Why Easy-Bake Ovens prove we can fight climate change

Stable government guidance can help businesses be flexible

Easy-bake ovens have been a childhood staple for generations (even landing in the National Toy Hall of Fame).  But with the vital organs of the classic Easy-Bake (100-watt incandescent bulbs that waste so much energy as heat that they can bake cookies) disappearing from shelves next year, it looked like Easy-Bake ovens had baked their last miniature goodies.

Until last week, when maker Hasbro announced a new Easy-Bake oven  – one that does away with the hot light and simultaneously proves that a little bit of regulation – in this case the phase out of incandescent light bulbs – isn’t strangulation and can actually lead to innovation.

Many in Congress don’t think this is the case.  This is most obvious in the current attacks on Environmental Protection Agency regulations on carbon pollution – many House Republicans call them “job-killing.”  But what those who oppose the EPA regulations don’t realize is that environmental regulation can be an important engine of innovation and job creation and should be seen as a key part of our Nation’s response to environmental AND economic needs.

This fact has its roots in a 20-year-old idea now known as the “Porter Hypothesis,” named for Professor Michael Porter of the Harvard Business School, and tested over the years in dozens of studies that affirm that, at a minimum, environmental regulation is rarely if ever the drain on the economy that some claim it to be. And in some cases, and especially when done right, pollution regulation can improve environmental quality while also boosting economic performance.

At one level this result obvious, since pollution is evidence of waste in the production system.  Due to the inexorable laws of physics, energy and materials that leave the factory by way of the smokestack, dumpster or effluent pipe are energy and materials that it will be costly, if not impossible to turn into something that can leave the factory by way of the assembly line. Less waste means more productivity, which means more revenue.

At a deeper level, environmental regulation causes businesses to take another look at their processes and even their business models and, through innovation, they can often boost productivity in ways that transcends mere waste reduction.  Following the Clean Air Act Amendments of 1990, for example, reducing sulfur dioxide emissions became a financial asset and business that could come up with the best ways to cut their emissions came to think of themselves as producing a whole new product: emission credits.

It is true that just any old regulation, especially one that tells businesses to use this or that particular means of achieving the environmental end, is not likely to achieve this effect.  But when businesses can be flexible to unleash the creative power of their employees, and when they can count on the regulations being relatively stable or at least predictable, not flip-flopping all over the place (as some in Congress would do with limits on carbon emission that Congress has previously authorized the EPA to implement).

At a recent lecture on the Porter Hypothesis featuring Professor Porter, business leaders and other academics, it was proposed that a simple carbon tax (which one panelists suggested we think of as a fee charged for the depletion of fossil energy resources available to future generations), starting at $5 per ton and increasing by $5 per ton each year for twenty years would be just the sort of smart regulation that would spur innovation and wealth creation. 

First off, we’d stop wasting so much money on inefficient energy use. (For example, we wouldn’t be baking bake any more brownies with 100-watt incandescent bulbs.)  Second, we’d innovate and lead the global race to finding smarter alternatives to our current over-reliance on fossil energy.

Photo: Easy bake oven courtesy National Toy Hall of Fame.