What do Global Warmers Owe Property Owners?

Ronald Bailey | June 12, 2008

My colleagues over at Reason's public policy shop have launched a roundtable discussion on "Climate Change and Property Rights." As my Reason public policy colleague Shikha Dalmia points out, there remain many scientific uncertainties about future man-made global warming. However, as she also rightly notes:

But ultimately libertarians and other advocates of free markets ought to have no ideological predisposition regarding the scientific outcome. They cannot treat the earth's thermostat as an enemy of freedom. 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.

To that end, libertarian scholars in recent years have begun exploring the possibility of property rights-based solutions to global warming - should science conclusively show it to be a major problem. But the difficulty with such solutions is that they would require the privatization of the global commons - dividing the global air-shed among the planet's inhabitants, letting them tend to their own little piece of space as they see fit. It is not obvious how one would accomplish that. Given that a pure property rights solution to global warming is elusive, libertarians have also started examining other solutions that would least empower the government - and least threaten property rights.

To launch this discussion of property rights in the context of man-made global warming, Dalmia has solicited initial comments from two leading libertarian scholars in this area: Case Western Reserve University law professor Jonathan Adler and free market environmentalism stalwart Indur Goklany.

Just a taste of their discussion follows. First from Adler:

Under the common law principles endorsed by most FME [free market environmentalism] proponents, the consequences of anthropogenic warming could constitute actionable nuisances - just like activities that, say, cause downstream flooding, alter the "natural" flow of waterways depriving existing users, or otherwise interfere with a neighboring landowner's "quiet enjoyment" of her land. FME proponents would recognize these infringements even if legal remedies were unavailable. ...

By the same token, if the land of a farmer in Bangladesh is flooded, due in measurable and provable part to human-induced climate change, why would he be any less entitled to redress than a farmer who has his land flooded by his neighbor's land-use changes? Nor does it matter that Bangladesh might stand to benefit from industrial development: If one's normative baseline includes a commitment to property rights, then aggregate welfare maximization is secondary - if not irrelevant.

And now from Goklany:

Greenhouse gas-producing activities in the US (and other industrialized countries) have created technologies to: raise food production and alleviate hunger; treat diseases such as AIDS, malaria, tuberculosis; and cope with droughts, floods and other natural disasters. Such activities have also lead to the discovery and harnessing of electricity and helped develop cell phones, internet and the personal computer, all technologies that every country in the world benefits from. The wealth they have generated, moreover, has allowed Bangladesh to benefit from trade, tourism and remittances from abroad. It has also allowed the US to offer aid to Bangladesh in times of famine and other disasters.

Had it not been for these activities, what would Bangladesh's level of human well-being be? Its life expectancy has gone up from 35 years in the 1940s to 61 now. Its hunger and malnutrition rates would undoubtedly be far higher as agricultural yields would be lower. It would be hard to even list all the ways in which Bangladesh has benefited.

Some might argue that the US can't subtract the benefits from the harms when estimating compensation because Bangladesh did not acquiesce to being harmed. But benefits are nothing but negative harms. Ignoring one but not the other would be as suspect as a company balance sheet identifying its credits but ignoring its debits. Who knows, in accounting for both benefits and damages, Bangladesh would not end up owing the United States!

Check out the Reason Roundtable debate over the role of property rights in addressing climate change here.

Comments

squarooticus|6.12.08 @ 11:25AM|#

Who knows, in accounting for both benefits and damages, Bangladesh would not end up owing the United States!

Notwithstanding "foreign aid" resulting from compulsory taxation, I'm presuming every benefit they derived from US technological development was obtained through peaceful trade. As a result, they don't owe us shit, because they've already paid for it.

As for whether the US or any other nation owes them anything as a result of AGW depends on the provability of AGW, as well as a determination of the percentage of warming due to human conduct, as well as the sub-contribution of the US to said warming. I'm not holding my breath on figuring any of that out anytime soon, which means any judgment would simply be premature.

|6.12.08 @ 11:31AM|#

There gets to be a point where there is no point in trying to trace out causation, benefits, and damages. I think the climate is well beyond that point.

I was glad to see at least some reference to the benefits of climate change above. Any philosophically consistent system for accounting for the effects of climate change has to take those benefits into account. But including those benefits adds another layer of causation, calculation, and complexity.

Of course, the global warming activists are not concerned with philosophical consistency. Global warming for them is a stalking horse for their pre-existing agendas.

Finally, one assumption that should not go unchallenged is that the transfers to balance the books on climate change should be at the nation-state level. Why is that?

squarooticus|6.12.08 @ 11:34AM|#

Finally, one assumption that should not go unchallenged is that the transfers to balance the books on climate change should be at the nation-state level. Why is that?

I presume primarily because judgments are unenforceable across State boundaries. Assuming you can get a magistrate or arbitrator to issue a summary judgment against some polluter halfway across the globe, good luck collecting: the market in armed international repo agencies is still pretty immature. ;-)

Of course, there's the related reason that the State doesn't want to lose its cut of the AGW lottery. No matter what "solution" appears, you can be sure that States will win and individuals will lose.

Neil|6.12.08 @ 11:50AM|#

Fuck Bangladesh.

fyodor|6.12.08 @ 11:56AM|#

There's a certain truth to the notion that there are positive externalities to others' wealth-advancing efforts for which they do not renumerated. Oh well. Direct renumerations seem to be enough incentive for the free market to thrive. Goklany brings up the central problem with negative externalities, which is that they are not agreed to, but I sure do not understand why bringing up the opposite is supposed to address that. If I inadvertently benefit from others' innovations, well lucky me, but I don't see why that somehow makes immaterialize any claim I have on someone else's fucking with me in ways for which I did not ask. That this someone fucking with me may have also done something good for me is what's immaterial.

|6.12.08 @ 11:57AM|#

This all sounds very complex. If the entire country of Bangladesh were to disappear under water, I suspect that the United States would be giving a whole ton of money to help, whether it was seen as the result of global warming or not.

tarran|6.12.08 @ 12:00PM|#

Squarerooticus beat me to the bunch.

Any legal system, to be rational and beneficial, must attempt to tie individuals with the injuries they have caused.

But how do you do that with global climate change. Do you enter a judgement against farmers whose cows are fatring all that methane? Do you punish road users? How about road owners, the onwes who invite people to drive internal combustion powered machines on their land?

What about "natural" climate change - the component caused by non-man made forces. How do you subtract that from the mix. If a natural warming cycle were to occur, the land would still be flooded and there would be no justification to sue.

I just don't see an actionable claim at this point. Any legal system that punishes people based not on a rigorous sytem of proof based on substantial evidence tying the defendand to the trespass, but on the premise that a crime might have been comitted and that the defendant might have had something to do with it will produce, inevitably, monstrous injustices.

|6.12.08 @ 12:01PM|#

Regardless of the realities of global warming, the statement

Who knows, in accounting for both benefits and damages, Bangladesh would not end up owing the United States!

is exceptionally fucking odious. It's advocating rounding up street people and infecting them with AIDS in exchance for housing and antiretroviral drugs. The fact that you've helped them arguably more than you've harmed them doesn't change the fact that doing it was an immoral thing to do in the first place.

|6.12.08 @ 12:02PM|#

If the entire country of Bangladesh were to disappear under water, I suspect that the United States would be giving a whole ton of money to help, whether it was seen as the result of global warming or not.

Even if it disappeared along with dozens of other countries around the world at the same time?

|6.12.08 @ 12:03PM|#

Including a significant portion of the US?

squarooticus|6.12.08 @ 12:10PM|#

Shem: try composing your thoughts in advance before posting three brain-vomit messages in a row.

Hypnos|6.12.08 @ 12:15PM|#

But ultimately libertarians and other advocates of free markets ought to have no ideological predisposition regarding the scientific outcome. [...]

Man, if libertarians keep saying reasonable shit like this, people may start listening to them.

|6.12.08 @ 12:16PM|#

Really, you think it would happen all at once?

Also, this "somebody's got to pay, and I don't care who" attitude is really dangerous as well.

kinnath|6.12.08 @ 12:19PM|#

We're being asked to pay "damages" to someone that is not only on the far side of the globe, but living a hundred years from now.

AGW, even if true, is so slow that no one alive today can be shown to be harming any other person alive today.

|6.12.08 @ 12:27PM|#

All: I put in the maps of Bangladesh and Northern Europe to make a contrast between their situations. As I discussed in my first take on the Stern Review on the Economics of Climate Change:

Just as a thought experiment, let's assume that boosting energy prices by imposing a carbon tax reduces economic growth by 1 percent per year. And because people like Stern, who are worried about climate change, are constantly mentioning their concern about the poor in Bangladesh, let's look at how a 1 percent cut in that country's growth rate would affect their future prospects. In recent years, Bangladesh's economy has been growing at about 6 percent per year. Let's assume the new carbon taxes cut Bangladesh's economic growth rate by 1 percent to 5 percent per year. Bangladesh's current GDP is $55 billion. So if Bangladesh's economy grew at 5 percent compounded for 50 years, it would increase to $630 billion and in 100 years it would exceed $7.2 trillion. However, Bangladesh's economy grew at 6 percent for 50 years, it would top over $1 trillion and in 100 years it would be $18.5 trillion. A 1 percent reduction in economic growth makes a big difference over the generations. Now the main concern about Bangladesh is how a warming world will cause rising sea levels to flood much of that country. It's interesting to note that the Dutch manage to keep the sea from flooding their low lying country with a GDP of just $500 billion.

|6.12.08 @ 1:00PM|#

Goklany brings up the central problem with negative externalities, which is that they are not agreed to, but I sure do not understand why bringing up the opposite is supposed to address that.

Because if I am supposed to pay others for negative externalities that they have not agreed to bear, why should they not be required to pay me for positive externalities I have not agreed to provide them?

A (more legalistic) angle on this (tagging on to Ron @12:27) - a plaintiff generally has a duty to mitigate damages, and cannot run up the bill by declining to do so.

Another (legalistic) angle to this: If the plaintiff experiences both benefits and damages from the defendant's behavior, why shouldn't the benefits be netter out against the plaintiff's recover? If Bangladesh gets (for example) better crop yields from all that CO2, why shouldn't that count against their claim?

But ultimately libertarians environmentalists and other advocates of interference/intervention in free markets ought to have no ideological predisposition regarding the scientific outcome

See? It works both ways.

civ gamer|6.12.08 @ 1:00PM|#

Maybe if low lying countries put their time and effort into making nukes instead of increasing their populations beyond what their country can bear without outside assistance they would have a better bargaining stance?

|6.12.08 @ 1:02PM|#

Why does allah hate bangledesh?

jblethen|6.12.08 @ 1:10PM|#

Sea level rise is not the problem with Bangladesh. The country is on the Ganges-Brahmaputra delta, which is subsiding due to compaction of sediment: http://heliogenic.blogspot.com/2008/04/not-this-again.html

Just as New Orleans, on the Mississippi delta, is subsiding and is now 20 feet below sea level. Flooding of Bangladesh is a false example knowingly used by global warming alarmists to scare and influence people.

Gilbert Martin|6.12.08 @ 1:27PM|#

"Under the common law principles endorsed by most FME [free market environmentalism] proponents, the consequences of anthropogenic warming could constitute actionable nuisances"

Only if the plaintiff can actually prove that such a thing as man-made global warming exists - which no is capable of doing.

fyodor|6.12.08 @ 1:29PM|#

Because if I am supposed to pay others for negative externalities that they have not agreed to bear, why should they not be required to pay me for positive externalities I have not agreed to provide them?

Because no one forced you to provide positive externalities whereas the negative externalities were forcibly visted upon the recipients.

a plaintiff generally has a duty to mitigate damages, and cannot run up the bill by declining to do so.

I don't understand the relevance. Are the Banglideshis purposely exposing themselves to sea level rise in order to collect more AGL damages?

If the plaintiff experiences both benefits and damages from the defendant's behavior, why shouldn't the benefits be netter out against the plaintiff's recover?

If someone robs your house but accidentally leaves their wallet, does the money in the wallet count against what they owe you for what they took?

All that said, I do see some mitigating issues here, and I'm thinking about 'em........

Gilbert Martin|6.12.08 @ 1:33PM|#

"Notwithstanding "foreign aid" resulting from compulsory taxation, I'm presuming every benefit they derived from US technological development was obtained through peaceful trade. As a result, they don't owe us shit, because they've already paid for it."

Most of the non-communist block nations on earth "owe us" for a lot more than direct gifts labeled foreign aid. They have been living off our military protection for decades. And it is primarily our naval power that has maintained the open sea lanes that allow the international trade other nations engage in to take place to begin with.

|6.12.08 @ 2:28PM|#

RC DEAN says:
Finally, one assumption that should not go unchallenged is that the transfers to balance the books on climate change should be at the nation-state level. Why is that?

We must accrue debts on nation state basis so that we can make the common man pay. This way we'll need to microchip them, track exhalation, food consumption and distance travel etc. The political elites and Bilderberg folks should be able to continue to circumvent "little guy stuff" like payroll tax, breathing tax etc. As Kissinger says: depopulation is the primary goal our policy.

|6.12.08 @ 3:09PM|#

Are the Banglideshis purposely exposing themselves to sea level rise in order to collect more AGL damages?

You missed Ron's post, where he pointed out that building dikes is one cost-effective way to deal with rising sea levels. Their claim should be limited to the amount of the cost-effective response, so as not to reward them for negligence and incompetence.

If someone robs your house but accidentally leaves their wallet, does the money in the wallet count against what they owe you for what they took?

Sure, if I was to sue them for civil damages, they could claim that as an offset. Why not? What difference does it make whether they delivered their money before or after the judgment against them?

Because no one forced you to provide positive externalities whereas the negative externalities were forcibly visted upon the recipients.

Now we're getting somewhere. This goes against trying to net out benefits from harm at the level of the emitter. It is not, however, an argument against netting out benefit from harm at the level of the claimant.

|6.12.08 @ 3:21PM|#

It looks to me like something related has already started: Greenpeace Drama Queens Sued by Victimy Developers. (my title - not theirs)

I am not a reactionary Greenpeace defender but this is just silly. Go Greenpeace!

Geotpf|6.12.08 @ 3:57PM|#

This doesn't work. If my property is flooded due to global warming, I can't sue every person on the planet who's CO2 emissions caused the temperture to go up .00000000000000000000000000000000000000000000007 degrees each.

DannyK|6.12.08 @ 4:04PM|#

You missed Ron's post, where he pointed out that building dikes is one cost-effective way to deal with rising sea levels. Their claim should be limited to the amount of the cost-effective response, so as not to reward them for negligence and incompetence.

It it "negligence and incompetence" that one of the poorest countries in the world can't afford to build dikes around its entire coastline? Hell, the U.S. couldn't even keep New Orleans dry.

You also ignore the fact that even the Netherlands, a rich country which has been the master of the seas for centuries, is starting to give land back to the ocean in the face of climate change. If the Dutch can't engineer their way out of this, how can we expect those Bangladeshis to figure it out?

The idea that Bangladesh owes us money because of all the positive externalities they received without our permission -- well, it takes a very special sort of intellectual to come up with things like that.

economist|6.13.08 @ 11:32PM|#

I would say that in a situation like this, it would be impossible to apply tort-style solutions to most possible problem. For one, you would have to determine when people's emissions started contributing to AGW, and go after everyone who made carbon dioxide emissions after that point. This is highly impractical. The least-worst solutions would probably be the moderate-libertarian-environmentalist ideas involving either a market in pollution externality rights (Basically, a set amount of pollution you can produce overall annually, with people then bidding for the permits), possibly in which proceeds would go to things, such as dikes, dams, maybe relocation assistance, that offset AGW damages or a carbon tax on emissions with proceeds being similarly distributed.

economist|6.13.08 @ 11:37PM|#

As to the negative-positive externality argument, I would suggest that, given the massive and complicated nature of the situation, the positives should mitigate and even offset the negatives in calculating externalities, we shouldn't say anything about "owing" for positive externalities. I would point out, however, that this is what governments do whenever they justify taxation by pointing to benefits that one doesn't ask them to provide.
"The worst sort of theft is to force a man to pay you for something you think he needs"
-Professor Bernardo de la Paz, from The Moon is a Harsh Mistress