Wednesday, October 09, 2013

Innovation to the Rescue

I think of myself as a rational optimist. A couple of years ago, I read and reviewed a book of that title by Matt Ridley. Ridley's central theme is the crucial role of trade in the growth of civilization and human well-being - starting with the trade of goods and services that allowed people to become specialized, resulting in more of everything for everyone. But when people learned to trade in ideas, that led to innovation, stimulating the growth of science, technology, and social institutions - things like universities, democracy, and the market economy are all inventions of the human mind (usually many human minds).

I just read another book on this same general idea, the critical role of innovation and the exchange of ideas. I really like The Infinite Resource: The Power of Ideas on a Finite Planet by Ramez Naam. Ideas and innovations truly are an infinite resource, and Naam believes (as do I) that in most situations, market forces are the most effective way to implement ideas and solve problems. He also believes that the major area where the market has failed is in "tragedy of the commons," situations such as pollution of air and water, over-fishing, and greenhouse gas emissions. When there is no direct cost for the use or abuse of such shared resources, these "externalities" cannot be affected by market forces. When such factors do have associated costs, these can drive innovation to find better solutions faster than (say) direct government regulation. Reduction of acid rain and the recovery of the Antarctic "ozone hole" are examples of the success of this approach. It could work for greenhouse gases, too, even if ideas like a carbon tax or carbon trade credits sound scary to some people. Even if some energy prices were to go up temporarily, it would provide the incentive for innovative people and companies to find ways to lower costs and gain a competitive advantage. Innovation needs something to work on, and when it has it, it can work fast.

Naam believes that we have plenty of resources on this planet to support 10 billion or more people in American-level affluence if we can learn to use resources more efficiently, especially the huge influx of solar energy that hits the Earth every day. Certainly "old solar" (fossil fuel) resources like oil, gas, and coal are finite. As he says, "Every solar panel built makes solar energy cheaper. Every barrel of oil extracted makes oil more expensive." He also advocates some innovations that are controversial, such as genetically modified organisms (GMO's) in the food supply and increased nuclear power as part of our energy solution. I agree with him on these points. The alternatives are worse - we need GMO's to improve yields and nutritional value, and to reduce pesticide use (and forest clearing) if we are to support billions more humans in the next 30+ years. And although we are everywhere bathed in more than enough solar energy to run the planet with safe, local, non-carbon-emitting power for billions of years, until innovation leads to more advanced storage systems for dark and windless times, solar and wind power can only be part of the energy solution. Burning more coal is bad for a number of reasons, including carbon emissions and radiation (coal plants release more radiation into the atmosphere than nuclear power plants).

I think this book is well worth reading for fresh perspectives on innovation, environmental issues, and much more. I will finish with a couple of quotes that I like:
Our problem in the near term is not that resources are in short supply. It's that we use those resources incredibly inefficiently, with side effects we have yet to eliminate.
For all practical effects and purposes, our growth is unbounded. If we choose wisely, and tap into the right resources, while acting together to put limits on the negative side effects and externalities of our actions, then we can grow for at least centuries to come, and perhaps longer. 
Our only limit, for the foreseeable future, is our collective intelligence in innovating, and in putting in place the systems to guide our collective behavior. 
Easier said than done, I know, and if you live in the US, such optimism may be especially hard to fathom at the moment, as the Republican controlled House of Representatives holds us all hostage in an ideologically (and idiotically) driven federal government shutdown and threatened debt default. But I still believe that enough humans on this planet are sane and clever that we will probably make it through the next few hundred years, with more humans every year living better off than ever before. Just maybe not in the US.


Unknown said...

Good post! - Craig

Unknown said...

You must be busy - you haven't posted in a while - Craig