Climate pollution can spark more tech innovation. Really.

Methane has made quite an entrance into climate science in the last few years.

Though long recognized as a potent greenhouse gas – more than 80 times as powerful as carbon dioxide in the short term – its significance in our battle against climate change has only recently been quantified. The oil and gas industry, for example, is among the largest emitters of methane on the planet, and research (including some by EDF scientists) has documented that far more methane seeps out of wells, pipelines, valves and other points in the oil and gas supply chain than energy companies and official emission inventories report.

This revelation has people worried. People like me, who are concerned about the health and future of humanity. People like the CEOs of global oil and gas companies, including BP and Exxon, who have voluntarily pledged to reduce their methane emissions. Increasingly, investors, public officials, and neighbors living near oil and gas development are worried, too.

At the same time, tech entrepreneurs are growing excited, because one person’s challenge is an innovator’s opportunity. Quietly, companies have been developing new technologies–including solar-powered lasers and drones–that make detecting methane leaks more efficient, reliable and affordable.

And around the world, energy producing countries are beginning to tackle the methane challenge head on. Many, including the United States, Canada and Mexico, have adopted national regulations to cut methane.

All of this momentum is positive.

But we need deeper and steeper cuts now. And smart regulations can play a significant role in how fast new detection and reduction technology is commercialized and deployed.

That’s right. Regulations can help speed up innovation. Here’s how I know.

Over the last year, EDF worked with a group of state environmental agencies engaged on shale gas issues and other stakeholders to identify issues that might be stifling methane technology innovation. One point arose to the top: the lack of a transparent, rapid and consistent pathway for regulatory approval of new technology.

We all know that innovation is the result of tireless trial and error. But at its core, innovation is about solving a problem – or reaching a goal – faster, better or cheaper than we could before.

Aileen Nowlan, Senior Manager

For innovation to solve environmental problems, entrepreneurs need a clear signal that their inventions will have a market. Investors want to know how long it will take to realize a profit. Written with an innovator’s eye, regulations can do much more than mandate a cleaner environment. They can spur entirely new competitive markets. But to do so, regulators must set standards, metrics and processes that reward innovation and risk just as strongly as they mandate the necessary emission cuts. Too often, they don’t.

Consider three common regulatory challenges and how addressing them could encourage more innovation.

The first is the issue of equivalence – the idea that an energy company could use a different practice so long as it produces the mandated “equivalent reductions.” Most stakeholders – from environmentalists to energy execs – would agree that if someone can find a better or cheaper way to hit a target, that innovation should be rewarded. But many rules fall short of a clear definition of equivalence that encourage an entrepreneur to find an alternative.

Adopting a shared model or definition, so that everyone knows how equivalency will be determined, would provide the market the kind of clarity it craves.

Another is the how well regulations address change and progress. Tech companies are used to constant improvement and progress, but they need to know that such progress will be rewarded, not punished.  Regulations can reward innovation by prescribing quick and transparent processes for approving new technology that achieves goals in innovative new ways.

Finally, the number of states, countries and companies that are currently developing methane reduction strategies is hard to nail down. But it’s big, and it’s growing. It’s hard to imagine how a start-up – or even a large corporation – could satisfy the market if each entity develops a separate, cumbersome and time-consuming process by which a new technology must be approved before being deployed.

It’s much easier to imagine technology companies rising to the challenge if jurisdictions were to present a standard set of targets, definitions, processes and assumptions surrounding how methane regulations will be enforced. That would turn a local or regional market opportunity into a global one.

Designed well, regulations can provide entrepreneurs confidence that there will be new markets for their inventions. States, provinces and federal governments have an opportunity to do more than protect a natural resource and limit harmful climate pollution. If they get the rules right, they can spark a new wave of energy innovation.

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