Markets and innovation, not government, are the key to reducing climate change risk » Publications » Washington Policy Center

This week I participated in an online discussion on climate politics hosted by Braver Angels, an organization dedicated to discussing important political issues in respectful and thoughtful forums.

I had four minutes to respond to the resolution: “Free market forces will never be enough to address climate change; Government must play a strong role.” You can read my statement below.

The question tonight is whether free market forces will be enough to address climate change.

After more than two decades of working in environmental policy and government agencies, I have found that the more concerned one is about climate change, the more one should support market-based approaches, as political approaches fail miserably.

Washington, King County and Seattle have fallen well short of every single carbon target despite spending hundreds of millions of dollars and adding many new regulations.

Washington’s failure is particularly pronounced given the governor’s claims that he is a climate leader. Washington used to have a climate dashboard with metrics measuring our progress in reducing emissions. The state was virtually all missing when the website shut down just a few months before Governor Inslee announced his presidential campaign.

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Earlier this month, Washington State announced that state agencies have failed in their legal obligation to have 20% of the fuel they use be biofuel. The actual amount was 11%. This was the 13thth Year in a row they failed.

Government approaches fail because the incentive is to pursue policies that make politicians look good, not policies that work. When a government program fails, politicians simply deny it. When was the last time a politician admitted they screwed up? Once we are caught in government on a path of failure, it is very difficult to get off that path.

The great innovator Buckminster Fuller once said, “You never change things by fighting the existing reality. To change things, you create a new model that makes the existing model obsolete.” Market-based innovation does this.

That’s the approach Microsoft, Google, Wal-Mart and Amazon are taking. All have set targets for reducing CO2 emissions that go far beyond the legal requirements. These companies report the results and are well on their way to meeting their goals. And unlike the government, many have exceeded their targets.

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One of the biggest ways to reduce carbon emissions is to shift people from using electricity during peak hours, when electricity is most expensive and carbon-intensive, to times of the day when renewable energy is available. In the UK and Texas, a utility called Octopus Energy lowers tariffs when renewable energy is available and even pays people to use electricity when there’s too much wind. We don’t get our pick of such a utility company in Washington state.

Perhaps the best example of how markets drive eco-innovation is the Prius. For nearly two decades, the Prius has been the vehicle of choice for those concerned about climate change. However, hybrids were not created in response to government regulations or incentives. Politicians didn’t know what a hybrid was in the 1990s. Toyota saw an opportunity to capitalize by marketing to consumers concerned about gas prices and the environment.

Politicians later jumped on the bandwagon and offered tax incentives, but market-driven innovation led the way. politicians followed.

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Certainly the argument is not that the government should do nothing. I’m not an anarchist, as you can tell by not wearing black. But top-down government planning has repeatedly failed to deliver on its promises.

Outsourcing important environmental issues to politicians is a false hope. In politics, we are always one election away from changing course.

It’s time to empower people to take action on climate change. By democratizing environmental protection, we can reward people for reducing carbon emissions and saving energy in a sustainable and effective way.

I’ve mentioned just a few examples, but my new book, Time to Think Small, available on Amazon, outlines many other ways people around the world are turning to innovation, not government, to solve our toughest environmental problems.

The simple truth is, the more you care about climate change, the less you should trust politicians’ promises and the more value you should place on innovation and markets.