10/22/2011 02:37 pm ET Updated Dec 22, 2011

Picking Losers

We know that we need several Nobel-worthy technology breakthroughs to get out of the current energy mess.

We can sit around and hope. That, of course, isn't a strategy. It's betting on wind (and perhaps solar) and a prayer.

We could also try to pick winners. That's still much closer to a crap shoot approach than we'd like, and it's mostly bad policy.

Instead, we ought to subscribe to what economists know as "induced innovation." Entrepreneurs will always tinker and experiment. The question is whether we can guide that tinkering in the right direction.

We don't want to pick winners. But we can certainly pinpoint some of the losers, and carbon pollution is a clear one at that. That's where limiting and pricing pollution comes in. Do that, and let the inducing begin.