03 December 2018

It's not just nappies

Nappies, cloth or disposable, just won't go away. I've blogged about nappies before (here and here). A recent article in New Scientist revisits the issue, citing an updated report done in 2008:

...if cloth nappies were washed in full loads, air-dried on a washing line and reused on a second child, they resulted in 40 per cent lower greenhouse gas emissions than using plastic disposable ones. These benefits are likely to be even greater today [ie 2018] now that half the UK's electricity comes from low-carbon sources. Are disposable nappies really so terrible for the environment?, Alice Klein, 'New Scientist', 21 November
The question posed by the article raises a general question here as to policymakers go about legislating or regulating in order to solve social and environmental problems. Most of these problems are complex: they have multiple causes whose significance changes radically over space and time. Our current policymaking system usually looks at a problem, or a symptom of a problem, tries to identify a cause, then goes about trying to legislate or regulate that cause so as to moderate its adverse effects. That works well when the relationship between cause and effect is easy to identify. But such is rarely the case today, as the nappies example shows.

It's not just nappies. Climate change is the same: we cannot rely on government to identify the causes of a complex problem, then do the right thing and, eventually, regulate it. There is too much scope for mis-steps along the way. The causes might be many and varied, with time lags and linkages impossible to verify. Legislating is nowadays a cumbersome and arcane process, and is often opposed or delayed by powerful interests that stand to lose if it goes forward. Results of policies are rarely monitored; still less are policies modified in the light of their impacts.

These flaws are inevitable in the way we make policy today. Fortunately, I believe there's an alternative. We need to focus on outcomes, and let the ways in which these outcomes be achieved be decided, on a continuous basis, by people rewarded only for achieving them. So: rather than government trying to deal with the problem of (say) landfill by commissioning a one-time study of the comparative benefits of cloth versus disposable nappies using fossilised data, it would instead target for reduction the volume of landfill. Rather than try to work out why there are more adverse climatic events, government should reward reductions in the number and severity of such events. And rather than try to work out some alleged 'root causes' of violent political conflict, we could instead reward the sustained absence of such conflict, whoever achieves it and however they do so.

Not only would this be intuitively more efficient than current the policymaking process, it would also be much quicker. It's taken decades to get to where we are now with regard to the causes of climate change and...adverse climatic impacts are worsening. And we haven't even begun to identify root causes of war. We don't even know if there are any....

What I'm advocating is, of course, the Social Policy Bond idea, whereby we issue bonds that become redeemable only when a targeted social or environmental goal has been achieved. Investors in the bonds would themselves work out the best ways of achieving these goals, and they would be motivated to do so efficiently and continuously. It's a simple idea, but the ramifications are many and varied, and I've written about some of them in this blog and on the Social Policy Bonds website. As I say: it's not just nappies. The traditional way of doing things just isn't working any more. It's time to focus on outcomes.