This document discusses the political challenges of implementing energy reforms and transitioning to clean energy. It notes that energy policies rely on a balance of political forces between government, businesses, workers, NGOs, and society. Changing this equilibrium faces resistance from those who benefit from fossil fuels. The document outlines five scenarios that could upset this political balance and allow for changes to energy policy: 1) an environmental crisis, 2) a wave of change spreading between countries, 3) a change in preferences of those in power, 4) a change in the relative power of political coalitions, and 5) an equal distribution of votes in the legislature. Ultimately, political will is needed to overcome resistance and appoint leaders who can implement reforms.

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Enernauta
The philantropic ape
Aldo Flores-Quiroga
In memory of Robert Mundell
Energy policies rest on a political balance. The statement seems obvious, but it serves to highlight the
enormous complexity of implementing reforms to our multidimensional energy systems. A balance of forces
between power groups -government, businessmen, workers, non-governmental organizations, society itself-
determines the objectives of policy, the distribution of subsidies and taxes, the orientation of government
purchases and financing, the direction regulations and other instruments available to the state.
Modifying this equilibrium means confronting major resistance because it redistributes income among
industry participants. For example, a breakthrough in clean energy penetration has so far required imposing
costs on the beneficiaries of fossil fuels. These costs and benefits arise from the application of contracting
policies, regulations for the purchase of minimum percentages of renewable energy, guarantee prices (feed-
in tariffs), tax exemptions, support for research and technological development, among many others.
Naturally, the losers of this redistribution fight back to the teeth, throwing obstacles in the way of change. This
has happened in practically every continent with the advance of the green agenda.
Tribulations like the previous ones surely already worry the officials who work in the offices of the ministers of
45 countries, leaders of international organizations and representatives of civil society that last week
participated in the Zero Net Emissions Summit of the International Energy Agency and COP 26 (IEA-COP 26
Net Zero Summit). Speeches swarmed about the importance of reducing emissions by acting on all possible
fronts, as well as statements that this time it must be different because time is running out. A group of OECD
countries, including leaders such as the United States, Germany and Japan, adopted “Seven Principles for
Implementing Net Zero (Emissions)”, highlighting the recognition that the energy transition is morally and
politically necessary and must be affordable. But the political roadmaps to achieve this are yet to be drawn.
Under what scenarios could the ministers upset the political balance and take the bull of redistribution by the
horns in each of the energy sectors of their countries? We could list at least five:
1. A widespread environmental crisis.
2. A wave of change that spreads from one or several countries to the rest of the world.
3. A change in the preference of those in power.
4. A change in the power of those who hold the preferences.
5. An equal distribution of votes in a legislature.
The first, a crisis, would make it clear that the current route does not work, would discredit both current
policies and their promoters, and would open the way to try something new. It would also require the crisis to

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unfold more rapidly than in slow motion, as it has done so far, even considering the greater frequency of
extreme weather events. Although the need for change is reflected in the speeches, actions to date confirm
the great difficulty of combating climate change in the absence of a crisis and without slowing down
economic growth.
The second scenario, a wave of change, would begin with a policy shift in country A, spreading to countries
from B to Z. In a process similar to the diffusion of a new technology, a first group of countries would adopt
the new policy one after another, quickly, by imitation or competitive pressure. A subsequent group would
adopt this innovation less quickly. One last group might never join the wave.
The cause of the initial turn in country A could be one of the other scenarios, such as a crisis (scenario 1), a
change in the preferences of those who hold power - a parliamentary majority, a monarchy or an autocrat-
(scenario 3), or simply a change in the relative power of political coalitions that ends up favoring groups that
prefer the expansion of clean energy (scenario 4). The latter would also imply a transformation of social
preferences and norms in favor of another energy model.
The diffusion process to countries B through Z would begin between geographic, ideological and economic
neighbors - the most common route of imitation -, extending with modifications according to the reality of
each country. We have seen something like this happen in the European Union and in a growing number of
states in the American Union, but there are examples in Latin America, Asia, and Africa.
The fifth scenario is more subtle: when political parties have power parity, it is more difficult for each of them
to obtain political advantage by offering inefficiency. Faced with a tie in their ability to offer private goods,
such as facilitating in the law contracts for the construction of electricity generation plants with coal, they may
find the possibility of distinguishing themselves and gaining an advantage by offering public goods, such as
clean air that is achieved using renewable energies. or with carbon sequestration projects. This requires an
equal division of forces in the legislature.
It remains to be seen which scenario will prevail in each country. The truth is that we are already witnessing a
change in the "moral spirit of the age” (the moral zeitgeist), which translates into the dissemination of more
policies or laws in favor of the environment throughout the world - and in more disputes to avoid redistribution
than it implies. The economist Deirdre McCloskey has pointed out, to my mind successfully, that it was the
dignity of the bourgeoisie and its buying and selling activities around the 17th century that resulted in the
most spectacular rates of economic growth ever seen in history. In other words, a change in rules became a
change in formal incentives that resulted in a new way of generating wealth from the Industrial Revolution. It
seems to be the turn of concepts such as the circular carbon economy, the Green New Deal, or green
industrial policy, although we do not yet know if they will endure in the public discourse.
Almost 25 years ago, I attended as a professor of political economy the Claremont-Bologna Monetary
Conference, which annually brought together group of Nobel laureates in economics, including Milton
Friedman, Paul Samuelson, Franco Modigliani, and Robert Mundell, among other prominent experts. In one of
the talks, Mundell referred to the simplicity that should guide monetary policy decisions. The idea that central
banks should be autonomous had just triumphed, and the prospect still hung in the air that a simple rule of

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currency issuance, inspired by the Gold Standard of 100 years before and that tied the amount of money in
circulation to the volume of gold reserves in each country, had to be reconsidered.
As I remember it, Mundell metaphorically proposed that it would be enough to put an ape (a monkey) in
charge of that simple and transparent objective to achieve it. No further complications, no complex rules, no
discretion in the handling of monetary aggregates, would be necessary. It was a position similar to that
articulated by Milton Friedman for years. More than one attendee laughed approvingly, but one question
remained open and from my place in the audience I decided to emphasize it: a monkey may be enough to
conduct monetary policy, but someone, in a political act, has to put him in charge and under that rule.
Mundell nodded with one of those gestures that also reveal surprise, the discussion briefly dwelled on my
comment and I enjoyed my fifteen seconds of glory.
We know how to promote renewable energy. It is worth saying, however, that it is a more complex process
than monetary policy - with the forgiveness of my friends who are experts on the subject - because it involves
more variables and disciplines than those controlled by a single institution. Channeling them also requires
enormous political will to overcome the resistance of the competing industries, technical capacity, inter-
institutional cooperation, intra- and intersectoral negotiation, and a long list of actions in which many and very
diverse interests converge.
The solution may be simple or complex, but in the end it will take a political act to designate the philanthropic
ape capable of implementing it.