Saturday, June 3, 2006

How can we facilitate corporate innovation
for local pollution control?

To: The New York Times Subject: What "incentives"?, re: editorial "Look to the States for Cleaner Air"


One would easily agree with you that "industry usually needs powerful incentives to make things happen," but what incentives are displayed in Governor Pataki's mercury control plan? The Pataki model is apparently the traditional statist challenge to industry to innovate in the face of fair regulation or leave the game, a virtue of liberalism, but no display of innovative incentivization. I want to see The New York Times give more focus to new ideas for incentivization for near-term local pollution problems.

The need for new models of local incentivization is vastly important. Of course, Bush-league credits-trading is inappropriate for incentivization against mercury pollution, as you and others indicate. So, the challenge of incentivization for local pollution control remains.

You call Pataki's plan an instance of states' "willingness to challenge industry to challenge itself," but all I see is a state's populist willingness to impose controls without fostering the innovation that exemplifies government-industry partnership. One may applaud such controls while still wanting to see new models for fostering green profitability within industry.

The Bush approach, no doubt corporatist, does seek incentivization within a government-industry partnership (which also accords with Bush's "answer" to "Kyoto"), but still needs new ideas for near-term local problems such as mercury pollution. I want to see New York Times leadership here. This is a matter of Democratic futures in government!

Gary E. Davis

P.S. (not sent to the Times)

Now, I appreciate that there's a hidden dimension to incentivization here: It's not up to government to come up with industry's innovations. It's up to government to, in short, enable innovation and ensure fairness. Democratically institute a fair regulation, give industry the freedom to innovate, and expect industry to competitively meet the fair challenge. In particular, the democratic response to the coal-based energy industry's complaint that mercury scrubbers will raise the cost of energy for consumers more than the $1/consumer/month anticipated by Governor Pataki is that it's up to industry (in partnership with regional public utility boards) to figure out how to avoid unfair price increases via increasing internal efficiences, fostering more compeititive markets for technology, and educating the public about the good attached to modest cost increases (which public utilities foster through their partnership with media).

My concern, in the letter above, is that democratic government should not miss opportunities to foster corporate support for fair regulation by failing to show partnership with the challenges that industry faces in compliance with new fair regulation. This is especially important for Democratic prospects. Maybe Pataki's model does display such partnership, in the details not reported. But that would be details that the public needs to understand (e.g., for the sake of other states' publics wanting to support fair regulation within fairly free markets, as everyone should want).

Progressives must swim in the mechanics of pragmatic realism and expect government initiatives that foster the public good in fair markets.