Santa Clara University

When politicians establish cost penalties (e.g., a "green tax") for objectionable results (e.g., pollution), they do what they are most capable of doing, reflecting the will of the electorate. When they set exactly the results to be achieved (e.g., a specified improvement by some date), they override a system that could be effective at reducing those cost penalties without ignoring other consequences. They are in danger of doing more harm than good if the results are achieved or of having to change the requirements if they cannot be achieved.

I once worked in a large shop building that was air conditioned. The system had many temperature sensors in various parts of the building that were set for optimum cooling of the whole building in the presence of the daily variations of outside conditions. However, the temperature still became higher than the occupants liked in certain parts of the building. Being technical types, some of them fixed the local problems by getting into and readjusting local thermostats. Eventually the whole building was out of control and engineers had to be called in to return the thermostats to their original-design settings. This is what happens when "fixes" are applied without accounting for the effect on the whole system. Fortunately, our economic system is more sophisticated than the air conditioning system and it appears that taxation can be used to alter overall results without ignoring the interactions within the system.

Our society would be so much better off if ideas like those espoused in your article were widely appreciated. I am very pleased (and surprised) to learn that Santa Clara students are exposed to them.