Regulation and innovation: beyond ‘top down’ solutions

Our report to the Victorian Government, released yesterday, provides examples of opportunities lost because of the time, effort and uncertainty for businesses trying to get regulation changed to enable them to do new things, or to do old things better.

And it shows how we could benefit from becoming a regulatory pacesetter.

For instance in greenhouse gas abatement we could pioneering new ways of measuring, verifying and auditing carbon emissions - for instance agricultural methane emissions from livestock. In addition to placing ourselves in the box seat to influence the evolution of the global trading system, we’d place Australian companies in the box seat to develop new technologies to export to the world when it caught up.

The report also argues that firms with a proven commitment to excellence should be subject to fewer impositions from regulation.

Right now regulating the regulators, like a lot of regulation, isn’t really delivering the goods. I recall in 1994 conducting an inquiry for the Productivity Commission asking the Federal Office of Road Safety why they wouldn't change ADR 61 to allow vehicle manufacturers to reduce cost and improve security by replacing aluminium compliance plates with self-voiding plastic stickers.

The response?

“It’s not that easy. We would have to do a regulatory impact analysis and that takes time and resources we don’t have.”

Perhaps it’s time for some fresh ideas.