A multitude of inventions

William D. Nordhaus writes:

The history of technology suggests that we should avoid trying to pick the winners in our search for revolutionary energy technologies. Radical invention is fundamentally unpredictable. Who could have predicted the nature of modern electronics, biotechnology, or communications a century ago? Similarly, it is a safe bet that we have only the foggiest ideas about the technologies that will save the globe from climate change a century hence. We should avoid thinking that we need a climate Manhattan Project to develop the key technology. It seems likely that new climate-friendly technologies will be the cumulative outcome of a multitude of inventions, many coming from small inventors, and originating in unrelated fields. 'The Question of Global Warming': An Exchange, 'New York Review of Books' [my emphasis]

Exactly. The key principle is that government can supply incentives for the endeavours of the inventors, but it cannot get too closely identified with them, because if it does, it won't terminate failed inventions. A Social Policy Bond regime could channel government incentives into finding solutions to the climate change problem, or other quantifiable problems. In that way, government could do what only government can do, and what it does best: articulating society's goals and raising the revenue required to achieve them. But through the Social Policy Bond mechanism it would let the market does what it does best: allocating scarce resources to meet our goals with maximum efficiency. For more about Social Policy Bonds and climate change, read this short paper about Climate Stability Bonds.