A libertarian response to global warming

Sunday, June 04, 2006

A libertarian response to Global Warming (all-in-one post)

Introduction



So here’s the deal. Over the past 100 years, industrial plants and vehicles have been burning fossil fuels to the point where the total atmospheric content of CO2 has increased by about 30%. Because CO2 is a heat-trapping, or “greenhouse” gas, the Earth has started to warm up. This warming could become very inconvenient, expensive, and even deadly if it continues at its present rate. Because of this, a number of solutions to this problem have been proposed. Almost all of them require a huge governmental program.

This is very odd, because global warming is one of the few modern-day problems which is not caused by government. But government solutions abound. And most of these solutions require unrealistic levels of diplomatic co-operation, corporate welfare of stupendous proportions, and very little consideration for personal liberty or the principles of limited governance.

The principles of a libertarian government are simple.
A government exists to protect people’s liberties.
A government does not have the power to limit people’s activities, as long as those activities do not cause harm to other people.
If a person is harmed by another person or corporation, he has a right to seek compensation for that harm.
A government should be the minimum size necessary to fulfill these limited roles.

Can these principles be applied to the problem of global warming, allowing a solution without massive government spending, rules, and treaties? I don’t see why not. And I don’t see why they can’t be applied using branches of government that already exist, thus precluding the need for new bureaucracies.

So, here is the plan:

Part 1: Compensation



If a person believes that he has been harmed by global warming, he should (and does) have the right to seek compensation for the damages in court. The United states have been operating civil courts for hundreds of years now, and they have a proven track record of being able to deal with complex issues, bizarre types of compensation, and litigants of all sizes, from the poor individual to the wealthy corporation.

After all, fossil fuels are not currently sold with a warning label: “Danger! Use of this product may cause coastal flooding.” Global warming is an unintended side effect of the use of fossil fuels for transportation, energy, etc, , and it is incumbent on the manufacturer of these products to pay for the damages caused. In a legal sense, carbon dioxide should be no different to thalidomide, or asbestos.

There should, however be some rules regarding these compensation claims.

a. Claims should be payable by all global fossil fuel producers, in proportion to their emissions.
b. A uniform standard should be applied to what constitutes a warming-induced event, as opposed to a natural event (e.g. greater than 3 sigma variance from the pre-industrial mean).

c. Punitive damages should be limited to cases where specific emitters have been deceptive, contemptuous, or otherwise acting in bad faith. After all, if individual judges start laying down arbitrary penalties, then the market will have a very difficult time quantifying what level of compensation it can reasonably expect to pay.

d. Since the deleterious effects of global warming will not be limited to the United States, foreign citizens should be given blanket approval to sue in our courts. Why? Because our courts are the best around, and more importantly, they are the only ones which we have any right to grant access to.

Trials should be standard jury trials, as there is no need to create a new governmental system to deal with this problem, and because this system has been proven to be fairer and more resistant to corruption that other types of tribunals.

The issue of foreign emitters who do not pay their compensation claims will be discussed in the diplomacy section.

Obviously, any compensation claims paid will be a cost of business, and will eventually be passed on to the consumer. If a company shows signs of being unable to pay these costs, then the government would be allowed to require fossil fuel producers to carry global warming insurance, which they could buy from private companies at market rates.

At any rate, the bottom line is this: Companies that produce fossil fuels should be responsible for the effects of the CO2 released by burning those fuels, from the time they enter the atmosphere to the time they are sequestered, or removed by natural causes.

Part 2: Diplomacy



Only 25% of all anthropogenic CO2 emissions come from the US, so attaching liability to only domestic sources would not affect most producers. It would also put US industry at a disadvantage. They would have to pay for litigation claims and insurance, while overseas companies would not.

Obviously, if US courts award damages that must be paid according to the amount of carbon emitted, then foreign companies would have to pay three quarters of these fines. As long as they do so, then the system will work. But if foreign companies refuse to pay, some sort of enforcement mechanism is necessary. The best way to do this would be to simply slap a carbon tariff on all good from uncooperative countries. This would be an import tax, scaled to the amount of carbon-based energy used in the delivery of the goods or services being imported, levied on all imports from the non-cooperative country. If that country chooses not to sell anything to the USA, then this system will not work. But seriously, when’s the last time that happened? I don’t think that North Korea’s industrial base is going to melt Greenland.

As for treaty-making, and global tree-hugging sit-its, they are irrelevant. If other countries want to reduce their carbon use, good for them. As long as they pay for the damage caused by any carbon they do use, they can do whatever they want.

Part 3: Politics



This is where this libertarian solution is clearly superior to the various social-democratic models. Even in today’s strongly anti-libertarian, big-government-friendly political environment, this proposal has a better chance at actually being passed by congress than do other plans. Remember how Kyoto got voted down 97-0? Other social-democratic solutions face the same hostile political climate, a climate that does not effect this proposal. Here is why:

Social democratic proposals require that just about everyone has to actually care about global warming. Not only do they have to care, but they have to care enough to sacrifice part of their lifestyle. In America today, this political will simply doesn’t exist. Not only that, but people don’t want to care. The have their own jobs, family, hobbies, and interests that they already care about. Global warming is somebody else’s problem.

The social democrats seem to thing that some sort of eco-messiah is going to come along, and convert all of America to their way of thinking. Perhaps that messiah is Al Gore. But then, he couldn’t even carry his home state in the last election he lost, so I doubt he’s going to single-handedly sway the nation now. And neither is anybody else. We don’t like being told how to think. It is un-American.

And that is where this proposal can potentially strike home with Americans. It tells them what they want to hear. Global warming isn’t their problem. They don’t have to co-operate, or hold hands, or change their lifestyles. Global warming is the responsibility of the companies who sold tens of gigatons of fossil fuels without adequately researching the side effects, or informing the consumer of the risks. So those companies, which are currently raking in record profits, can pay for the damages.

The higher energy prices that may eventually result from this plan might make people choose to change their lifestyles, but that would be their choice. Nobody is forced to do anything. And that’s how government should work.

The other political advantage of this plan is that it is difficult for the industry to fight. For 20 years, they have been telling us that global warming is a hoax, that it would be good for us, and that carbon dioxide is life. They would have a severe credibility problem if they instantly backflipped from “Global warming is natural and harmless” to “We can’t afford to pay for the damages.” Ultimately, the American ideal of fairness is rooted in responsibility, and this solution simply requires polluters to take responsibility for their products.

FAQ



What if global warming is a hoax?
If global warming is a hoax, then the evidence and theories will not stand up to the controlled, adversarial environment of a courtroom. If the data simply isn’t there, then it will be illuminated, and litigants will not be able to win cases. If no damages are awarded, there will be no costs to pass on to the consumer, and market forces would the price of global warming insurance down to a negligible level.

What if global warming provides a net benefit?
If global warming is economically beneficial, then the people and companies who benefit can pay the damages with some of their profits, and still have money left over (If the damages are greater than the profits, then it isn’t really beneficial, is it?)

What if global warming is catastrophic?
If global warming is catastrophic, then the damages paid will be large, and energy prices for carbon-based energy will rise to the point where alternative energy sources become economical. By requiring companies to take out global warming insurance, the insurance companies then have an economic incentive to predict future catastrophes and raise their rates before the catastrophes eventuate. Because the damages are awarded on the basis of the amount of CO2 the defendants have produced, these defendants can limit their exposure by either removing carbon from the atmosphere, or by sourcing their carbon from biological sources.

Can you give an example of how this might work?
Joe Smith owns a ski resort in the Poconos (northeastern Pennsylvania). After a string of unusually warm winters, he finds it necessary to buy additional snowmaking equipment and shorten his season. So, he hires some slick NY eco-lawyer, and sues a variety of energy and petroleum companies. The companies agree to reimburse him for the lost revenue and additional equipment, and he goes back to work.

Alternatively, they have a big court fight, where he tries to prove that the recent warm spell is unprecedented over the past 300 years, that the globe is warming due to CO2 emissions, and that this, and not some other regional factor, is why the unprecedented warm winters have happened. If he can convince 12 jurors of this, he gets awarded damages. If he can’t make his case, he doesn’t get a cent.

What about nuclear, solar, and wind energy?
If global warming damages and insurance premiums cause the price of energy from fossil fuels to rise, then these other forms of energy might become economically viable. People living in states with free energy markets can then switch their plans from coal-based electricity to electricity from some other source. People living in other states would first need to tell their state legislators to get with the 21st century.
It might be worthwhile to require NIMBYs who delay the construction of carbonless power facilities to pay the carbon costs of the coal plants that they are keeping on-line, if a coal company does try to diversify its generation methods.
It is also worth mentioning that nuclear power could use an injection of free market libertarianism on its own. In the US, the nuclear waste disposal industry has been nationalized, and there are reams of federal regulations regarding nuclear plants that could be replaced with a more market-friendly solution. But that’s a whole different rant.

What about carbon sequestration?
If a company that has put a lot of CO2 into the atmosphere predicts that this CO2 is going to cost them a lot of money down the track, they may decide that it is financially prudent to remove that CO2. That would be their business decision, since it is their CO2.

What about the Kyoto Treaty?
What about it? Actually, it hasn’t been as completely useless as most people commonly believe. Even if it was rejected 97-0, it did have some positive aspects. For example, it spurred a lot of research into how to keep track of carbon emissions, sequestration, and trading. This how-to knowledge will be useful for keeping track of carbon, if companies with CO2 exposure try to sequester their liabilities or sell them to brokers. As for the national limits? Well, no-one is stopping foreign countries from making deals amongst themselves. They can do whatever they want.

Why should foreigners be allowed to sue US companies in US courts?
Because our court system is better than theirs is. Seriously, though. The US has one of the best legal systems around. The more people who use it, the more likely they are to realize the merits of participatory democracy, take the systems home, and reform whatever corrupt regime it is under which they currently suffer. If they can’t use our courts, they’d probably set up some sort of suspect inferior tribunal of their own, so why not let the seek justice where it is most likely to be meted out fairly and impartially.

What about my evil scheme to use global warming as the dire threat needed to justify my Socialist Revolution and New World Order?
Sorry, you’ll have to piggyback your evil schemes off of some other cause. Try animal rights. Or gay boy scouts getting married in Catholic churches. Or the fluoridation of our precious bodily fluids.

Conclusion and disclosure



In the interest of full disclosure, I should mention that I do contract work for oil and gas companies. I also do contract work for paleoclimatologists. I see no problem with this; everyone has a right to top quality data, if they are willing to pay for it.

I realize that this response to global warming is a bit wishy-washy, and fuzzy on technical details. But I’m an analytical chemist, not an economist or a lawyer. So I’m a bit out of my field here. As a result, I don’t know how practical this solution actually is. However, I think it is worth considering, for two reasons. First of all, it gives a new way of approaching the problem, where agreement on the severity of climate change is not necessary for the implementation of the plan. I think that any climate change plan that requires unanimous agreement on all aspects is doomed to fail.

More importantly, it shows how the libertarian mindset can be used to approach important public policy areas that are outside the core issues of traditional libertarian thought. If libertarians want to be anything more than a fringe political force, we need to devise libertarian solutions to mainstream problems; guns, taxes and speech will only get us so far, if we can’t devise coherent and sensible non-bureaucratic solutions to complex issues of national and international concern.

5 Comments:

At 5:04 AM, Blogger Jose said...

You post some very interesting and compelling ideas here. I suspect that to a certain extent petroleum companies are already anticipating this. They've obviously learned the lessons learned by Big Tobacco when it comes to disseminating contrarian press releases. You'll notice that the vast majority of these press releases are released by advocacy groups who are in turn funded by think tanks who are in turn funded by someone else, etc, etc. It all seems like a form of PR money laundering designed to prote3ct the original source of the funds from litigation.

 
At 8:36 PM, Blogger Chris said...

It's not obvious to me how this solves the problem of accounting for future damages--where carbon released in 2008 might not come home to roost until 2058. Was that the part where the government might require companies to buy insurance if it looks like they can't meet their obligations? I'm suspicious that that would be about as reliable as pension funds.

I'm also wondering whether the users of fossil fuels might be found liable. For example, if I burn oil, I've released more CO2 than if I turn it into plastic. Thus, the production of oil is not the final step in the responsibility chain. But if oil-as-fuel consumers are partially liable, we get a nasty mess.

Would you approve of class-action suits? Without them, the courts would be flooded. What about reverse-class-action, where a person sues a basket of responsible parties as a class? I don't think we have reverse-class-action, and I think we'd need it to make this work. But if you have class-on-class suits, you'd be better off implementing a carbon tax.

Thinking through the implementation of this, and how it'll turn into a massive bureaucratic collective solution at best, reminds me of the final scene from Animal Farm. "They looked back and forth, from the lawyers to the legislators, from the legislators to the lawyers. But already it was impossible to tell the difference."

Anyone wants to respond--I'm cphoenix at crnano.org.

Chris

 
At 12:48 AM, Blogger Zarquon said...

Class-on-class lawsuits are already happening, it seems -- though the Other Side aren't the "oil-as-fuel consumers", they're oil and coal companies.

-- bi, International Journal of Inactivism

 
At 12:43 PM, Blogger Unknown said...

While this makes sense from certain economic viewpoints, it almost completely misses the actual problem. Climate change isn't about money. It's not about people paying for the damages, though that's certainly a concern for many. The biggest problem is that it's causing real and irreparable harm to the environment, especially the ocean. This isn't just about a 1° change or melting ice in the Arctic. The oceans are absorbing this CO2 and becoming more acidic, and huge swaths of ocean life are dying off as a result. This a real issue right now, that needs an immediate response. Every day we fail to act we are costing numerous lives, directly animal lives and indirectly (at least right now) human lives. We rely on the environment way more than it relies on us. We have to protect our natural resources if any life is to have a future on this planet- especially us. I would love to see an answer that doesn't involve huge government intervention but they're the only ones even talking about taking the initiative. The corporations don't care. They've been working for decades to suppress this information, and paying corrupt politicians for their silence. We as citizens have limited say because we don't have the funds to combat those corporations or invest in alternate solutions. Most of us can't just run out and buy a hybrid car to excercise our disagreement with the practices of the fossil fuel companies. We really are at the mercy of the oil industrial complex and the government, and at this point, I trust big oil slightly less. I've been a libertarian for a decade but I'm voting Green Party this election because of this. I don't agree with them on everything but this is the most pressing issue for humanity right now and the biggest challenge to my ability to leave a good life for my children, and the Libertarian party just hasn't offered a good solution.

 
At 12:44 PM, Blogger Candace Hawkins said...

While this makes sense from certain economic viewpoints, it almost completely misses the actual problem. Climate change isn't about money. It's not about people paying for the damages, though that's certainly a concern for many. The biggest problem is that it's causing real and irreparable harm to the environment, especially the ocean. This isn't just about a 1° change or melting ice in the Arctic. The oceans are absorbing this CO2 and becoming more acidic, and huge swaths of ocean life are dying off as a result. This a real issue right now, that needs an immediate response. Every day we fail to act we are costing numerous lives, directly animal lives and indirectly (at least right now) human lives. We rely on the environment way more than it relies on us. We have to protect our natural resources if any life is to have a future on this planet- especially us. I would love to see an answer that doesn't involve huge government intervention but they're the only ones even talking about taking the initiative. The corporations don't care. They've been working for decades to suppress this information, and paying corrupt politicians for their silence. We as citizens have limited say because we don't have the funds to combat those corporations or invest in alternate solutions. Most of us can't just run out and buy a hybrid car to excercise our disagreement with the practices of the fossil fuel companies. We really are at the mercy of the oil industrial complex and the government, and at this point, I trust big oil slightly less. I've been a libertarian for a decade but I'm voting Green Party this election because of this. I don't agree with them on everything but this is the most pressing issue for humanity right now and the biggest challenge to my ability to leave a good life for my children, and the Libertarian party just hasn't offered a good solution.

 

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