Improving Richard Branson's Pledge

Sir Richard Branson today made the pledge to invest upto US$ 3 billion over the next decade into the search for alternative energy sources that would solve the problem of global warming.

I think that as reported, Sir Richard Branson requires a little advise to ensure that his pledge is used efficiently and that he could maximize its utility in the following ways.

First, the evidence that is available suggests that a number of research consortia and labs are already in the search for this alternative energy source. It is not necessary therefore to have to start again. Instead he ought to complement the ongoing research efforts by putting up his investment into a prize kitty that would be awarded to the researchers who provide the solution within the time frame.

Secondly, Sir Richard is best known for being a good investor in certain industries and making his companies grow. He does this while keeping overheads very low and leveraging on capital. He ought therefore to concentrate on making investments from which profits could be utilized to fill up the prize kitty and let all specialized research teams to compete for the prize. All he needs to do is define the technical parameters that the teams must meet in terms of energy costs and applications.

In this way, he would ensure that the appropriate division of tasks take place to provide the incentive towards provision of the the solution. Its about designing the appropriate incentives system.