Your Fist and My Nose
Megan McArdle approvingly references Matt Yglesias’s post on limiting CO2 emissions. She cites these key paragraphs:
It’s worth going back to first principles on markets, property rights, and air pollution. To have a functioning market, you need to have property rights. And property rights need to be defined in some way or other. This includes taking some view of the relationship between property rights and particulate emissions into the air. On one conceivable conception of property rights, the Sierra Club could buy up a field somewhere and then assert that its property rights over the field give it the right to exclude any form of air pollution from wafting into its field. On that definition of property rights, which is the one “the Greens” would favor if we really wanted Stone Age economic conditions, industrial production would swiftly become impossible. You couldn’t so much as warm yourself with a fire before neighbors were accusing you of tresspassing for depositing microscopic soot particles in their lawns.
So obviously we don’t define the property rights that way.
Another way would be to say the air is just a kind of free-for-all. You just dump however much of whatever you want into it and forget about it. This is, needless to say, convenient for people who are producing a lot of pollution. But it’s not so convenient if there’s acid rain falling on your roof. Or if smog is wrecking your view. Or if you develop asthma as a result of poor air quality. Or, indeed, if your gets drowned in a flood or your fields go dry or your drinking water vanishes because of climate change. A third way is a find a middle ground. You’re allowed to emit some sulfur dioxide into the atmosphere so that industrial production can continue, but an unlimited amount so as to prevent the acid rain situation from getting out of control. The “green” proposal for carbon dioxide is essentially similar to this. It’s important, economically, that we allow there to be some carbon emissions. But it’s also important that we not have unlimited levels of greenhouse gases making the world hotter and hotter and hotter and hotter with all sorts of deleterious consequences for people’s lives.
This thought is evidence of a reasonable disposition, and is a superficially reasonable argument; but if we want to go “back to first principles”, we ought to go back to actual first principles. Yglesias seems to have an unarticulated (understandably so in a short post like this one) normative premise that if faced with the seeming logjam that a literal interpretation of “you can’t harm my property at all without my OK” would place on any economic activity, then the correct criterion for preventing these potentially unending claims of tortuous action is some kind of reasonable balancing of the benefits the action generates for the alleged transgressor as compared to the costs this action imposes on the property owner.
Of course, some version of this dilemma applies to more mundane situations like a neighbor’s campfire dumping particles on my hut, and so it should not be surprising that there is a complicated set of principles that bear on this issue going back as far as the misty origins of the common law. As one example, there is the idea that the first person to begin using a previously-unclaimed natural resource thereby creates a property right in its use that would provide at least some legal protection. This proceeds from the idea, articulated by not originated by Locke, that when I “mix my labor” with a previously-unclaimed natural resource, then I own it. Bove v. Donner-Hanna Coke Co. [1932] is a classic case of a court holding that an entire industrial area had an effective right to continue to emit increasing amounts of particulate emissions into the air because of this known historical behavior.
None of this is to say that legal doctrines exist that allow us to reconcile these competing interests effectively, or that I have shown that there is not some difference of kind rather than degree between these cases and an action with literally global scope, or that these principles are not just cover for power politics and so on; but I do think that any serious attempt to address the quandary that Yglesias illustrates has to confront this huge intellectual heritage.
But let’s grant the premise for a moment. On what basis would the hypothetical “we” draw the line that Yglesias proposes between (in my words) “enough allowable emissions to permit a healthy economy” on one hand, and “not so much that we trash the planet” on the other?
To a first-order approximation, there is exactly one action that creates the carbon dioxide emissions in the contemporary U.S. that would be subject to restriction: burning fossil fuels. Let’s start with the point that it is entirely artificial to isolate the hypothesized negative externality of global warming created by this action from all of the other positive and negative externalities created by it. Burning fossil fuels adds CO2 to the atmosphere and thereby increases the risks from global warming, but these fuels create social utility by generating energy at lower direct costs than alternatives, but the US needs to bear a huge military burden to protect oil supply chains in unstable geographies, but a car-based economy allows more people to satisfy their desire to live in detached homes with yards, but roads are subsidized to do this and it crates excess congestion, and so on and so on, ad infinitum.
How could we possibly weigh all of these against one another? A recent review of such analyses by European academics finds that the estimates for the external costs per kilowatt-hour of, for example, coal range from about .01 cents to $10. Think about this numerically. The cost of a kilowatt-hour in that you would buy for your house is on the order of 10 cents, so incorporating the external costs would lead to a price increase of somewhere between 0.1% and 10,000%. For all we know, prospective global warming damages might be a trivial or a dominant component of the external effects of burning fossil fuels.
Since he focuses only on global warming impacts of burning fossil fuels, what seems to be implied in Yglesias’s argument is either that this is false uncertainty, or that the worst case for the prospective impacts of global warming is so awful that that it trumps everything. But as I have argued many, many times, there is no good evidence for this proposition.
So, while his argument sounds like (and at some level is) a sensible way to think about the issue, he has neither considered alternative legal principles other than an administrative state that sets allowable emissions limits through supposedly utilitarian calculations, nor the (in my view, more important) issue of providing evidence for the implicit premise that prospective global warming damages are the dominant external effect of the actions that create carbon dioxide emissions.
I’m not sure why you feel the need to pen such an elaborate takedown of Matt Yglesias. It seems to me that your position on global warming isn’t that it shouldn’t be combatted somehow, simply that the most widely proposed means to do so have costs that outweigh their benefits.
In that sense what Matt is writing here (which I originally read on Megan’s blog and seemed pretty mundane to me) doesn’t seem to me to be contradictory at all with what you’ve said time and time again about global warming. It doesn’t follow directly from what he’s saying that there should be cap-and-trade legislation, simply that global warming is a new challenge that may require new regulation. Of course as we know Matt goes from that premise to favor different policy options than you, but it doesn’t mean that this premise is false or rather, incompatible with your views.
You make very good points, but I’m not sure if they’re necessary in this instance.
— PEG · Dec 1, 05:12 PM · #
PEG:
Because if we accept that we should set up some kind of an adminstrative body to determine what emissions should be allowed, we hae cap-and-trade (or technically, “cap”; I assume trading would be allowed).
— Jim Manzi · Dec 1, 06:10 PM · #
Jim: But he’s not proposing to set up any administrative body, at least not in these three paragraphs.
What he’s saying is that global warming is a new phenomenon and that therefore, old understanding of property rights and old legal frameworks will have to evolve. You’re right to point out that property law is already quite adaptable and might not need to change much, and it would be correct to point out that from that premise Matt goes on to advocate cap and trade, etc. which you oppose. But if you take those three paragraphs as such I don’t have a problem with them, and I don’t really understand why you do.
I may be really boorish and reading things a little too literally, but he’s not saying there needs to be cap and trade, or even cap, he’s saying there needs to be less carbon in the air. I think we can all agree to that. But I’m sure that if some researcher came up with GM carbon-eating trees as have been proposed by Freeman Dyson and created a for-profit company to grow them and reduce our CO2 levels you would both cheer him on.
— PEG · Dec 1, 06:42 PM · #
PEG:
I agree that there should be less carbon dioxide)in the air, if there is a proposal to do this that creates more benefits than costs. I’ve yet to see such a proposal at scale.
— Jim Manzi · Dec 1, 06:50 PM · #
“[W]hat seems to be implied in Yglesias’s argument is either that this is false uncertainty, or that the worst case for the prospective impacts of global warming is so awful that that it trumps everything. But as I have argued many, many times, there is no good evidence for this proposition.”
And every time, your argument is premised on the erroneous assumption that uncertainty about the extent of the impact of global warming is actually evidence that there will be no impact from global warming.
— alkali · Dec 2, 04:32 AM · #