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SCPKU World Leaders Forum features Nobel laureate Steven Chu on climate change and clean energy

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The Stanford Center at Peking University (SCPKU) held its second annual Lee Shau Kee World Leaders Forum at the center on Oct 13.  This year’s conference, titled “Climate Change and Clean Energy,” was keynoted by Dr. Steven Chu, the William R. Kenan, Jr., Professor of Physics and Professor of Molecular and Cellular Physiology in the Medical School at Stanford University; the 12th U.S. Secretary of Energy; and co-recipient of the 1997 Nobel Prize in Physics for laser cooling and atom trapping.  Two panel discussions with a diverse set of experts from academia, government, and industry were also part of the event.

After welcoming remarks by SCPKU Director Jean C. Oi and Xiamen University Dean of the School of Energy Research Ning Li, the conference kicked off with the first panel, “Paths to Clean Energy” which centered around two questions:  Is renewable energy feasible and how does China move away from coal as a dominant energy source?  The second panel, “Challenges and Opportunities to Clean Energy,” focused on barriers preventing China from being progressive on climate change.   China’s National Energy Advisory Committee, British Petroleum-China, and the U.S. Commission on Natural Resources Protection were among the organizations represented by panelists.

 

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Panelists discuss climate change and clean energy at SCPKU's World Leaders Forum held October 13.
Courtesy of Stanford University

 

Steven Chu’s keynote wrapped up the forum, which touched on new data reflecting the risks of climate change and the need to continue progress on the development of clean energy.  Regarding the pressing issue of pollution, he cited data from a British study inferring that the risk of contracting lung cancer is 29x higher in Beijing than other cities and highlighted Stanford’s research on nano-fiber filtration as a possible solution.  Chu also spoke on the topic of energy storage and how the full cost of renewable energy needs to account for backup generation capacity, transmission and distribution systems, as well as the storage itself.  Two things, he said, will likely play large roles in the future: high voltage lines (HVDC), and machine learning, which will be needed for largely autonomous management of the electrical grid.  Nuclear energy will also be important to mitigate blackouts when transitioning to clean energy.  In closing, Chu shared a poignant phrase from ancient Native Americans: “We do not inherit the land from our ancestors, we borrow it from our children.” 
 

The purpose of the forum is to raise public understanding of the complex issues China and other countries face in the course of development.  Funded by a generous gift from the Lee Shau Kee Foundation, the forum seeks to increase support for Asia-Pacific cooperation and turn ideas into action.  

 

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Steven Chu poses with SCPKU World Leaders Forum attendees after delivering keynote.
Courtesy of Stanford University

 

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Reception following SCPKU's World Leaders Forum featuring the China National Symphony Orchestra Concert Quartet in
the center's courtyard.
Courtesy of Stanford University

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Steven Chu keynotes SCPKU's second World Leaders Forum.
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Ian Morris

450 Serra Mall
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Stanford, CA 94305-2145

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Jean and Rebecca Willard Professor in Classics
Fellow of the Archaeology Center
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Ian Morris is Jean and Rebecca Willard Professor of Classics and a Fellow of the Archaeology Center at Stanford University. He grew up in Britain and studied at Birmingham and Cambridge Universities before moving to the University of Chicago in 1987 and on to Stanford University in 1995. He directed Stanford’s archaeological excavations at Monte Polizzo in Sicily between 2000 and 2007 and has served at Stanford as Senior Associate Dean of Humanities and Sciences, Chair of the Classics department, and Director of the Stanford Archaeology Center and Social Science History Institute. He has served as a contributing editor at Stratfor, the Roman Professor of International Studies at the LSE, the Australian Army's Professor of Future Land Warfare, and as a member of the Max Planck Institute's Scientific Advisory Board. In 2012 he was elected as a Fellow of the British Academy.

He has published thirteen books and more than a hundred essays in scholarly journals and newspapers. His book Why the West Rules—For Now: The Patterns of History, and What they Reveal About the Future (published by Farrar, Straus & Giroux in 2010) won three literary awards, was named as one of the best books of the year by The New York Times, The Economist, Foreign Affairs, Newsweek, Nature, and the London Evening Standard, and has been translated into fourteen languages. Foreign Policy magazine ranked it number 2 among the books global thinkers were reading in 2011. His most recent book, Foragers, Farmers, and Fossil Fuels: How Values Evolve, was published by Princeton University Press in 2015. His next book looks at Britain's relations with Europe and the wider world--all the way back to 6000 BC, when rising sea levels physically separated the British Isles from the European continent.

Affiliated faculty at The Europe Center

Making the Resource Curse Disappear: A re-examination of Haber and Menaldo’s “Do Natural Resources Fuel Authoritarianism"

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Abstract:  

Haber and Menaldo (2011) claim there is little evidence that oil is harmful to democracy, and that previous studies to the contrary were corrupted by omitted variable bias. Michael Ross professor of political science at UCLA will present findings from a paper co-authored with Jørgen Juel Andersen to show there is little evidence of the bias they allege, and point out that they decline to test the most credible version of the resource curse hypothesis.  The versions that they do test, moreover, are based on two implausible assumptions: that oil will effect a country’s regime type immediately, rather than over a period of several years; and that the relationship between oil wealth and political power did not change over the 200 year period covered by their data.  We argue that oil only had strong anti-democratic effects after the 1970s, when most oil-producing autocracies nationalized their industries; and show their main results are overturned when we add to their models a dummy variable for the post-1979 period, and allow the effects of oil to take place over a period of three, five, or seven years, instead of just one year.  

Speaker Bio: 

Michael L. Ross is Professor of Political Science at the University of California, Los Angeles (UCLA), and Director of the Center for Southeast Asian Studies. 

He has published widely on the political and economic problems of resource-rich countries, civil war, democratization, and gender rights; his articles have appeared in the American Political Science Review, American Journal of Political Science, Annual Review of Political Science, British Journal of Political Science, International Organization, Journal of Confiict Resolution, Journal of Peace Research, Politics and Gender, and World Politics.  In 2009, he received the Heinz Eulau Award from the American Political Science Association for the best article published in the American Political Science Review. 

His work has also appeard in Foreign Affairs, Foreign Policy, Harper's, The Los Angeles Times, and been featured in The Washington Post, Newsweek, and many other publications. 

Ross currently serves on the advisory boards of the Review Watch Institute, the Natural Resource Charter, and Clean Trade, and was previously a member of the Advisory Group for the World Bank's Extractive Industries Review.  He is also a member of the Political Instability Task Force and the APSA Task Force on Democracy Audits and Governmental Indicators.

Reuben W. Hills Conference Room

Michael Ross Professor, Political Science Speaker UCLA
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The Politics of Nuclear Development: China as a Case Study

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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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PESD releases study of Nigeria's national oil company NNPC

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Nigeria’s national oil company NNPC is at the center of a profoundly dysfunctional oil sector in a country that some argue embodies the “resource curse.” In a new study, PESD Associate Director Mark C. Thurber and PESD affiliated researchers Ifeyinwa Emelife and Patrick Heller find that NNPC’s persistent underperformance stems from its role as the linchpin of a sophisticated and durable system of patronage.

Abstract

Nigeria depends heavily on oil and gas, with hydrocarbon activities providing around 65 percent of total government revenue and 95 percent of export revenues.  While Nigeria supplies some LNG to world markets and is starting to export a small amount of gas to Ghana via pipeline, the great majority of the country's hydrocarbon earnings come from oil.  In 2008, Nigeria was the 5th largest oil exporter and 10th largest holder of proved oil reserves in the world according to the U.S. Energy Information Administration.  The country's national oil company NNPC (Nigerian National Petroleum Corporation) sits at the nexus between the many interests in Nigeria that seek a stake in the country's oil riches, the government, and the private companies that actually operate the vast majority of oil and gas projects.

Through its many divisions and subsidiaries, NNPC serves as an oil sector regulator, a buyer and seller of oil and petroleum products, a technical operator of hydrocarbon activities on a limited basis, and a service provider to the Nigerian oil sector.  With isolated exceptions, NNPC is not very effective at performing its various oil sector jobs.  It is neither a competent oil company nor an efficient regulator for the sector.   Managers of NNPC's constituent units, lacking the ability to reliably fund themselves, are robbed of business autonomy and the chance to develop capability.  There are few incentives for NNPC employees to be entrepreneurial for the company's benefit and many incentives for private action and corruption.  It is no accident that NNPC operations are disproportionately concentrated on oil marketing and downstream functions, which offer the best opportunities for private benefit.  The few parts of NNPC that actually add value, like engineering design subsidiary NETCO, tend to be removed from large financial flows and the patronage opportunities they bring. 

Although NNPC performs poorly as an instrument for maximizing long-term oil revenue for the state, it actually functions well as an instrument of patronage, which helps to explain its durability.  Each additional transaction generated by its profuse bureaucracy provides an opportunity for well-connected individuals to profit by being the gatekeepers whose approval must be secured, especially in contracting processes.  NNPC's role as distributor of licenses for export of crude oil and import of refined products also helps make it a locus for patronage activities.  Corruption, bureaucracy, and non-market pricing regimes for oil sales all reinforce each other in a dysfunctional equilibrium that has proved difficult to dislodge despite repeated efforts at oil sector reform.

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PESD releases study of Norway's national oil company Statoil

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Norway is lauded as the rare example of a major oil and gas exporting country that has managed to avoid the "resource curse." A new study by PESD Associate Director Mark C. Thurber and Consulting Research Associate Benedicte Tangen Istad looks more closely at the Norwegian petroleum experience and the role of national oil company Statoil in it. The reality is messy and political but nonetheless an impressive story of how Norway built a vibrant domestic oil and gas industry on the back of national champion Statoil and a robust system of governance that could curb Statoil's excesses as needed at a few key junctures.
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Norway's Evolving Champion: Statoil and the Politics of State Enterprise

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Executive summary:

Statoil was founded in 1972 as the national oil company (NOC) of Norway.  Along with Brazil's Petrobras, Statoil today is a leader in several technological areas including operations in deep water.  With its arm's length relationship to the Norwegian government and partially-private ownership, it is generally considered to be among the state-controlled oil companies most similar to an international oil company in governance, business strategy, and performance.

Statoil's development and performance have been intimately connected to its relationship with the Norwegian government over the years.  The "Norwegian Model" of distinguishing Statoil's commercial responsibilities in hydrocarbons from regulatory and policy functions granted to other government bodies has inspired admiration and imitation as the canonical model of good bureaucratic design for a hydrocarbons sector. 

However, the reality is that Norway's comparative success in hydrocarbons development, and that of Statoil, has been about much more than a formula for bureaucratic organization.  Belying the notion of a pristine "Norwegian Model" that unfolded inexorably from a well-designed template, the actual development of Norway's petroleum sector at times was, and often still is, a messy affair rife with conflict and uncertainty.  But Norway had the advantage of entering its oil era with a mature, open democracy as well as bureaucratic institutions with experience regulating other natural resource industries.  Thus far, the diverse political and regulatory institutions governing the petroleum sector-and governing the NOC-have collectively proven robust enough to handle the strains of petroleum development and correct the worst imbalances that have arisen. 

Mark Thurber and Benedicte Tangen Istad make the following six principal observations from their research.

First, Norway's policy orientation from the start was focused on maintaining control over the oil sector, as opposed to simply maximizing revenue.  As a result, the country was more concerned with understanding and mitigating the possible negative ramifications of oil wealth than with any special advantage that could be gained from it. 

Second, the principal means through which Norway was able to exert control over domestic petroleum activities was a skillful bureaucracy operating within a mature and open political system.  Civil servants gained knowledge of petroleum to regulate the sector through systematic efforts to build up their own independent competence, enabling them to productively steer the political discourse on petroleum management after the first commercial oil discovery was made.  Robust contestation between socialist and conservative political parties also helped contribute to a system of oil administration that supported competition (including between multiple Norwegian oil companies as well as international operators) and was able to evolve new checks and balances as needed.

Third, Statoil did play an important role in contributing to the development of Norwegian industry and technological capability, in large part because it had the freedom to take a long-term approach to technology development.  With a strong engineering orientation and few consequences for failure as a fully state-backed company, Statoil developed a culture valuing innovation over development of a lean, commercially-oriented organization.  These priorities may not have always contributed to maximization of government revenues in the short run-costs came to be perceived as high in Norway (for various reasons not all related to Statoil) and Statoil was on occasion responsible for significant overruns.  However, the focus on innovation contributed to significant technological breakthroughs and helped spur the development of a high-value-added domestic industry in oil services.

Fourth, the formal relationship between Statoil and the government has become more arm's-length as Norway's resources and oil expertise have matured.  Under its first CEO, experienced Labour politician Arve Johnsen, Statoil aggressively flexed its political muscles to gain special advantages in licensing and access to acreage.  As domestic resources began to mature, Statoil's leadership (starting with Harald Norvik in 1988, and continuing through the tenures of subsequent CEOs Olav Fjell and Helge Lund) focused more on forging an independent corporate identity and governance structure that would allow the company to compete effectively abroad. 

Fifth, notwithstanding changes in their formal relationship, it has remained impossible to sever the close ties between the Norwegian state and a company with the domestic significance of Statoil.  These residual ties can manifest in various ways, including: 1) the effect on policy decisions of direct personal connections between Statoil leaders and politicians; 2) persistent "Norway-centric" influences on Statoil's strategy even in the larger context of efforts to internationalize; and 3) public pressure from politicians who continue to see themselves as Statoil's masters.  Such pressures can affect large strategic companies, public or private, in any country, but their effect is magnified by Norway's small size and Statoil's importance within it as the largest petroleum developer.

Sixth, Statoil's experience thus far casts doubt upon the conventional wisdom that NOC-NOC connections provide material benefit in opening resource access around the world.  To the extent that such linkages are important, Statoil would seem to be among the best-positioned to benefit from them as both a highly competent producer and a company that might be sympathetic to the needs of resource-rich countries.  However, there are few instances so far where Statoil's status as an NOC has been an obviously decisive factor in unlocking resources that would otherwise be off-limits.

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Program on Energy and Sustainable Development
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Mark C. Thurber

Clean Trade vs. the Resource Curse

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Profile
Leif Wenar is Chair of Ethics at King's College London.

After earning his Bachelor’s degree in Philosophy from Stanford, he went to Harvard to study with John Rawls, and wrote his dissertation on property rights with Robert Nozick and T.M. Scanlon.

Leif Wenar works in moral, political and legal theory. His most abstract theoretical work concerns the nature and justification of rights. Most of his scholarly writings have focused on the work of John Rawls. Much of his current research focuses on international issues such as war, human rights, severe poverty, development aid, and inequalities among nations.  He has recently written on the global trade in natural resources such as oil and diamonds, and how to stop the damaging effects of the "resource curse." Most of his published work is available online at  wenar.info.

He has been a Visiting Professor and a Fellow at the Princeton University Center for Human Values, a Fellow of the Center for Ethics and Public Affairs at The Murphy Institute of Political Economy, and a Fellow of the Program on Justice and the World Economy at The Carnegie Council on Ethics and International Affairs.

Research
Leif Wenar works in moral, political and legal theory. Much of his current research focuses on international issues such as war, human rights, severe poverty, development aid, and inequalities among nations. His most abstract theoretical work concerns the nature and justification of rights. Most of his scholarly writings have focused on the work of John Rawls, and he co-edited the autobiographical volume Hayek on Hayek.

He has recently written on the global trade in natural resources such as oil and diamonds, and how to stop the damaging effects this trade has on low-income countries. His work on this topic can be found at www.cleantrade.org.

Attached is the paper for the seminar. Of course there's no expectation that you'll want to read the whole thing, so here's a short guide to what might be most interesting for our time together:
  • The main policy proposals in the project can be gotten from sections 1-14, skipping the 'Question' sections. (These sections cover the material in "Property Rights and the Resource Curse"; if you've read that article you'll not miss too much by skipping these sections.)
  • The final section, A14, tries to build on Seema's excellent work on loan sanctions;
  • Sections 7, 8, 9, and A13 touch on the issues of the standards for
    disqualifying regimes from selling resources/accessing credit, and the
    agencies that could rule on whether these standards have been met.

The rest of the material is just there in case it interests you.

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Encina Ground Floor Conference Room

Leif Wenar Professor of Ethics Speaker Kings College London
Workshops
Linda Randall Meier Research Workshop on Global Justice

Hubbert's Peak, The Coal Question, and Climate Change

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Abstract
An accurate estimate of the ultimate production of oil, gas, and coal would be helpful for the ongoing policy discussion on alternatives to fossil fuels and climate change. By ultimate production, we mean total production, past and future. It takes a long time to develop energy infrastructure, and this means it matters whether we have burned 20% of our oil, gas, and coal, or 40%. In modeling climate change, the carbon dioxide from burning fossil fuels is the most important factor. The time frame for the climate response is much longer than the time frame for burning fossil fuels, and this means that the total amount burned is more important than the burn rate. Oil, gas, and coal ultimates are traditionally estimated by government geological surveys from measurements of oil and gas reservoirs and coal seams, together with an allowance for future discoveries of oil and gas. We will see that where these estimates can be tested, they tend to be too high, and that more accurate estimates can be made by curve fits to the production history.

Bio
Professor Rutledge is the Tomiyasu Professor of Electrical Engineering at Caltech, and a former Chair of the Division of Engineering and Applied Science there.  He is the author of the textbook Electronics of Radio, published by Cambridge University Press, and the popular microwave computer-aided-design software package Puff.  He is a Fellow of the IEEE, a winner of the IEEE Microwave Prize, and a winner of the Teaching Award of the Associated Students at Caltech.  He served as the editor for the Transactions on Microwave Theory and Techniques, and is a founder of the Wavestream Corporation, a manufacturer of high-power transmitters for satellite uplinks.

This talk is part of the PESD Energy Working Group series.

Richard and Rhoda Goldman Conference Room

Dave Rutledge Professor of Electrical Engineering Speaker Caltech
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Program on Oil Wealth Management in Developing States - Completed

OPEC's net oil export revenues exceeded $1 trillion in 2008, and oil exporting states (petro states) are eager to learn from experience and from their peers how to mitigate the negative macroeconomic spillover effects such a massive explosion in revenues can bring about and to lay down the foundations for a sustainable, diversified economy. Oil importing states, on the other hand, followed this development very closely as they turned to abundantly capitalized oil funds to rescue companies that came under severe distress from the global credit crunch that began in 2008. 

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