How to Write Bad Legislation in the Name of Environmentalism 101
by Vicki Tardif
By day, I am a software engineer. In a former job, I designed and implemented customized software for large-scale web sites. After a while, I learned that one of the best ways for a project to start off on the wrong foot was for the customer to specify that they wanted their web site to use Hot-New-Technology-Mentioned-In-Business-Week™. Often times Hot-New-Technology-Mentioned-In-Business-Week™ was completely inappropriate for the engineering problem at hand and using it created unneeded complexity. But for some reason, the customers decided that they were more competent than the professional engineers they hired. Inevitably, the more the customer insisted on a particular implementation, the more the project floundered.
The California Energy Commission fell into the trap of requesting the Hot-New-Technology-Mentioned-In-Business-Week™, when it proposed mandating thermostats that can be controlled by state regulators. In spite of the details of their proposal, the California Energy Commission’s goal is not to control people’s thermostats; their goal is to cut California’s energy consumption, particularly during peak usage times. Instead of meeting their goal, the Energy Commission attracted opposition and derision from around the country and ultimately scrapped their proposal.
Ideally, lawmakers write legislation that either promotes a desired behavior or deters unwanted behavior. Lawmakers are not and cannot be experts in every field under the sun. When they write legislation that is overly specific, they run the risk of either inadvertently promoting undesired behavior or squashing innovation that may lead to a better solution. In the case of the state regulated thermostat settings, nothing stops particularly obstinate homeowners from finding a different, less efficient way to cool their homes and ultimately using more power in the process. A better way to achieve the same goal would be to mandate programmable thermostats and educate consumers on how best to use them. The Energy Commission could then position itself as trying to help consumers save money instead of trying to force people to conserve.
Similarly, the federal government gives a tax credit for hybrid and alternative fuel vehicles. The goal of the law is to help people buy more fuel efficient cars. However, as it is written, if I buy a hybrid SUV that gets 18 miles per gallon, I get a tax credit; if I buy a traditional compact car that gets 30 miles per gallon, I do not. Is it really more environmentally-friendly for me to drive the hybrid SUV instead of the compact car? Because the law is overly specific, it can promote the very behavior it is trying to deter.
Ideally, legislation should be written to describe the end goal and allow the market to find a solution that meets that goal. Instead of promoting hybrid vehicles, the government should promote a minimum fuel efficiency. This would not only close the hybrid SUV loophole mentioned above, but it would also allow the law to adapt along with new solutions. If I somehow find a way to power my car with a fleet of gerbils running on wheels, I should also get the credit, so long as I meet the fuel-efficiency goal. Who knows, maybe my gerbil-powered car could blow away a Prius in a drag race, but we will never find out so long as lawmakers are mandating the Hot-New-Technology-Mentioned-In- Business-Week™.
on January 18th, 2008 at 2:08 am
Hey! Good to have you back on line.
I think that this is an important point, trying to regulate at a suitably general level that innovation is not squished, but I’m going to play Devil’s advocate a bit on the case of HOV lanes. (The thermostat issue was pure stupidity.)
Regulation not only needs to (sometimes) set up standards for the market to meet, but also might want to create a market. All car manufacturers are already building vehicles with the standard internal combustion engine. And, there are already incentives for trying to maximize the efficiency of the engine. (There are also countervailing disincentives.)
The market for hybrids has been harder to create, and the cars, correspondingly, expensive. Offering owners of hybrids a chance to use carpool lanes helps to offset some of the expense and make the cars more desirable–and thus helps to build a market that wasn’t already there.
I’m speaking generically here and don’t have any data to back me up, but I bet that this (relatively small) incentive for people to buy hybrids had little or no effect on car manufacturers’s decision to make traditional vehicles more efficient. So innovation was not squelched. At the same time, something small was done to make hybrids more desirable and help get an alternative to market–an alternative that might create more competition among manufacturers to build even more efficient cars.
Now, maybe this was not the best way to spur the making of hybrids. (Again, I have no data.) Maybe it was a compromise. (I don’t know the history of the provision either.) But I think I would want to know more before I condemned the idea out right.
on January 18th, 2008 at 5:03 pm
So, I completely idea with the idea of creating a market, but I think Vicki’s point is that you don’t necessarily want to create a market for the implementation (a specific technology), instead, you want to create a market for anything that can meet a particular performance specification.
To that end, why do we care if there is a market for hybrid SUVs? Or hybrids where the hybrid engine does little to nothing to increase the fuel efficiency and is really just a ploy to add more power to the car?
Rather than creating a market for hybrids, per se, we should be creating a market for cars that meet a particular specification (e.g., specific emissions standards or fuel efficiency standards).
What is the end goal that we are trying to achieve? Does having a hybrid engine really solve anything?
And what if there are other ways of solving the same problem? Why create a market for one implementation over another implementation if they both solve the problem?
In this specific example, you could have an HOV lane for hybrids or you could have an HOV lane for car models that are rated by the EPA to get 35 mpg and that are certified as partially zero emission vehicles (PZEV) or better.
Under this model, the hybrid Dodge Durango which gets something like 18 mpg would not qualify whereas the Smart Car — which does not use a hybrid engine, but gets 40+ mpg — would qualify.
What is the point of favoring the hybrid Durango over the Smart Car because of the type of engine it uses?
Shouldn’t the goal to be spurring the making of highly fuel efficient, low emission vehicles rather than spurring the making of hybrid vehicles? What is the value that we get in society by encouraging hybrid Durangos?
on January 18th, 2008 at 5:31 pm
I the environmental movement you have the terms “mitigation” and “adaptation”.
Most of our focus tends to be on mitigation — what can do you do decrease the likelihood of “bad things” from happening? Things like conservation are all about mitigation — if we all conserve enough, then we can prevent the bad things from happening.
I think that in the situation of California and the thermostats, they have passed the point where mitigation will itself be sufficient and they have moved into adaptation — how do you change your life to deal with the fact that “bad things” are happening? Adaptation is about admitting that, as much as we might not like it, failure may in fact be an option and, as part of that, we should figure out what the least bad course of failure is.
While it would be great to do more to encourage greater efficiencies and greater voluntary decreases in power usage, adaptation is about answering the question, “And what do you do when that fails?”
It is important to recognize that California already has a solution to this problem: rolling blackouts. When you have a really hot summer day and there is not enough electricity to feed the demand they solve this problem by actively choosing to shutdown all power to neighborhoods.
Problem solved.
While this solves the problem of demand exceeding supply, it is an incredibly blunt instrument. It also means I probably lose phone service (if I am using any modern phone that needs electricity), I lose power to my refrigerator, my computer equipment, potentially medical equipment, etc.
Wouldn’t it be better if the electrical companies could target which electricity they turn off? Let’s say they had the ability to have a “rolling partial blackout” where they turned off electricity, but only to the air conditioning units. That sure seems like a much better solution than the current rolling blackouts.
I guess I have a little more sympathy for the problem that California is trying to deal with and can understand why they would be looking to try to find creative solutions to avoid rolling blackouts. In general, most adaptation solutions intrinsically suck since you are already in a very bad situation and are trying to make the best of it.
While I am not sure I agree w/ the thermostat plan, I do think one has to consider the current state of affairs and evaluate the proposal compared to that. While remote controlled thermostats might seem like a bad idea are they a worse idea than the alternative? If California doesn’t implement something else, what is going to happen? More rolling blackouts. Is that really the best adaptation solution all around? Or is there a better adaptive solution?
on January 18th, 2008 at 9:46 pm
Eric wrote, What is the end goal that we are trying to achieve? Does having a hybrid engine really solve anything?
As I admitted, I don’t know the history of the legislation in this case, and if it turns out I am wrong I am fully ready to join all right-thinking people and condemn HOV regulations. But let me explain how I’m coming at the problem.
As I think about it–quite probably incorrectly–the 1990s witnessed the renaissance of 1950s’s era vehicles, with gaudy SUVs standing in for tailfinned Ford Fairlanes. There were a lot of reasons–low gas prices, especially early in the decade, marketing, consumer vanities, outsized notions of patriotism, etc., etc.
And it was conventional wisdom that Americans just wouldn’t buy small or fuel-efficient cars in large numbers. (Japanese cars were called rice grinders, even as they sold increasing numbers.)
To be overly simplistic, what changed that was the Toyota Prius. Yes, gas prices also jumped, but then SUV sales largely continued apace, and Americans did not cut back on the number of miles that they drove, so that probably played a small role. Environmental concerns, lifestyle statements, middle class sanctimony, technogeekery–these all played a role, too. But my point is that a hybrid vehicle helped to open the nation to the idea that Americans would buy smaller, more efficient cars. And the Prius put pressure on American car manufacturers to change.
In this environment, it would make sense to open HOVs to hybrids, to encourage the shift to more efficient cars. Certainly, that might piss off Fred Flintstone, but the barriers preventing entry of his mode of car into the market were greater than preferential access to HOV lanes. (For context, it’s worth remembering that there are huge tax incentives for corporations to purchase SUVs.)
I suppose I am staking out a Rumsfeldian vision. You go to war with the army you have, and you innovate with the innovative technologies that you have on hand–not the ones you wish yo had.
Now, it may also be the case that it is time that this law was changed to allow Smart Cars and more efficient conventional vehicles into HOV lanes and to exclude Dodge Durangos. I’m cool with that. ANd it’s easy enough to change.
My argument is that public policy is messy, and laws are–as you say in your second post–often blunt instruments. So it sometimes does make sense to legislate based on specific technologies–to prime the pump, say, as in this instance, and create competition–and then to change later once the conditions have also changed. This post seemed to rule out that possibility generally, and I wanted to make a case that sometimes it is sensible policy.
on January 24th, 2008 at 7:30 pm
Josh, you asked about what spurred the innovation that led to the creation of the Prius.
Interestingly, I think this was a case of regulation working (at least temporarily) correctly.
As a caveat, my understanding of the history largely comes from the movie Who Killed the Electric Car?, but it seemed pretty plausible.
According to them, in 1990, the California Air Resources Board enacted the Zero Emissions Vehicle Program to mandate that a certain percentage of cars produced by manufacturers meet the zero emissions target.
The key here is that they did not specify how to meet this — instead they specified the performance requirements necessary to meet this.
Not surprisingly, nearly all of the U.S. auto manufacturers fought against this proposal tooth and nail. The only manufacturer who really did anything here was General Motors who produced the EV-1 — the subject of the movie reference above.
Ultimately, the U.S. manufacturers were successful in getting the CARB to largely neuter their plan and General Motors killed off the EV-1.
However, the very interesting side effect of this whole thing is that — at least according to the movie — the Japanese auto manufacturers were terrified that the U.S. manufacturers were going to take the CARB regulations seriously and so they began heavily investing in clean car technologies.
Again, according to the movie, the Hybrid Synergy Drive — the fundamental underpinning of the Prius — was developed in reaction to the CARB mandate.
on January 25th, 2008 at 2:16 am
Thanks for the history lesson.
To move the conversation along a bit, I wanted to respond to your point, The key here is that they CARB did not specify how to meet this — instead they specified the performance requirements necessary to meet this.
I agree completely that this was the right way to go. And, more generally, I agree that performance requirements are a good thing. But the HOV issue is slightly different–and that difference, I think matters. I just don’t think it’s right to make an analogy between HOV access and new software, thermostat installation, or–as was done in an earlier post on this blog–light bulb installation.
It seems to me quite correct that you don’t necessarily want to force a software program to use some particular technology–because that technology may prove to be wrong, or may soon be outdated. And then the problem is that the modish technology is already built into the architecture of the program, so changing is expensive. The same principle holds true in regards to mandating that people use certain thermostats or CFCs instead of incandescent bulbs–when those thermostats or bulbs are no longer state of the art, then replacing them becomes onerous.
HOV-lane access is different.
The investment in HOV-lanes was already made–in dedicating the lanes, putting up the signs, building special off-ramps, etc. It’s comparatively easy to change who (or what) gets access. Thus, some places in California grant it to cars with two or more people, while others require three (or one or two passenger vehicles filled to capacity). Mucking around with the exact requirements for access is relatively easy. So it doesn’t bother me that at some point legislators granted it to cars with specific technologies rather than those that met some performance criteria. As you point out, it does need to be changed–but that’s okay, because its relatively easy to change those requirements.