Gil Friend, CEO of Natural Logic, an eco-business consultancy, blogs here but has contributed this post to World Whingeing.

Two weeks ago, writing about the European Union's product take back and product content regulations, I observed that many companies' sustainability initiatives are hampered by a pervasive and deeply wrong-headed assumption: that designing and delivering better, more efficient, less toxic, more recyclable products would necessarily cost more money and yield less profit...

First, there's the great power of "we've always done it this way," with its impact on habits (of thought as well as of action), on cost analysis methods, on capital budgets...

Second, change is not easy, and is inescapably multi-dimensional -- change in technology, processes, roles, ways of thinking, and more -- can demand investment, in time and money, that conflict with other perceived needs...

Third, business is hampered by analytical methodologies that fail to accurately capture and value the full spectrum of costs and benefits...

Friend argues that with sufficient time, money and effort a commitment to conformance with regulatory requirements can be turned to a profit... and isn't really optional so we should look on the bright side, even take pride in conformance.

It's true, green can be profitable. Improving business planning to consider a fuller spectrum of costs, especially those currently externalized or which have no defined market value in the absence of regulatory requirements, reveals opportunities for process changes that reduce those costs. Some of those changes would be good business practice even if there were no regulatory takings and all can be justified on aesthetic or environmental grounds.

But, it's a clumsy way to achieve these objectives. This is always the case with regulation since those regulations act to alter the field of adaptation. Businesses earn profits not by being good at their core activity but being clever about working the system. It's the same with taxes, subsidies, legal threats and all the other artificial elements of the business environment. Successful businesses don't really need to be very good at producing anything so long as they are very good at working the system. They are insulated from competition from new and better producers by those same high cost regulatory hurdles.

Worse, regulation precludes achievement of other even more desirable changes. The time, energy and money of the business and its suppliers is narrowly focused on the artificial target. They have neither the resources nor interest in pursuing even more useful activities, and can't justify undermining their investment even when the approaches are shown to be antiquated. It's the Minitel blunder, replayed again Europe wide with mobile telephony standards, and now being extended to diverse other industries.

We are much better off to inform businesses of true opportunities than to either persuade or require them to conform to any single standard or set of standards. There are true benefits to enlightened processes that can be revealed by better business analysis methods. Profits can improve while businesses become less of a burden on their environment. Leaving the field open spurs the discovery machine since both the businesses and their suppliers are rewarded for improved methods and that enables them to vigorously compete with their rivals. If governments want to use the bully pulpit in a constructive way they can talk up opportunities that are being neglected, which will spur investment to capture those unharvested profits.

For example, consider this bit of research just announced.

In a paper to be published on the Nature Materials website Jan. 9, senior author Professor Ted Sargent... and his team report on their achievement in tailoring matter to harvest the sun's invisible rays.

"We made particles from semiconductor crystals which were exactly two, three or four nanometres in size. The nanoparticles were so small they remained dispersed in everyday solvents just like the particles in paint... Then, they tuned the tiny nanocrystals to catch light at very short wavelengths. The result – a sprayable infrared detector.

Existing technology has given us solution-processible, light-sensitive materials that have made large, low-cost solar cells, displays, and sensors possible, but these materials have so far only worked in the visible light spectrum, says Sargent. "These same functions are needed in the infrared for many imaging applications in the medical field and for fibre optic communications," he says.

The discovery may also help in the quest for renewable energy sources. Flexible, roller-processed solar cells have the potential to harness the sun's power, but efficiency, flexibility and cost are going to determine how that potential becomes practice... "These flexible photovoltaics could harness half of the sun's spectrum not previously accessed."

... "Our calculations show that, with further improvements in efficiency, combining infrared and visible photovoltaics could allow up to 30 per cent of the sun's radiant energy to be harnessed, compared to six per cent in today's best plastic solar cells."

Premature investment in deployment of solar applications using older and far less efficient technologies would be a waste, harmful to businesses that adopted them, but more importantly would be environmentally destructive, a form of pollution in a sense. A similar situation exists for every business process and businesses that prematurely adopt technologies and processes to conform to the regulations required in some markets would have a competitive disadvantage as well as being the least environmentally friendly.

The sensible approach during these times of rapid change isn't often regulation. It is far more sensible and effective to intervene in systems in ways that help them do what they seek to do than to force them to do things they would not do otherwise. Making information about existing opportunities to improve business processes to be both more profitable and less harmful is the primary useful intervention. Technology transfer isn't just a third world behavior.

Spuring new development is a longer term and far more rewarding intervention but it isn't easy to do well. The temptation to pick winners by supporting development of ideas that seem attractive is another form of destructive subsidy that skews and degrades the discovery machine. Less specific aid such as support for education at every level without trying to target the aid is a better approach. Nuturing the discovery environment in general by projecting approval can be helpful too. Geeks are hot, or at least heroic when their efforts are beneficial. Switching from priggish attempts to discourage some behaviors using state force to encouraging behaviors using much softer methods will be far more beneficial over time.

When we take the long view and seek policies that will be beneficial over long periods rather than focusing on immediate objectives we create a better world, one that is more productive while being less consumptive, allowing an increase in well being across the board. This isn't just an aesthetic issue, a more elegant way to live, since much of humanity is currently in need and their numbers will continue to increase for decades. Being smart about what we do now is the intellectually and morally decent thing to do as well as being aesthetically superior. Eurosclerotic clumsiness isn't just a fashion crime, it's a humanitarian and environmental threat.