ABSTRACT
IntroductionNew technologies are often necessary to achieve evolving societal goals, such as reducing environmental harms, improving industrial or economic efficiency, or enhancing communication, educational, or entertainment capabilities. While market forces will usually create incentives to develop technologies that can meet these societal demands, there sometimes can be a gap between what the market is capable of producing and the broader societal interest. These market failures and barriers, whether real or perceived, often drive legislatures and regulatory agencies to enact policies to accelerate the development, adoption, and use of beneficial new technologies that they conclude are needed to achieve societal goals. In the past government has used a number of tools to try to induce beneficial technology change, ranging from generic incentives for
innovation such as research funding, a research and development tax credit, and intellectual property protection, to more targeted measures such as government procurement policies for specific products, consumer tax credits, and regulatory requirements (Marchant, 2009). Perhaps the most aggressive example of government technology inducement efforts until at least recently was the technology-forcing regulation of motor vehicle emissions, which provides vehicle manufacturers a specified lead time to develop new technologies needed to meet performance levels unattainable at the time of adoption (NRC, 2006). Over the past decade, governments have increasingly adopted an extraordinary new regulatory tool for attempting to induce beneficial technological change. This tool involves the direct mandating of specific technologies, and recent U.S. examples include technology mandates (whether express or de facto) for electric vehicles (EVs), digital TV (DTV), and compact fluorescent lightbulbs (CFLs). This new tool of mandating specific technologies represents a radical departure from the evolved conventional wisdom in modern U.S. regulatory theory and practice that regulators should focus on performance rather than design standards, leaving it to the creativity of the market to select the best technologies and approaches for achieving the performance goals set by the government (Jaffe et al., 2002; Stewart, 1981). Yet, for a variety of reasons, governments have recently felt compelled to mandate specific technologies that are viewed as essential for meeting important societal goals. Such measures are risky because they require the governments to “pick winners” among competing technologies as well as the timeline in which that technology can be brought to fruition, both of which combined require an accurate assessment of the full spectrum of benefits, costs, and consequences of different technology choices. Such attempts to “pick winners” are characterized by uncertainty and complexity (Nelson & Langlois, 1983). Thus, any government attempt to force specific technologies should only be undertaken, if at all, after a careful and detailed analysis of the technological, business, economic, legal, social, and psychological dimensions of the entire technology life cycle. In this chapter, after exploring in more detail the technology mandate tool generically, I critically assess three recent governmental technology mandates-for EVs, DTV, and CFL bulbs. While these
technology mandates have achieved some progress in achieving their desired goals, they have also encountered rough turbulence and unanticipated problems because of the government’s failure to consider the full range of impacts and consequences of the technology mandate. The lesson from this analysis is that if government chooses to mandate additional technologies in the future, it must do a better job in anticipating and addressing the full range of environmental, economic, and social implications across the technology’s life cycle, which would involve undertaking an assessment of these implications, a process I refer to as socio-behavioral life cycle assessment. Technology Mandates as a Regulatory ToolThe recent trend in regulatory practice is toward greater market flexibility and less government micromanagement to achieve regulatory objectives. Thus, performance standards that specify the overall level of performance a regulated entity must achieve, without dictating the means by which such compliance must be obtained, are preferred over design standards that stipulate a particular technology or method a company must use to achieve the applicable performance objective. Performance standards give industry more flexibility to innovate to find cheaper and better means to achieve compliance, often in the form of new technologies, that government experts may not have been able to anticipate at the time the regulation was enacted. Market-based approaches such as cap-and-trade and marketable permit systems shift even more discretion to private actors, with government in effect specifying overall market performance rather than company-specific performance, again to maximize the role that industry flexibility and creativity can play in achieving societal goals at the lowest cost (Jaffe et al., 2002; Magat 1979). Technology mandates therefore run counter to the current trend away from government control and inflexibility. Governments nevertheless have recently been resorting to technology mandates in limited circumstances to require the development of a targeted technology (although as discussed below a de facto mandate is sometimes framed as a performance standard). Not surprisingly, such technology mandates tend to be highly controversial, often portrayed as an unduly intrusive intervention of government into the marketplace.
