To fight global warming: Regulate or Innovate?

Can regulation lead to innovation

I haven't yet had time to read Thomas Friedman's Hot, Flat and Crowded book, although it is planned. However, I read an interesting review of the book by Bjorn Lomborg, author of "Cool It: The Skeptical Environmentalist's Guide to Global Warming, in the Wall Street Journal.

For those that haven't heard anything about Lomborg, he's a rather interesting fellow, whom doesn't either deny global warming nor man's effect on global warming. He does, however, question plans for dealing with global warming. Essentially, while humans should try to reduce their affect on global warming, we should also be seeking ways of adapting to global warming.

It's not an all or nothing future in Lomborg's opinion.

Mr. Lomborg agrees with Friedman an a very essential point, which Friedman states, "If you take only one thing away from this book, please take this: we are no going to regulate our way out of our problems, we can only innovate our way out."

To this end, Friedman envisions massive regulations through cap and trade, taxes, laws, subsidies, etc, which he believes will create "crazy, wild, off-the-charts demand" for green technologies - I sentiment I've often shared, but Lomborg says hold on.

"Think back to early computers of the 1950s: the only way to make them better was to massively invest in public R&D, which governments did. Demand only took off in the 1980s, when computing became so cheap that it provided more good than it cost. In Mr. Friedman's world, we should have all been forced to purchase expensive early computers in the 1950s, which of course would have been great for the producer but catastrophically expensive and leaving us with dramatically inefficient technology."

Interesting perspective. One that definitely makes me step back for a second.