Incenting the Positive vs. Restricting the Negative

By Kevin Meyer

A couple weeks ago The Wall Street Journal published a series of articles on climate change – or the approach to reducing climate change – that I'm still trying to wrap my head around.  My point and thoughts aren't on climate change itself although I have some definite opinions on the subject, but on effective leadership methods to create change.

The Kyoto Protocol and last week's Cancun talks focus primarily on restrictions – reducing emissions, reducing carbon footprints, etc.  This inflicts a negative, which is very difficult to agree to and even more difficult to actually hold countries accountable to.  Kyoto is exhibit A to that problem… as is Copenhagen and now Cancun.

Ted Nordhaus and Michael Shellenberg propose a different solution: incenting the positive instead of restricting the negative.  The WSJ editor prefaced the series of articles this way:

What if we're going about it all wrong?

That's the intriguing question Ted Nordhaus and Michael Shellenberger pose in their cover story, with regard to cutting global greenhouse-gas emissions. Instead of trying to get countries to agree to cap their emissions at a specific level, they argue, we should be working to develop—and share—new technologies that can accomplish the same thing by making clean energy cheaper than fossil fuels.

Their reasoning is simple: We have to stop throwing good money after bad. The old approach, they say, has failed before and will continue to fail in the future. Countries aren't going to agree to either a big increase in the price of energy or a mandatory limit to emissions, especially in these economic times. But they believe that all countries (and left and right) can come together on the need to push for technology innovations that reduce our reliance on carbon-based fuels.

I'm not going to go into their proposed mechanics with regards to climate change, although the article is intriguing.  But perhaps there's a general leadership lesson here.

How often are managers pulled to the easy solution: saying what not to do.  What would happen if instead we worked together to develop solutions that increased overall value, not restrictions on the value-creating process?

Could the analogy even be extended to the toolheads, those that focus purely on lean tools without understanding the problem – if there even is one – that the tool is intended to solve?  Ok that's a stretch – it's just a pet peeve of mine.  I've had it lately with the "thou shalt do 5S first" quacks.  Figure out the problem or opportunity, prioritize, and find or even develop the right tool.  End of temporary diversion – back to my point.

Think about the following statement from the article from a lean, value-based perspective:

There is a better way. Nations should focus on lowering the cost of clean energy, not raising the cost of fossil energy. The goal? Make clean energy cheap enough to become a viable option for poor as well as rich nations. Until that happens, emissions will continue to rise, and no effort to regulate carbon can succeed.

Lower cost and create value to incent the desired positive outcome, not restrict the inherent value-creating process.

Think about that the next time you have to solve a problem.