Regulate Me!

Mindy Lubber, head of Ceres, is writing for Worldchanging from Davos:: "What's needed now is a clear market signal from Washington that sets the parameters of the regulatory environment in which companies in the world’s largest producer of greenhouse gas emissions will operate. 'You have to have government set the goal, set the timetable,' Yale professor Daniel Esty told a group of businessmen and government officials here. Then it will be off to the races in the low-carbon, clean technology gold rush."

This gets to the heart of why all of the big industrial companies are suddenly begging for government to make set a carbon reduction direction. Everyone now knows that some kind of government regulation is inevitable. And once you're in that mindset, you immediately want clarity on what those regulations will be. As one of the speakers at last fall's Kyoto Plus conference in Berlin put it, "business people are very good at making decisions in the face of risk...what they have a hard time is making decisions in the face of uncertainty.". I agree with Mindy that we've passed a tipping point, and it came earlier than I thought. As they say - "we're going somewhere fast!".
Comments:

I believe rather than arbitrary government regulations, something like the Ansari X-Prize is the way to go.

I have never heard of government regulation causing a wave of innovation. Nor do I think government is skilled in using regulation to encourage innovation. Although, the potential of Kyoto carbon credits did help increase Enron's stock price, as it planned to create a trading market for such credits.

Regulations generally benefit large, bureaucratic companies, with a large government lobbying staff, not small, fast, innovative ones.

But if you had asked me if I thought Burt Rutan could build a reusable spaceship, I would have doubted it. Now Jeff Bezos is in the act as well. While the highly bureaucratic NASA struggles.

Imagine a series of X-Prizes focused on accomplishing certain technologies. That would drive the start-up mentality.

And more near term than climate change is to end the need for petroleum as a fuel. Both Thomas L. Friedman and Newt Gingrich have correctly called for a "Project Apollo" type of program to get us off of oil in about 20 years. Gingrich went further to say our goal should be to relegate petroleum to nothing more than plastic ore.

This would cause a steady decline in the economic value of oil, which would simultaneously destroy the political power of much of the middle east. There could be drawbacks. Countries like Saudi Arabia could collapse into poverty and anarchy. Undoubtedly radicals would blame a European/American/Zionist conspiracy for their economic collapse. But it is a risk we must take, and one current advocates of energy independence clearly have already considered and decided it is worth taking.

Posted by Mark on February 01, 2007 at 10:08 AM EST #

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