Climate Change Roundable at Reason

Lynne Kiesling

Did the Reason article from the Kiesling/Bailey/Smith carbon policy panel that I linked to earlier this week just whet your appetite? Then this Reason Roundtable on Climate Change is for you!

There has been much discussion in free market circles about market-based solutions to global warming that minimize the threat that big government poses to property rights. But less attention has been paid to the threat that greenhouse gas emitters themselves might pose to private property. This is the issue that Jonathan Adler, Professor of Law and Director of the Center for Business Law & Regulation at the Case Western Reserve University School of Law and Indur Goklany, author of The Improving State of the World: Why We’re Living Longer, Healthier, More Comfortable Lives on a Cleaner Planet discuss in this edition of Reason Roundtable in two radical and provocative essays.

I like Shikha Dalmia’s introductory essay, particularly where she says

Indeed, regardless of whether climate change eventually turns out to be real or not, the libertarian goal ought to be to ensure the protection and advancement of freedom – and all its attendant institutions: free markets, limited government and property rights. These rights enhance human welfare by allowing individual choice and experimentation and creating an incentive for individual entrepreneurship and economic growth. But more: they are both the base of – and bulwark for – all other rights. They have normative value quite apart from their utilitarian value.

Jonathan Adler’s essay focuses on thinking about climate policy from a property rights perspective, and I think he’s broadly correct throughout. But his discussion leaves a gaping hole: there are substantial transaction costs associated with a property rights approach, given existing institutions. Some policy change is required to reduce the transaction costs that currently reduce the capacity of the global network to achieve private ordering. Bringing either tort claims or nuisance claims in this highly diffuse and distributed situation would be prohibitively costly. So how do we use his insights to help us design a set of institutions that enable private climate ordering to occur?

I encourage you to read all three essays.

One thought on “Climate Change Roundable at Reason

  1. There is currently no provable damage from AGW. There are multiple, inconsistent computer projections of potential future damage. There are also questionable assertions that AGW is responsible for heat waves, cold blasts, excessive rain events, drought, hurricanes, tornadoes, desertification, glacier retreat, etc.

    Throughout the history of efforts to monetize environmental externalities costs, there have been two primary approaches pursued: the damage cost approach and the control cost approach. In the case of CO2, damage costs would rely on computer model projections, since no provable damage has occurred. Establishing unique damage cost estimates for criteria pollutants has so far eluded their proponents. I believe establishing a unique damage cost estimate for anthropogenic carbon would be even more elusive.

    Control cost estimates, however, are available. IEA has recently estimated a global investment of $45 trillion by 2050 to reduce CO2 emissions by half. Since preventing further CO2 accumulation in the global atmosphere would require complete elimination of anthropogenic CO2 emissions, a complete solution would require the investment of more than $100 trillion. It must also be noted that atmospheric CO2 concentrations would continue to increase over the period as CO2 emissions were being reduced.

    I suspect that those whose property includes coal, oil, natural gas, oil shale, tar sands, etc. would also have some property rights concerns resulting from the process of terminating the use of their property and reducing its value.

    The key to preserving freedom while reducing anthropogenic carbon emissions is the implementation of advanced technologies which provide equivalent or increased utility at equal or lower cost, compared with current fossil-fueled end uses. The first step in that process is focusing RDD&D efforts on zero emissions technologies, rather than on reduced emissions technologies which would be obsoleted rather quickly.

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