2012 2012 Floors 3Floors-5, Belfer 3-5, Building Belfer Building

CREATING PUBLIC VALUE BY ENGAGING BUSINESS AND GOVERNMENT

October November 2012 2012 Floors 3Floors-5, Belfer 3-5, Building Belfer Building

FORMER FREDDIE MAC CEO ED HALDEMAN DELIVERS M-RCBG PLANNING MILESTONE FALL EVENTS Seminars & Events 2012 GLAUBER LECTURE As M-RCBG continues to celebrate the 30th anniversary of the Center‟s founding, it is planning M-RCBG has over 5030 seminars and events numerous events this semester as it continues to seek new ways to add value to our changing scheduled for the fall semester. Below is a The 2012 annual Robert Glauber Lecture scheduled for the fall semester. Below is a worldl Among them are: small selection. Please see our website was given this year by Charles “Ed” (smallwww.hks.harvard.edu/centers/mrcbg selection. Please see our website) for a Haldeman in a talk entitled Freddie &  A 30th anniversary forum lecture on “The Vexed Relationship between Business & Govern- complete(www.hks.harvard.edu/centers/mrcbg listing. ) for a Fannie: Where They've Been, What To Do ment”. Speakers will include Center Director Lawrence Summers, Prof. Roger Porter, Ben complete listing. Heineman and Nina Easton (JFK Jr. Forum, October 30,with 6pm). Them . Haldeman recently retired from his position as the CEO of Freddie JamesChristian Hammitt, Von Hirschhausen, Harvard School German of Public  The 2012 Glauber Lecture featuring Ed Haldeman, formerMac and CEO is ofa 35Freddie-year veteran Mac (JFK of Jr.the Fo- fi- Health.Institute Positive for Economic v. Normative Research. Justifications Electric- rum, October 18, 6pm). nancial services industry. During the lecture, he outlined the key contribu- ityof Cost Sector Benefit Reform: Analysis. Toward Bell Low Hall,-Carbon October Gen- 4, 11:45-1pm.  The 20th Doyukai Symposium will focus on “A Visiontions for Japan that both in 20 Fannie Years”. and Speakers Freddie will have eration. Bell Hall, Nov. 5, 12:15-1:45pm.

include Joseph Nye, Roger Porter, Anthony Saich, andmade Ezra to Vogel. society (November as well as 19).their recent Carmen Reinhart, Harvard Kennedy mistakes, and encouraged a fair and Christopher Knittel, MIT. Embracing our For additional information about any of these events, please contact [email protected] or A Decade of Debt. balanced examination of the factors that Differences:School. Heterogeneous BellExternalities Hall, Nov. and call XXX. led to Fannie Mae and Freddie Mac‟s their8, 11:45 Implications-1pm. for Welfare. Littauer-382, role in the recent financial crisis. October 10, 4:10-5:30pm. Kyle Meng, Columbia University. The

Haldeman talked of the mortgage sys- Cost of Potential Cap-and-Trade Policy: An temS whenTUDENTS Fannie Mae R wasEPORT formed ON in 1938, SUMMER when the average INTERNSHIP loan term was E fiveXPERIENCES to ten years, rates EventMatthew Study Baum, using Cary Prediction Coglianese, Markets and and were always variable, and loan approval was frequently contingent upon a 50% downpayment. Richard Zeckhauser. Regulatory Break- Lobbying Records, Littauer 382. Nov. 14, ThisSince past then, summer, Fannie Mae,M-RCBG Freddie provided Mac and financial other governmentsupport to 17 sponsored HKS students, enterprises enabling (GSEs) them have to down: The Crisis of Confidence in U.S. Regu- dramatically changed the mortgage industry, helped lower rates and standardize loan offerings. lation,4:10-5:30pm. Bell Hall. October 11, 11:45-1pm. undertake internships in a variety of settings around the globe. Students worked at the US Depart- mentMany of people the Treasury, have blamed United the Nations GSEs for Capital the financial Development crisis and Fund, recession. International Haldeman Finance presented Corpora- Nancy Nord, U.S. Consumer Products Dale Jorgenson, Harvard University. tion,compelling Asian Developmentevidence to refute Bank, this, and pointing numerous to thesmall huge non growth-governmental in the provision organizations, of private testing mort- new Safety Commission. Mandatory Regulatory Comprehensive Tax Reform and U.S. Energy approachesgages in the torun improve-up to the trade, recession, create economiccoupled with opportunity, a dramatic and deterioration strengthen inregulation. their underwriting The range Review at Independent Agencies. Bell Hall, standards. He noted that default rates on GSE-backed mortgages remained a fraction of those in Policy. Bell Hall, October 15, 12:15-1:45pm. and impact of these internships is notable. Robert Boudreau (MPA 13) prepared policy briefs for Nov. 15, 11:45-1pm. the sub-prime market financed by the private sector. senior officials at the U.S. Treasury, Office of International Banking and Securities Regulation. Thomas Covert, Harvard University. Working“The employees on a smaller who workedscale, Jonathan for me wereElist very(MPA passionate 13) developed about alternative the role they forms performed,” of credit report- Halde- Joseph Aldy, Harvard Kennedy School. Learning and Experimentation in the North ingman for said. Rent “It Reporters was hard into Pasadena.imagine there Two were students people worked in society with whoInstiglio, had aan visceral organization feeling founded in the The Impact of Tax Credits and Grants on opposite direction about the work they did...neither side was able to see the other‟s point of view.” Dakota Bakken Shale. Littauer-382, October by HKS students to bring social impact bonds to developing countries. Piyush Jain (MPP 13) ex- Wind Power Investment. Bell Hall, Nov. 19, 10, 4:10-5:30pm. plored the potential for social impact bonds to deliver social services in India, and Eunice Lim 12:15-1:45pm. The lecture honors Robert Glauber and his long record of distinguished contributions to the U.S. and(MPP world 13) tested financial their systems, potential as to well address as his at long-risk and youth successful in Colombia. scholarship Prad Kerdpairojand teaching (MPAID which 13) DavidGilbert Greene Metcalf, University, U.S. Department of Tennessee of the. provided technical support to Impact Investment Shujog Limited in Singapore, and Pragya Lohani have characterized his career at Harvard. Glauber is an adjunct lecturer at the Harvard Kennedy OilTreasury Dependence:. Moving What Forward Does onit Really Climate Cost Pol- (MPPSchool. 13) helped develop government strategies to promote business development in Sri Lanka. icy:Us? WhatBell Hall, Do We October Need to 22, Know? 12:15 Bell-1:45pm. Hall, Several students plan to use their summer experience as the basis for Policy Analysis Exercises this Nov. 26, 12:15-1:45pm. year. THE KANSAI KEIZAI DOYUKAI PROGRAM RemaHoward Hanna, Kunreuther Harvard, University University of. UpPenn- in ELEBRATES ITS TWENTIETH YMPOSIUM sylvania. Integrated Risk and Uncertainty C S Smoke: The Long Run Impact of Improved Assessment of Climate Change Response With support from M-RCBG, Mariella Amemiya Cooking Stoves. Littauer-382, Nov. 28, 4:10 On November 19, M-RCBG will host the 20th U.S.-Japan Symposium with the Kansai Keizai Policies. Littauer-382, October 10, 4:10- (MPAID 13) spent the summer working with the -5:30pm. Doyukai, a nonprofit, nonpartisan organization of corporate leaders from the Osaka region of 5:30pm. United Nations Economic and Social Commission for

Japan. Cass R. Sunstein, Harvard Law School. Asia and Pacific, in Bangkok, Thailand, to develop This year‟s symposium, entitled “Challenges andtrade Opportunities and investment for Japanstrategies over for thethe Asianext PacificTwo Dec- BehavioralRio+20 Panel Economics Discussion. and Regulatory Collective Policy. Ac- ades”, will feature presentations from Harvard professorsregion. Roger Porter (program chair), Bill Ho- Belltion withinHall, Nov. the Financial 29, 11:45 Sector.-1pm. Allison gan, Joseph Nye, Tony Saich, and Ezra Vogel. Also featured will be presentations from Doyukai Dining Room, October 25, 11:45-1pm. Hanna Breetz, ETIP associate/MIT Ph.D. members Mr. Akio Ogura (Bando Chemical Industries), Mr. Jun Sato (Showa Marutsutsu Com- pany), Mr. Kazuhira Ogura (Mitsubishi Corporation), Mr. Koichi Kunisada (Osaka Gakuin Univer- candidate. The “Stealth” Tax and Biofuels sity), and Mr. Sadao Kato (Nippon Life Insurance Company). Topics to be discussed include na- Mandate. Bell Hall,CSRI Dec. Senior 3, 12:15 Fellows-1:45pm. tional security policy, energy policy, Asia-Pacific relations and economic policy. Several of M-RCBG’s seminars Jared Carbone,Simon ETIP UniversityZadek and of Salil Cal- Visit www.hks.harvard.edu/centers/mrcbg/programs/doyukai for details. are now videos accessible for gary. Carbon TaxesTripathi and Deficit Discuss Reductions viewing via Vimeo. To access, Several of M-RCBG’s seminars are now videos accessible for Bell Hall, Dec. 10, 12:15-1:45pm.

viewing via Vimeo. To access, visit: vimeo.com/mrcbg visit: Grievancevimeo.com/mrcbg Mechanisms

Weil Hall |79 JFK Street | Cambridge | Massachusetts | 02138 PROGRAM UPDATES M-RCBG’s Rosengard and Bilmes host Indonesian leaders Bilmes addresses veterans in Welcome to Harvard event On October 2, Jay Rosengard, Director of the Financial Sector Pro- gram, and Linda Bilmes, Daniel Patrick Moynihan Senior Lecturer Linda Bilmes, Daniel Patrick Moynihan Senior Lecturer in Public Pol- in Public Policy, led 70 Indonesian mayors and city counselors on a icy, recently participated in a panel of Harvard affiliates calling on stu- visit to Somerville to study how budget reform and statistical pro- dent service members to facilitate conversations with their peers about grams are functioning. The event included discussions with Bali the role of the military. Bilmes said that Harvard students are often mayors on methods for evaluating contracts, combating corruption unacquainted with service members, which creates barriers to mutual and refuse collection. understanding. According to Bilmes, the three most common responses to army veteran are a sense a befuddlement, guilt, and a sense of appre- ciation and awe. She encouraged veterans to have meaningful discus- Beyond Rio +20 panel tackles collective action sions with Harvard students about service and to serve as “ambassadors One of the key themes of the private sector discussions at the Rio+20 Summit in Rio de Janeiro this past summer was the need of the military” on campus. for more systemic industry-wide partnerships to bring about HPCA publishes new policy brief on the Durban Platform change on a broader scale. Participants recognized the need to In a new Harvard Project on Climate Agreements Policy Brief, authors move beyond individual corporate sustainability programs to Joseph Aldy, Faculty Fellow of the Harvard Environmental Economics collective action in a variety of areas, particularly within the finan- Program (HEEP) and Robert Stavins, HEEP Director, discuss why the cial sector. Building on the momentum from that summit, the Durban Platform for Enhanced Action represents an important mile- Regulatory Policy Program and Corporate Social Responsibility stone in the history of climate negotiations. The challenge is to find a Initiative at M-RCBG recently hosted a panel of business and envi- way to include all key countries in a structure that brings about mean- ronmental advocacy group leaders working to advance sustain- ingful emission reduction on an appropriate timetable at acceptable ability investment opportunities and reduce material risks posed cost, while recognizing the different circumstances of countries in a way by sustainability challenges. that is more subtle, more sophisticated , and more effective than the dichotomous distinction of years past. The brief expands upon the au- Matthew Arnold of JPMorgan Chase opened the panel by noting thors‟ Science article, “Climate Negotiators Create an Opportunity for the bank's shift toward innovative, sustainable financing. “The list Scholars.” of things we should not finance is very, very long for [the NGOs],” Arnold said. “When you go to bankers with that list, it‟s not very With grant, HEEP to study energy-efficiency technology adoption inspiring to them.” Arnold underscored the problem: “Bankers do not manage to an environmental outcome…[or] a social outcome. The Harvard Environmental Economics Program (HEEP) has received a They manage to a deal outcome. The question is – how do we get grant from the Alfred P. Sloan Foundation to conduct research on how our issues into the deal metric?” Arnold encouraged students to and why individuals and firms adopt energy-efficiency technology. A learn the language of those they are trying to influence and find major goal of the project is to better understand the so-called “energy- ways to build bridges across institutions and sectors. efficiency gap,” the observed tendency of decision makers to “under- invest” in energy-efficiency technologies, that is, to appear to exces- Namrita Kapur of the Environmental Defense Fund (EDF) de- sively discount the value of future energy savings in comparison with scribed her organization‟s partnership with the private equity firm up-front costs of technology adoption. The principal investigators will KKR. In aggregate, the private equity sector represents 8% of be Robert Stavins, Albert Pratt Professor of Business and Government United States GDP and employs 5% of workers, yet, by its nature at the Harvard Kennedy School and Director of HEEP, and Richard as "private," has been largely untouched by international sustain- Newell, Gendell Associate Professor of Energy and Environmental Eco- ability initiatives. Through its KKR partnership, EDF has worked nomics at Duke University‟s Nicholas School of the Environment and to reduce the environmental footprint of businesses that are part Director of the Duke University Energy Initiative. of the KKR portfolio. The most gratifying piece, says Kapur: "We find that private equity is no longer asking if the environmental lens is going to provide value creation, now it's a matter of how."

For more information about RPP‟s seminar series, please visit: www.hks.harvard.edu/m-rcbg/rpp/seminars.html. To read Katherine Leland‟s (MPP „13) full article, visit: www.hks.harvard.edu/m-rcbg/ rpp/seminars.html.

The Sustainability Science Program welcomed 24 fellows this fall, includ- ing doctoral, post-doctoral, and mid-career fellows. Research topics run the gamut from land use modeling with a changing climate in the Amazon (Eunjee Lee) and evaluating particulate emission trading schemes in India (Anant Sudarshan), to examining trade-offs between different water uses in China (Scott Moore), and commercializing a technology that stabilizes vaccines so they can be stored and shipped around the world without refrig- eration – eliminating the need for the cold chain (Livio Valenti). Find fur- ther details at www.hks.harvard.edu/centers/mrcbg/programs/ RPP Director Joseph Aldy and Matthew Arnold of JPMorgan Chase participated sustsci. in October 25th’s Beyond Rio +20 panel.