September 29, 2009

How do we overcome resistance to change?

There's been a lot of discussion of how to overcome resistance to change, especially to the changes needed to deal with climate change. I think a lot of it's been pretty unrealistic.

We need to stop butting our head pointlessly against those who will be hurt by a transition to renewables (and other new ways of doing things) - that's the path to the paralysis we see now. We need to find ways to buy out/compensate those who will be hurt.

This applies especially to coal consumption: there isn't any country in the world that will let the lights go out, if coal is available (This means that we don't face Peak Energy: we face Peak Oil and Climate Change).

With luck, we'll start building out wind and solar even faster. When it starts hurting revenues for investors in coal, we'll need to find a a way to buy them out to maintain the pace of the transition.

-------------

We need to stop butting our head pointlessly against those who will be hurt by a transition to renewables - that's the path to the paralysis we see now. We need to find ways to buy out/compensate those who will be hurt.


A classic story: Manhattan needed more cab drivers, but faced resistance from the current drivers, who would face more competition. The solution? Giving the licenses to the old drivers, so they could sell them and get the benefit of the new resource. It accomplished the result, and yet the existing drivers were happy.

We need creative ways to enlist the investors, and employees, in existing industries, so that they become enthusiastic partners. Otherwise, they'll fight change forever, in the exhausting trench warfare we see today.
----
The Cash For Clunkers program was a good example.

Criticism of CFC seems a bit "hindsight is 20/20" ish. While it's always good to identify where something could be improved, it seems we should acknowledge that

1) it did what it was intended to do - primarily to stimulate auto sales and the economy, amd secondarily to improve efficiency,

2) it was an improvement over the European programs from which the US got the idea (they had no efficiency provisions), and

3) CFC got intense criticism during the drafting process for the efficiency provisions, as many people thought they would limit the program too much.

Sure, it was expensive: that's the point of stimulus programs, to put money into the economy.

Efficiency regulations are cheap for the government, and great in theory, but the difficulty is that you're creating costs for those who are regulated, so that they'll fight the regulations tooth and nail. We have to acknowledge the costs in delay created by a parsimonious approach. We may need to compensate people for their costs in order to get things moving.

Shouldn't Cash for Clunkers have had much stronger efficiency requirements?

Sure.

The problem here is that the political context in which such legislation is crafted doesn't contain the PO/CC awareness needed to support more aggressive action. CAFE requirements should be much higher; we should have stiff carbon/fuel taxes; we should be doing many other things such as cap and trade in addition to regulatory efficiency improvements such as CAFE and carbon taxes (not to mention building efficiency).

Of course, we have most of the information we need to take action. Much of the reason for delay is resistance in the form of disinformation ("FUD") from those who would lose careers and investments. That's one good feature of "C4C": it overcomes such resistance by paying people to give up their inefficient capital investments (rather than just making them obsolete by regulation).

Finally, we learn by doing and trial & error. There was much speculation that the efficiency requirements were too stiff, and that as a result the program would fail for lack of participation. Instead, there was so much demand that they expanded the program substantially.

No comments: