Massive Environmental Externalities

[Msgr. Martinez]

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In addition to pointing to the previous thread, this is the PM I just sent to ojc about this:

Basically, although I am not worried because I don't by into the hysterical apocolyptic anthropogenic global warming bunk, the market will solve the problem the way it already solves pollution problems (when it is permitted to). All major pollution indices were on their way down after WWII prior to the passage of any major anti-pollution legislation or regulation. Why? In a nutshell, because consumers are all powerful under capitalism, and they don't like pollution. If consumers don't like CO2 emissions or the possibility of anthropogenic global warming, they will drive the market to ever cleaner technologies.

The problem has always been that a) governments are the largest set of polluters, b) the second largest set polluters are entities that have pollution subsidized (the public roads, for example) and companies that are either shielded from tort action by governments (bet you didn't know it was illegal to sue a company for air pollution, did you?) or effectively shielded from tort action by the complete failure of the state monopoly tort system (can you say decades to litigate? I knew that you could), allowing them to externalize those costs.

Also, it will be the accumulated future capital that will be created under the free market that will allow the technologies that could actually *do* something about "the problem" anyway. Why in the world would you want to reduce it?

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In other words, I will own my little slice of the atmosphere here in America, and when some factory in Banglore pollutes and is .025% responsible for a hole in the ozone layer in the part of the atmosphere that I own, I will sue them, and they will of course submit to a neutral arbitrator. This will TOTALLY work.

[Borodog]

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borodog

yes it is reactionary. furthermore is creates economic inefficiencies.

don't you believe in specialization and outsourcing jobs you don't have a comparative advantage in? making individuals police their property for damages related to external costs creates huge costs! people don't know how to identify such costs, nor do people have the know-how regarding how to use the court system to litigate the responsible parties (which they likely can not themselves identify).

why not have a specialist do this. my policy has that. your policy doesn't. of course you will say the market will provide these services, of course it will. but my policy directly provides them immediately through the market.

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Dude, I haven't even read "your policy". I've been responding to the OP. Furthermore, I have no "policy." Furtherfurthermore, your inability to imagine how the free market would provide for a solution to a problem does not imply that no one could think of one. For example, professional class action litigators could profitably specialize in identifying potential class actions where transaction costs for individual suits would overwhelm the damages they are owed and create class actions that would make the damaged whole for even small damages, but more importantly, internalize the costs that are currently being externalized. Poof. Problem solved. In fact, this exact scenario happens now. I see the commercials on the TV all the time.

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it seems like sometimes you just use your rallying cry "let the market figure it out" without even thinking of the implications.

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Like when? Obviously this instance does not qualify, since it is you who haven't thought of the implications of my position before attacking it.

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yes your system might work. yes my system might work. of course that is pretty much irrelevant. there is an infinite number of policy options. your suggestion that 'you don't have to do it that way" adds nothing. you need to make the decision based on some metric.

my solution doesn't involve people compromising their rights. my solution is proactive. my solution is severely weakened by asymmetries of information, though it doesn't suffer nearly as bad as your system where every individual on the planet has to incur at the minimum the initial research costs to find someone to manage their externalities. which also implies your system has huge opportunity costs.

the net effect of those costs equates to a market failure. there will be over pollution because there won't be an equilibrium amount of litigation because of frictional costs.

actually, after a little reflection, all i needed to post was "asymmetrical information." it absolutely crushes your policy

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All of this is already rebutted, so I'll just leave it at that.

[Phil153]

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the market will solve the problem the way it already solves pollution problems (when it is permitted to).

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All major pollution indices were on their way down after WWII prior to the passage of any major anti-pollution legislation or regulation.

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Do you have proof of this?

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Why? In a nutshell, because consumers are all powerful under capitalism, and they don't like pollution. If consumers don't like CO2 emissions or the possibility of anthropogenic global warming, they will drive the market to ever cleaner technologies.

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If that is the case, why isn't this happening now? A large portion of the population would like and would pay for pollution free cars, if they were a viable alternative. The money to be made here is astronomical. Yet, the market has been very slow to solve the problem. Neither the Japanese or the Germans or the Americans have produced large quantities of pollution free cars that people want to buy. Are you going to argue that's the government's fault?

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The problem has always been that a) governments are the largest set of polluters

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Do you have proof of this assertion?

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Also, it will be the accumulated future capital that will be created under the free market that will allow the technologies that could actually *do* something about "the problem" anyway. Why in the world would you want to reduce it?

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So your argument is that technological innovation will increase greatly without a government, enough to solve our environmental problems. Again, what do you base this on? Do you have historical evidence of this?

[Borodog]

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the market will solve the problem the way it already solves pollution problems (when it is permitted to).

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All major pollution indices were on their way down after WWII prior to the passage of any major anti-pollution legislation or regulation.

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Do you have proof of this?

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It was an article I read 5 or 6 years ago. I spent about a half hour googling and can't find data either way. I can't spend any more time on it, so I'll concede the point. My argument stands without it.

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Why? In a nutshell, because consumers are all powerful under capitalism, and they don't like pollution. If consumers don't like CO2 emissions or the possibility of anthropogenic global warming, they will drive the market to ever cleaner technologies.

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If that is the case, why isn't this happening now?

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It is.

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A large portion of the population would like and would pay for pollution free cars, if they were a viable alternative. The money to be made here is astronomical. Yet, the market has been very slow to solve the problem. Neither the Japanese or the Germans or the Americans have produced large quantities of pollution free cars that people want to buy. Are you going to argue that's the government's fault?

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Are you trying to argue that cars are not actually getting cleaner every year? [img]/images/graemlins/confused.gif[/img] The reason that most people have not adopted "extremely green" cars is precisely because they are not viable alternatives yet. You can't wave a magic wand and make technologies develop overnight.

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The problem has always been that a) governments are the largest set of polluters

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Do you have proof of this assertion?

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FEDERAL GOVERNMENT POLLUTION
Congressional Record Online
Hon Paul Ryan of Wisconsin in the House of Representatives
Saturday, October 28, 2000
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Mr. RYAN of Wisconsin. Mr. Speaker, I would like to submit for the Record an article written by former Senator Robert W. Kasten, Jr. The Honorable Bob Kasten served in both the House of Representatives (1975-81) and the Senate (1981-93).
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Mr. Kasten writes to remind us of the fact that the Federal Government is the largest polluter in the United States. He brings to our attention anecdotes from the states, which illustrate the states' difficulties enforcing local environmental laws on the federal government. He writes about the federal government's lack of accountability in cleaning up its own toxic waste sites and its attempts to push cleanup responsibility and costs to local levels of government and to private landowners.
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According to a Boston Globe article last year, ''federal agencies have contaminated more than 60,000 sites across the country and the cost of cleaning up the worst sites is officially expected to approach $300 billion, nearly five times the price of similar destruction caused by private companies.'' In contrast, private Superfund site clean up is estimated at a fraction of the federal government at $57 billion. The article goes on to say that the EPA Inspector General has found that, federal agencies are increasingly violating the law, with 27 percent of all government facilities out of compliance in 1996, the latest year figures available, compared to 10 percent in 1992.
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Department of Energy and Department of Defense environmental clean up budgets are routinely last priorities in the appropriations processes. For example, this year I worked to cut construction funding in the Energy and Water Appropriations bill for the doe's National Ignition Facility (NIF)--a bottomless money pit that the GAO has determined to be mired in waste and technological difficulties—and suggested that this funding be transferred to the doe's waste management account, where I believe the money could be put to better use.
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The final appropriations bill increased the Defense Environmental Restoration and Waste Management fund by $490 million dollars. In comparison, the NIF project, which is 100 percent over budget and 6 years behind schedule, was appropriated $130 million for FY 2001. The NIF boondoggle was granted nearly one-third of the total increase of the environmental clean up budget. Clearly the federal government has other agendas than the environment.
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We need to look more closely at Federal Government's own environmental problems. The State and Federal Government can work together to modernize environmental laws, streamline the bureaucratic process, and focus less on punishment and more on figuring out the best way to reach high environmental standards and compliance.
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Senator Kasten's article


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Also, it will be the accumulated future capital that will be created under the free market that will allow the technologies that could actually *do* something about "the problem" anyway. Why in the world would you want to reduce it?

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So your argument is that technological innovation will increase greatly without a government, enough to solve our environmental problems. Again, what do you base this on? Do you have historical evidence of this?

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Are you levelling me?

The history of capitalism is the history of technological development to solve problems.

[adios]

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There have been a few threads about the validity of the global warming concern. I just wanted to ask about what we would do if we *knew* that they were correct and that anthropogenic CO2 has and will cause a global warming disaster.

The way I see it this represents quite a huge market failure, in that CO2 polluters are going to cause a massive disaster some time in the future. In this situation a large number of people will have done huge damage to the property of another very large number of people at some time in the future (when the sea-levels rise). Again, assume for the purposes of discussion that we know this will happen. It seems like it would be totally impossible to arbitrate this after the fact.

I think if you are a consequentialist free market anarchist this should present a bit of a quandry. At least for me, the argument could always be made that the benefit of the market was so huge that you would put up with relatively minor externality failings because the introduction of a state to deal with them would wreck the whole system.

Now we are faced with a situation where the externality is potentially so gigantic that I don't think a consequentialist could argue against intervention in this situation (eg a Pigovian tax, or some other pollution reduction measure).

I totally understand if you want to argue from a Locke natural rights point of view and call this a tragedy of the commons.

I think Borodog quoted one of the Austrians at one point saying that: (paraphrase) pure capitalism was both the most just and the most beneficial system possible. This seems to call that into question.

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I really like reading your posts, great ideas and great thinking IMO FWIW. There are those that claim that the hidden agenda regarding "Global Warming Crises" is to make government more powerful than it already is. The rational of many who claim there is an acute crises seems to go something like this:

Only government intervention can solve this problem and thus we need to make government powerful enough to do so ASAP.

You put it a little more succinclty, if there is an acute crises then the market has failed with the implication being that the government needs to rectify the failure.

[AlexM]

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There have been a few threads about the validity of the global warming concern. I just wanted to ask about what we would do if we *knew* that they were correct and that anthropogenic CO2 has and will cause a global warming disaster.

The way I see it this represents quite a huge market failure, in that CO2 polluters are going to cause a massive disaster some time in the future. In this situation a large number of people will have done huge damage to the property of another very large number of people at some time in the future (when the sea-levels rise). Again, assume for the purposes of discussion that we know this will happen. It seems like it would be totally impossible to arbitrate this after the fact.

I think if you are a consequentialist free market anarchist this should present a bit of a quandry. At least for me, the argument could always be made that the benefit of the market was so huge that you would put up with relatively minor externality failings because the introduction of a state to deal with them would wreck the whole system.

Now we are faced with a situation where the externality is potentially so gigantic that I don't think a consequentialist could argue against intervention in this situation (eg a Pigovian tax, or some other pollution reduction measure).

I totally understand if you want to argue from a Locke natural rights point of view and call this a tragedy of the commons.

I think Borodog quoted one of the Austrians at one point saying that: (paraphrase) pure capitalism was both the most just and the most beneficial system possible. This seems to call that into question.

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I really like reading your posts, great ideas and great thinking IMO FWIW. There are those that claim that the hidden agenda regarding "Global Warming Crises" is to make government more powerful than it already is. The rational of many who claim there is an acute crises seems to go something like this:

Only government intervention can solve this problem and thus we need to make government powerful enough to do so ASAP.

You put it a little more succinclty, if there is an acute crises then the market has failed with the implication being that the government needs to rectify the failure.

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How can you call the government preventing the market from punishing polluters for their misdeeds a market failure?

[adios]

I don't. I'm stating that many feel that the "Global Warming Crises" is a subterfuge for giving government more power. The rational of the people who feel that there is an acute "Global Warming Crises" is that the government needs to intervene massively (save the earth from impending destruction) to solve the problem and alleviate the crises. If there really is not an acute crises no need for massive government intervention. The people that believe that there is no dire crises obviously feel that massive government intervention isn't desirable. I think the OP hit on the major reason why this seems to be an issue that divides political factions be it conservative-liberal; statist-anarchist or what have you.

[ojc02]

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There have been a few threads about the validity of the global warming concern. I just wanted to ask about what we would do if we *knew* that they were correct and that anthropogenic CO2 has and will cause a global warming disaster.

The way I see it this represents quite a huge market failure, in that CO2 polluters are going to cause a massive disaster some time in the future. In this situation a large number of people will have done huge damage to the property of another very large number of people at some time in the future (when the sea-levels rise). Again, assume for the purposes of discussion that we know this will happen. It seems like it would be totally impossible to arbitrate this after the fact.

I think if you are a consequentialist free market anarchist this should present a bit of a quandry. At least for me, the argument could always be made that the benefit of the market was so huge that you would put up with relatively minor externality failings because the introduction of a state to deal with them would wreck the whole system.

Now we are faced with a situation where the externality is potentially so gigantic that I don't think a consequentialist could argue against intervention in this situation (eg a Pigovian tax, or some other pollution reduction measure).

I totally understand if you want to argue from a Locke natural rights point of view and call this a tragedy of the commons.

I think Borodog quoted one of the Austrians at one point saying that: (paraphrase) pure capitalism was both the most just and the most beneficial system possible. This seems to call that into question.

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I really like reading your posts, great ideas and great thinking IMO FWIW. There are those that claim that the hidden agenda regarding "Global Warming Crises" is to make government more powerful than it already is. The rational of many who claim there is an acute crises seems to go something like this:

Only government intervention can solve this problem and thus we need to make government powerful enough to do so ASAP.

You put it a little more succinclty, if there is an acute crises then the market has failed with the implication being that the government needs to rectify the failure.

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Thank you for the positive feedback [img]/images/graemlins/smile.gif[/img]

I'm still up in the air about this (no pun intended [img]/images/graemlins/smile.gif[/img] ). I'm trying to keep as open a mind as possible because I don't want my (rightly) deep-seated suspicion of government to cloud my judgment.

Borodog makes very good points though. In general it's very hard to tell what the situation would be if government wasn't present because in my lifetime they always have been there - screwing things up, usually.

To me this situation is analogous to someone claiming they've invented something that can break a law of thermodynamics. It appeared that government was the only "solution" (from a consequentialist perspective). It's like I thought I'd found a perpetual motion machine. That's (almost) how disturbed I was.

[latefordinner]

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To me this situation is analogous to someone claiming they've invented something that can break a law of thermodynamics.

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funny, that's precisely how I feel when people claim that there is no theoretical limit to economic growth as if the "economy" isn't a subset of a larger ecological system with finite limits.

[Brainwalter]

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To me this situation is analogous to someone claiming they've invented something that can break a law of thermodynamics.

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funny, that's precisely how I feel when people claim that there is no theoretical limit to economic growth as if the "economy" isn't a subset of a larger ecological system with finite limits.

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Who ever claimed that?