Nature’s signals are changing American minds about the risks of climate change. But Washington’s minds are lagging, despite President Obama’s stirring call to action in his inaugural speech.
The best hope for achieving the transition to a low-carbon economy is through innovation to reduce the costs of new energy technologies. Energy markets left to themselves will discount climate-change risks, so public action to encourage these innovations is needed. But public action does not mean putting government agencies at the center of the innovation system. Instead, the focus should be on unlocking the immense creativity and resources of America’s private entrepreneurs, investors, producers, and energy users.