{reprinted from June 2009]

I would like to present a concept for your consideration. I like to call it incentivise the positive and publicise the negative, and it specifically applies to the introduction of new environmental laws and regulations. I have seen a number of introduction of new environmental regulations since 1987 and been able to examine others I have no first hand knowledge of. The concept has become abundantly obvious to me, and probably obvious to many once they have had to examine the issue in detail.

The concept comes about as a result of the understanding that industry’s first response to the introduction of any new regulation is typically going to be that it costs jobs, eliminates exports, or by some other means generally cause the downfall of capitalism and society as we know it instantaneously. This is a tried and true argument for them and has often been used to undermine any support for doing the right thing in democracies where you basically need to control things, but you need not get the paras on the street immediately. The concept also harnesses that slight taste of greed, as we should all recognise that there is no way to motivate a capitalist by letting them get a sniff of an opportunity of a profit. The concept also makes use of acting upon any vanity, celebrity or good reputation the focus of it has.

Now, from my experience before, I found that no new enabling legislation and set of regulations combined the above qualities better than than the US Toxics Release Inventory (TRI). The TRI in 1989 is the direct antecedent which led to the implementation of the National Pollution Inventory (NPI) here in Australia. The TRI did something new in environmental legislation worldwide, as it wasn’t prescriptive in requiring any reductions in any emissions whatsoever. All it required reporting industries to do is report what they were emitting to the local communities where they live, and give informational support to the local emergency response authorities near them in planning for major incidents. However, the results of this piece of legislation resulted in more emissions reductions in the USA than any other single piece of environmental legislation I have seen before, because companies saw the profit in it, and saw the benefit (or detriment) to their reputation at the same time.

So to me, the key to introduction of something like the CPRS in Australia is to embrace a similar approach, using the principle of incentivise the positive and publicise the negative. We should make use the NGERs inventories, and reports of surrendered credits to the government under a CPRS, as our means to examine companies in a new way based on this new commodity. The increased scrutiny will help them find where they should be finding savings, or in a perfect storm, realise a profit opportunity form doing the right thing by the environment. For those that choose to do nothing, the press and NGOs will likely do what they do best and sensationalise those who are large emitters and bad publicity will encourage them to get on board.

There are also new ways to incentivise take up of clean power of consumers, as Zac and I have been discussing in the office, as well as ways that smaller businesses could help the adoption of the climate friendly activities and assist at arriving at the “real” price of a ton of CO2 by “opting in” to the carbon trading system early. I will be writing more about these in coming weeks.