Last week, I had one of those conversations that crystallized something I’ve been wrestling with for months. We were discussing the World Business Council for Sustainable Development (WBCSD) and their ambitious mission to help corporations implement all seventeen United Nations sustainability goals. Noble work, certainly. But as we talked through their challenges—the endless red tape, the sluggish progress, the political complexity—I found myself asking a fundamental question: Are we fighting the wrong battle?

The more I thought about it, the more I realized we’re witnessing two completely different approaches to achieving sustainability. The first is the path of regulation, subsidies, and corporate transformation—what I call “sustainability through red tape.” The second is the path of economic disruption, where new technologies naturally replace old ones through superior economics—“sustainability through economic disruption.”

The question isn’t which approach feels more satisfying to our moral sensibilities. The question is which one actually works.

The Red Tape Approach: Why Good Intentions Aren’t Enough

The WBCSD represents the pinnacle of the red tape approach. They’re asking established corporations—companies like Shell, traditional automakers, coal mining operations—to fundamentally transform their business models in service of sustainability goals. The logic seems sound: these are the companies causing the problems, so they must be part of the solution.

But here’s what the data tells us: despite trillions spent on subsidies and transformation programs, incumbent-focused efforts delay meaningful change rather than accelerate it.

Empirical analysis of global trade data confirms Schumpeter’s creative destruction: product appearances systematically lead to disappearance of old products, but the reverse never occurs. In other words, new technologies displace old ones through economic forces, not through regulation.

Research from the IMF shows that R&D tax credits overwhelmingly benefit large incumbents, who then shift from innovation to protecting their market positions. These firms even engage in “innovation-stifling hiring,” recruiting top startup talent only to slow them down—resulting in a 6% drop in inventors’ productivity compared to peers at younger firms.

Subsidies to fossil fuels create a “carbon lock-in” that directly impedes renewable energy adoption. Higher fossil-fuel subsidy levels correspond to a lower renewable market share, and only when subsidies are removed does the transition gain momentum. The U.S. experience under President Trump underscores this: wind, solar, and storage projects worth $263 billion were jeopardized, putting $373 billion in clean investments at risk while fossil-fuel incumbents remained protected.

The Kodak story offers a cautionary tale. Despite inventing the digital camera in 1975, Kodak’s management refused to let it cannibalize their film business—and even after creating a profitable digital unit, they reabsorbed it to “save costs,” dooming the company to decline. Their red-tape mentality literally killed their own disruptive innovation.

Economic Disruption: Let the S-Curve Run Its Course

By contrast, economic disruption follows predictable S-curve dynamics that can only unfold when new incumbents are given space. An NBER study shows subsidies to existing technologies force regulators into flatter subsidy schedules, delaying the optimal adoption timing of new technologies and flattening the S-curve.

Case in point: despite generous incremental subsidies for solar PV in the Netherlands, households applied a 15% discount rate to future benefits—distrusting long-term support—and ad hoc subsidy design increased costs by 51% and delayed adoption. Meanwhile, global learning-curve economics drove solar costs down 80% without relying on red tape.

Climate-tech research highlights how balancing feedback loops form when incumbents lobby against new alternatives, slowing their deployment. Only when reinforcing loops—driven by market-based economics—dominate does the S-curve accelerate.

Tony Seba’s disruption framework encapsulates this: clean technologies will outcompete the old purely through economics, not moral persuasion. Solar became the cheapest electricity source by 2020 exactly as he predicted in 2010, while sustainability frameworks remain mired in policy inertia.

The Only Path Forward

The evidence is overwhelming: sustainability through red tape delays progress by propping up dinosaurs, whereas sustainability through economic disruption unleashes exponential change. We must stop pouring resources into transforming incumbents whose cultures and incentives are structurally opposed to radical innovation. Instead, our mission should be to identify, fund, and give space to the new incumbents—the five-person garages, the agile startups, the climate-tech pioneers—so that the S-curve can run its course unimpeded.

If our goal is rapid, scalable, and lasting sustainability, we need to shift our focus. Let the dinosaurs fade, and let the disruptors thrive.

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