Let the market, not governments, work out how “build back better”

Most attempts at affecting climate change by governments have and will continue to fail because most market regulation to date has been framed in terms of “solutions” dreamt up by well-meaning committees and functionaries but crippled by industry lobbyists and vested interests (like for example carbon trading) rather than giving the *problem* to the market and letting the market devise the best solutions.

There is however an alternative approach, which – paradoxically – is already employed in the nuclear sector of the electricity generation market (which is one of the biggest carbon emitting sectors). The nuclear power model is very simply that you are not allowed to even start to make money from selling electricity produced by nuclear power until you have demonstrated to the regulator exactly how you will clear up your mess.

I.e. It is quite simply to say to the “polluter” (be that radioactive waste or carbon dioxide) you aren’t allowed to make money from burning coal or selling petrol (or nuclear fission) until you demonstrate to me (the regulator) how you are going to ensure that your activities result in net zero pollutants being released into the environment.

So if we applied the nuclear model to the oil industry we’d say to say BP you are not allowed to sell petrol until you can demonstrate exactly how it will remove a tonne of carbon dioxide from the atmosphere for every tonne of carbon dioxide it’s products produce. So BP stops selling petrol until it solves the problem .

Given this scenario I suspect I’m not alone in thinking that rather than spending millions on dis-information, lobbyists, false science etc… to cripple or delay the implementation of imposed solutions as they normally would, BP will come up with a workable solution in VERY short order! Not only that but the solutions they come up with will be those that put the minimum burden on the company whilst achieving the net zero bar.

Exactly the same will apply to gas companies, coal mines and any industry that emits carbon (or methane in the case of agriculture).

So in a nutshell give the problem of solving the net zero carbon issue to the people that will have the biggest incentive to solve the problem – and don’t let them trade until their solution is acceptable – i.e. give them the problem and let them and the market find the best solutions rather than trying to impose half baked solutions and challenge the market to find ways of circumventing them.

All markets are regulated – it’s just that some are well regulated to achieve the public good desired and some are not. Giving the problem to the people with the biggest incentive to solve it and the regulator the power to ensure the desired outcomes will ensure the best solutions for all concerned.

 

 

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