American Innovation - Gaming the System

There are three ways people respond to regulatory pressure for improvement:

1. They can work to improve the system.

2. They can distort the system.

3. They can distort the data.

Distortion involves “gaming the system”. In other words, how can we use rules and procedures meant to protect a system to manipulate it for a desired outcome?

This is the core of the lawyering game. Ask an attorney what’s two plus two and the answer is, “what do you want it to be?”

Volkswagen has admitted it is guilty of using cheating software, known as a "defeat device” in meeting the EPA’s emission standards. The software sensed when the car was being tested and then activated equipment that reduced emissions. VW is facing a fine of as much as $18 billion should the feds decide to throw the book at them.

Where did these clever Germans come up with their gaming innovation? In 1995, General Motors agreed to pay $45 million after being accused of circumventing pollution controls on 470,000 Cadillac sedans.

But gaming is not restricted to cars. About five years ago, LG was caught red handed using an illegal device that activates an energy-saving mode during testing of certain model refrigerators. Recently, Samsung TVs in Europe appear to use less energy during official testing conditions than in real-world use.

The impressive efficiency of mini split heat pumps have made them the darling of the energy efficiency/climate change crusade. Now it seems that the Japanese and Koreans may have routinely been applying clever programming schemes to these energy ratings as well. Turns out the software switches these units into a unique operating mode that leads to more efficient operation during testing.

Sadly, there seems to be more and more stories of the Japanese, Koreans, Germans and Americans gaming the system. So what’s the solution?

Accountability! If someone sells you a dozen eggs, you should expect at least a dozen in the carton. But predictions rule in the energy efficiency/climate change crusade. Why don’t we start by placing less emphasis on predicting energy performance and more emphasis on measuring it? We have all the technology necessary to monitor real world performance.

As a matter of fact, Energy Solutions has been doing so since the 90’s.


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