Home > Bradley, Coal, externalities, MasterResource, Stanton > MasterResource/Tom Tanton: another muddle-headed "free-marketer" who thinks it’s fine that coal gets to shift pollution costs to others

MasterResource/Tom Tanton: another muddle-headed "free-marketer" who thinks it’s fine that coal gets to shift pollution costs to others

Sadly, so-called “free-marketers” are often so busy smacking down bad arguments from greens that they fail to note, much less acknowledge, that they’re fairly frequently making bad arguments themselves or ignoring gaping inconsistencies in their own positions.  Of course it IS awfully easy to get caught up in partisan conflict, which provides a nice rush of self-righteousness, but it probably also helps if you’re being paid to post by fossil fuel interests, like the folks over at the supposedly “free-market” MasterResource energy blog, of Rob Bradley‘s Institute for Energy Research.  In any case, it’s disappointing, not solely because it comes from “free-marketers”, but because it offers no hope of engaging productively with those with whom they disagree.  In other words, more of Culture Wars “R” Us.

I’ve already commented quite a number of times here about Rob Bradley and his co-bloggers at MasterResource, but I continue to be astonished by the inability of the bloggers (and some commenters) to notice when they are being inconsistent or are taking anti-market/anti-lbertarian positions.  A recent post by Rob Bradley on the limitations of wind power, with follow-on comments by others, is a case in point.  In his post, Rob trots out some very old literature to make some perfectly fine – if rather obvious and well-known – points about the limitations of wind power; I observed that of course one can make similar observations about the short-comings of other energy sources, such as the social costs of coal. 

While Rob fails to respond, a visitor and one of his guest bloggers, Tom Stanton, senior energy fellow at the Pacific Research Institute (which bills itself as a “champion [of] freedom,
opportunity, and personal responsibility for all individuals by
advancing free-market policy solutions”) ride to his rescue, with strawmen and astonishingly non-libertarian (indeed, utilitarian) commentary.  Why can’t the right do better than this?

For the interested, I excerpt the relevant comments below (emphasis added):

TokyoTom { 03.04.09 at 12:09 pm }

Rob, thanks for this; you are right of course about the drawbacks to wind.

Now can I interest you in some very, very old tracts on how dirty
coal is, both in mining and combustion, or newer ones about deaths,
health costs, damages to property that are still ongoing and
BTW, while you are obviously an advocate for coal, are you also an
advocate that coal producers and consumers bear their own costs? Or is
shifting those costs to others a right that they have homesteaded?

Andrew { 03.04.09 at 6:45 pm }

the question isn’t “is coal bad?” its “is it better than (essentially)
nothing?” It is. Coal, I submit, has save far more lives than it has
cost, and has improved quality of life more than damaged it.

TokyoTom { 03.05.09 at 3:58 am }

the question is NOT whether “coal is it better than (essentially)
nothing?”, just as it is not whether wind or any other energy source is
perfect or preferable.

The question is whether those who engage in economic activities are
bearing the costs or risks of those activities, or whether those
activities appear relatively preferable to the people involved because
they are able to shift damages, costs, risks and/or responsibilities
for consequences to others.

True libertarians insist that individuals (and firms) bear full
responsibility for harms caused to others; some in fact insist that
those who are harmed without their consent have the right to use courts
to enjoin the damaging activity. Maybe this all seems a little quaint
to you?

My point is simply that Rob is ignoring, rather obviously and perhaps deliberately, the human costs of the use of coal.

Tom Tanton { 03.05.09 at 9:15 am }

“human cost of coal” has been extensively studied as have most other
energy (nay, all economic) technologies. That study are most often
referred to as “externalities”–Guess what? The economic ‘costs’ of coal
are mostly, if not completely, offset by the economic benefits.
negative externalities are NOT enough to offset the higher cost
premiums of technologies like wind that never quite mature (most likely
because of the heavy per unit subsidy they’ve become dependent on after
35+ years.)
Now let’s see about human costs–in countries with coal (or nuclear or
any meaningful) baseload power isn’t the average life span about twice
that of folks living in countries with no or primitive energy? Aren’t
THOSE folks also less educated, and less free? Do they even have 15
minutes a day of “leisure time”?Aren’t those folks also burdened with
spending every daylight hour finding a piece of wood (or dung) to cook
their measly daily bread and using unsanitary water to boot?
I don’t believe Rob is ignoring the costs of coal. I believe Sir you’re
ignoring the economic and human benefits of coal and modern energy

TokyoTom { 03.05.09 at 12:08 pm } [links added]

it seems that you understand little, if anything, about free markets or
libertarian principles. Murray Rothbard`s paper on air pollution makes
it clear that it was utilitarian arguments like yours – “the damage my
pollution does to you is fine because people want to but my products” –
that industry used in the 1800s to subvert the common law and run
roughshod over property rights, leading to the “pollution is free”
philosophy and ruinous competition where the non-polluter went
bankrupt. The upshot was the horrible pollution in the 50s, 60s and 70s
that led to tremendous citizens` movements to use government to bring
pollution under control – with laws signed by Republican presidents.

No externalities? Where were you? What motivated the Clean Air Act, Clean Water Act, SuperFund?

As for coal vs. wind, please spare me the strawman. I`m not at all
suggesting that wind OUGHT to be subsidized. I`m just asking for a
little intellectual honesty that will recognize that coal use IS
subsidized, by being allowed to shift real and significant costs to
others, and that we`d all be better off if those socialized costs were

Perhaps someday it will occur to those who (correctly) want to bash
greens for their stupid proposals that they might be more successful if
they were a little more consistent themselves and started exploring
common ground. Where`s the post praising the federal court decision
forcing TVA to do a better job at cleaning flue gases than required by
the CAA in order to limit harm caused in NC, for example? Where`s the
post calling for the privatization of the bumbling, polluting TVA,
which keeps generating costs for taxpayers and ratepayers?

But that`s not what this blog is all about, is it? You guys are more
into making enemies and fighting over government than in truly shifting
risks and regulation back to markets and the courts.

As for countries abroad, this is of course unrelated to a discussion
local/regional costs and energy alternatives in the US. But since you
bring it up, don`t forget that the real reason why these other nations
aren`t developed yet is that they`re still kleptocracies that don`t
sufficiently protect private property rights and returns on
investments.  Why are you cheering on poor governance, instead of
suggesting that they could become wealthier sooner by accelerating
their move up the Kuznets curve
(which is an artifact not only of
preferences, but of insufficient information and laws that protect the
elites over private property of the masses)?

  1. TokyoTom
    March 8th, 2009 at 16:16 | #1

    Tom, you`re a difficult one to have a conversation with, because you are not willing to examine libertarian or market principles, and seem to be confusing observations about costs shifted to others as conclusions about how we ought to change policies. Logically they are distinct.

    One can recognize that there are considerable external costs associated with coal, and have a separate discussions as to why things are they way they are (I refer to Murray Rothbard on the subversion of common law principles, to be replaced by regulation and rent-seeking), and on the merits of possible policy options.

    And one can have a similar discussion about wind, renewables and nuclear power, on their own merits, without referring to coal at all.

    But you seem to advance a principle that is entirely unlibertarian, as well as a massive policy coordination effort that is in fact impossible and an evenhandedness that is never in fact observed in practice.

    This betrays you as a believer in social planning, instead of in free markets.

    “those who assert that coal has externalities that exceed those of other technologies or that externalities only have negative signs are the muddle headed ones or are intentionally deceptive” – Hmmm; this is actually a new one. I challenge you to take a look back through my comments and find ANY place where I said that the externalities of coal exceed those of other technologies; I wasn`t trying to make such a point but to argue that each technology should be considered on its own merits by the market. But since you bring it up, can you find a single energy expert who thinks that coal imposes fewer externalities than, say, natural gas?

    And as for externalities, again you fail to comprehend. I have certainly indicated that the some goods may have postitive externalities (though I can`t say I`ve really heard anyone make an argument that there are strong “public good” aspects to fossil fuels or other energy, all of which can easily exclude free-riders.

    So look in the mirror if you`re looking for someone who`s confused. Deliberate deception? It`s a shame that you let your dumb hostility lead you to further debase yourself by throwing out completely unsupportable charges like that, rather than working to understand libertarian and market principles that you are still clueless about.

    A darn shame, in fact, especially for someone working and blogging at “free market” institutions.

    But maybe hostility and ignorance is exactly what MasterResource and Pacific Research Institute want; they come in handy if one`s purpose is not to protect market principles, but to defend particular special interests.

    Please feel free to comment again, as freedom is too important to turn one`s back on. You say goodbye; I say hello.

  2. Tom Tanton
    March 8th, 2009 at 01:45 | #2

    Coal producers and users should carry their own costs, but if and ONLY if ALL other producers and consumers do. My original and continuing point is that those who assert that coal has externalities that exceed those of other technologies or that externalities only have negative signs are the muddle headed ones or are intentionally deceptive. Goodbye.

  3. TokyoTom
    March 7th, 2009 at 22:00 | #3

    Tom, I certainly didn`t miss the distinction; I made the point upfront that coal producers and users should – as a matter of principle – be allocated the considerable costs that they generate (though libertarian point out that aggregating damages across people of different preferences is inherently flawed). I also made the further point that in determining external costs. one does not also measure external benefits; one is liable for the damages he cause even if others like his products. Thus steel mill should still liable for damages it causes to neighbors, even though others like the steel (especially cheap) and the neighbors buy cars etc buod with the steel.

    I have a hard time believing you are actually puzzled over this.

    Perhaps sometime I`ll abandon my pseudonym, but it`s of little relevance to the points I`ve made. This website and the internet puts many things I`ve written at your fingertips, and even in the blogsphere, and cetaintly here, reputation matters quite a bit.

    It seems you mention identity only to sidestep the work of thinking about markets and principles. But since you`re working for “free market” groups, that seems to present some problems.

  4. Tom Tanton
    March 7th, 2009 at 17:30 | #4

    I guess you miss the distinction between quantification and allocation. It would also be nice if you revealed your real self, rather than hiding behind a nom de guerre.

  5. TokyoTom
    March 7th, 2009 at 16:26 | #5

    Tom, thanks for your comments here, and pointing to your comment at MasterResource; I posted this in part because it wasn`t clear when I would get a response there.

    However, your additional remarks simply further illustrate your muddled thinking.

    1.  My chief point was that energy/power producers of whatever type should be bearing their own costs instead of externalizing them, and that it is clear that coal producers and coal-fired utilities are NOT bearing all of the costs of their activities, but shift them to others.  As a result, broad swaths of the population (the American Lung Assn says that even now there are more deaths annually from coal than there are homicides) are left with the damages, while investors in coal get the profits.

    2.  Your initial response?  That the “extensively studied” “human costs of coal” or “externalities” “are mostly, if not completely, offset by the economic benefits”.  As I noted this IS very much a utilitarian – and profoundly non-libertarian – calculation that elevates considerations of general social costs and benefits over the rights of people not to be physically harmed by others, and over the duty of people not to harm others.

    3.  You then compounded your socialistic, non-libertarian analysis by further stressing indicating that general social costs and benefits are also to be compared between various energy technologies (“the negative externalities [of coal] are NOT enough to offset the higher cost premiums of technologies like wind”).  This is a market planner`s calculation, not one that a libertarian (much less a power producer) engages in.

    4.  You now say that you haven`t said where the various costs should be placed, but you both suggest that a general social cost-benefit analysis is appropriate and refuse to acknowledge that a libertarian view both rejects a general social cost-benefit analysis while clearly making actors liable for the harms they cause others.

    5.  You further illustrate your misunderstanding of libertarian principles – and basic economics – by rather astonishingly arguing that social costs should be internalized “only provided the social benefits are similarly internalized”.  The whole reason why people engage in market transactions (and wealth is generated as a result) is that all parties believe that the value of benefits that they receive exceed the cost of the trade; your formulation would end the market system!  If you are trying to suggest that there are vast positive externalities to coal, please note, again, that it is not a libertarian or market principle that simply because an economic activity generates positive benefits that that means the people engaged in such activities do not have liability for the damages that their activities cause to others.

    6.  You make a further mistake by suggesting that coal producers/power generators should only have to bear the costs that they impose on others only if the social costs of wind are also internalized.  What, is it okay if I throw my trash in your yard, simply because nobody sues the factory down the street because the government has given it a license to pollute?  For shame; one social cost does not justify another.

    7.  Again (how many times do I have to say it?), I am not arguing FOR wind. I understand perfectly well that not only is it a less efficient and generally less valuable technology, but that there are also social costs (particularly bird and bat kill).  But these points have nothing to do with whether or not coal should carry its own weight.

    8.  Finally, allow me to note that on top of all the health and property costs directly associated with coal mining and power generation, that there are significant climate risks as well – enough so that even Exxon supports the IPCC, is leading investments in GHG-lite technology and supports carbon taxes.

  6. Tom Tanton
    March 7th, 2009 at 13:56 | #6

    TokyoTom–you miss some important follow up points/comments at Master Resource. You mis-interpreted my comments and thus reached a faulty conclusion. “the damage my pollution does to you is fine because people want to but my products” –only I NEVER said that. What I said was that the [damage function] calculated negative externalities were smaller than the price/cost premiums demanded by most renewables. I never said anything about where the various costs are placed.
    wrt to “by being allowed to shift real and significant costs to others, and that we`d all be better off if those socialized costs were internalized. ” yes, but only provided the social benefits are similarly internalized, and that the social costs of e.g. wind also be internalized–right now they are seldom acknowledged, even less frequently quantified, but never once placed where they belong.

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