Archive for December, 2007

Environmental Markets? Links to Austrians

December 29th, 2007 No comments

Environmental Markets?  Links to Austrians

Here’s a partial list of useful articles, alphabetically by author (further suggestions are appreciated):

Terry L. Anderson and J. Bishop Grewell
Property Rights Solutions for the Global Commons: Bottom-Up or Top-Down?’y+F.+73+pdf

H. Barnett and Bruce Yandle
The End of the Externality Revolution

Walter Block 
Environmentalism and Economic Freedom: the Case for Private Property Rights

Robert W. McGee and Walter E. Block
Pollution Trading Permits as a Form of Market Socialism and the Search for a Real Market Solution to Environmental Pollution
John Bratland
Toward a Calculational Theory and Policy of Intergenerational Sustainability

Roy E. Cordato
Toward An Austrian Theory of Environmental Economics

The Common Law Approach to Pollution Prevention; a Roundtable Discussion (1997) (Hope Babcock, Elizabeth Brubaker, David Schoenbrod, Bruce Yandle, Michael Krauss)

Peter J. Hill

Market-Based Environmentalism and the Free Market; they’re Not the Same

Roger Meiners & Bruce Yandle

Common Law and the Conceit of Modern Environmental Policy, 7 Geo. Mason L. Rev. 923, 926-46 (1999) [attached at end of this post].

Murray N. Rothbard 
Law, Property Rights, and Air Pollution

Fred L. Smith, Jr.
The Bankruptcy of Collectivist Environmental Policy

Fred L. Smith, Jr. 
Eco-Socialism: Threat to Liberty around the World

Robert J. Smith 
Resolving the Tragedy of the Commons by Creating Private Property Rights in Wildlife

Ludwig von Mises 
“The Limits of Property Rights and the Problems of External Costs and External Economies”, in Human Action

Bruce Yandle
Coase, Pigou, and Environmental Rights

Bruce Yandle
The Commons: Tragedy or Triumph?


Categories: environment, markets Tags:

Environmental law resources

December 18th, 2007 No comments

Apologies for the lack of clear organization.  Maybe later, as time allows.


Richard B. Stewart’s essay, “ADMINISTRATIVE LAW IN THE TWENTY-FIRST CENTURY”, New York University Law Review, May 2003:

Richard B. Stewart – A NEW GENERATION OF ENVIRONMENTAL REGULATION (attached at bottom as a .zip document)

Stewart is a professor of law at NYU law school, was formerly professor at Harvard law school, former chairman of the Environmental Defense Fund, and served as Assistant Attorney General for the environment and natural resource division in the Reagan administration.

Adam Babich, TOO MUCH SCIENCE IN ENVIRONMENTAL LAW, Columbia Journal of Environmental Law 2003:

Michael S. Greve, The Demise of Environmentalism in American Law (AEI 1996):,M1

Alfred A. Marcus, Donald A. Geffen, Ken Sexton, Reinventing Environmental Regulation: Lessons from Project XL, (Resources for the Future 2002):,M1

Benefit-Cost Analysis in Environmental, Health, and Safety Regulation, Kenneth J. Arrow, Maureen L. Cropper, George C. Eads, Robert W. Hahn, Lester B. Lave, Roger G. Noll, Paul R. Portney, Milton Russell, Richard L. Schmalensee, V. Kerry Smith, Robert N. Stavins (American Enterprise Institute 1996):



Mol A P J, 2006, “Environmental governance in the Information Age: the emergence of informational governance” Environment and Planning C: Government and Policy 24(4) 497 – 514:

Jonathan H. Adler, A New Environmental Federalism, Forum for Applied Research & Public Policy Vol. 13, 1998:

, 89 Geo. L.J. 257 (2001):

CARY COGLIANESE & DAVID LAZER, Management-Based Regulation: Using Private Management to Achieve Public Goals  (Harvard 2004):

Climate Policy in the State Laboratory: How States Influence Federal Regulation and the Implications for U.S. Policy, Andrew Aulisi, John Larsen, Jonathan Pershing, Paul Posner (World Resources Institute 2007):

Business sees green in going green, December 21, 2006:

WENDY WAGNER, When All Else Fails: Regulating Risky Products Through Tort Litigation,

Innovative Markets, Mobilizing the energy of entrepreneurs:

The Green Entrepreneur’s Toolbox: 100 Networking Resources, Guides, and Links, Monday, August 27, 2007:

Last, but not least, various Austrian and other economic perspectives:

Evidence of the Intelligent Designer found!

December 17th, 2007 2 comments

His helpers are busy in a laboratory near you:

And other stories show how He left some of His Watchmaking tools lying scattered around the universe:



Categories: evolution, intelligent design Tags:

Holiday joy: roasting "watermelons" on an open pyre!

December 17th, 2007 1 comment

[snark on]

One of Sean Corrigan’s threads brings us not only more information on handy Misesean definitions, but a path towards Yuletide joy.  (For those of you who have not been reading them, Sean’s columns and comment threads are truly gifts that keep on giving.) 

In this case, we learn more about “watermelons”, and how to enjoy them.

– In the second comment on Corrigan’s “Heroic opposition to the Bali-hoo on AGW”,, one reader capably summarizes what I call the “Corrigan Creed” (sometimes known as the “Reisman Rule”), which is now ensconced as a seemingly venerable part of the Mises Blog orthodoxy:

Evidence does not deter the global warming crowd. Nor does a list of dissenters. Dissent is viewed in the same light as denying the holocaust. Global warming is the new religion.

It also serves as a handy excuse to grab power. This is what Al Gore and his fellow “watermelons” are really after. Scare the masses and the elites can get away with perpetrating any fraud imaginable, including the notion that governments can change the weather.

Posted by: Steve Hogan at December 13, 2007 9:22 PM 

– After first swallowing Corrigan’s commendable suggestion that the very noticeable and widespread warming of the Arctic may be due to localized geothermal heating in one remote corner of Greenland (as opposed to the seven degrees Fahrenheit rise in air temperatures over the past 15 years bandied about by so-called “scientists”), reader IMHO, sadly behind on important lingo, implores:

BTW, would someone please be kind enough to explain to me the use of the term “watermelon” and its relationship towards those who support global warming? Thanks! 🙂

Posted by IMHO at December 15, 2007 1:20 PM

– Faithful follower Dennis – who nobly objects to the “goose step” advance of “statism and the revolt against reason” in much of the academic/intellectual and media worlds and to the “perversion of reason-based discourse and truth that has been fostered by an alliance of rent-seeking politicians, court ‘intellectuals’ (including many natural scientists), bureaucrats, statist businessmen, and others” – helpfully and ably explicates the term:

The term “watermelon” is used by some to describe an individual that is allegedly green (environmentally friendly) on the outside, but red (socialist), on the inside. As to its relationship to global warming, I believe that you can make the inference.

Posted by Dennis at December 15, 2007 1:47 PM

– For the sake of making the “inference” perfectly clear, I offered IMHO the following further color (further emphasis added) on how Miseseans view global warming “watermelons”:

Further to Dennis, in other words, “watermelon” is a venerable ad hominem here, useful for Miseseans to put fingers in their ears and dismiss what practically everyone who disagrees with them on climate change – from our national academies of science on down – has to say.

The trick is to first dismiss the evil “enviros” – you know, that class of rent-seekers that Rothbard and others tell us were created when statist corporations managed to subvert common law protections against polution damage to property – by focussing on their efforts to use the state to control corprations, while resolutely ignoring not only corporate statism but what Austrian economics tells us about how markets and private transaction are inefficient with respect to resources that are not clear owned or protected by enforceable property rights.

Then, having dismissed those wacky “watermelons”, we can simply ignore everyone else, by jeering at the enviros and thereby implicitly imputing to the whole scientific, economic, business and government community the same malevolent and stupid misanthropism.

Neat trick, isn`t it?

IOW, enviros should be burned at the stake for the heresy of trying to use the state to solve a possible problem, and everyone else, who have gullibly been corrupted by them, ignored. In this way, we can cleanse the body politic and avoid serious mistakes. See?

[Serious people know that only irreproachable commentators like Dr. Reisman get to suggest that we use the state to address possible climate change:

there is a case for considering the possible detonation, on uninhabited land north of 70° latitude, say, of a limited number of hydrogen bombs. … This is certainly something that should be seriously considered by everyone who is concerned with global warming and who also desires to preserve modern industrial civilization and retain and increase its amenities. If there really is any possibility of global warming so great as to cause major disturbances, this kind of solution should be studied and perfected. Atomic testing should be resumed for the purpose of empirically testing its feasibility.“]

– Enjoying the occasion, another reader reaffirms his willingness to partake in the Misesean ritual:

Did someone say ‘stake’? 🙂 I’ll prepare the pyre!

Posted by Inquisitor at December 16, 2007 11:02 AM 

– Whom I promptly commended:

Good boy, Inquisitor!

Now, we just need Sean, a “neopyrrho” or somesuch to light the fire, and we can neatly cleanse the world of misanthropic scum!

Enviro-haters, unite!



O what fun, what joy and conviviality, the Austrian community offers!  And how appropriate for the season! 

Who but a Scrooge would fail to agree with the reasoned Misesean revolt against revolting unreason, or to heed the clarion, heart-warming call to roast the Beast?

As the solstice arrives, let us rejoice in the Good News that the gathering forces of Darkness have been defeated at Bali by the voices of reason – spines stiffened by PR from the clear-eyed contrarians trumpeted by Corrigan, and champions of liberty and free markets in Russia (where the overlords are firmly opposed to measures that would reduce their personal wealth and growing influence on oil markets); a new dawn of light and reason must surely be ahead of us!

So let us enjoy the spirit of the holiday, I say!  As “Inquisitor” suggests, let us assemble a few watermelons, gather with our brethren ’round the cleansing pyre, remember the words of the angels on the first Christmas (announcing “Peace on Earth; goodwill towards men who slay enviros”), and sing merry holiday songs, like “What fun it is to ride and sing, a slaying song tonight” and “Enviros roasting on an open pyre”!

And then, united in fellowship and renewed in purpose, we can arise fresh in the dawn of a New Year, to proclaim our undying dedication to Reason and, linking arms, boldly step out in glorious battle against the evil, goose-stepping, man-hating watermelons.  AFTER we’ve defeated the RED herrings, THEN we can turn our attention to their bootlicking sycophants – throughout the world’s scientific, economic, business and government communities – who have swallowed the enviros’ KoolAid.

And with Reason (not to mention love of mankind and brotherhood) on our side, how can we fail to prevail?!

Bison and the Theft of the Commons

December 16th, 2007 No comments

[Updated, as noted]

[I now view this as my first “Avatar” post. February 15, 2010.]

My attention was drawn today to a letter to the editor published by The Property and Environment Research Center (PERC), an organization of free-thinkers who pioneered what is now known as “free market environmentalism” and which is the nation’s oldest and largest institute dedicated to original research that brings market principles to resolving environmental problems.

The letter, by P.J. Hill, Professor of Economics at Wheaton College and a PERC Senior Fellow, addresses an interesting article titled “Bisonomics” by Brian Yablonski in the Fall 2007 issue of “PERC Reports” on the growing private market that has led to a remarkable expansion of bison herds in North America

[Update: According to the bison industry webpage, (i) bison producers can be found today in all 50 states, every Canadian province, and in several countries overseas, (ii) the Department of Agriculture reported in 2002 that approximately 4,000 private ranches held 232,000 head of bison across the United States, (iii) approximately 25,000 additional animals are kept in public herds, and (iv) the Canadian herd is estimated at 150,000 head.  This is an amazing comeback for a species that hovered on the brink of extinction in 1900.

However, in the lower 48, only the 4000-head Yellowstone herd is genetically pure.  While there are  no “domestic” breeds, ranched bison all carry cattle genes, largely as a result of efforts to make hardier breeds of cattle.  Efforts to further domesticate bison continue.]

In explaining the near extirpation of American bison herds in the late 1800s, Yablonski rather conventionally describes this occurrence as “one of the great environmental catastrophes in our nation’s history” and “one of the starkest examples of the tragedy of the commons. No one owned the bison. Those who were not the first to capture the economic benefits of a bison lost those benefits to someone else.”

Professor Hill challenges this conventional wisdom and offers what seems to be a new twist:

“Yablonski …  errs in saying “the tragedy of the bison is one of the starkest examples of the tragedy of the commons.” A tragedy of the commons occurs when a resource is consumed more rapidly than it would be if well-defined and enforced property rights existed. In other words, the institutional framework leads to over-use. The primary reason bison did not remain abundant on the Great Plains after 1880 is not because they were unowned, although that fact might have sped up their slaughter. But, bison were a costly way to convert grass to meat in comparison to cattle, and if there would have been rights to bison on the parts of nineteenth century ranchers most of them would have been killed and cattle would have replaced them.

In the 1880s, a buffalo hide (the only part of a bison that could be easily shipped to eastern markets) was worth $3 in Miles City, Montana. A cow was worth $20 to $25 (see The Not so Wild, Wild West by Anderson and Hill 2004). Ranchers understood the economics of bison ranching versus cattle ranching and hence made no efforts to stop the hide hunters.

(emphasis added).

But is this really a new insight, or merely stating the obvious, while ignoring the ethnic and natural resource war of which the bison slaughter was part and parcel?  What follows below is part of an email that I have sent to PERC, cc: to Mr. Yablonski and Prof. Hill (with slight editing):

I see that P.J. Hill has commented in a letter that the near extinction of the bison was NOT a “tragedy of the commons”; his paper on this [“The Non-Tragedy of the Buffalo Commons”] carries the argument even further:
This deserves a much more detailed response, but suffice it to say that Mr. Hill’s analysis suffers from the very curious omission of a blindingly salient issue – the conflict between a hunter-gather Indian society and a much more technologically advanced white society.  The Indians were simply incapable of protecting the land and the resources that previously they had unquestionably occupied and possessed.  The slaughter of the bison was part and parcel of the elimination of the Indians as the lords of the Plains.
Once an eastern/white market for buffalo skins was established, the Indians, like the bison, stood no chance, and the rest of Mr. Hill’s argument is also fairly obvious.  Bison are powerful animals, not tame like cattle, and can be ranched today only with difficulty, through costly measures not available 135 years ago.  Their hides had value, but they themselves were a nuisance and a competing grazer.  Killing them was a free-for-all on land that was not owned or protected by whites, and on land that was, the skinners provided a service.
Finally, of course, removing the bison also had a value to the white government and settlers in removing emphatically their competitors for the land, the Indians.
Wikipedia summarizes:
“In August 1867, Grant appointed Sheridan to head the Department of the Missouri and pacify the Plains. His troops, even supplemented with state militia, were spread too thin to have any real effect. He conceived a strategy similar to the one he used in the Shenandoah Valley. In the Winter Campaign of 1868–69 he attacked the Cheyenne, Kiowa, and Comanche tribes in their winter quarters, taking their supplies and livestock and killing those who resisted, driving the rest back into their reservations. By promoting in Congressional testimony the hunting and slaughter of the vast herds of American Bison on the Great Plains and by other means, Sheridan helped deprive the Indians of their primary source of food.[39] Professional hunters, trespassing on Indian land, killed over 4 million bison by 1874. When the Texas legislature considered outlawing bison poaching on tribal lands, Sheridan personally testified against it in Austin, Texas. He suggested that the legislature should give each of the hunters a medal, engraved with a dead buffalo on one side and a discouraged-looking Indian on the other. [40] This strategy continued until the Indians honored their treaties. Sheridan’s department conducted the Red River War, the Ute War, and the Black Hills War, which resulted in the death of a trusted subordinate, Lt. Col. George Armstrong Custer. The Indian raids subsided during the 1870s and were almost over by the early 1880s, as Sheridan became the commanding general of the U.S. Army.[41]
Sheridan’s said the following to  Texas legislature in 1875: “These men, the buffalo hunters, have done in the last two years, and will do more in the next year, to settle the vexed Indian question, than the entire regular army has done in the last thirty years. They are destroying the Indians’ commissary; and it is a well-known fact that an army losing its base of supplies is placed at a great disadvantage. Send them powder and lead, if you will; but for the sake of lasting peace, let them kill, skin, and sell until the buffalo are exterminated. Then your prairies can be covered with speckled cattle, and the festive cowboy, who follows the hunter as a second forerunner of an advanced civilization.”
(emphasis added)
Far from a simple tragedy of the commons, we had a deliberate war, and a slaughter, driven by a white market demand, in a no man’s land from which Indians had been driven.
Dr. Hill simply addresses the question of whether those whites who established and could enforce property rights would prefer bison or cattle – and he hardly needs any firepower for that, as the comparison of bison to cattle for purposes of white markets is an open and shut case in favor of the much more docile (and less powerful) cattle.
One wonders whether Dr. Hill would venture similar arguments that the removal of native americans from their land in the Amazon and conversion of the “public land” to cattle ranches and soybean plantations (and palm oil plantations in Indonesia) is not a problem of the identification and enforcement of property rights, but is also simply a matter of economic efficiency.

(emphasis added)

[Update: I couldn’t stop myself from noting here a few thoughts]

P.J. Hill concludes in his paper that:

“There was no tragedy in an economic sense in the killing of the bison; it was simply a rational economic act by people who wished to maximize the value of the grass on the Great Plains.” 

Bison herds both consumed the grass and disrupted cattle production so their removal was an economic necessity, not a tragedy or a waste of resources.”

“The history of the American bison is one of rational individuals operating under an institutional framework that did not create a tragedy of the commons. It is true that property rights were not well defined and established for buffalo on the open prairies, but since they were not a valuable resource, property rights entrepreneurs put little effort into establishing rights, and if there would have been well-defined and enforced property rights, cattle would still have replaced bison as the primary converter of grass on the Great Plains.”

(emphasis and italics added)

P.J. Hill is right to say that the near-extirpation of the American bison was not a pure “tragedy of the commons”, but I disagree strongly with his reasoning. What occurred was NOT simply, as Hill describes, the replacement of a wild, open-access ecosystem with “more productive” individual cattle ranches, farms, towns and railroads inextricably tied to distant markets. Rather, what occurred was just as much the usual tragedy when an indigenous people with community-property systems encounter a more numerous and more technologically advanced society – namely, the prompt swamping of the native community-property system and outright theft of resources.

Once one accepts P.J. Hill’s premise that the Great Plains rightfully belonged to the white newcomers, then his conclusions naturally and logically follow.  But one is not seeing history clearly if a cold analysis does not also consider the the broader clash of peoples, which the Indians were fated to lose (a la Jared Diamond‘s “Guns, Germs and Steel”).

More than a little disturbingly, Hill’s references to “people”, “rational individuals” and “entrepreneurs” are references only to the white newcomers, and not those who were dispossessed.  Rather startlingly, one can get a clearer picture of how many in the much more powerful white culture contemporaneously viewed the subjugation and removal of the American Indian from what had once been their domain by simply replacing Hill’s references to “bison” in the quoted paragraphs with “Indians”.

I do not mean to attribute such a view to Dr. Hill, but I do think that his failure to consider the issue of a clash of owners is a fatal flaw in his apparently dispassionate, reasoned academic analysis.

John Baden: is this free market enviromentalist stalwart a Mt. Pelerin misanthrope/watermelon?

December 16th, 2007 No comments

[snark meter – medium] 

John Baden, a former logger and oilman, has long been a pillar of the “free-market” environmentalists.  He founded and leads the Foundation for Research on Economics & the Environment (FREE) and founded and headed the Property and Environment Research Center (PERC), both based in Bozeman, Montana.;

But don’t let his Mont Pelerin Society ( membership fool you; John is very green on the outside and, with so much green, might he not be more than a little pink on the inside?

He recently summarized advice he had given (on request) to policy advisers for a Democratic presidential candidate and a Republican one.  Allow me to quote freely (emphasis added):

“Both parties need help—but in opposite directions. Republicans need sensitivity to Green issues, Democrats sensibility regarding incentives.”

We are … eager to help all candidates develop sound policies, ones we believe will foster responsible liberty, environmental quality, and modest prosperity. Over the decades, we’ve made compelling, well-respected arguments against the Green tradition of greater bureaucratic powers, increased federal control, and heightening paranoia over environmental issues.

“From the Civil War until the first Earth Day in 1970, the West’s politics, culture, and economy were oriented toward the exploitation of its natural resources. But the extractive sector no longer drives the Western economy and hasn’t for several decades. Today’s economic drivers are amenities, services, and symbolic manipulation, not the traditional material stuff of wood, wheat, water, and minerals. …

“Here’s the reality some politicians ignore at their peril: we’ve high-graded our best, most accessible resources. The richest ores, finest timber, and best dam sites have been developed. The easy fruit has been picked and the Western economy can no longer rely on the extractive sector. No ghost dance will bring them back.

“Ray Rasker notes that since 1970, “Montana has added over 150,000 new jobs, and not one of the new net jobs has been in mining, oil and gas, farming, ranching, or the woods products industry.” The extractive industries are notoriously unstable, and commodity prices always undulate. The timber industry, for example, has largely abandoned the West for the Southeast and foreign countries. …

Now, increased opportunities in the West are created by high-tech enterprises and services. The service sector includes professional occupations in law, health care, software, data processing, education, and finance. Although they are not the traditional Western jobs, these occupations, like those in extractive industries, depend upon open space and natural resources.

“Why? Because professionals seek locations rich in environmental amenities, e.g., wilderness, open space, fish and wildlife, and recreational opportunities. Data indicates the West’s roadless public lands, wilderness areas, free-flowing rivers, national parks and forests, open ranges, and healthy wildlife habitats generate much of our economic growth. Folks don’t move here by accident nor do they do so to maximize income—quality of life trumps.

“The GOP and the Democrats compete for well-off and well-educated voters, those David Brooks describes in Bobos in Paradise: The New Upper Class and How They Got There, and the Democrats are clearly winning. This is no accident; the nation has become immensely wealthy, and with wealth and education comes heightened environmental sensitivity. When Americans become wealthy most think, or at least posture, Green.

President Clinton capitalized on these demographic realties when he set aside 40 million acres of National Forest as roadless areas. Many fiscal conservatives and the vast majority of Westerners applauded the decision, even those who disliked Clinton.

These roadless areas were undisturbed for good reason; most have low economic value. Without explicit or implicit subsidies, resource extraction on these lands is infeasible. Federal lands are political lands where heavy subsidies are the norm. Traditional politics have ignored or discounted the full costs of exploitation. Citizens now demand more honest accounting of both economic and environmental costs.

A candidate who hopes to capture the West’s electoral votes should not take seriously any campaign policy that ignores links between ecology and economics. Westerners are Greener, more sophisticated, and better informed than 30 years ago. Few are dependent on traditional resource exploitation. A good candidate will discern the implications and propose appropriate policies. 

Inquiring minds want to know:

– are only those in the American West “Greener, more sophisticated, and better informed than 30 years ago”, or is this true across all developed and emerging economies?

– does “heightened environmental sensitivity” come with “wealth and education”?  Or is such “heightened environmental sensitivity” simply a ploy by the educated wealthy to use the tools of the state to restrict access by brave captains of the extractive industry to the public lands of the West (the better to go fly fishing)?

– outside of the struggle for control over “public lands” in the West, are there any other areas where voters oppose policies that “ignore links between ecology and economics”?

if “heightened environmental sensitivity” does come with “wealth and education”, what do we make of the concern that enviros, scientists, industry leaders, and politicians around the world all express concern about climate change and the pressure of economic activity on unowned commons like the atmosphere, oceans and tropical forests/wildlife?  More uninformed nonsense, led by evil man-haters?

By not stridently demanding privatization of public lands, John Baden sounds like an “incrementalist” rather than a pure libertarian, and by urging policies that favor recognition of the relatively higher values in environmental amenities than in extractive industries, he sounds very much like an environmentalist statist.  

Does it help us to better understand him, or the problems that concern him, if we call him a misanthropic “watermelon”?


Warning:  If you are an Austrian, you have just been gravely polluted by reading this.  Seek help immediately, and recite the “Corrigan Creed” (or as some may have it, the “Reisman Rule”) at least five times.

(If you missed it, the Corrigan Creed is here:

Reducing CO2 vs. expanding energy needs

December 15th, 2007 2 comments

Ron Bailey of Reason, reporting from Bali, has an interesting post up summarizing the discussion by James Connaughton, director of President Bush’s Council on Environmental Quality, on one small aspect of the climate conundrum, namely, what would be actually involved in meeting the energy shortfall implict in targets to reduce CO2 emissions by half by mid-century.

 The crux?

Connaughton offered an interesting thought experiment. The major economies emit 22 gigatons (1 billion tons) of CO2 annually. In one reference case, those emissions would rise to 37 gigatons by 2050. So, Connaughton says, assume that we need to reduce current emissions by half from current emission—by 11 gigatons—to stabilize CO2 atmospheric concentrations. That means that the world would have to find the equivalent energy that producing 25 gigatons of emissions would have produced in 2050.

To get a handle on what this might mean, Connaughton asked, “How big is a gigaton?” One gigaton is equivalent to 273 coal-fired electric generation plants with carbon capture and sequestration (CCS). Of course, there are only a few demonstration plants now, and 273 plants represent 7 percent of the world’s current coal-fired generation capacity. Estimates of how much CCS might cost range between $150 to $250 per ton of carbon (or $50 to $80 per ton of CO2). By one estimate CCS would raise the cost of electricity to 25 to 40 percent; others suggest that the increase could be as much as 85 percent.

Connaughton also pointed out that avoiding the emission of a gigaton of CO2 implies building 135 new nuclear power plants. The world has 400 now. In addition, a gigaton is equivalent to 270,000 windmills which is 4-times more than are currently operating. Growing enough biofuels to reduce a gigaton of emissions would take an area twice the size of the United Kingdom. Of course, such projections rely on the deployment of near-term technologies. It’s impossible to tell what new technologies a higher price on carbon fuels might call forth from the world’s laboratories.

Categories: AGW, bali, bush, climate, CO2, Ron Bailey, targets Tags:

Richard Tol and Marty Weitzman on The Costs of Ignoring Carbon

December 15th, 2007 No comments

There is a new paper out by economist Richard Tol that summarizes all of the economic work on climate change over the past two decades, in light of recent analyses, particularly the ground-breaking new work by Harvard’s Marty Weitzman on how the “fat tail” of climate risk affects cost-benefit analysis.  Tol is attached to the Economic and Social Research Institute (Dublin), the Institute for Environmental Studies, Vrije Universiteit (Amsterdam), and the Department of Engineering and Public Policy, Carnegie Mellon University.


 Tol`s conclusions?

There are three implications.

Firstly, greenhouse gas emission reduction today is justified. The median of the Fisher-Tippett kernel density for peer-reviewed estimates with a 3% pure rate of time preference and without equity weights, is $20/tC. This compares to a future price of carbon permits of $8/tC in the European Union (and a spot price of ¢3/tC).  The case for intensification of climate policy can be made with conservative assumptions. One does not have to rely on dodgy analysis as in Schneider et al. (2007) and Stern et al. (2006).

Secondly, the uncertainty is so large that a considerable risk premium is warranted. With the conservative assumptions above, the mean equals $23/tC and the certainty-equivalent $25/tC. More importantly, there is a 1% probability that the social cost of carbon is greater than $78/tC. This number rapidly increases if we use a lower discount rate – as may well be appropriate for a problem with such a long time horizon – and if we allow for the possibility that there is some truth in the scare-mongering of the gray literature.

Thirdly, more research is needed into the economic impacts of climate change – to eliminate that part of the uncertainty that is due to lack of study, and to separate the truly scary impacts from the scare-mongering. Papers often conclude with a call for more research, and often this is a call for funding for the authors or a justification for further papers by the authors. In this case, however, quality research by newcomers in the field would be particularly welcome.

Tol drew these conclusions from the principal results of his research, which were as follows:

Besides more data and more advanced statistical analysis, this paper offers four results.

Firstly, there is a downward trend in the estimates of the social cost of carbon – even if the IPCC (Schneider et al., 2007) would like to believe the opposite.

Secondly, the Stern Review (Stern et al., 2006) is an outlier – and its impact estimates are pessimistic even when compared to other studies in the gray literature and other estimates that use low discount rates.

Thirdly, the uncertainty about the social cost of carbon is so large that the tails of the distribution may dominate the conclusions (Weitzman, 2007) – even though many of the high estimates have not been peer-reviewed and use unacceptably low discount rates.

Fourthly, if everyone were to pay a carbon tax equal to the social cost of carbon (but not reduce emissions), there is a fair chance that annual taxes would exceed annual income for many people.

(emphasis added)

The recent Marty Weitzman paper that Tol refers to is here:

Marty Weitzman: “On Modeling and Interpreting the Economics of Catastrophic Climate Change”, December 5, 2007 [Update: Weitzman has revised; the latest version is dated Februaru 8, 2008];

Categories: AGW, carbon pricing, climate, CO2, Tol, Weitzman Tags:

"Heroic" contrarians, proven wrong on AGW, make another slick cry for relevance at Bali

December 14th, 2007 No comments

On the main blog, Sean Corrigan posts the latest missive of what he considers the brave dissenting voices on climate science.

The letter nods briefly at the concerns summarized by the IPCC reports about warming and the role of human economic activity, and raises good issues about how global society should react, including the respective merits of public policy and private measures directed towards mitigation and adaptation.

But Sean does not examine any of these issues, but simply (i) touts the supposed “heroism” of the dissenters, (ii) complains about the supposed unfairness of the Bali conference sponsors (the 180+ states that are party to the UN Framework Convention on Climate Change) for not providing them a soapbox, (iii) cries about the supposed hysteria of the UN Secretary General (Mr. “Barking-at-the” Moon”!) [okay, points for being clever, anyway] and (iv) finally, for good measure, tries to sweep away the undeniable and rapid climate change in the Arctic with a link that tells us about a possible localized factor but nothing about the wider scale changes, which just MIGHT be due to the fact that air temperatures over the Greenland ice sheet have increased by about seven degrees Fahrenheit since 1991

Interestingly, while Corrigan seems to think his ongoing rants on “carbolic socialism” helps to clarify the issues and the interests of all parties, he constantly fails to note how a large and powerful group of rent-seekers packages the items that he swallows whole. In this case, only a modicum of research shows that these brave dissenters have been smoothly packaged by yet another new “grassroots” organization established to influence policy for the benefit of energy interests.

The whole issue deserves much better discussion, but it seems that many Miseseans are fundamentally not interested, either in conducting a serious analysis or even in being taken seriously.  Instead, they would rather be taken in, either by one group of rent-seekers or by themselves, by swallowing all manner of uninformed science (see my preceding post;  This kind of cantankerous self-delusion and naivete is hardly the best way to show the strengths of Austrian analysis to the world.

I`m getting tired of what I see as the Mises blog fundamentally counterproductive approach to this and related problems – which surely will NOT go away until some sort of management regimes are extended to important global and regional open-access “commons”.

Below is a copy of my initial response on Wrong-Way Corrigan`s thread: [snark on]

Heroes, Sean? Really?

This is an eclectic group (weighted towards social sciences and others outside of climate science) but still more like a bunch of grumpy emerituses who have been wrong time and again over the past thirty years (and don`t even agree with each other) but now wish to assert relevance by reluctantly conceding that change is in the cards and arguing that, given our long delay, sunk costs in current infrastructure and long lead times to change changes, our best course is to simply start getting ready for the ride.

Well, if even these folks think we need to start getting ready, then perhaps even the most skeptical should admit some slight concern. (I note that climate science “skeptics” John Christy and Pat Michaels didn`t sign on; can you guess why?)

 – Our most respected scientific bodies have been stating unequivocally that global warming is occurring, and that human economic activity is a significant factor. The U.S. National Academy of Sciences, which in 2005 the White House called “the gold standard of objective scientific assessment,” issued a joint statement with 10 other National Academies of Science saying “the scientific understanding of climate change is now sufficiently clear to justify nations taking prompt action. It is vital that all nations identify cost-effective steps that they can take now, to contribute to substantial and long-term reduction in net global greenhouse gas emissions.” (Joint Statement of Science Academies: Global Response to Climate Change [PDF], 2005);

I know; they and all of the other scientists who participated in the IPCC process are all hysterical misanthropes, whom freedom-loving rationalists can sweep away, in favor of this hero`s lot, who are now clearly changing tactics to argue adaptation instead of mitigation. (The lack of stomach in this second group is enough to make one wonder whether we might be better off without ALL scientists, isn`t it?)

– You and others are good at pointing out evil and rent-seeking motives on the part of everyone you disagree with – practically everyone now, it seems – but do you ever to trouble to notice how you`re being played by this letter? Like a string of others (this is the fourth in the past five years), it was started in Canada, organized and pushed by smooth PR professionals via a sophisticated vehicle (that are designed to provide “balance” while conducting “grassroots” campaigns) that clearly has significant backing from energy interests; this campaign differs in that it was perhaps more polished – for example, though the core signers remain the same over all four letters, this one was “by invitation only”:;;;

While energy firms have entirely legitimate interests, they too are rent-seekers and it behooves one to note that when they speak they certainly have their own interests in mind. Even more so when they try to hide who they are and pretend to be impartial, grassroots groups concerned only about the pubic interest.

– The letter itself argues that we’d be better off adapting to/managing the effects of climate change rather than trying to prevent it. This is no slam dunk, but clearly there are more iummediate returns from investments in adaptation than in trying to mitigate future climate change. But serious standard cost-benefit analysis has clearly shifted in the past two years to the conclusion that investments in mitigation also make sense:


Marty Weitzman/Harvard: “On Modeling and Interpreting the Economics of Catastrophic Climate Change”, December 5, 2007;

Richard Tol: “THE SOCIAL COST OF CARBON: TRENDS, OUTLIERS AND CATASTROPHES”, August 9, 2007;; Yohe, G.W. and R.S.J. Tol (2007), Precaution and a Dismal Theorem: Implications for Climate Policy and Climate Research,

These are the papers that the policy crowd is reading.

Who knows climate science? The Mises Blog!

December 13th, 2007 2 comments

[Snark alert; See update at bottom]

The Mises “Daily Article” for December 11 presents “Are Carbon Emissions the Cause of Global Warming?” a brief, unfootnoted post by David Evans, a self-acknowledged non-expert (who has once previously graced the LvMI blog) offering a “very much needed” “correction” to the popular understanding of “whether global warming is actually occurring, and, if so, what its cause is”. 

Given the popular reception on the blog, one wonders if the LvMI has not found a productive niche in providing a soap box, not for economists or libertarians to analyze policy (or to discuss what von Mises intended when he discussed external effects), but for updates on climate science.  On the comment thread for this post, I posted the following (tongue firmly in cheek) comment to Jeffrey Tucker, blog administrator:

Jeff, allow me to commend you and LvMI, a bastion of rational economic thinking, liberty and human welfare, on its decision to expand its influence on (and help its supporters to gird their loins for) the important and complex battle over domestic and international climate change-related policy by turning away from its strengths -economic analysis – in favor of providing a soap box for short and simple “exposes” on climate science by self-made and self-confident experts.

This is clearly just what the doctor ordered, given the warm reception and acclaim – as well as piercing and cogent questions and observations – that David Evans has earned here. As this post propagates through the intertubes, I can positvely FEEL the serious policy world turning toward LvMI and sensing that an important voice of reason, judgment, gravitas and, above all, clear scientific thinking, has just arrived on the scene.

By all means, keep these “scientific” posts coming!



PS: I am not troubled in the least that:

– David Evans has himself previously said that “my only relevant qualification in this debate is that I saw the interaction of science and politics first hand, and that I was on the global warming gravy train” and, when pointed out that Sen. Inhofe staffer Marc Morano had referred to Evans as “a prominent scientist,” forthrightly said “It never occurred to me that he could be referring to me!” and “Morano is exaggerating both my prominence and agenda, and assuming my motivations for his own ends. A typical political approach, if I might point out.” This forthrightness, even though in little evidence on Evan`s current post, is admirable and certainly doesn`t disqualify him from trying explain his understanding of the science. In fact, it increases his credibility vis-a-vis all of those scientists who publish their work in “scientific journals” or hide behind thousands of pages of publicly-available reports and summaries, or brazenly trumpet their ideology on accessible blogs, and all of their deluded, misanthropic, self-seeking and/or struthious KoolAid swallowers throughout wide swathes of the business world and the rest of the “establishment”.

– Or that Evans, while observing that atmospheric CO2 trails rising temperatures in the paleo record, fails to note that the rising CO2 levels today are due to man, what the link between warming oceans and further releases of oceanic CO2 may imply for future warming, or to note obvious ongoing warming or to suggest alternate mechanisms.

– Or the neat way in which he tries to discredit imperfect climate models by assuming the reliability of their results, without referring to the papers he is relying on (by authors previously criticized and subsequently addressed by notorious AGW warmers here: ).

– Or that, while focussing on possible flaws in climate models, ignores the actual abundant and startling evidence for ongoing climate change.

Heaven forbid that the Mises blog pollute readers’ minds on this or other scientific views by sending them off to read the IPCC reports, scientific reports by various national academies of science, other blogs by climate scientists and analysts (on various sides) or the like.  It’s clearly better to directly bring in “informed” views of people like David Evans, who haven’t prostituted themselves by actually conducting or publishing climate science, but still manage to keep their finger on the pulse of the scientific developments.


Somewhat disappointingly, there actually IS a good discussion of issues raised by the David Evans piece (and the Mises’ blog posting of it), but over at Arnold Kling’s and Byan Caplan’s EconLog:

Those who are interested in links for where the scientific issues are discussed should look there (adults only; I also do not want to contribute to the delinquency of innocents and innocent wannabes!).