6 Jun 2006

Call for Unity Part 3 - Compromises

3.1 Regulation vs. Free Markets

The principle of protectionism is contrary to the proponents of the Free Market. And yet they endorse and furiously defend intellectual property and patents, which are forms of protectionism. No principle of economic practice can ever be absolute and all-embracing.

So the laws framed to encourage CO2 emissions reduction should exploit the loophole in free marketer thinking. New and suitable technology can be given subsidies and other forms of financial support that stress their new industry status - short term measures with built-in expiry dates, but strong enough to encourage investment for the long term, when economies of scale and incremental improvements in technology and production methods will be sufficient to replace them.

At the same time, the polluter-pays principle can be extended to charge users for burning fossil fuels according to the calculated cost of extracting the CO2 from the air and sequestering it. This will drive up the price of using these fuels, and so make alternatives even more financially attractive, allowing the market to drive the transition once a level playing field is established.

3.2 Regulation vs. Technology

Those who think that all we need is new technology to move away from fossil fuels are often also in favour of subsidies and regulation to encourage the uptake of that technology. However, they tend to advocate future technologies rather than those that already exist. Regulating to encourage the use of wind and nuclear power, for example, is opposed on the grounds that cleaner, cheaper technologies are just around the corner.

Therefore regulation needs to be framed in such a way that it encourages existing technologies at the same time as promising support for any future innovation delivering more benefit. The level of support and the duration should be dependant on the degree of benefit that the technology provides.

3.3 Regulation vs. Social Change

Those who say our behaviour must change are the same people who object strenuously to any attempt to encourage behavioural changes by governments. The paradox is not precisely hypocrisy (although it can come across as such when the advocate is unwilling to accept any kind of compromise). It is simply a misapplication of optimism.

Social changers think that all that is necessary is for them to point out where people's best interests lie over the long term for them to act accordingly. But people don't change their short-term behaviour on the basis of long-term consequences. Not when they are detrimental to their short-term interests. It takes the introduction of short-term consequences to balance the equation.

This is where regulation has a part to play. Adding immediate consequences makes people more aware of the long-term impact of their behaviour. It encourages people to act more logically by making the costs more real.

Just as tax on cigarettes has reduced the numbers of people smoking to the point where it is now possible to ban smoking in all indoor public spaces, regulating to add a cost (small, but steadily increasing) to burning fossil fuels will pave the way to an eventual complete ban.

In ten of twenty years, with sufficient encouragement and education, people will accept the necessity for a permanent change in their behaviour. Encouragement and education, however, depends on the wide-scale muscle of governments and their ability to create real short-term consequences for undesired behaviour.

3.4 Free Markets vs. Technology

Many of the same people who promote investment in technology also think that the mechanisms of the free market will encourage this investment. There is, however, an area of conflict. Free market advocates occasionally object to governmental investment in R&D, even though most industries depend on state-funded education programs for the expertise in their labour pool.

So long as it is remembered that state-funded education is, in effect, a subsidy for high-tech industries, any objection to more direct investment in technology advancement can be rejected.

3.5 Free Markets vs. Social Change

The conflict between capitalists and socialists - particularly those classing themselves as anti-capitalists, has no room for compromise, on the face of it. Each side is implacable in their opposition and disparagement of the other.

Advocates for social change are most readily to be found among the anti-capitalist camp. This is at least in part because many of the changes proposed involve the dismantling of the machinery of capitalism.

How do you bring two such groups together in the cause of alleviating climate change? Is there any common ground?

Surprisingly there is. Social changers use the boycott as a powerful tool for change. Branding one corporation or another as anathema in order to bring about change, and using the power of the consumer to drive the corporation in a new direction. This is, at heart, a tacit acknowledgement that the profit motive has the power to do good.

Without the profit motive, the corporation would not pay any attention to a small proportion of its customers refusing to buy from them. They would write off the lost business and move on. The fact that they change course is down to the simple fact that they cannot write off any lost business. Their shareholders would not stand for it.

To achieve a common goal, the free marketers must be aware of the activities of the social changers. The social changers must focus and target their efforts in areas where it will do the most good. Of late this has been air travel.

The international air industry is currently immune from any attempt to regulate or limit it. The US is opposing any attempt to legitimise taxes on aviation fuel. As a result, no pressure can be brought to bear on the carriers to reduce their flights or explore less polluting technologies (except as part of their constant drive for efficiency).

However, it is also vulnerable to market forces, which can best be shaped by the social changers. A targeted campaign of protest and no-fly pledges, boycotting one corporation at a time until it either goes under or adopts artificial bio-fuels, would change the industry forever.

3.6 Technology vs. Social Change

Many of the social changers are in favour of reducing our dependence on technology. They want to reverse progress to the point where the planet was able to tolerate human activity without the threat of catastrophe.

While this approach holds the promise of a sustainable lifestyle, it will not prevent, nor will it alleviate, the climate change impacts to come. Merely starting to live within our limits will not undo the damage done so far. Nor will it encourage others to do so, as they will see only the reductions in lifestyle.

Instead, the emphasis of both camps should be on making the adoption of a sustainable lifestyle a step forward - attractive in its essence in the same way that owning a TV and washing machine was attractive to the family of the 1950's.

One such blending of the two approaches is micro power-generation. Fitting out a house with solar panels and wind turbines is becoming more affordable as technology improves, and it has the attractiveness of self-sufficiency without the drawbacks. By encouraging the uptake of new, sustainable technology, the companies investing in them make profits and can cut costs to make the change more affordable.

So the best approach for those interested in social change is to embrace new, appropriate technologies, and encourage the consumerism of progress.

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