Product of His Environment

By Robert H.

I was excited to read that Jonathan H. Adler had written an article entitled Conservative Principles of Environmental Reform, and even more excited when I read an interview with him entitled "Yes, Conservatives Can be Environmentalists   Here's How."  For years now I've thought that conservatives need to come up with a plausible environmental program, and this promised to show me a conservative who had done just that.

Unfortunately , he has not.

To explain this, we need to review the ideological bidding:  Recall that there are two big economic problems with pollution.  

1. The tragedy of the commons.  Because no one owns common resources, the incentives to preserve them don't work out right.

2. Transaction costs.  Because pollution injures a lot of people a little, the transaction costs to get them all together and deal with the polluter (either by suing him or paying him to stop) can be too high.  

In the 60's and 70's, conservatives and libertarians had clear answers to these problems.  Nozick outlined this in Anarchy State and Utopia, for example (such a good book you guys).

1. Privatize the commons.  If the government sells off all the common resources to the highest bidder, we can a. make sure incentives line up right for preserving those resources  and b. use the proceeds to help the common good, keeping the little guy from getting hosed.

2. Class actions.  Create a legal mechanism by which people can easily aggregate and sue polluters.

But then, over the coming years, problems undermined these solutions.

1. New kinds of air pollution.  Back when people thought of air pollution as a factory pouring smog into the air next door, you could kind of see how "privatize the resources" could work.  Treat the pollution like a trespass on all the nearby land it worsened the air quality over, let those landowners sue.  But when we realized that polluters were making microscopic contributions to continental or global air quality problems -- acid rain in the northeast, ozone holes over the antarctic, global warming -- it wasn't clear how to create a private property interest that could solve the problem.  The damage was to the entire atmosphere, the individual polluters contribution to it minimal and hard to separate out.  What do we do in response to that, sell the atmosphere?  Expect everyone who owns land on earth to get together and sue him?  Try to track down where the individual sulfur atoms he pumped into the air went?  There was no good solution.

2. Class actions turned out to be a mess.  Trying to simplify the costs of coordinating all those people just isn't possible without creating terrible agency problems (you basically end up with a lawyer who isn't actually working for his clients, and whose clients might not even know he exists), and at this point both conservative and liberal lawyers have pretty much given up on class actions.

So conservatives have never recovered from that.  They've basically spent the last few decades with wax in their ears, claiming that in every case the cost of pollution is overhyped and the cost of government intervention underhyped and so we should never regulate pollution ever.  They're probably right in a lot of individual cases, but as a universal answer to the problems posed by pollution it is wanting, and the empirical evidence supporting it seems week (IE, there have been some low cost, big success regulations of pollution).  Meanwhile, the liberals have workable answers to both the problems raised in one and two:

1. Deal with air pollution with cap and trade or taxes (from an economic perspective they get they same result).  

2. Deal with the aggregation problem by having government centrally regulate polluters (this imposes inefficiencies and risks regulatory capture, but, again, I think conservatives are nuts to claim that in every case the inefficiencies outweigh the gains).  

***

Ok, so that is out of the way, and the stage is set for Adler to finally come up with a conservative answer to the problems that stifled conservative environmentalism   Fortunately, he is able to express his solutions in one, succinct answer.

BP: So how do you use property rights to align incentives in other areas, like air pollution? 

JA: We do have to recognize that in many areas we still don’t know how to do that. We know what it might look like. In the pollution context, it would mean that every polluter would be held responsible for the pollution it generates. We don’t yet know how to make the tort system do that efficiently. But we know that’s the incentive we want. And the closer we can get to that ideal, the more we’re going to produce environmental results.

So... that's disappointing.  He doesn't know how to regulate air pollution and doesn't have a better tort solution than class actions, but he wants those better solutions to exist.  Good for him?

  He does have some specific ideas about global warming, though:

BP: So that’s the case that conservatives should pay attention to climate change. But what does that mean for policies to deal with?JA: I’m not a fan of regulating greenhouse gases under the Clean Air Act, I don’t think that’s particularly effective or efficient. But I don’t see the argument for doing nothing. I don’t think that’s consistent with conservative principles. So I’ve done papers on adaptation and how do we get the degree of energy innovation that many people think will be necessary. And most controversially, I’ve argued that a revenue-neutral carbon tax would be a good idea.

Oh.  He wants a carbon tax.  Like the liberals.

So his conservative solution to the problems plaguing conservative environmentalism are 1. Surrender to the liberals.  2. Figure something out.  Disappointing.


***

Seriously though, Adler makes some good points.  If I could force his argument into my paradigm (which is not his paradigm, and it's worth reading what he has to say in his own words), it would be 1. Conservatives need to stick to our "just privatize the commons" approach and fight for it aggressively in the places it works. 2. In the places it doesn't work, like air pollution, we need to be thinking hard to come up with something.  3.  We also need to be thinking hard to come up with a better tort system.

Then, as a sort of general 4. He does a lot to feed into the current conservative argument (centralized regulation of the environment, like liberals want to do it, is super super costly it is just terrible you guys).

Those are all fair and good points, they just fall super short of bringing conservative environmental policy back to where it was forty years ago: sitting pretty with a plausible story for how conservatives can protect the commons.

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As an aside, I would add that environmentalism raises non-economic problems: for some people (IE, hippies) it is an inherently negative outcome when animals go extinct or biomes cease to exist or whatever.  If you value some piece of nature more than is economically efficient (IE more than people are willing to pay for it), then even the broad outlines of conservative environmentalism Adler presents won't do much for you.