How do you plan for the law of unintended consequences?

By definition, it is impossible to do so. And yet businesses and legislators developing environmental initiatives have little choice but to try, or else risk their best intentions back firing badly and in some cases doing more harm to the environment than good.

The law of unintended consequences was given a good airing this week as observers tried to work out the likely repercussions of London Mayor Ken Livingstone's decision to give the green light to a tiered congestion charge that charges gas guzzlers £25 a day while exempting Band A and B vehicles from any charge.

According to some critics the plan is likely to have little or no impact on emissions and congestion and could well cripple the embryonic market for electric cars. By extending the exemption from the congestion charge currently enjoyed by electric cars and alternative fuel vehicles to all cars emitting less than 120g of CO2 per km, including several diesel cars, the financial case in favour of electric cars in the capital has been seriously diminished.

Moreover, there is a risk that those driving SUVs and the like will just fork out the £25 a day and keep driving, while more people will be tempted to drive smaller cars into the capital, leading to increased congestion and air pollution. It's not what the Mayor intended, but there is a real chance it could happen.

With so many green laws, technologies and business models still barely out of kindergarten the risk of unintended consequences are often sizable. From biofuels to the first phase of the EU's cap-and-trade scheme there are countless examples where what seemed like a green idea at the time have either failed to deliver or even had some potentially unpleasant side effects.

This week alone we've had warnings that tighter rules governing green advertising could inadvertently stifle firms' attempts to develop environmentally friendly business models, fears that investing in ethical funds could bolster big oil, and the bizarre sight of the government making such a mess of its grant scheme for onsite renewables that an increase in the overall amount of cash available has led to a slump in the number of people applying for grants.

The one good thing about the law of unintended consequences is that unless you have the memory of a goldfish it should only happen the once – after that it is an intended consequence and failure to put it right means you are either an idiot or just don't care.

As the green business movement matures more and more people will get their head round the counter intuitive thinking that is often required to develop a green business model or product. In time haulage firms will realise that you can sometimes save money, cut emissions and even travel faster by driving slower; cap-and-trade schemes, such as that proposed in the US, will learn from the EU's early mistakes and develop a far more robust system from the start; and emerging green sectors such as offsetting will realise they are stronger working together than competing.

Right, I'm off to lobby my boss to give me the 29th of February off so I can picket outside restaurants serving bottled water.

Have a good weekend.

Cheers,

James