After Hassan II's death, I told Mohammed VI with all the sincerity my affection for him demanded, that real change was necessary, that modernizing the Makhzen was not enough. Since then, I have only seen the King, my cousin, twice, for strictly family events, where our exchanges have remained courteous and distant, as required by the circumstances. Politically, I am persona non grata at the palace.  I'm not complaining. I said what I had to say, but I was not heard by either Mohammed VI or by those information handlers who presented him as the "king of the poor" while dubbing me the "red prince." Better to just laugh about it! So I took some distance by moving with my family to the United States, and I congratulate myself every day for making a decision that has allowed me to achieve a lot both professionally and personally. Besides, and this is fundamental for me and my wife, it allows our children to grow up in an open, free environment. In short, I am not a problem to anyone at all, or at least I shouldn't be. For my part, I don’t have a problem with anybody. This also answers your imputation that I should see myself as the solution. No, not at all. If there is a solution, it is up to the Moroccans to find it together. In this regard -- that is, as citizen Hicham ben Abdallah -- I won't deprive myself of contributing what I can, to the best of my abilities. But I do not believe that democratizing Morocco has any special need of a prince. Just as I've also come to the conclusion that I’m in the King’s way, so I keep my distance. To be perfectly clear: I believe that involving myself more directly would be a disservice to democracy in my country, because, at this stage, it would add to the confusion. But I claim total freedom of expression, without any red lines I shouldn't cross. We'll see whether either the king or the February 20 Movement will complain about it.

S. S. – Since the subject has come up, let's get down to brass tacks: how do you view Mohammed VI's constitutional reform, which was adopted by referendum on July 1st, by 98% of those voting, with a 72% participation rate?

M. H. – Let's look at it from the right side:  I have no doubt that the constitutional reform proposed by the King was adopted by the great majority of Moroccans. Duly noted. That said, 98% "yes" votes and a 72% participation rate -- that is, almost double the previous election --is simply not credible. We'd hoped that the "score-making" machine had been mothballed once and for all, but it's back at full tilt: people were herded into buses, they were driven to the polls like electoral livestock and, to make sure they clearly understood what was expected of them, they had a sermon, dictated by the Ministry of Islamic Affairs, crammed into their heads in the mosques on Friday, June 25 – unheard of, even back in the days of Hassan II and his Minister of the Interior and grand master of referenda, the late Driss Basri! The kingdom's largest Sufi brotherhood, the Zaouiya Boutchichia, was mustered, and, just as disturbingly, so were gangs of young hooligans who were tasked with creating sometimes violent "counter-demonstrations." In short, if a progressive kind of democratization was the goal, and if – as I believe– a majority of Moroccans were ready to go along with this proposal, why turn a citizen referendum into a populist beiya (allegiance)? The modus operandi belied the purported objective. The Makhzen, cautiously hanging onto its privileges, abused the popular vote to establish a "party of order," that is, a rampart behind which to seek shelter. But that is a petty solution. The sacredness of the monarchy, while no longer written into the new Constitution, is reaffirmed in spirit in its most retrograde form in practices from another age. The result is twofold, and twice as destructive: on the one hand, the fears of the majority – the fear of losing their livelihood, of being alienated in a globalizing country with new and disturbing mores, particularly among the young... – were kindled, while the point was to create hope and confidence in a better future; on the other hand, the February 20 Movement can only harden its positions and may well find itself shoved into the arms of the extra-parliamentary Al Adl Wal Ihsan (Justice and Charity) Association Islamists. Besides, since Sunday July 3, the refuseniks of the Moroccan street have started marching again, by the thousands, under the slogan «Mamfakinch» (we will not let go).

S. S. – The King allowed democratic measures to be included in the new Constitution while feigning they were not conceded under pressure. Who is he kidding? And, as a matter of fact, is that enough?

M. H. – I don't think there was any intention to deceive anyone, but I fear the King may have fooled himself. People in Morocco, particularly members of the propertied classes, wonder if, with the vote, they can hold their own. As for me, I have interest in any reform completely lacking any enlightened, sincere intent, beyond seeking a short-term advantage, to move towards parliamentary monarchy. Some – very narrow –measures were put in place: a new title for the Prime Minister, who will henceforth be the "head" of a government which the King will continue to appoint and dismiss as he pleases; a number of "councils" were created, all controlled by the monarch, thus completing his "NGO-ization" of the Moroccan State, thus multiplying appointments with which to co-opt the members of both the political class and civil society; finally, a whole raft of "rights" were included in the Constitution, which will have to await their implementing orders, but will frequently prove, in actual practice, to be unenforceable. For example: while article 36 of the new constitution "prohibited" conflicts of interests and the abuse of office, do you really think the members of Mohammed VI's inner circle, whose names are regularly booed in the streets, are going to lose their incomes and positions, when the royal holding alone pulls in 8% of the Moroccan GDP? The Constitution might as well state that Makhzen is no longer the etymological root of the French word "magasin [store]" – which would be just as absurd. In this regard, we may well witness one predation layered upon another, if the new Prime Minister takes his new autonomy to the limits by seeking to insert his own clients into key state positions. In short, we could find ourselves with a street stall set up alongside the big "store."

S. S. – But if the King hasn't given up anything essential, why would he be mistaken? From his point of view, he remains in control of the country, while you acknowledge yourself that the protest movement is struggling to move from the street into the seats of power.

M. H. – First, allow me to clearly state how much sympathy and respect I have for the February 20 Movement. The young people who launched it are prophets of the people, because they are openly proclaiming the truth. Acknowledging that this is not enough to improve the daily lot of most people is not disparaging of them. It is just a reminder that a statement is not an act, saying is not doing. Something else to keep in mind is the experience of the Moroccan movida at the start of "M6's" reign, when greater freedom of speech in a new independent press made a nice illusion for a while. There's not much left. After the intoxication, the toxic. Nowadays, several protagonists from that period, such as Boubker Jamaï, Ali Lmrabet, and Ahmed Benchemsi, comment on events from abroad, where they now live. Next, while the King has ceded almost nothing to the popular sovereignty, he has ceded the essential where national unity is concerned. For a long time, I have been strongly in favor of recognizing Morocco's Berber culture. I believe richness lies in diversity. But this constitutional reform has institutionalized the fragmentation of the Moroccan State. The King attempted to innovate, and perhaps also to give assurances of openness by acknowledging the Berber language and Hassania, the language of the Sahrawi. But the text that was adopted has ended up twisting the cultural demands as well as the regional framework for localized democratization by creating a political market for identity brand selling. Are we really, over a half century after Independence, going to recreate the 1930 "Berber dahir," that sought to infect the Moroccan people with the seed of division? Morocco is not an American-style melting-pot, it's a big couscous where everything can be tossed in. However, the new provisions, which have been taken lightly, may spoil the national dish. When you leave certain ingredients out, the whole dish loses its richness.

S. S. – Earlier, you went as far as saying that Mohammed VI had erred to his own disadvantage. How so?

M. H. – The King has implicitly acknowledged the failure of the "executive monarchy" he set up at the beginning of his reign twelve years ago. The trade-off of a technocratic promise of top management performance against the further weakening of an already anemic political class has run its course. But who will now "inhabit" the new areas set up in the name of democratizing the system? The same political class, reduced more than ever to shadow theater? This is a fundamental contradiction: to win his gamble on renewal, Mohammed VI is counting on collecting the I.O.U.s from those for whom he’s done favors.  How could such people conceivably build a new institutional framework? And if, extraordinarily, they should manage to, their success would prove the king's failure at two essential levels. On the one hand, they would be proving they can manage the economy better than Mohammed VI and his inner circle, and that the royal "store" should close shop. On the other, they would be demonstrating that a new era of human rights is possible without repressing the Islamists, without the Temara torture center denounced by Amnesty International and Human Rights Watch, without the silent renditions of those presumed foreign terrorists whom Morocco has received entirely illegally as a favor to George W. Bush, who turned the Commander of the Faithful into the jailer of his fellow Muslim believers. In short, the new Constitution may help the Makhzen save some time, but the country will surely be the loser. Because, sooner or later, it is likely to turn against Mohammed VI.

S. S. – Since you have started making predictions, what future do you foresee for the "Arab Spring" as a whole?

M. H. – If this year has taught us just one thing, it's to be properly humble about our predictions... But I'm not trying to duck your perfectly legitimate question. So, first, I think the whole Arab world has just rounded a corner, maybe even passed a point of no return. Even if there is authoritarian regression, nothing will go back to the way it used to be. Next, I think we can identify three geographic and geopolitical areas – the Gulf States, the Near East and North Africa – provided we don't start seeing them as fatalistically-determined communities. And since we were just on the subject of North Africa, let's start there, where any outcome is possible. I think, for instance, that Tunisia has a real chance of managing a breakthrough to become the first Arab democracy. From a demographic, sociological and political point of view, all the conditions are there – which doesn't mean it's guaranteed. I am equally optimistic that Morocco will eventually become progressively democratized. On the other hand, Egypt runs the risk of a "frozen" transformation at some stage. As for Algeria, I'll admit I don't foresee anything besides a status quo, even though everybody knows it is untenable. And I am frankly pessimistic about Libya. It risks becoming a failed state, and was already fairly "Bedouin" under Gaddafi.

S. S. – What about the Gulf States?

M. H. – In their case, their common traits give them advantages: petroleum money, which disconnects the state from its citizens and makes them into dependents the weakness of civil society in spite of having a middle class; the high number of immigrants who do the basic work of the economy, at the lowest cost; and, finally, the lack of significant geopolitical pressure for democratization, thanks to their supply of petroleum. All of these conditions come together to smother any aspiration for greater freedom under a cozy down comforter. As the situation plays out, I expect the Arabian Gulf States will be the least affected by the great movement now taking place.

S. S. – Is that also the case for the Middle East, for other reasons, that is, because it is located in the eye of the storm?

M. H. – I don't think so. Anything can happen in the Middle East, especially in Iran and, even more so, in Iraq, where the state shaped under the American occupation – a state dominated by former exiles and ethnic marketing entrepreneurs – is corroded and corrupt to the extreme. Will this regime collapse? Are the American troops going to leave? And when? Everything is on the table. On the other hand, there are further determining factors in the Middle East. Pressure towards democratization has already led to a reconciliation agreement between Hamas and Fatah, although this agreement has yet to be put into action. Nonetheless, it is a given that the Palestinians, particularly the ones on the West Bank, are the ready-made pioneers of Arab democracy, thanks to their education and their – forced – openness to the world. But in absence of political freedom, under Israel's iron rule, only their institutional capabilities can be seen. Finally, almost five million Palestinian refugees living scattered about the Arab world have everything to hope from a democratization of their host countries. It still would not be the long-awaited "return" but, nevertheless, democracy would make adopting their second homelands more palatable.

S. S. – In which case Israel would lose its regional monopoly on democracy...

M. H. – It's almost a given. And we can wonder how the United States, in particular, will go about repositioning themselves in a strategic region with a multiplicity of partnerships available to them, without the opprobrium of supporting dictatorships. Of course, there will always be the pro-Israeli lobby in America to consider, which will endeavor to tip the scales to the detriment of the Arab democracies. But it will no longer be the same. All the less so, because Israel, under Benyamin Netanyahu’s frankly narrow-minded leadership, is on the verge of missing the boat. The current government continues to reason in terms of "peace between regimes" rather than "peace between people." Instead of making overtures to Arab public opinions – a term which henceforth needs to be in the plural –, the Israeli authorities are hunkering down while waiting for new Arab leaders to emerge, whom they hope to approach like the old ones. Speaking on behalf of the Israeli opposition, the centrist Tzipi Livni has publicly expressed regret about their short-sightedness. The "Arab Spring’s" window of opportunity could well close again without the Arab people having understood the interest of an historical compromise with Israel within a context of shared civil liberties. Nobody should complain later on if an anti-Israeli populism grabs the “pot” so rashly left there for it to snatch.

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This Arab Reform and Democracy research seminar will examine Lebanon’s failure to reform the electricity sector against the background of elaborate networks of client-patron relations, failing state institutions, and governance issues. It will explain how the electricity services have become a major element feeding Lebanon’s political and social fragmentation.

The electricity sector reform has featured as a major priority for several consecutive governments in Lebanon. Despite declared attempts at reform and legislative commitments, the state-run Electricité du Liban (EDL) still fails to ensure a reliable electricity supply, and has become a longstanding symbol of the profound political crisis affecting the Lebanese state and its institutions. The consequences of a failing sector and unreliable electricity supplies presents a number of impediments, the most important of which are those affecting Lebanon’s economic and social development and its regional integration. The failure to provide a systematic distribution of electricity also exacerbates inequalities along geographic, socio-economic and confessional lines.  During the summer of 2011, the electricity issue was brought to the public attention due to a major controversy in the current Lebanese government headed by Prime Minister Mikati. A last-minute deal prevented the government's fall and earmarked $1.2 billion of state financing to support some investments in infrastructure. However, practical implementation on the ground is still hindered by the patronage networks benefitting from the current status quo.

Katarina Uherova Hasbani is the Safadi Scholar of the Year at Stanford's Program on Arab Reform and Democracy, and is an energy policy expert focusing on MENA countries and their policies of energy diversification. She has worked for the European Commission, where she held several positions dealing with internal and external aspects of European Union’s energy policy, including the Cabinet of EU’s Energy Commissioner. Previously, she worked for Edelman and Cambridge Energy Research Associates, both consulting companies. She holds a master’s degree from the Institute of Political Studies (Sciences Po) in Paris, a master’s degree in international relations and diplomacy and a bachelor’s degree in finance from Matej Bel University in Slovakia. She is currently based in Beirut where she lectures at the American University for Science and Technology.

 Read more about Katarina’s appointment as a Safadi Scholar of the Year here.

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Katarina Uherova Hasbani Safadi Scholar of the Year at Stanford's Program on Arab Reform and Democracy Speaker
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The Program on Arab Reform and Democracy (ARD) at the Center on Democracy, Development, and the Rule of Law, together with the Safadi Foundation USA (SFUSA) and the Center for International Private Enterprise (CIPE) announced the winners of the first annual Safadi-Stanford Initiative for Policy Innovation (SSIPI). The title of Safadi Scholar of the Year has been awarded to Katarina Uherova Hasbani, an energy policy expert at the American University of Science and Technology in Beirut, Lebanon. The title of first runner up has been awarded to Miriam Allam, an economist for the Middle East North Africa Governance Program at the Regulatory Policy Division, Organization for Economic Cooperation and Development (OECD).

SSIPI was established to promote new scholarship and analysis on Lebanon. “SSIPI represents the link between the academic and policy worlds that Stanford's Program on Arab Reform and Democracy aims to nurture,” said Dr. Lina Khatib, who leads the ARD program at CDDRL. "The research by Hasbani and Allam addresses some of the core challenges impacting governance in Lebanon and the rest of the region. Hasbani’s paper on the reform of the electricity sector and Allam’s discussion on public consultation are both strategic areas vital to linking citizens and institution building,” said Lara Alameh, Executive Director of Safadi Foundation USA.

Hasbani will begin her four-week residency at CDDRL with the ARD program on October 1 where she will participate in seminars, engage with leading faculty and benefit from the scholarly resources at Stanford. During that time she will produce a publishable paper based on her research, which will then be presented at a policy conference in Washington, DC on December 6, 2011.

"It is an incredible opportunity to receive the support of SSIPI for my research on consensus-based electricity sector reform as a vital element for Lebanon's future economic and social development," said Hasbani.

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Nuclear energy is politically sensitive. For its proponents, nuclear energy is clean and highly efficient and indeed is the only alternative to fossil fuels in providing a base supply of electricity. For its opponents, nuclear energy is nothing but trouble, a symbol of war and weaponry par excellence, and one that creates environmental problems for mankind today and in the future. What is remarkable in this highly emotional debate is the general division between developed and developing countries. Asian and Gulf states are more active than many in other continents in expanding or developing their nuclear energy capacities. China is leading this expansion with 27 reactors under construction now.

Nuclear development in China highlights a series of objectives many developing countries try to balance – energy and economy, energy and development, energy and environment, energy and security, and the need for both clean energy and adequate and reliable energy supplies. It tells a counterintuitive story about Chinese politics – a single-party authoritarian political system with an extremely fragmented institutional structure in nuclear energy policy making, implementation and regulation and with highly competitive market forces in play. It provides a cautionary tale about the Chinese as well as global nuclear future. This paper discusses the challenges of nuclear energy development, using China as an example. It asks who drives it, what technology is selected and adopted, how human capital is developed, what the rules of the games are, and more importantly, which institutions are responsible for issuing licenses, regulating standards, and overseeing the compliance, and what forms of regulation do they use. At the core of these questions is if and how countries can ensure safe, secure and sustainable nuclear development.


Speaker Biography:

Dr. Xu Yi-chong is a research professor of politics and public policy at Griffith University. Before joining Griffith University in January 2007, Xu was professor of political science at St Francis Xavier University in Nova Scotia, Canada. She is author of The Politics of Nuclear Energy in China (2010); Electricity Reform in China, India and Russia: The World Bank Template and the Politics of Power (2004); Powering China: Reforming the electric power industry in China (2002); co-author of Inside the World Bank: Exploding the Myth of the Monolithic Bank (with Patrick Weller 2009) and The Governance of World Trade: International Civil Servants and the GATT/WTO, (with Patrick Weller 2004); and editor of Nuclear Energy Development in Asia (2011) and The Political Economy of Sovereign Wealth Funds (2010). All these projects were supported by the research grants from either Social Sciences and Humanities Research Council of Canada (SSHRC) or Australian Research Council.

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Xu Yi-Chong Professor of Research Speaker Griffith University Center for Governance and Policy
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