Clean-tech Innovation Policy from Inside the Leviathan
In The Leviathan (Thomas Hobbes, 1651) the social contract initiated and supported by the state is seen as the penultimate element in managing its citizens. Social contracts designated the proper functioning of markets, and allowed proper allocation of resources. Without such contracts, it is inherently difficult to increase the overall wealth and productivity of a particular state.
Yet one problem remained: Who or what might carry out the task of equally monitoring the duties of the Leviathan? Absolute but neutral power must be given to the Leviathan in order to punish those whom violate social contracts. Otherwise fair commerce would inevitably denigrate into piracy.
In the case for global clean-tech policy, in particular the United Nations’s climate negotiations, a Leviathan seems to be needed. For example, some have called for a Leviathan responsible for monitoring progress for the world’s hopeful agreement in Paris this December under the auspices of the UNFCCC. Others call for a global carbon trading system, or carbon tax. These positions are put forward within the UNFCCC negotiations with the United Nations as the assumed Leviathan judiciary.
But is the UN the proper institution for monitoring the social contracts of trading permits for emissions into the global atmospheric system? After all, the UN has not been able to uphold some of the most modern agreements, including both in Ukraine and Transnistria. Further, it is necessary to consider if the Leviathan can ever hope to stimulate innovation if its main task is to monitor emissions of archaic conventional energies? Emissions are not the problem of weak social contracts, they are the result of leviathan-mandated energy monopolies. Lastly, without enforcement mechanisms, the Leviathan quickly collapses.
Unfortunately, enforcement mechanisms and teeth are something the UN lacks, and its subsidiary organs including UN Peacekeeping have learned the very unfortunate result of this void in Rwanda, Yugoslavia, Haiti and elsewhere. Though the UN has over the past half century increased its capacity to avert egregious political disasters, especially evident in the non-proliferation of nuclear arms, it cannot hope to enforce or even implement global climate change policies in its current form.
That leaves several options on the table. Some of these have been increasingly evident to this writer over the past five years of working within the UNFCCC negotiating process in New York, Switzerland and Denmark. Whereas the UN brings the faces to the table, the action comes from elsewhere—in Davos, Silicon Valley, Wall Street, and no Hong Kong, Shanghai, and Tokyo.
Yet many of these well-seasoned investors will never consider putting their assets into such an insecure set of products making up the majority of the clean-tech field. This begs the question: Where does the money come from? Who will develop such “breakthrough” technologies as called for by philanthropists such as Bill Gates? What institutional apparatus are required to encourage such risk taking?
These are valid and pressing questions. Yet their answers wield insubstantial calls for responsibility and, ultimately, a benevolent “Leviathan” able to properly implement such policies, such as global carbon trading. But global carbon trading, even a global carbon tax is completely outside the realm of possibilities within the next fifteen years. It is simply not “politically viable (pdf).” The US still does not recognize the sovereignty of an aviation tax imposed on US carriers entering European airports—how would it begin to agree on trading rights of invisible quantities of carbon.
If the leviathan turns out to be the global carbon comptroller, we can be assured power in all forms will corrupt absolutely. Nuclear energy and natural gas will be the only remaining energies due to their “low carbon” designations. This is a problem because the former is by far the costliest and most dangerous energy considering its global implications while natural gas is quickly becoming economically stagnant under increased environmental regulations.
A more progressive UN leviathan-clean energy rubric would consist of mechanisms promote and assimilate clean tech innovations more readily. This includes the transfer of products, ideas, and people. This can be done via increase focus on licensing for particularly acute clean-tech innovations, with the dual purpose of scalability and economic feasibility. Unfortunately, this can only come with greater integration among organizations with more legitimacy in the field of patent law and trade agreements such as the WTO and the OECD. The WTO might facilitate the transfer, patenting, and competition in the development of highly innovative clean-tech solutions.
Many technological breakthroughs have come from the poor world, or citizens who have emigrated from poorer parts of the world to develop their ideas within countries with the capability to scale up “breakthrough” innovations (including Sergey Brin, the co-founder of Google). Small investments in innovation centers in Asia have spawned enormous innovations in computer technology over the past two decades.
Where institutions are strong, including judiciary and financial, innovations seem to flourish—thus a stronger role for legitimatize global institutions such as the WTO inevitably will lead to more global uptake in clean energy technologies.
The most prudent solution is to designate the WTO as the supreme benevolent dictator in regards to global clean energy policy and development. The WTO can best appropriate duties and responsibilities via open trade and transparent investment mechanisms; it can likewise make rulings that even the U.S. and China might abide by.