OPINION/COMMENTARY

General Rent Seeker

The CEO of GE recently committed the company to "define the cutting edge in cleaner power and environmental technology" through increased R&D spending. He also pledged significantly reduced greenhouse gas emissions by 2012 and doubling the revenue earned by cleaner technologies to $20 billion by 2010. A commitment to improved environmental stewardship is commendable but hardly dramatic. Many companies have already raised the bar for their environmental standards. Some are using their actions to shape their image with the public. The motivation for GE's initiative is not completely clear. However, for a company of GE's stature it is fair to ask, why didn't you do this earlier and do it with shareholders instead of politicians and the media? The setting and timing justify a little skepticism. Since we live in a world where images drive perceptions, it is prudent to apply the Reagan maxim of "trust but verify". The GE announcement went beyond just a stronger commitment to environmental improvement. By raising the specter of climate change, GE's CEO called for legislation with clear milestones for greenhouse gas reductions, a cap and trade program (which means mandated limits on energy use to reduce emissions) and a government program to fund technologies. It is ironic that GE's founder and first great innovator, Thomas Edison, did not need government regulations and subsidies to create a market for the light bulb....

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