April 15th, 2008 | Author: admin
What Can’t We Advocate Market Competition For Fighting Against Global Warming?
It is great and rightfully so that we get the governemnt involved but I’ve noticed something. When Toyota started to build its Prius other car companies followed like Ford with its Escape and Mariner, GM with its Chevy Malibu and Cadillac Escalade, Daimler Chrysler with its Mercedes S-Class and Dodge Durango, and there are countless other companies joining. I think its because customers wanted them to be built and Toyota is approaching #1, or has it? However, I might be wrong. Also, I’ve noticed that Home Depot is producing double-layered glass for insulation lowering the gas to make profits. I used to think that GREED always destroys the environment but sometimes it can help since a corporation needs PROFITS. Remember, they exist because YOU, the CONSUMER, gave them money to buy their products. Realize that you are POWERFUL and corporations are POWERLESS. Anyway, what do you think? I want some great thought on this. Thank you.
You’re on the right track–but there’s a bit more to it.
Don’t underestimate the power of corporations to manipulate the market. The SUV is a classic example. This is essentially an off-road design, not suited to urban travel and expensive to build and operate. Functionally, its not as good in a city as other designs. But through a combination of styling and marketing, the car companies sold millions of them. Despite the fact that by any rational measrure, a minivan or station wagon is a better, afer, and cheaper alternative.
Not to beat up on SUV’s–just making the point about marketing effectiveness. But corporations aren’t the only ones who can manipulate the market–the government can as well–and with extraordinary effectiveness. One of the most effective–and economically efficient ways–is by setting standards. We see this daily–and often don’t realize it. The reason why all computers can link into the internet isn’t because they’re magic–they all have to use certain standard protocols.
In this case, the government can shape the market by setting standards (for instance, minimum fuel efficiency standards for cars). There are two ways to do this. One is for the government to issue regulations saying everyone has to do things a certain way. This is sometimes effective–but isn’t often the best way to solve a problem (such prescriptive standards arethe kind i just gave an example of with computers). The other approach is to set a standard–but without mandating how to achieve the standard. Where global warming and comparable issues are concerned, this is almost always the best approach. The idea is that companies are then free to innovate and find the best–and most cost-effective–ways of meeting the standard.
If you think about it, this can be–and in practice often is–an even better way of acheiving policy goals than relying on market forces alone. And it’s proved very effective with many technologies. Much of the innovation involved in radio, television, cars, computers, aircraft, etc. has been a result of intelligent combinations of standards like those cmputer protocols–that insure compatibility–and achievement standards (goals) that set safety or other standards–but leave the market forces free to find the best way to reach the goal.
Our biggest problem at this juncture, however, is that special interests (mainly the oil companies) are deliberately trying to derailefforts to set policies like the above. The reason is simple: they are scared. It doesn’t matter what standards, market forces, etc end up coming up with as solutions–demand for oil is going to begin a long term decline in the near future–and they are the big losers. The good news is that evryone else is a potential winner. But in a (so far deplorably successful) effort to delay change, they are blocking needed policy research, debate, and implementation.
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