Saturday, February 21, 2009

Solutions to anthropogenic global warming: The Carbon Badge

We're coming across a number of quality seals in our everyday lives. Some commend the product for its superior quality, others for the company's worker-friendly atmosphere, others for the humane treatment of any animals involved in the production process. In an age of climate concern, companies could show their efforts to reduce greenhouse gas emissions by putting a special quality seal on their products that we will refer to as The Carbon Badge (TCB).

TCBs will be issued by separate companies which specialize in analyzing the carbon output of other businesses. To get permission to use the seal on their products, companies would have to subject themselves to the rigorous scrutiny of TCB employees who have been trained to look twice on an official carbon balance sheet before accepting it and who would be allowed to check any corner or record of the aspiring company for evidence of fraudulent carbon claims. After successfully verifying the carbon benevolence of a company, "TCB Inc." would contractually allow them to use their seal on any company-related product and probably promote willing companies on their website or in TCB-friendly magazines and papers. That way, climate-conscious customers could discriminate against companies who refuse to take action against climate change and support industrial efforts to cut back on greenhouse gases.

But what if, say, Big Oil sets up a TCB-issuance company to promote their products with a phony seal? Markets will figure out which seals to take seriously and which not. An oil company that sets up a rigged seal and puts it on its products would soon be discovered by environmental activists and pilloried in their publications. Any general news outlet that has a reputation of editorial independence to lose will likely cover the topic as well as soon as the details reach the general market. Another approach would be customer guidance booklets which promote trustworthy seals so that customers can specifically look for them. After some time, those seals with the best customer/market feedback would become general knowledge and people would be able to recognize brand names or specific signs on first glance.

How about companies which put a trustworthy TCB seal on their product without permission? That would constitute fraud. If a product is supposed to contain apple juice, but you smell root beer after opening it, you're free to sue the producer and inform customer information agencies. Entrepreneurs who chose to act like that would soon lose credibility, maybe even their good credit ratings (after all, a fraud lawsuit may result in a hefty amount of trial fees and smart-money obligations).

What if people just don't care enough about climate change to notice any carbon badges? In that scenario, we'd be even worse off with a state solution. Since a majority of voters wouldn't care about climate change and likely oppose any related political measure that burdens them with extra costs and toils, we can expect politicians to drop the issue. Worse even, they might fund scientists to disprove anthropogenic climate change theory, thereby decreasing the chances of concerned AGW activists to get the message through. If a sufficient number of people worry about AGW, we shouldn't settle for an unsatisfying, wasteful and slow state solution, but instead harness the power of the market to tackle the issue.


Danielle said...

This can't work as a matter of fact, that is exactly what I believe.

Tamsin said...

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