Should ambitious goals be set based on current capabilities?

Or should they stretch for what's necessary, adopting emerging possibilities to achieve these objectives?

In a rapidly evolving world, the question of whether ambitious goals should be anchored to our current capabilities or stretch to encompass emerging possibilities has never been more pertinent. This dilemma is starkly evident in energy transition, where ambitions have outpaced what traditional economic models can forecast. The dissonance between the lofty goals of policymakers and the predictive capabilities of conventional models underscores the need for a paradigm shift.

The Institute for New Economic Thinking alongside the Oxford Smith School of Enterprise and the Environment spotlight this conundrum. They argue the case for dynamic models which promise a more accurate foresight into policy impacts. This innovative approach moves beyond the dated methods of cost-benefit analysis and equilibrium models that have long been the bedrock of economic forecasting.

But why is such a shift critical? Traditional models are ill-equipped to handle the complexities and nuances of today's challenges. They fail to fully capture the potential of technological advancements and the dynamic interplay of global economic forces. In contrast, dynamic models offer a more nuanced understanding of how ambitious policies can shape the future. This is not just about predicting outcomes but enabling them through informed, forward-thinking decisions.

Examples include China's Emissions Trading Scheme (ETS), the UK's groundbreaking offshore wind auctions, and the US Inflation Reduction Act. These initiatives epitomise ambition, each aiming to redefine the landscape of their respective sectors. Yet, their success hinges on the ability to navigate uncharted territories, leveraging emerging technologies and novel approaches. Dynamic models can bridge the gap, providing a roadmap that aligns ambitious goals with actionable strategies.

It's important to recognise that ambition extends beyond the corridors of power and the boardrooms of Big Tech. Across the globe, individuals and organisations are setting bold targets. From small startups to community groups, the drive to innovate and push boundaries is ubiquitous. This collective endeavour reflects a broader truth: ambition is not confined to what we currently know or can do. It's about envisioning a better future and working tirelessly to realise it.

The question, then, is not whether our goals should be ambitious but how we can equip ourselves to achieve them. Do we limit our aspirations to the immediate capabilities of our organisations, industries, or the wider world? Or do we dare to envision a future that transcends current limitations, adopting and adapting emerging possibilities to turn ambitious goals into reality?

There’s more to the world than what we see. Including what we can reimagine.

The pursuit of ambitious goals, especially in the context of energy transition, demands a bold reimagining of how we forecast, plan, and act. It's about embracing uncertainty, fostering innovation, and being willing to venture into the unknown. As we stand at the crossroads of tradition and innovation, the choice we make will define the trajectory of our collective future.

Do you set ambitious goals based on what you want to achieve, or based on the current possibilities in your organisation, industry, or wider world?

Further Reading:

• ‘Experts call for new economic modelling to meet energy transition ambition’ by the University of Oxford (link here)