Environmental Engineering Reference
In-Depth Information
Standards Reduce Variety
Promoting Efficiency
control systems. These enable the installation of
adaptive systems to locomotives so they can run
more efficiently over the variety of incompatible,
nonstandard power distribution systems (Jane's
2003). Indeed, IT innovations may prove to be
crosscutting to environmental technologies in
other important ways.
Environmental standardization holds promise
to enhance sustainable technology development
and deployment by retarding costly monopolies,
enabling competition, reducing the costs of envi-
ronmentally sensitive products and services. The
ultimate social welfare benefits to society will
include increased availability of environmentally
friendly products and services (Farrell and Saloner,
1985). Thus environmental standards arguably
manage environmental risks better than almost
any proliferation of variety.
In much of the world, transportation efficiency
and the economic and strategic advantages of
increased transportation mobility rest on the de-
ployment of standardized electric railway systems.
Unfortunately, dozens of legacy electrification
projects create inefficiencies making standard
electrification an elusive goal. The social welfare
losses of pollution, domestic energy dependency
on unstable foreign sources, monopoly-induced
over-pricing by nonstandard equipment suppliers,
national boundary barriers to efficient travel, and
loss of economies of scale would all be addressed
with more efficient transportation systems (Gandal
and Shy 2001).
Consider how electric traction power systems
for use in European rail systems include both AC
and DC currents, there are voltages at various
discrete values ranging from 750 volts to 25,000
volts, and the AC frequencies in use range from 25
through 50 cycles per second. Furthermore, there
are different physical power distribution technolo-
gies including one and two conductor overhead
catenary wires and third rails, often with differing
geometric sizes and separation distances. Euro-
pean rail lines encounter incompatibility making
the achievement of efficiencies from standard-
ized systems into a daunting and costly task that
ultimately has impeded the diffusion of efficient
electrified railroad networks. Differences between
various nations' electrified railroad standards are
anticompetitive, creating an inefficient variety of
rolling stock, costly differences in locomotives as
well as generation and transmission networks and
societal losses from a lack of economies of scale
production of standardized equipment. Further-
more, this system has favored first movers and
local suppliers with advantages allowing them
to enjoy near monopoly pricing. This is arguably
a nontariff barrier to international trade. Today,
much of this inefficient variety can be addressed
Standards Manage Many
Forms of Risk
As the railway electrification example above il-
lustrates, the choice to encourage variety through
robust R&D vs. the choice to standardize by
narrowing the range of variety, is a tricky prob-
lem discussed more fully below. Provisionally,
consider that R&D encourages useful innova-
tion into practical solutions until some variety is
achieved. If standardization is achieved too soon,
then further innovation is often retarded such that
alternative systems and methods are adopted less
aggressively. By contrast, if excessive variety is
achieved, then, too often, this retards meaning-
ful deployment, enables costly monopolies and
raises societal costs of incompatibility. Competi-
tion generates both imitation, a form of de facto
standardization, and variety. Societal welfare is
enhanced by competition unless interoperability,
safety, and quality are compromised (Farrell and
Saloner 1985). The elusive dilemma of standard-
ization is how to balance the societal benefits of
competition-inspired variety against the cost sav-
