Environmental goals need diverse, adaptive approaches

David Lauterwasser writes:

Free energy is nowhere around the corner, neither is truly sustainable energy.  Solar panels are made from sand, which is running out. The production of photovoltaic plates for solar panels requires tremendous amounts of energy, involves the excessive use of highly toxic chemicals and creates vast amounts of waste products such as silicon tetrachloride (three to four tons of which are produced for every ton of the desired polysilicon), which forms hydrochloric acid upon contact with water, is often casually dumped somewhere and already devastated landscapes in China. The Collapse of Global Civilization Has Begun, David B Lauterwasser, 'Medium', 14 November 2017

The life-cycle assessments required to establish the environmental benefits or otherwise of shifts in our behaviour are bedevilled by boundary issues, measurement difficulties, and the difficulty of weighing one type of environmental impact against another. They are better than blandly assuming that rail is ‘better’ than air travel, that solar power is better than coal-fired power stations but, for the making of robust policy, they would need to be continually reassessed in the light of our ever-expanding knowledge of the environment and our ever-changing environmental priorities. Government policy cannot be so responsive: if government did use life-cycle analyses with the aim of altering our behaviour, it would probably do so on the basis of one-time, necessarily limited, and possibly quite subjective assessments of environmental costs and benefits. It wouldn't be good enough, but even worse would be what we have now: environmental policy largely dicated by corporate interests, with attempts to mitigate disasters that are fast-moving and visual enough to make the television news.

Social Policy Bonds would take a different approach. They would subordinate environmental policy to targeted environmental outcomes. It might be, for instance, that society wishes to reduce its use of fossil fuels. A Social Policy Bond issue that rewarded achievement of such a reduction would generate incentives for bondholders to bring it about at least cost. They might well carry out life-cycle analyses in their attempt to do so. But there is an important difference between the way do they would conduct their research and the way government would do so: bondholders have incentives to achieve their goal efficiently. This is likely to mean responding to and stimulating: increased knowledge of scientific relationships, and technical advances.

A single environmental goal, such as reduction in fossil fuel use, entails diverse, adaptive responses. These are precisely the sort of responses that government does very badly. Government can and should articulate society’s environmental goals, and can raise the revenue required to pay for their achievement: in the democratic countries it performs these functions quite well. But actually achieving these goals requires continuous, well-informed and impartial decisions to be made about the allocation of scarce resources. These, government does badly. For that purpose, the Social Policy Bond principle as applied to the environment, with their incentives to achieve targeted outcomes efficiently would, I believe, be far better than the current haphazard, one-size-fits-all approach.