The Republicans have their echo chamber which allows them to influence the media, so it is my turn to help the other side.


The Most Efficient Solution to Climate Change

The NY Times recently featured an interesting article about prizes. I discovered the article through a post on Greg Linden's blog where he discusses the Netflix prize and big data. Since he covered the personalization aspect, I'll talk about the best way to prevent climate change.

The article gives a history of prizes: Prizes have been around for hundreds of years. Perhaps the most notable was the Longitude Prize. Prizes eventually fell out of fashion and were replaced by grants, which paid for the upfront cost of research (such as new equipment). There has been a recent surge in popularity of prizes—such as the X PRIZE, DARPA Grand Challenge, and Netflix prize—since they encourage innovation and reward results.

How does this relate to climate change? The article explains:

[Democrats and Republicans] have handed out grants and subsidies for various alternative energy sources like ethanol, even though nobody knows what the best sources will ultimately be.

I wouldn't have phrased it that way, perhaps because I'm more cynical than the author. The politicians haven't given away grants and subsidies because they believe a certain technology is promising, they give them away based on their own self interests. Iowa is the country's top producer of ethanol; Iowa is the first stop of presidential hopefuls; many politicians support ethanol, despite the obvious drawbacks. Coincidence? Again, quoth the NY Times:

A much smarter approach would be to mandate that the economy use less carbon. This would effectively set up a multibillion-dollar prize — in the form of new customers — for whichever companies came up with efficient energy sources.

Exactly. In our current situation, we are are paying to get politicians reelected by subsidizing technologically inferior solutions. The best and most fair solution is a carbon cap-and-trade program. By mandating a cap-and-trade system, the free market would automatically discover the cheapest way to prevent the most pollution.

This method is free for the government: subsidies, grants, and tax breaks empty their coffers, where as the free market delivers the best solution at no cost. You might argue that the economy would slow because of this new regulation, therefore reducing government revenue, but that would likely be offset by the increased income of whoever develops the new technologies.

If you truly care about climate change, then requesting a cap-and-trade system is the most sensible course of action. Demanding specific subsidies only hurts your cause.

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