Climate Liberalism

This essay outlines the way in which natural rights theory regards pollution and on what basis it will say that pollution violates persons’ rights. I will also outline some key objections that have been made to its response to pollution, but argue that these are surmountable. More serious ontological objections can be made—unfortunately I present these without offering any way out for the natural rights theorist. However, these ontological objections also raise surprisingly interesting insights about the relationship between how we determine that a purported pollutant constitutes a rights violation, and the social context in which it is purported to occur. The self-understanding that social groups have of their activities is essential to determining what counts as a harmful interference in them, and therefore what counts as rights violating pollution. These are important issues worthy of discussion even in lieu of a full solution.

Climate change, as a social-ecological problem, presents a great challenge to libertarian thought. At a first approximation, a “libertarian climate policy” would involve a simplistic panacea solution: enforcing completely specified and allocated property rights using rules approximating those of common-law trespass. This approach remains the first-best option for many libertarians; for some, it remains the only justifiable approach. This chapter compares and contrasts various “libertarian” approaches to climate change policy, including those offered by scholars associated with “Free Market environmentalism” (FME), such as Terry Anderson and Donald Leal, along with proposals by non-FME consequentialist-libertarians, such as Milton Friedman, Richard Epstein, Jonathan Adler, Jeffrey Miron, and Martin Anderson. It is heartening to see libertarians grappling seriously with the greatest collective-action problem the world has ever confronted, but arguably none of their policy recommendations has added much to wider climate policy debates. Meanwhile, the more practically workable their arguments become, the less “libertarian” they appear.

Climate change is, perhaps quintessentially, a collective, rather than an individual, problem. The scale of the problem and the plausible solutions go far beyond the action of any particular individual, any particular entity, or perhaps even any particular nation. But that does not mean that an individual rights perspective cannot be instructive in considering one major dimension of climate change, climate change adaptation as it plays out in the courts. Climate change suits have been, and will continue to be, brought in the courts by property owners alleging that climate-change-adaptation regulation is depriving them of their individual rights without just compensation. We also will see suits alleging that the government’s failure to protect private property from climate change is a deprivation of individual property rights. Property rights are also implicated, if implicitly, in public nuisance suits alleging that energy companies caused climate change. In all these litigation settings, contested concepts of notice, harm, and causation will play a major role.

This book chapter explores how common law (state or federal) tort law evolves to fill regulatory voids. Particularly in areas that pose emerging, and incompletely understood, health and safety risks, common law tort liability holds out the potential for a dynamic regulatory response, one that creates incentives to develop additional information about potential risks and stimulates innovation to mitigate and/or adapt to these risks. In this temporal model, common law tort plays an essential role in transition, allowing for experimentation with various risk-minimization methods and remedial approaches until optimal approaches emerge which could then be enshrined in more uniform regulations. The chapter identifies and assesses this dynamic, information-forcing role for common law tort liability in the realm of climate change litigation. In this model, common law tort, rather than a relic of the past, emerges as relevant to the future of environmental risk regulation, as indeed superior to legislation and/or regulation in terms of addressing newly emergent risks. Moreover, the model suggests that the interaction between common law tort and federal statutes and regulations will remain interactive and dynamic over time. The chapter then uses climate change litigation as a case study to shed light on the expansion of common law public nuisance to fill a regulatory void in this area, revealing the modern relevance of common law tort in environmental law. The chapter concludes with a preliminary evaluation of the extent to which experimentation among states and municipalities with regard to various adaptation measures fits the optimal model of common law tort in transition, with a final gesture toward forces at play that may stymie the common law’s evolutionary impulses.

Libertarians often emphasize courts’ potential to alleviate pollution problems without the need for legislation and regulation. However, this chapter argues courts cannot completely replace these other tools. Because of the historical conditions in which pollution law develops, we should expect courts in industrial societies to initially develop legal standards that deliver limited protection against many common pollution threats. As societies grow wealthier and citizens begin favoring stricter defenses against pollution, courts honoring longstanding precedents will struggle to keep pace with changing priorities. Because legislators and regulators are authorized to create and alter laws deliberately in a way judges are not, they can perform an essential function by updating legal standards amidst changing circumstances. Libertarianism stands the best chance of addressing the challenges pollution creates by allowing each branch of the liberal division of powers to perform its role, not by substituting the judiciary for all other branches.

This chapter is the first to identify that U.S. Environmental Protection Agency climate change accounting systemically overlooks manipulation of airspaces through wildfire smoke emissions and cloud seeding—virtually unregulated activities undertaken by a mix of public and private actors. These examples illustrate a broader theoretical point: that climate and environmental policy analysis and solutions are hamstrung by the limitations inherent in modern Western conceptions of property. This chapter discusses how a model of multidimensional property—derived from emerging interdisciplinary discussions of overlapping property rights, mismatched property rights, and landscape-level resources—can improve the framing of climate change and other ecological problems, and thus improve available outcomes.

One difficulty with using individual nuisance lawsuits to combat climate change is that there are so many parties affected by climate change that the number of potential litigants is basically limitless. This precludes private ordering. It is often thought that only government regulation can cut through the transaction costs posed by widespread externalities. But class action lawsuits might offer another way. Drawing on my arguments in “The Conservative Case for Class Actions,” I contend that the private class action bar has many advantages over government regulators and these advantages may extend to climate change litigation.

Some pollution problems may be resolved by defining, delimiting, and enforcing property rights. The problem in all but the simplest scenarios, however, is that neither legal enforcement of property rights against pollution nor low transaction costs can be assumed. This often leads to calls for administrative regulation. Yet reliance upon property rights does not necessitate relying upon individuated property owners acting in an atomistic fashion nor is government intervention the only appropriate response to high transaction costs. Just as firms often utilize centralized command structures to increase production, private institutional structures—“firms”—may be capable of dealing with transaction costs more effectively than the government alternative. This chapter explores the potential of firms and other property-based institutional arrangements to resolve pollution problems that may otherwise call for regulation.

Modern, open societies are characterized by growth and dynamism. To many environmentalists, however, it is this very commitment to growth and change that put modern societies at odds with the values of environmental protection. Many argue that the uncertainty that comes from growth endangers the environment, with the implication being that we should adopt general prohibitions rules like the “Precautionary Principle,” which prohibits economic activity unless it can be proven to have no substantial environmental impact. I argue that this conclusion is largely mistaken. Dynamism is so important and in opposition to general prohibition rules that we should avoid them when possible. Instead, I argue that we should favor a general default permission rule. This rule, I argue, is not only more suited to most environmental domains but also compatible with a dynamic capitalist economy, which is crucial for raising standards of living and finding solutions to existing environmental problems.

Climate change involves changes in risk distributions for extreme weather events, increasing uncertainty about where these events occur and their frequency, a problem different from traditional environmental concerns and so requiring different tools. Markets respond to increasingly uncertain risk distributions by identifying means of managing risks that both reduce the potential for catastrophe and facilitate investment in developing the information that enables entrepreneurs to identify opportunities. This chapter draws on the economic analysis of entrepreneurship to address the legal infrastructure necessary for harnessing alternative risk transfer methods (ARTMs) to address climate-change-induced changes in risk distributions for extreme weather events. It explores how the ARTM industry uses the data it develops to help insurance buyers modify behavior to reduce losses as a form of market response to this class of environmental problems and how these responses fit with our understanding of entrepreneurial behaviour.

This chapter sets the task of outlining an approach to climate policy that is consistent with the classical liberal tradition in political philosophy and economics. It begins by applying John Locke’s theory of acquisition of property by first use to the case of carbon emissions. It argues that today, it is no longer possible to claim new emission rights while leaving “enough and as good for others.” It follows that under Locke’s theory of government, the remaining waste disposal capacity of the atmosphere should be managed as an unenclosed commons through the institutions of liberal government. Drawing on the work of Friedrich Hayek, it argues that science and the price system should play co-equal roles in the design of policies for managing emissions. It concludes by making a case that a target-consistent approach to climate policy is more suitable to one based on the social cost of carbon.

This chapter use the principles of ‘robust political economy’ to consider institutional alternatives to address the problem of anthropogenic climate change. It argues that non-ideal comparisons between alternatives are necessary to judge the likely ‘real-world’ consequences of adopting different policy regimes to address the climate change dilemma, but that the global character of the problem and the timescales required to judge the relative effectiveness of any institutional response prevents the production of the necessary comparisons. In the case of climate change, therefore, there are no empirically robust comparative institutional claims that can be made.

At first glance, it may seem that climate policy based on estimates of the social cost of carbon (SCC) presupposes a set of controversial assumptions, especially about what detailed knowledge regulators have about the impacts of climate change, and what the proper role of government and policy is in responding to those impacts. However, I explain why the SCC-based approach need not actually have these problematic presuppositions as well as why SCC estimates may provide the best guide to climate policy when implemented in a way that incorporates a healthy dose of humility. The SCC-based approach can be used in a way that is ecumenical between the wide range of reasonable but incompatible views about the proper goals of government and policy, ranging from views that aim only at market-efficiency, to utilitarian views, to rights-based and other deontological views, to libertarian views, to virtue ethics views, and others.