Twenty years ago Michael Porter, now the “I think this whole question of American Bishop William Lawrence University Profescompetitiveness and the role of regulation sor at Harvard, published a one-page essay in American competitiveness has really risen in Scientific American, entitled “America’s again to the top … of the radar screen in Green Strategy,” in which he argued that the debate in this country,” Porter said in stricter environmental regulations could his opening remarks. “There’s a tremendous encourage innovation, increase efficiency, angst and even tension between business and enhance business performance. This and government—the private sector and concept has heavily influenced business and environmental regulatory Michael Porter and Daniel Esty at the annual Hans Landsberg Memorial Lecture. theory ever since and is now known as the Porter Hypothesis. The hypothesis challenges traditional command-and-control policies that mandate specific technologies and instead opts for outcome-based regulations, which give firms the flexibility to elect least-cost options and spur innovation. The right kind of regulations can result in a process that not only pollutes less but lowers costs or improves quality by: »» stressing pollution prevention rather than merely abatement or cleanup, »» not constraining technology, »» being sensitive to the costs involved, and
the public sector—and how those two parties can either work collaboratively or competitively in addressing some of the most important challenges facing America and our society.” Asked by an audience member about the regulatory “train wreck” at EPA regarding pending Clean Air Act regulations that will be imposed on power plants, Porter
Ellen A. Walter
»» using market incentives.
To acknowledge this milestone, Porter was invited to give the annual Hans Landsberg Memorial Lecture at RFF this past January, where he discussed how his hypothesis has evolved to be particularly germane to environmental regulation in the current economic climate. The lecture was followed by a lively panel discussion.
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Goings On
An Auspicious Moment: Looking for the “Win-Win” Solution