The Road Not Taken IV: My other hysterical comments on climate science & how Austrians hamstring themselves

November 2nd, 2009 2 comments

In my initial post, on how Austrians strive for a self-comforting irrelevancy on climate change, I copied my chief comment to Stephan Kinsella.

I copy below my other posts and some of the remarks I was responding to on Stephan`s thread, including the one that I was unable to post – for some reason I am trying to figure out (but that Stephan tells me was not a result of moderation by him; I note my full apology, as stated in my update to my preceding post):

  • TokyoTom

    fundamentalist: “I love the responses from the GW hysteria crowd.
    They have nothing to offer but ad hominem attacks and appeals to
    authority.”

    Am I excluded from the “hysteria” crowd, Roger? Because if I`m in,
    you seem to have entirely missed my post, and my point, as to the
    consistency of your arguments with Austrian principles and the
    effectiveness of approaches like yours in dealing with the rest of the
    world – including all of the deluded and others who are engaged in bad
    faith.

    Published: October 30, 2009 9:44 AM

  • Stephan Kinsella
    [Note: this is the comment to which I responded with the remarks copied on my preceding post]

    “Tokyo” asked me to respond to his post but it’s so rambling I am
    not sure what to respond to. To me this is very simple. I think we are
    in an interglacial period. It’s going to start getting cooler
    eventually, unless by then we have enough technology and freedom (no
    offense, Tokyo) to stop it. If there is global warming maybe it can
    delay the coming ice age by a few centuries.

    If there were really global warming why not just use “nuclear
    winter” to cool things down? You don’t see the envirotards advocating that! 🙂 (see Greenpeace to advocate nuking the earth?)

    In any event as I see it there are several issues. Is it warming?
    Can we know it? Do we know it? Are we causing it? Can we stop it?
    Should we stop it?

    It seem to me we do not know that it’s warming; if it is, it’s
    probably not caused by Man; and if it is, there’s probably nothing we
    can do to stop it except effectively destroy mankind; there’s no reason
    to stop it since it won’t even be all bad, and in fact would be overall
    good. I do not trust the envirotards, who hate industrialism and love
    the state, and seek anything to stop capitalism and to give the state
    an excuse to increase regulations and taxes; why anyone thinks these
    watermelons really know what the temperature will be in 10, 100, 1000
    years, when we can’t even get accurate weather forecasts a week out, is
    beyond me.

    That said, I’ll take the watermelons seriously when they start
    advocating nuclear power. Until then, they reveal themselves to be
    anti-industry, anti-man, techo-illiterates. (See Green nukes; Nuclear spring?.)

    Published: October 30, 2009 10:03 AM

  • TokyoTom

    [my prior version ran off without my permission; this is a re-draft]

    It seems like I can lead a horse to water, but I can`t make him think,

    We all have our own maps of reality and our own calculus as to what
    government policies are desirable and when, but as for me, the status
    quo needs changing, and the desire of a wide range of people – be they
    deluded, evil, conniving or whatnot – to do something on the climate
    front seems like a great opportunity to get freedom-enhancing measures
    on the table and to achieve some of MY preferences, chiefly because
    they help to advance the professed green agenda. [To clarify, I didn`t mean that I want to advance “the green agenda”, but that the pro-freedom policy suggestions I have raised should be attainable because greens and others might see that they also serve THEIR agendas.]

    I see no reason to sit at home or simply scoff or fling poo from the
    sidelines, and let what I see as a bad situation get worse. There`s
    very little in that for practically anyone here – except of course
    those who like coal pollution, public utilities, corporate income
    taxes, big ag corporate welfare, political fights over government-owned
    resources, energy subsidies and over-regulation, etc. (and those folks
    aren`t sitting at home, believe me).

    I can keep on questioning everyone`s sanity or bona fides, or I can
    argue strongly for BETTER policies, that advance shared aims.

    Does Austrian thinking simply lack a practical political arm, other
    than those few who have signed up to support special interests?

    Ramblin` Tom

    Published: October 30, 2009 11:51 AM

  • TokyoTom

    Stephan, if I may, I am appalled and offended by your shallow and
    fundamentally dishonest engagement here. That there are a string of
    others who have preceded you in this regard is no excuse.

    You: (i) post without significant comment a one-page letter from a
    scientist – as if the letter itself is vindication, victory or a
    roadmap for how we should seek to engage the views and preferences of
    others,

    (ii) refuse to answer my straightforward questions (both above and
    at my cross-linked post, which you visited) on how we engage others in
    the very active ongoing political debate, in a manner that actually
    defends and advances our policy agenda, and (putting aside the
    insulting and disingenuous “Tokyo asked me to respond” and “it’s so
    rambling I am not sure what to respond to”); and

    (iii) then proceed to present your own view of the science, the
    motives and sanity “watermelons” (as if they`re running the show), a
    few helpful, free-market libertarian “solutions”, like open-air
    explosion of nuclear weapons to bring about a “nuclear winter” effect!

    And my attempt to bring your focus back to the question of how we
    actually deal with others in the POLITICAL bargaining that is, after
    all, underway is met with silence – other than your faithful report
    back from your trusty climate physicist expert policy guru friend about
    …. science (all being essentially irrelevant to my question, not
    merely the cute little folksy demonstration about how the troubling
    melting and thinning of Antarctic ice sheets actually now underway
    simply CAN`T be occurring, but also a further failure to address the
    very rapid ocean acidification our CO2 emissions are producing)!

    Maybe it`s me, but I find this type of insincere and shallow
    engagement on such a serious issue to be a shameful discredit to the
    Mises Blog (even if it does cater to those who prefer to think that the
    big to do about climate – which may very well result in a mass of
    ill-considered, costly and counterproductive
    legislation – is really groundless and so can simply be ignored, aside from a bit of internal fulminations here).

    If you are not actually interested in discussing policy on a serious issue, then consider refraining from posting on it.

    Maybe it`s not my position to expect better, but I do.

    Sincerely,

    Tom

    Roy Cordato (linked at my name) said this:

    “The starting point for all Austrian welfare economics is the goal
    seeking individual and the ability of actors to formulate and execute
    plans within the context of their goals. … [S]ocial welfare or
    efficiency problems arise because of interpersonal conflict. [C] that
    similarly cannot be resolved by the market process, gives rise to
    catallactic inefficiency by preventing useful information from being
    captured by prices.”

    “Environmental problems are brought to light as striking at the
    heart of the efficiency problem as typically seen by Austrians, that
    is, they generate human conflict and disrupt inter- and intra-personal
    plan formulation and execution.”

    “The focus of the Austrian approach to environmental economics is
    conflict resolution. The purpose of focusing on issues related to
    property rights is to describe the source of the conflict and to
    identify possible ways of resolving it.”

    “If a pollution problem exists then its solution must be found in
    either a clearer definition of property rights to the relevant
    resources or in the stricter enforcement of rights that already exist.
    This has been the approach taken to environmental problems by nearly
    all Austrians who have addressed these kinds of issues (see Mises 1998;
    Rothbard 1982; Lewin 1982; Cordato 1997). This shifts the perspective
    on pollution from one of “market failure” where the free market is seen
    as failing to generate an efficient outcome, to legal failure where the
    market process is prevented from proceeding efficiently because the
    necessary institutional framework, clearly defined and enforced
    property rights, is not in place.”

    Published: October 31, 2009 1:00 PM

  • TokyoTom

    Bala:

    “Did rising temperatures cause an increase in atmospheric carbon-dioxide concentration”.

    This is a great, basic question; I`d love to answer it (actually, I
    already did, though a bit indirectly), but you see, I`m one of the
    nasty obfuscating members of the socialist hysterical crowd, so I
    really should defer to others here who have better ideological and
    scientific stature here (and who hate ad hominems and love reason),
    such as fundamentalist, or perhaps even our confident lead poster,
    Stephan Kinsella (who has nothing to offer on the question of how
    libertarians should engage with others on the political front), or even
    our humble physicist climate system authority, Dr. Hayden.

    Gentlemen, take it away.

    Published: October 31, 2009 11:31 AM

  • TokyoTom

    I`m sorry I don`t have time now to respond in more detail to those
    who have commented in response to mine, but let me note that not one of
    you has troubled to actually respond to my challenge, which was based
    on Austrian concepts of conflict resolution, understanding of
    rent-seeking embedded in the status quo, and the recognition that the
    present debate on climate, energy and environmental issues presents
    opportunities to actually advance an Austrian agenda.

    In my view, we can either try to improve our lot, by seeking items
    such as those I laid out previously or condemn ourselves to irrelevancy
    by standing by and letting the big boys and the Baptists in their
    coalition hammer out something worse from our Congresscritters.

    For this, the correctness of our own views of climate science
    matters little – nothing, in fact, unless we are willing to DO
    something about it, by engaging with OTHERS who have DIFFERENT views.

    For those who have too much trouble remembering the legal/regulatory changes that I suggested, here they are:

    [pro-freedom regulatory changes might include:

    * accelerating cleaner power investments by eliminating corporate
    income taxes or allowing immediate amortization of capital investment,
    * eliminating antitrust immunity for public utility monopolies (to
    allow consumer choice, peak pricing and “smart metering” that will
    rapidly push efficiency gains),
    * ending Clean Air Act handouts to the worst utilities (or otherwise
    unwinding burdensome regulations and moving to lighter and more
    common-law dependent approaches),
    * ending energy subsidies generally (including federal liability caps for nuclear power (and allowing states to license),
    * speeding economic growth and adaptation in the poorer countries most
    threatened by climate change by rolling back domestic agricultural
    corporate welfare programs (ethanol and sugar), and
    * if there is to be any type of carbon pricing at all, insisting that
    it is a per capita, fully-rebated carbon tax (puts the revenues in the
    hands of those with the best claim to it, eliminates regressive impact
    and price volatility, least new bureaucracy, most transparent, and
    least susceptible to pork).

    Other policy changes could also be put on the table, such as an
    insistence that government resource management be improved by requiring
    that half of all royalties be rebated to citizens (with a slice to the
    administering agency).]

    Many others come to mind.

    Well, what`s it going to be? Relevancy, or a tribal exercise in disengaged and smug self-satisfaction?

    Published: October 31, 2009 12:37 PM

  • TokyoTom

    1. Christopher and mpolzkill:

    Thanks for the favor of your comments.

    I was asking if Austrians never seek to practically engage others on
    questions of policy; the first of you brings up Ron Paul, but one man
    is not a policy, nor are his sole efforts a policy program; the other
    of you suggests succession from the U, which is hardly an effort at
    pragmatic engagement with anybody over a particular issue. (BTW, here
    is Ron Paul`s climate program.)

    I can see some engagement by libertarians on this issue, but such
    seeds either (i) die when they fall on the rocky ground of the Mises
    Blog or (ii) represent work by people paid to criticize one side of the
    debate, and consistently ignore problems with the definitely
    non-libertarian status quo.

    Why libertarians do not see any opportunity here for a positive
    agenda? Do they prefer to be taken as implicit supporters of the
    government interventions that underlie most enviros` complaints?

    2. fundamentalist:

    “I don’t see anyone doing that except the GW hysterical crowd.
    Honest scientists like Hayden try to present evidence and reason so
    that we can have a real debate, and the hysterical crowd flings poo
    from the sidelines.”

    Thanks for your direct comment (even as you lace it and others with
    ad homs), but can`t you see you also are missing my point? Are you NOT
    interested in trying to cut deals that would, say:

    * accelerate cleaner power investments by eliminating corporate
    income taxes or allowing immediate amortization of capital investment,
    * eliminate antitrust immunity for public utility monopolies (to allow
    consumer choice, peak pricing and “smart metering” that will rapidly
    push efficiency gains),
    * end Clean Air Act handouts to the worst utilities (or otherwise
    unwinding burdensome regulations and moving to lighter and more
    common-law dependent approaches),
    * end energy subsidies generally (including federal liability caps for nuclear power (and allowing states to license),
    * speed economic growth and adaptation in the poorer countries most
    threatened by climate change by rolling back domestic agricultural
    corporate welfare programs (ethanol and sugar),
    * insist that government resource management be improved by requiring that half of all royalties be rebated to citizens,
    * end federal subsidies to development on barrier islands, etc. or
    * improve adaptability by deregulating and privatizing roads and other “public” infrastructure?

    Or is it more productive to NOT deal with those whom you hate, and
    stand by while special interests cut deals that widen and deepen the
    federal trough?

    TT

    Published: November 1, 2009 2:21 AM

  • TokyoTom

    Allow me to outline here a few responses to the arguments raised by
    Dr. Hayden, even as I do not pretend to be an expert (and, to be
    pedantic, even though they are largely irrelevant to the question of
    whether Austrians wish to take advantage of the opportunity presented
    by the many scientists and others who have differing views, to roll
    back alot of costly, counterproductive and unfair regulation).

    1. Models: Dr. Hayden disingenuously casts aside what modern physics
    tells us about how God plays dice with the universe (via random,
    unpredictible behavior throughout the universe), and the limits of
    human knowledge (including the ability to measure all inputs affecting
    climate, including all of our own), and essentially asks us to wait
    until our knowledge is perfect, and our ability to capture and
    number-crunch all information relevant to the Earth`s climate
    (including changing solar and cosmic ray inputs and ocean behavior)
    before any of us, or our imperfect governments, can take any action on
    climate.

    Physical and practical impossibility aside, is this how any human or
    any human organization structures its decisions? Narrowly, Dr. Hayden
    is of course right that “the science is not settled”, but so what?

    2. Was there a tipping point 300 million years ago (or whenever it was when CO2 levels reached 8000 ppm) ?
    Dr. Hayden plays with language, suggesting that a “tipping point” means
    something irreversible over hundreds of millions of years, when it`s
    very clear that there have in the past been numerous abrupt changes in
    climate (some taking place in as little as a few years, with a general
    return to prior values sometimes taking very long periods of time) and
    that scientists today are talking about tipping points that may be reached in human lifetimes.
    Will we lose all mountain glaciers? Will the Arctic become ice-free in
    winter? Will thawing release sufficient methane from tundras and seabed
    clathrates to push the climate even more forcibly than CO2? Are we set
    to lose glaciers in Greenland and Antarctica, regardless of what we do?
    Will we dry out the Amazon basin, and interrupt the Asian monsoon?
    There is plenty of concern and evidence that these things are real
    possibilities.

    3. “Global-warming alarmists tell us that the rising CO2 concentration is (A) anthropogenic and (B) leading to global warming.”

    But you never tell us whether you, too, Dr. Hayden, are an
    “alarmist”. Further down you acknowledge that “Nobody doubts that CO2
    has some greenhouse effect” admitting (B) (though not that it may be
    the chief factor), but as far as (A) goes, you only acknowledge that
    “CO2 concentration is increasing”. Care to make yourself an alarmist by
    admitting what cannot be denied – that man is responsible for rising
    CO2 concentrations? Or you prefer play with laymen`s ignorance by
    irresponsibly suggesting that rising CO2 is now due to warming oceans
    and not man`s activities?

    – “CO2 concentration has risen and fallen in the past with no help from mankind.”

    Yes, but what relevance is this now, when man is undeniably not simply “helping” but clearly responsible?

    – “The present rise began in the 1700s, long before humans could have made a meaningful contribution.”

    So? Does the fact that CO2 fluctuates naturally do to things other
    than man`s activities mean humans` massive releases of CO2 have NOT
    made a “meaningful contribution”? It`s very clear that the Industrial Revolution caused a dramatic rise in CO2. Surely you don`t disagree?

    – “Alarmists have failed to ask, let alone answer, what the CO2
    level would be today if we had never burned any fuels. They simply
    assume that it would be the “pre-industrial” value.”

    “Alarmists” of course is simply an unhelpful ad hom; and as for the rest, concerned scientists and laymen clearly note how CO2 has fluctuated prior to the Industrial Revolution.

    There undoubtedly many clueless laymen, just as there are some
    clueless scientists, so your sweeping statement may be narrowly
    accurate.

    But in the big picture, it is clear that man has had a drastic
    impact on CO2 levels – so what, precisely, is your point, except to
    confuse the issue?

    – “The solubility of CO2 in water decreases as water warms, and
    increases as water cools. The warming of the earth since the Little Ice
    Age has thus caused the oceans to emit CO2 into the atmosphere.”

    Sure, but this doesn`t mean man hasn`t been the dominant contributor to atmospheric CO2.

    Further, of course, warming oceans CEASED to release CO2 at the
    point that atmospheric CO2 started to make the oceans more acidic.

    – “The historical record shows that climate changes precede CO2
    changes. How, then, can one conclude that CO2 is responsible for the
    current warming?”

    The lag in the historical record BEFORE man simply shows that CO2,
    which has an acknowledged warming effect, was a warming reinforcer and
    not an initiator. This does NOT, of course, suggest that massive CO2
    releases by man magically have NO effect.

    4. Assuming that we ARE changing climate, is that a bad thing?

    – “A warmer world is a better world.” Maybe, but are there NO costs,
    losses or damages in moving to one? And do those people and communities
    who bear these costs or kinda like things as they are have any choice,
    much less defendable property rights?

    – “The higher the CO2 levels, the more vibrant is the biosphere, as
    numerous experiments in greenhouses have shown. … Those huge
    dinosaurs could not exist anywhere on the earth today because the land
    is not productive enough. CO2 is plant food, pure and simple.”

    I see; this is not a question of fossil fuel interests homesteading
    the sky (or being given license by govt) and so being entitled to shift
    risks and costs on us, but them beneficiently bestowing gifts on
    mankind – or dinosaurs, as Dr. Hayden may prefer! Wonderful gifts that
    cannot be returned for centuries or millenia! Yippee!

    [This is only scratching the surface of the letter, but I`m afraid I need to run for now.]

    Published: November 1, 2009 4:51 AM

  • TokyoTom [Note: my original post contained some bolding that went haywire and bolded most of the post; I`ve fixed that.]

    Okay, here`s a few more unconsidered thoughts to show how hysterical
    I am, am hooked on religion, hate mankind, [want to] return us to the Middle Ages
    and otherwise take over the world:

    – “Look at weather-related death rates in winter and in summer, and the case is overwhelming that warmer is better.”

    Sure, for If only it were so simple. The increase in AVERAGE global
    temps that we`ve experienced so far has meant little warming of the
    oceans (a vast thermal sink), and has shown up at higher latitudes,
    where we have seen a very marked warming and ongoing thawing, a shift
    of tropic zones away from the equator, disruption of rainfall patterns
    and stress on tropical ecosystems; all of this is considered to be just
    the beginning of a wide range of climate effects that have not yet been
    fully manifested for GHG and albedo changes so far,. much less to
    further increases in GHGs.

    – “CO2 is plant food, pure and simple.”

    It IS a “pure and simple” plant food, but your rhetoric implies much
    more – essentially that CO2 is NOTHING BUT plant food, and large
    releases of it have no effect on climate. And this, as you well know,
    is NOT a “pure and simple” matter.

    – “CO2 is not pollution by any reasonable definition.”

    You mean not by your reasonable definition, or under
    historical standards. But what IS “pollution”, but a social construct
    to describe the outputs of human activity that some of us have found to
    be damaging to our persons, property or other things that we value?
    Were CFCs released by refrigeration equipment “pollution” before we
    discovered that they damage the ozone layer?

    Scientists may be qualified to measure particular outputs and their
    consequences, but otherwise have no special insights into what others
    value.

    – “A warmer world begets more precipitation.”

    Sure, as warmer air generally holds more water – which in turn has a
    warming effect, let`s not forget. But as for the water itself, climate
    change leads to more severe rain events in some places but to droughts
    in others. And let`s not forget that a warmer world means that mountain
    snows don`t last until spring and summer as they once did, leaving
    streams and forests drier, and adversely affecting agriculture that
    relies on such water.

    – “All computer models predict a smaller temperature gradient
    between the poles and the equator. Necessarily, this would mean fewer
    and less violent storms.”

    Not so fast; this doesn`t hold for rain events or tornadoes.
    Further, independent paths of research indicate that while the North
    Atlantic may end up with fewer hurricanes, warming is likely to make them more intense.

    – How, pray, will a putative few degrees of warming melt all the ice
    and inundate Florida, as is claimed by the warming alarmists?

    First, note again the Dr.`s use of a strawman; no one is expect an
    imminent melt of “ALL” the ice. But significant melting and thinning of
    coastal ice IS occurring, and not merely on the West Antactic
    peninsula, which the good Dr. would realize if he`d trouble himself to
    compare his simple mental model, of reality with FACTS. As previously
    noted, coast ice sheets are plugs that slow the flow of glaciers from
    the interior. As these plugs are removed, the glaciers flow more
    quickly, via that exotic phenomenon we call “gravity”. I`ve already
    addressed this above, with links.

    – “If the waters around it warm up, they create more precipitation.”

    Yes, but does the new precipitation balance the ice being melted?
    Actual, detailed observations tell us that, despite your absolute
    certainty, that we are seeing increasing net mass losses far inland,
    not merely in Greenland but also in Antarctica. Your religious-like
    faith in your own superior understanding doesn`t make the facts go away.

    – “The ocean’s pH is not rising. It is falling, ever so slightly.
    Obviously your respondent has not the faintest clue as to how pH is
    defined. (BTW, the oceans are basic, not acidic.)”

    Yes, the good Dr. catches my mistake – pH is falling rather
    remarkably (from basic towards acidic) – but he too hastily skates past
    the main point, which is that this is due to increased atmospheric
    levels of CO2, which prove that the oceans are NOT actually releasing
    CO2 (or they`d be becoming more basic).

    I provided links in this last year here:
    http://blog.mises.org/archives/007931.asp#c192563

    Here`s more:
    http://www.scienceprogress.org/2008/06/our-dying-oceans/
    http://docs.google.com/gview?a=v&q=cache:y_W6vseUrykJ:www.tos.org/oceanography/issues/issue_archive/issue_pdfs/20_2/20.2_caldeira.pdf+caldeira+ocean+ph&hl=en&gl=jp&pid=bl&srcid=ADGEESgEEoFLf7xd9QTyol2TYYmXKPxXFqMq5Nr1IPdGd_yEbV3zIxPi-4Rmhb6d-IQ-r4BPwBqzyhF6GZQw_ka1Eh3Ynn0lYlP7p974IYMHIdLMVE90nWJ81GHAfcdTrUJTNk7W8Man&sig=AFQjCNGg6Idq6GQ5gyrddlXRD8R98NQ_dQ

    From the Plymouth Marine Laboratory (UK) :

    “Until recently, it was believed that the oceans contained so much
    disolved carbonate and bicarbonate ions that any extra would have
    little effect. In fact this absorbtion was generally acknowledged a
    valuable process in protecting the planet from the worst effects of
    rising temperatures and climate change. However, in 2003 a paper was
    published in Nature (vol 425) which suggested that the increases in
    atmospheric CO2, occurring over the last 200 years, has actually
    increased the acidity of the oceans by 0.1 of a pH unit.The pH scale is logarithmic and this change represents a 30% increase in the concentration of H+ ions.

    “However, atmospheric concentrations of CO2 have been
    higher during previous times in Earths history and these high CO2
    periods didn’t cause ocean pH to change. The difference now is that the
    rate at which CO2 concentrations are increasing, is 100 times greater
    than the natural fluctuations seen over recent millennia. Consequently,
    the processes that ultimately balance the carbon cycle are unable to
    react quickly enough and ocean pH is affected. About half of all
    released CO2 is absorbed by the oceans but even if we stop all
    emmissions today, the CO2 already in the atmosphere has been predicted
    to decrease ocean pH by a further 0.5 unit.”

    From
    Wikipedia”>http://en.wikipedia.org/wiki/Ocean_acidification”>Wikipedia:

    “Dissolving CO2 in seawater also increases the hydrogen ion (H+)
    concentration in the ocean, and thus decreases ocean pH. Caldeira and
    Wickett (2003)[1] placed the rate and magnitude of modern ocean
    acidification changes in the context of probable historical changes
    during the last 300 million years.

    Since the industrial revolution began, it is estimated that
    surface ocean pH has dropped by slightly less than 0.1 units (on the
    logarithmic scale of pH; approximately a 25% increase in H+), and it is
    estimated that it will drop by a further 0.3 to 0.5 units by 2100 as
    the oceans absorb more anthropogenic CO2.[1][2][9] These changes are
    predicted to continue rapidly as the oceans take up more anthropogenic
    CO2 from the atmosphere, the degree of change to ocean chemistry, for
    example ocean pH, will depend on the mitigation and emissions pathways
    society takes.[10] Note that, although the ocean is acidifying, its pH
    is still greater than 7 (that of neutral water), so the ocean could
    also be described as becoming less basic.”

    “The term global warming has given way to the term climate
    change, because the former is not supported by the data. The latter
    term, climate change, admits of all kinds of illogical attributions. If
    it warms up, that’s climate change. If it cools down, ditto. Any change
    whatsoever can be said by alarmists to be proof of climate change.”

    Wonderful observation, except for the fact that IT`S WRONG; the
    change instead being deliberately led by Republicans; leading
    Republican pollster/ spinmeister Frank Luntz in 2002 pushed Republicans
    to move the public discussion away from “global warming” to “climate
    change”, because, as Luntz wrote,

    “’Climate change’ is less frightening than ‘global warming.’
    … While global warming has catastrophic connotations attached to it,
    climate change suggests a more controllable and less emotional
    challenge”.

    Of course there IS the inconvenient fact that “climate change” is
    actually more accurate than simple “global warming”, but who cares
    about accuracy anyway, right Dr.?

    – “the earth has handily survived many millions of years when CO2
    levels were MUCH higher than at present, without passing the dreaded
    tipping point.”

    I already addressed above the point that while the Dr. seems to
    what to recreate the Cretaceous, the better for dinosaurs, most of us
    seem rather to like the Earth that we actually inherited and that the
    rest of current Creation is adapted for. He is obviously a physicist
    and not a biologist, and doesn`t seem to give any thought to the
    rapidity of the scale at which we are conducting our little
    terraforming experiment, and te challenges the pace of those changes
    are posing to ecosystems.

    – “To put it fairly but bluntly, the global-warming alarmists
    have relied on a pathetic version of science in which computer models
    take precedence over data, and numerical averages of computer outputs
    are believed to be able to predict the future climate. It would be a
    travesty if the EPA were to countenance such nonsense.”

    To put it bluntly, this is largely rubbish; there is a tremendous
    and growing amount of climate change DATA. You just make it your habit
    not to let facts get in the way of your own opinions. I would be a
    travesty if we continue to countenance posts such as yours, questions
    of relevance to Austrian purposes aside.

    – “I don’t do politics”

    Fine; I can see why that would not be your forte. But what`s very
    puzzling is that you seem to think that climate science IS your forte,
    when all you`ve show is a shocking level of arrogant ignorance.

    – “I don’t pretend to be an economic theorist.”

    And on a blog dedicated to Austrian economists, just why, one
    wonders, do the “giants” in our Mises world keep filling the Blog pages
    with post such as this, which are, on their very face, IRRELEVANT, to
    the question of how Austrians wish to address the preferences of other,
    the misuses of government and the management of unowned common
    resources.

    – “he only difference between the Republicans and the Democrats
    is, in practical terms, their rhetoric. I don’t pretend to be an
    economic theorist.

    – “But the notion that we can run an industrialized giant on
    chicken manure and sunbeams doesn’t even pass the giggle test. Except
    in Washington.”

    At long last, you say something something intelligible. Except
    Washington spends trillions on nonsense at the drop of a hat, if you
    haven`t noticed recent events.

    Published: November 1, 2009 10:02 AM

  • TokyoTom

    Sorry if I`ve been a bit intemperate; that I`m rushed doesn`t excuse it.

    Dr. Hayden, you are entirely welcome to your own opinion and your
    own mental map of reality, but not to your own facts. As to your
    opinion and mental map, they are by your own admittance uninformed as
    to matters of economics and political science, but I must confess that
    I find your understanding of climate science to be seriously wanting.

    Given these, I fail to see what you offer here, other than a
    convenient, if very thin, cover for others here who don`t want to
    think, or to fight to make the world (or our own government) better.

    Sincerely,

    Tom

    Published: November 1, 2009 10:11 AM

  • TokyoTom

    Bala, I appreciate your polite persistence; I`m sorry I haven`t responded yet, but I`ll get to you.

    Please note that my time is both limited and my own (though indeed
    others have claims on it), and I have no obligation to spend any of it
    responding to your importunings regarding climate science, which are
    now shading into impertinence.

    Feel free to draw whatever conclusions you wish, but a fair reader might note that:

    – my priorities may (unsurprisingly) differ from yours,
    – my chief points (and Austrian principles as to how to engage with others) have nothing to do with climate science per se,
    – I explicitly make no pretense of being a scientist or climate expert, and
    – in any case, there is no simple course to understanding reality; we
    are all forced to make decisions as to how much energy to devote to
    puzzling things out on our own (and overcoming what we know of our own
    subconscious cognitive filters) versus outsourcing this effort to
    others (by accepting things without deliberation, “on faith” as it
    were).

    Others who have been around longer will know that I`ve also devoted
    what they might consider an unreasonable amount of my time over the
    past few years, “hysterical” trying to help others work through climate
    science (and policy) issues.

    TT

    Published: November 1, 2009 8:46 PM

  • TokyoTom

    mpolzkill:

    – “Tom, believing you live in a Republic with 300,000,000 people is a delusion which heads off all actual pragmatism.”

    This is not a delusion I have, but in any case it`s not at all clear
    that this or any other delusion “heads off all actual pragmatism”.

    – “Until there is actual representation, everything said by we
    proles is literally hot air (unless it’s happens to coincide with
    whatever benefits the regime).”

    I use “our government” simply as shorthand for what you call “the
    regime”, but perhaps may be more accurately described as a multicentric
    mess.

    In any case, the painstaking efforts of LVMI to grow the Mises
    website, and the welcome reception of and contribution to those efforts
    by everyone here – yourself included – belies both your near-nihilistic
    cynicism and your conclusion, as to virtually every topic discussed
    here. Words are deeds, though they be more or less frivolous, weighty,
    insightful or consequential.

    If the other Mises bloggers agreed with you as to the possible
    efficacy of their words, either generally or on this particular topic,
    they simply wouldn`t bother to post.

    However, I share your concern about efficiacy, which is why I
    criticize posts such these (whether by Stephan, George Reisman, Sean
    Corrigan, Walter Block, or Jeffrey Tucker), which are, by and large,
    more of a circle jerk than an effort to engage.

    – “thank you for being respectful”

    My pleasure, but you hardly need to thank me; this is a community, after all.

    – “even though you mistakenly think I’m a nut.

    In this case, it is you who are mistaken (not that you ARE a nut, but that you think I think you are).

    Tom

    Published: November 1, 2009 9:35 PM

 

This is last version of the comment that I tried to post several times:

method fan:

[my first attempt apparently failed to post, so apologies if this shows up twice]

– “You are insofar wrong, that not only this “data” is analysed but it is also used to “predict” the future of reality by using it in simulations!”

You miss my criticism of Dr. Hayden`s refusal to examine facts about ongoing melting in Antarctica, but of course I do NOT disagree with you that current and paleo data can be used to “predict” the future.

But of course a scientific understanding of the world, and information – in this case, both about the past and current trends of climate inputs – certainly can give us useful information about what the future may hold in store for us.

“There is no sound experimental proof that human activity-emitted carbon dioxide is the cause for some sort of global warming.”

Nicely phrased; there of course plenty of experimental proof that carbon dioxide is an atmospheric warming agent, but no experimental proof that it is “the” cause for any global warming.

While we are now running such a global experiment – one that started centuries ago and will not be played out for centuries hence and is, for all intents and purposes irreversible – and thus cannot, in the Popperian sense, even be considered an “experiment”.

Whether our ramping up of the experiment is prudent or principled are entirely different questions, and properly the subject of much discussion.

– “These guesses remind one of the idea that rain dances are the cause for rain.”

I`m tempted to make a comeback, but surely you realize your flip comparison is entirely inapropos.

Here`s hoping for more sincere discourse.

TT

[Update- apology] The Road Not Taken III: Stephan Kinsella plugs his ears on the Austrians` obstinate, willful irrelevancy in the climate debate?

November 2nd, 2009 5 comments

[Note: Stephan Kinsella tells me he has NOT put my posts on his thread on moderation.  I believe him, and so (even as I fail to understand why I was unable to post a particular comment after a number of attempts), as noted I would in my original post, I withdraw my charge that he put my comments on moderation, and offer my sincere apology to Stephan (and to LvMI readers) for my mistake and for the offense that I imagine I may have caused to his sense of fair play. I am happy to do this, though of course I deeply regret my mistake.

Stephan, I`m sorry. I take your word that the conclusion I jumped to was wrong.

I am still trying to puzzle through what happened; below I have restored an edited version of my prior post, with the unjustifed portions deleted.

Meanwhile, the discussion continues at the Mises Blog, at the above thread.]

 

In my preceding post I commented on Austrian (dis)engagement on climate issues, as exemplified by Stephan Kinsella`s Mises Blog post, “Physicist Howard Hayden’s one-letter disproof of global warming claims”.

[clip]

Instead of the usual cheerful message LvMI provides when comments
are accepted (“Confirmation…  Your comment has been submitted!)”, my
attempts  to comment are now met with the message, “Thank you for commenting.  Your comment has been received and held for approval by the blog owner.”

While there are times that this message is automatically served up
for technical reasons, such as not providing proper email address
(i.e., by accidently typing in “.comh” instead of “.com”) or providing
too many links (which may trigger a spamblocking feature), this [seemed to me] to be fairly clearly NOT one of those occasions – I had just successfully
posted a couple of comments that included links, and my “failed” post
included my usual email address (properly formatted, as I can confirm
simply by backing up) and no links.

[clip]

I copy below the comment that I
[had supposed] turned his playful non-responsiveness (see his comment to my prior post) into stony silence/silencing:

  • Published: October 31, 2009 1:00 PM
  • TokyoTom

    Stephan, if I may, I am appalled and offended by your shallow and
    fundamentally dishonest engagement here. That there are a string of
    others who have preceded you in this regard is no excuse.

    You: (i) post without significant comment a one-page letter from a
    scientist – as if the letter itself is vindication, victory or a
    roadmap for how we should seek to engage the views and preferences of
    others,

    (ii) refuse to answer my straightforward questions (both above and
    at my cross-linked post, which you visited) on how we engage others in
    the very active ongoing political debate, in a manner that actually
    defends and advances our policy agenda, (putting aside the
    insulting and disingenuous “Tokyo asked me to respond” and “it’s so
    rambling I am not sure what to respond to”); and

    (iii) then proceed to present your own view of the science, the
    motives and sanity “watermelons” (as if they`re running the show), a
    few helpful, free-market libertarian “solutions”, like open-air
    explosion of nuclear weapons to bring about a “nuclear winter” effect!

    And my attempt to bring your focus back to the question of how we
    actually deal with others in the POLITICAL bargaining that is, after
    all, underway is met with silence – other than your faithful report
    back from your trusty climate physicist expert policy guru friend about
    …. science (all being essentially irrelevant to my question, not
    merely the cute little folksy demonstration about how the troubling
    melting and thinning of Antarctic ice sheets actually now underway
    simply CAN`T be occurring, but also a further failure to address the
    very rapid ocean acidification our CO2 emissions are producing)!

    Maybe it`s me, but I find this type of insincere and shallow
    engagement on such a serious issue to be a shameful discredit to the
    Mises Blog (even if it does cater to those who prefer to think that the
    big to do about climate – which may very well result in a mass of
    ill-considered, costly and counterproductive legislation – is really
    groundless and so can simply be ignored, aside from a bit of internal
    fulminations here).

    If you are not actually interested in discussing policy on a serious issue, then consider refraining from posting on it.

    Maybe it`s not my position to expect better, but I do.

    Sincerely,

    Tom

  • [Note: I had intended to excise the following from my comment,
    but it`s just as well that it slipped in, as it serves to illustrate
    what productive Austrian approaches to climate issues might look like.
    I`ve added a link to Roy Cordato.]

    Roy Cordato (linked at my name) said this:

    “The starting point for all Austrian welfare economics is the goal
    seeking individual and the ability of actors to formulate and execute
    plans within the context of their goals. … [S]ocial welfare or
    efficiency problems arise because of interpersonal conflict. [C] that
    similarly cannot be resolved by the market process, gives rise to
    catallactic inefficiency by preventing useful information from being
    captured by prices.”

    “Environmental problems are brought to light as striking at the
    heart of the efficiency problem as typically seen by Austrians, that
    is, they generate human conflict and disrupt inter- and intra-personal
    plan formulation and execution.”

    “The focus of the Austrian approach to environmental economics is
    conflict resolution. The purpose of focusing on issues related to
    property rights is to describe the source of the conflict and to
    identify possible ways of resolving it.”

    “If a pollution problem exists then its solution must be found in
    either a clearer definition of property rights to the relevant
    resources or in the stricter enforcement of rights that already exist.
    This has been the approach taken to environmental problems by nearly
    all Austrians who have addressed these kinds of issues (see Mises 1998;
    Rothbard 1982; Lewin 1982; Cordato 1997). This shifts the perspective
    on pollution from one of “market failure” where the free market is seen
    as failing to generate an efficient outcome, to legal failure where the
    market process is prevented from proceeding efficiently because the
    necessary institutional framework, clearly defined and enforced
    property rights, is not in place.”

    The Road Not Taken III: Stephan Kinsella plugs his ears on the Austrians` obstinate, willful irrelevancy in the climate debate

The Road Not Taken II: Austrians strive for a self-comforting irrelevancy on climate change, the greatest commons problem / rent-seeking game of our age

October 30th, 2009 3 comments

[Update: Readers may wish to note the latest developments, as I note in these follow-up posts.]

Stephan Kinsella – whom I have engaged before on the ramifications of the decidedly non-libertarian state grant of limited liabiility to corporations – has a new post up on the Mises Blog on global warming;  his first on this subject, as far as I know.

The post is surprisingly short, and consists of a simple introduction by Stephan a copy of letter to the EPA (which he has appended) that one Howard Hayden, a retired physicist, one whom Stephan assures us is “a staunch advocate of sound energy policy” – whatever that means (hey, me too!) – submitted in connection with the EPA`s Supreme Court-mandated consideration of whether to regulate CO2 and other greenhouse gases. Stephan also refers to Dr. Hayden`s letter as a “one-letter disproof of global warming claims.”

I welcome Stephan to this discussion, which has taken place at the Mises Blog in fits and starts over the past few years. However, the absence of any commentary by Stephan leaves me scratching my head. Where`s the beef? Are this person`s scientific views on climate so convincing or obviously correct, and are the policy implication so straightforward, and correct, that we should all “get it” and agree, without any commentary by Stephan? Or Is Stephan simply playing with our credulity, and his own?

In any case, given both (1) the focus of Austrian economics on productively addressing conflicts between people with conflicting preferences (and the frequently negative role that governments play in resource tussles, generally to the benefit of entrenched insiders and to government itself) and (2) the recent Nobel prize award to Elinor Ostrom regarding the ways that humans work together successfully or not) to address common resources, I am simply disappointed. Is this all that Stephan has to offer?

Observing that Stephan fits within a grand tradition at Mises of shallow thought on climate and other “environmental” issues, I felt compelled to post a few thoughts at Stephan`s post, which I copy below:

 

Stephan:

Thanks for bringing your post to my attention.

My short response? Remember “Thank you, Prof. Block, for feeding our confirmation biases“?

But since I can`t resist doing what nobody else seems inclined to – I suppose it is, after all, why you invited me to this feast – let me make a few comments on matters that would apparently not otherwise occur to you or to the rest of the community.

The fact that most of the contents of Dr. Hayden`s letter is confused twaddle that has been explained in detail countless times (and personally by me, ad nauseum, to the extreme annoyance of most of the blog over the years 2006-2008) aside, it puzzles me that you and others prefer to treat the pages of the Mises Blog as a forum to dismiss – through drive-by postings like this (a la Walter Block) of a particular piece of “skepticism” that caught your fancy – extremely widespread scientific views (held by EVERY major national academy of science, including China and India), rather than engaging in a discussion of preferences, institutions and policies.

As I`ve asked Jeffrey Tucker previously, is science the forte of the Mises Blog, or its readers?

Even if those who believe that man`s rising emissions of CO2 have nothing to do with an observably rapidly changing world and pose no threat whatsoever – and that those who disagree are all deluded and/or evil – turn out, after we play our little massive and irreversible game with the Earth for another few centuries, to be absolutely right, is engaging with them by dismissing their concerns an approach that holds even the slightest prospect of success?

It`s as if Austrians were determined to ignore their own principles, stampede themselves into irrelevancy, and to make sure that we get the WORST policy outcomes possible.

Why not, if you think others all wrong, deluded or evil, play along with their game, and actually seek policy changes that might not only address the expressed concerns of others in a meaningful way, while also advancing a libertarian, freedom-seeking agenda?

As I have noted in a litany of posts at my blog, most recently one addressed to Bob Murphy, such pro-freedom regulatory changes might include:

  • accelerating cleaner power investments by eliminating corporate income taxes or allowing immediate amortization of capital investment,
  • eliminating antitrust immunity for public utility monopolies (to allow consumer choice, peak pricing and “smart metering” that will rapidly push efficiency gains),
  • ending Clean Air Act handouts to the worst utilities (or otherwise unwinding burdensome regulations and moving to lighter and more common-law dependent approaches),
  • ending energy subsidies generally (including federal liability caps for nuclear power (and allowing states to license),
  • speeding economic growth and adaptation in the poorer countries most threatened by climate change by rolling back domestic agricultural corporate welfare programs (ethanol and sugar), and
  • if there is to be any type of carbon pricing at all, insisting that it is a per capita, fully-rebated carbon tax (puts the revenues in the hands of those with the best claim to it, eliminates regressive impact and price volatility, least new bureaucracy, most transparent, and least susceptible to pork).

Other policy changes could also be put on the table, such as an insistence that government resource management be improved by requiring that half of all royalties be rebated to citizens (with a slice to the administering agency).

As Rob Bradley once reluctantly acknowledged to me (in the halcyon days before he banned me from the “free-market” Master Resource blog), “a free-market approach is not about “do nothing” but implementing a whole new energy approach to remove myriad regulation and subsidies that have built up over a century or more.” But unfortunately the wheels of this principled concern have never hit the ground at MR [persistently pointing this out it, and questioning whether his blog was a front for fossil fuel interests, appears to be what earned me the boot].

There have been occasional   libertarian  climate  proposals floated over the past few years, but they have never graced the Mises Blog, instead falling gently to the ground unnoticed – apparently, except for me – like the proverbial unstrained koala tea of Mercy.

Austrians seem to act as if the love of reason requires a surrender of it in favor of the comforting distraction of a self-satisfied echo chamber of a type that would warm the cockles of any like-minded religious “alarmist” cult.

Then of course, we have our own  home-grown libertarians who are happy to participate actively in the debate (with many excellent points, naturally), but carefully skirt for the purposes of maximum effectiveness (and felicitously, for their own consciences) the fact that their views are funded by the dirtiest class of rent-seekers. Plus we have a few who are happy to regurgitate for us “heroic” “grassroots” efforts that are transparent corporate PR ploys.

Finally, since no one else seems to be remotely interesting in scratching the surface of Dr. Hayden`s letter, here is what a little due diligence turns up:

– sure, the solubility of CO2 in water decreases as water warms, and increases as water cools. Some skeptics use this to suggest that rising atmospheric CO2 concentrations are due not to man, but to a naturally warming. That`s why it`s so interesting that, despite a warming ocean, ocean pH is rising [oops, I meant pH is “falling”, as I`ve noted in a previous comment about rapidly changing ocean pH]  because dissolved CO2 is also rising (because man`s CO2 emissions are forcing more CO2 to be dissolved in water).

– You ask sarcastically, if the melting point of ice is 0 ºC in Antarctica, just as it is everywhere else, how will a putative few degrees of warming melt all the ice and inundate Florida, as is claimed by the warming alarmists? The answer is, simply, that (1) the warming oceans melt and undermine the coastal ice, and (2) as coastal buttresses are removed, gravity brings the continental ice down more rapidly. This process is well underway and apparently accelerating, as described in a study just published in Nature. Note also that not all of Antarctica lies precisely at the South Pole, and that some parts are melting directly as the atmosphere warms.

– finally, not all men are dinosaurs, nor is the rest of extant Creation (save birds, of course). Why should we feel comforted by the fact that we may, in the blink of an eye in geologic time (decades/centuries), be terra-forming the Earth for creatures that no longer exist, while stressing it for the rest of Creation? Do we have no right of preference in climate or in the life we share the Earth with, or have the investors in fossil fuel firms homesteaded the right to modify environmental matters willy nilly, come what may?

Thanks for providing the soapbox, Stephan.

Tom

I note that Stephan closes his introduction to Dr. Hayden`s letter with the following:

“I love Hayden’s email sign-off, “People will do anything to save the world … except take a course in science.””

Would that problems of governance of shared resources were so easy as taking a science course! Then ALL of us Austrians, and not merely our leading lights at the Mises Blog, could simply pack up and go home, and leave everything to a few philosopher-king scientists!

[update] Bob Murphy, Rob Bradley and the Austrian Road Not Taken on Climate by two fossil-fuels gunslingers

October 28th, 2009 No comments

[Update: I copy at bottom a follow-up exchange I had on Bob`s thread with another reader – radio silence from Bob.]

Bob Murphy has a new post up at his blog, “CBO Testimony Misleads on Cost of Cap-and-Trade“, that draws attention to a new blog post at the Institute of Energy Research that Bob says he “had a lot to do with”.

The IER post rightly criticizes some of the numbers that the Congressional Budget Office has released, but the IER is playing games itself.

I left the following note at Bob`s (now substantially goosed up for the benefit of readers):

TokyoTom said…

IER? Isn`t that the “free-market” blog that bans libertarians who are not on their pro-coal, pro-pollution wagon? [Oops, I confused this with Rob Bradley`s MasterResource blog; IER is different, in that IER is – much more clearly than MR – an active rent-seeking front for fossil fuel interests, which Exxon made clear last year when it publicly announced that it would no longer fund IER`s “unproductive”, climate-skeptic position.]

But while we`re on the subject, let`s not forget:

– Austrians` fundamental objections to cost-benefit analysis;


that the mining, transport and combustion of coal, in addition to whatever climate “cost” it
might have to various people whose preferences can`t be measured, have
very real and significant costs in terms of damage to persons and property;


that federal law authorizes this (via the “Clean Air Act”, surface mining laws and ownership of the TVA), and grandfathers the very worst
midwestern utilities, the oldest 10% of which (41 or so) are  estimated to be responsible for 43% of the
$62 billion in annual  damages (not including damages from harm to ecosystems, effects of some air pollutants such as mercury, or climate change)(according
to the latest NAS report on the indirect costs of fossil fuels);

– that our federal government and states own most of the coal deposits and are otherwise addicted to the royalty revenues and complicit in turning a blind eye to damages;

– the future “costs” that the IER analysis refers to (in 2050) are not discounted to present value;


that alternative policies – such as

are never advanced, much less their costs weighed [that is, no attempt is ever made to engage opponents in good faith or to seek mutual gains by working to resolve underlying problems];

– the costs/consequences/risks and equities of “do-nothing” policies are hardly considered, and when so are heavily discounted;

– that deliberate “geo-engineering” holds no promise as a panacea, and itself is fraught with issues about statism, preferences, risks and liaibility;


the need for investment in infrastructure and change in laws to adapt
(and foster adaptation) to very real ongoing climate changes are never
discussed; and

– no one at IER ever seems to question the
unstated presumption that utilities and our transportation industries
have somehow homesteaded an ownership right over the global atmosphere – or the massive role that our federal government and states play as coal and other energy resource owners),
so that it`s perfectly okay to dismiss the preferences of those who
have concerns at home [those “religious” nuts like Exxon, and our Academies of Science] and those abroad in the least developed countries
that are most vulnerable to damages (much less to suggest how those
injured should be aided).

In other words, those defending the
status quo seem to have abandoned any Austrian training (or to have no
familiarity with its concern for problem-solving and awareness that
[as Block points out] common law protection of private property rights was hijacked a century
ago, with massive pollution and rent-seeking problems being the result
).

Someone
ought to post a few of these thoughts over at IER; Rob Bradley somehow
finds comments of this type over fundamental principles to be “ad hominem” arguments [of the kind that very quickly tested his patience and got me banned, without any word to his co-bloggers, who found my comments worthy of considered response].

Sure, we should fight over policy, but let`s not ignore principles or put our heads in the sand.

October 28, 2009 10:10 AM

*  From the NAS report:

Coal accounts for about half the electricity produced in the U.S.  In
2005 the total annual external damages from sulfur dioxide, nitrogen
oxides, and particulate matter created by burning coal at 406
coal-fired power plants, which produce 95 percent of the nation’s
coal-generated electricity, were about $62 billion; these nonclimate
damages average about 3.2 cents for every kilowatt-hour (kwh)
of energy
produced.  A relatively small number of plants — 10 percent of the total number — accounted for 43 percent of the damages.  By 2030, nonclimate damages are estimated to fall to 1.7 cents per kwh.

[update:

Supporters of cap and trade always turn to the
argument that opponents are burying their heads in the sand. It’s not
true. This legislation won’t do anything to help the environment. It is
merely a front so that the administration and the Democrats can say
they did “something.” We don’t need legislation that is going to cost
every single American household and won’t even be able to achieve its
stated goals. Write your Congressmen at
http://dontcapandtradeourjobs.net/?tr15.

[A], you`re missing my higher -level poinht, which is that IER is
rather apparently UNINTERESTED in engaging productively or on a
principled basis on this issue; rather, they are simply sniping (though
they make excellent points) at the cap-and-traders).

Though,
of course, from the view of those financing them, this form of
engagement may very well be “productive”, if it delays any action that
will lower returns to coal, rail or utility investors.

What`s
regrettable is that this obfuscation, which has been going on for
decades, is what is likely to saddle us with extremely costly, porky
and ineffective “climate change” policies.

My freaking thoughts on the "Superfreakonomics" climate chapter and on geoengineering

October 22nd, 2009 No comments

 

 

Categories: Uncategorized Tags:

Positive sum games: Get yer Elinor Ostrom here! A reprise of posts on rolling up our sleeves to address real problems that "markets" (& govt.) now aggravate

October 16th, 2009 No comments

I excerpt below, in chronological order, portions of my prior posts here that refer to Elinor Ostrom (the political scientist who recently was awarded the Nobel prize in economics) and are indebted to her thinking.

Perhaps items 3 and 10 are most accessible for readers in a hurry to find links to her own work.

1.   Too Many or Too Few People? Does the market provide an answer?, Sep 28 2007:

Too many or too few? Good question, Dan.
I agree with you that the population question is like any other aspect
of the social order: best addressed by the market and by free societies.

There are just a few small problems – even within the developed
world (and very clearly outside of it), there are many important
resources that are unowned and thus not fully priced in the “market” economy.

Unowned resources include almost all of Nature.  Primary
productivity (the amount of vegetation produced from photosynthesis)
has changed little, so as we use technology and our organizational
abilities to divert more and more of it to feed us, this is an
inevitable cost to other species, either directly or in the form of
altered environments that support less life (and less diversity of
life).

In altering our environments to suit us, we are of course no
different from other life forms that compete for resources to live and
propagate, but with our technical and organizational abilities, mankind
has clearly triumphed over the rest of nature (except perhaps evolving
microbes, to whom we represent an increasingly large and relatively
untapped food source). But at what cost?

Through the centuries we have wiped out many wild systems of food
and other resources – because they were never owned, and because our
improving technology enabled us to race each other to take the
resources before others (or from others, in the case of many native
peoples). Not only Jared Diamond`s “guns, germs and steel”, but
also forms of social organization have played deciding roles in the
competition between human societies for survival, growth and
dominance.  In this regard, societies that recognize and protect
property rights and utilize free markets have proven clearly superior
in the competition with other societies to obtain and utilize available
resources.

But our struggle has been not only to capture resources and to use
them before others do, but also to manage and protect them
effectively.  Evolving ownership systems have been a key means of
limiting wasteful “tragedy of the commons” struggles (see Yandle; von Mises),
but even where ownership systems have been implemented, we have
generally replaced complex natural systems with simpler systems
designed solely to feed us (and particularly so where, due to higher
consumptive demand, we have replaced common property systems with
private property systems (Ostrom)).

Meanwhile, virtually all of the natural world – the world’s oceans,
atmosphere, tropical reefs, tropical forests and other great commons –
remain unowned and thus unmanaged and unregulated (or indigenous
occupants have been forced aside).  For example, the great cod fishery
off of the Grand Banks that fed Europe for centuries has now
disappeared, and other fishery stocks worldwide are crashing – to be
“replaced” by “farmed” fish that are fed to a substantial degree by
catching and grinding up fish stocks that humans prefer not to consume
directly, and in part by fish firms that are established by destroying
the mangroves that are estuaries to various fisheries.  The same is
true of the replacement of vast tracts of tropical forests with
soybeans or oil palm plantations, with the rapid increase in
atmospheric CO2 (and attendant risks to climate) and with the
correspondingly geolologically rapid increases in ocean acidification (and
threats to plankton, corals and shellfish).

While populations in the developed economies are now relatively
stable, demand from our markets (as well as the burgeoning developing
markets) continues to strip out unowned (or mismanaged “public”)
resources from the oceans or undeveloped countries, aided by
kleptocratic elites who are happy to steal from the peoples they
supposedly represent in order to line their own pockets.  

As Dan points out, property rights failures in poorer nations
contributes to population growth there by delaying the demographic
transitions that we have experienced.  Developed economies face similar
problems with respect to “public”, state-owned lands, for which
rent-seeking by and sweet deals to insiders are enduring problems and
sources of politcal conflict (as markets cannot work to allocate
resources).

Dan states that the stunningly rapid growth of human populations
from the Renaissance to the present (6+ billion now expected to nearly
double again soon) “actually represents the rise of capitalism and
capital development … [and]  shows … the stunning capacity of
freedom to provide for the whole world.”  While partly correct, this
misses completely the question of our massive impact, within a very
short period of geological time, on the environment in which we evolved
over millions of years, the fact this has occurred because clear and
enforceable property rights have not been created in many of the
resources that have been consumed, and the corollary fact that
we continue to lack the ability to manage our impact on our endowment
of natural resources.

The market clearly does NOT send accurate pricing signals with
respect to goods that are unowned or ineffectively owned; these goods
are either unpriced or underpriced, so the effect is overconsumption
until the point that the resource is greatly degraded, at which point
attention is turned to the next unowned resource.
Thus, human
populations are responding to rather imperfect market signals.  And
where resources are unowned, individuals and groups with differing
values and desires cannot adjust or realize those desires by means of
private, market transactions.  As a result, we are seeing a recourse to
the public and political arenas – and the inevitable discordant debates
– as various parties seek to use either moral suasion or the levers of
government (locally, nationally and internationally) to advance what
they consider to be their own interests.
  (Of course, in a “tragedy of
the commons” situation, all resource users share an interest is the
future availability of a resource; the difficulty is in the prisoners’
dilemma negotiations at the primary user level about how to allocate
short-term pain in the interest of long-term gains, compounded in the
case of multinational resources by rent-seeking with each national
participant.)

A cynic may say that our ongoing assault on nature is only
“natural”, presents no moral or philosophical issues and that we hardly
owe any responsibilities to “nature” or even “future generations” –  so
let’s just all keep on partying, consuming for today, and patting
ourselves on the back at how marvelous our market systems are.  And
that we should keep on hurling invective at those evil “enviros” who
want to crash the party and drag us all back to the Stone Age.

Perhaps I suffer from a want of sufficient cynicism.

2.    Using the State to solve common resource problems?, Oct 12 2007:

How exactly do you transfer commons into private ownership in a fair way, even for easily divided up stuff like land?

Libertarians do not insist that open-access resources (or common
property resources/CPR) be divided up by creating individual property
rights; cooperative ownership  via formal agreements or informally
developed practices and customs (such those developed by Maine
lobstermen, English angling clubs, indigenous peoples and Wikipedia and
online communities) may work better at solving the prisoners’ dilemma
issues and are just as acceptable
.

But technological advances and greater demand often swamp CPR
regimes, so such regimes remain vulnerable if they are not accorded
legal protection. My understanding of the UK enclosures in this regard
is that they were actually a legislative theft of common property by
the powerful.

Can states play positive roles in solving problems? At least
internally, it is rather clear that the answer is that the state works
best by allowing, and providing judicial mechanisms to enforce, private
transactions, and works least well when it tries to specify detailed
and rigid “solutions” itself – since the government itself never has
perfect information, often plays favorites and once a regulatory regime
is put in place, parties have no ability to work out their differences
directly with each other, but are forever in the position of trying to
influence the state and in adversarial positions vis-a-vis each other. 
But states can also play a positive role by disseminating information
and by acting to facilitate deals between various resources users,
particularly in cross-border/multi-state problems.

Elinor Ostrom is the guru of CPR regimes; anyone interested
should look into her fascinating and highly-regarded work, particularly
her seminal Governing the Commons (1990).

[She is a member of the American Academy of Arts and Sciences, the
National Academy of Sciences, and the American Philosophical Society,
and a recipient of a number of prestigious awards. Her other books
include Rules, Games, and Common-Pool Resources (1994); The Commons in the New Millennium: Challenges and Adaptations (2003); The Samaritan’s Dilemma: The Political Economy of Development Aid (2005); Understanding Institutional Diversity (2005); and Understanding Knowledge as a Commons: From Theory to Practice (2007).]

Here is one link to get readers started:  Elinor Ostrom et al.,
Revisiting the Commons: Local Lessons, Global Challenges, Science 9
April 1999: http://conservationcommons.org/media/document/docu-wyycyz.pdf

Technology seems to provide us ability to create property rights regimes in ocean fisheries.

The
stickiest problems are those where the resource is located in a country
where we cannot ourselves create or enforce legal rights and in the
atmosphere, which no one owns and to which all have access.
 
Unfortunately, many libertarians don’t even want to acknowledge, much
less discuss, these problems. Since they are not confined to any one
country, clearly we need to coordinate with others – for which
purposes our state apparatus cannot be avoided.

Reaching any kind of effective solution for problems of this type
will require much more focussed attention and bridge-building (abroad
and at home), and if libertarians do not want to be part of the
discussion, clearly they will have little influence on the results.

3.    Sophomoric optimism?, Oct 16 2007:

Our states are merely one subset of the wide universe of formal and
informal institutions through which we cooperate with one another. 
States are not a market, to be sure, but then neither are corporations,
and there is a spectrum of ownership types between the two.  We can
study all of these institutions and use that knowledge to direct how we
make use of them.  Such study has informed, for example, the deliberate
shifts in policy that have led to the ongoing (yet incomplete)
privatization of the former USSR and of China. 

A study of institutions governing common pool resources by guru Elinor Ostrom makes the following point:

 “Whether people are able to self-organize and manage CPRs also depends on the broader social setting within which they work. National governments can help or hinder local self-organization. “Higher”
levels of government can facilitate the assembly of users of a CPR in
organizational meetings, provide information that helps identify the
problem and possible solutions, and legitimize and help enforce
agreements reached by local users. National governments can at times,
however, hinder local self-organization by defending rights that lead
to overuse or maintaining that the state has ultimate control over
resources without actually monitoring and enforcing existing
regulations.

“Participants are more likely to adopt effective rules in
macro-regimes that facilitate their efforts than in regimes that ignore
resource problems entirely or that presume that central authorities
must make all decisions.
If local authority is not formally recognized by larger regimes, it is difficult for users to establish enforceable rules.

Elinor Ostrom et al., Revisiting the Commons: Local Lessons, Global Challenges, Science, 04/09/99 http://conservationcommons.org/media/document/docu-wyycyz.pdf

Was von Mises foolish to suggest we can use the state to reform our institutions?

“It is true that where a considerable part of the costs incurred are
external costs from the point of view of the acting individuals or
firms, the economic calculation established by them is manifestly
defective and their results deceptive. But this is not the outcome of
alleged deficiencies inherent in the system of private ownership of the
means of production. It is on the contrary a consequence of
loopholes left in this system. It could be removed by a reform of the
laws concerning liability for damages inflicted and by rescinding the
institutional barriers preventing the full operation of private
ownership.

http://mises.org/humanaction/chap23sec6.asp

And Cordato, for suggesting that Austrians take particular policy approaches to environmental issues?

“For Austrians then, public policy in the area of the
environment must focus on resolving these conflicts over the use of
resources that define pollution, not on obtaining an ultimately
unobtainable “efficient” allocation of resources. …
For Austrians, whose goal is to resolve conflicts, the focus is on clarifying titles to property and rights enforcement.

http://mises.org/daily/1760

Sorry, but I cannot believe that we are condemned always to repeat
all mistakes, despite our rather constant human nature.  Rather, as Yandle notes, our very history as a species is about our success in evolving, devising and adopting ways to manage shared problems.   http://www.fee.org/publications/the-freeman/article.asp?aid=4064

This is a message of profound optimism, not cynicism — said the fool.

4.    Ron Bailey of Reason congratulates Al Gore , Oct 15 2007:

1.  You were right last year when you
said that “In the end, the debate over global warming and its obverse,
humanity’s energy future, is a moral issue.”
http://www.reason.com/blog/show/113924.html

2.  I share your understanding of the
economics and institutional problem and agree that a straightforward
explanation of these is important for very many.

3.  However, you forget what
evolutionary psychology, Ostrom and Yandle have explained to us so well
about how our innate moral sense drives and underpins mankind’s success
as a species by enhancing our ability to cooperate and to overcome
commons issues.

Ostrom: http://conservationcommons.org/media/document/docu-wyycyz.pdf
Yandle: http://www.fee.org/publications/the-freeman/article.asp?aid=4064

Our long history of developed rules and
institutions (informal and formal now overlapping) are based on our
moral sense and the effectiveness of these rules depends critically on
our moral investment in accepting their legitimacy – witness our views
on murder, theft, lying and “not playing by the rules” – and in
voluntarily complying with them.

Our moral sense reinforces our judgments
about when rules/institutions are not working and the need to develop
new ones in response to changing circumstances and new problems.  When
we see a problem that we think requires change, it is unavoidable that
we respond the the status quo, the behavior of people within it and the
need for change with a moral sense. 

This is simply a part of our
evolutionary endowment.  (Of course, other parts of our endowment
accentuate our suspicions of smooth talkers and help us catch free
riders and looters and to guard against threats from outsiders.)

4.  Accordingly, while it’s unclear how
deliberate Gore’s talk of “a moral and spiritual challenge” and
“lifting the global consciousness” is or whether this is a
productive approach for some people, I think it is fairly clear that,
in order to build consensus for a solution to the climate commons
problem (and other difficult commons problems) and to ensure that any
agreed solutions are actually implemented, we will need to bring our
moral senses to bear.

In other words, it is RIGHT to worry
about climate change, but no meaningful/effective “solution” can be
reached or implemented unless it is FAIR and the parties involved have
sufficient TRUST (backed by information) in each other.

5.    Not Climate Change Welfare, But Capitalism and Free Markets, Jan 22 2008:

[F]ar from “forc[ing] rich countries to become poor”,
figuring out how to manage a global commons like the atmosphere, while
it may have the effect of imposing a cost on the release of carbon, is
basically aimed at privatising externalities, with the intention of
increasing the efficiency of private transactions and net wealth.
  Climate
change is, of course, just one of a broad range of pervasive problems
that occur when markets encounter resources that are not clearly or
effectively owned or managed.  http://mises.org/Community/blogs/tokyotom/archive/2007/09/28/too-many-or-too-few-people-does-the-market-provide-an-answer.aspx

3.  Most importantly, while Lockitch correctly diagnoses the illness
– poor countries need to “embrace free markets and private property
rights and attract the investment of profit-seeking entrepreneurs to
create wealth and drive economic growth” – he simply fails to address what wealthy nations SHOULD be doing, if anything, to assist the cure.  This,
of course, is the main dodge, because Lockitch fails to own up to the
true difficulties involved in trying to help the developing nations.
 

Trying to build “soft” infrastructure in the form of rule of
law and property rights (ending kleptocracy and theft of “public”
resources) is tremendously difficult – perhaps a problem that is even
more difficult than the wealthy nations deciding how to share the pain
of GHG reductions
(as I noted in comments to a post on Amazonian deforestation here: http://sciencepolicy.colorado.edu/prometheus/archives/climate_change/001043lahsen_and_nobre_20.htmlHeck,
the wealthy nations have a hard enough time doing the easiest things to
speed development of poorer nations, which is simply to open import
markets by removing domestic tariffs, import restrictions and subsidies.
 
Rather, it seems that the richer nations have to feed their more
powerful elites first, while hamstringing competition from poorer
nations in products for which they should be able to exploit a
comparative advantage.  If Lockitch was truly interested in
helping the poor of developing nations, you’d think he’d note how
enduring rent-seeking at home serves to keep the poorer nations down.

And if the wealthy nations should do something to help
poorer nations, which seems implicit in Lockitch’s analysis (if not
conventional aid, then aid to build soft, governance infrastructure),
then can’t some of those efforts easily dovetail with efforts to
establish carbon pricing in the wealthy countries?  Why couldn’t aid
budgets be funded by carbon taxes at home, for example?  And can’t
demand for “carbon credits” help to establish incentives to improve
governance infrastructure in poorer nations?  In other words,
“mitigation” (efforts to limit climate change) in developed
nations need not conflict with any efforts to help poorer
nations “adapt” to climate change or otherwise become wealthier.

4.  Lockitch asserts that the concern of enviros for the world’s
poor is “feigned”, but this is a cheap and unproductive ad hominem –
and one that can easily be turned around.  While some enviros may not
understand the institutional sicknesses that hinder development, this
illness has been fed much more by governments and corporations at home
than by enviros, many of who have been involved in the long,
hard effort to build local infrastructure and to protect traditional
private and community property rights.
 

On the other hand, just what is it that evidences that
Lockitch himself – or other skeptics – have any “real” concern for the
world’s poor?  Does the wheel of this concern ever hit the road, or is
it simply spinning noisily, to welcoming nods from  domestic special
interests who benefit from the continuation of climate externalities?

A key insight of Austrian economics relating to the environment is that man does not harm the environment per se, but that social
welfare or efficiency problems arise because of interpersonal conflict
associated with irresolvable inefficiencies – inefficiencies that
cannot find a solution in the entrepreneurial workings of the market
process
 because of institutional defects associated with the
lack of clearly defined or well enforced property rights.  (See Roy
Cordato
, http://mises.org/daily/1760). 
It is both ironic and disappointing that many Austrians and others
similarly minded, rather than focussing on the difficult task of
conflict resolution in the case of the climate, seem to prefer the
emotional rush of conflict itself over analysis and bridge- and
consensus-building.  But this is nothing new (and is certainly
tempting, given our tribal nature)(http://mises.org/Community/blogs/tokyotom/archive/2007/12/17/holiday-joy-quot-watermelons-quot-roasting-on-an-open-pyre.aspx). 

No one owns the world’s atmosphere, so all are entitled to
their opinions about managing it.  And clearly the world continues to
struggle with the rapid exploitation of other unowned, “public” or
poorly defined or protected physical resources, in the face of growing
populations, growing markets and technological advances that lower the
costs of access to the commons.  I suggest that rather than ad
hominems, we would be better served by frankly acknowledging problems
of this nature and starting to build shared understandings.
  The writings of Elinor Ostrom are a good place to start:  http://www.conservationcommons.org/media/document/docu-7e8akm.pdf

In honestly engaging on these issues, it is perfectly
appropriate – nay, essential – to be aware of the self-interests of
various participants and to caution against the problems of
rent-seeking, “rent-farming” by politicians, and frequently unaligned
incentives of bureaucracies
.

5.  Finally, this is a quibble, but Lockitch is wrong to assert thay developing nations need to “industrialize”.  What they need to do is to better govern themselves by protecting investments, markets and human rights, and then getting out of the way of their people. 
What results will be these countries’ own path, which will naturally
differ from Western industrialization (leapfrogging it in some ways).

6.   Rob Bradley cheers on coal, but are all those who want to better manage commons and environmental impacts “Malthusian” idiots, or only in the case of coal?, Feb 5 2009:

Rob Bradley has a new post up at MasterResource, cheering on big (and now “clean”) coal, which has apparently received assurances from the Obama administration – after being bad-mouthed by NASA scientist Jim Hansen, Steven Chu and Obama himself – that, despite pressures from the “Malthusian anti-energy crusade” regarding climate change impacts, the recent massive TVA fly-ash spill and opposition to destructive mountaintop removal practices in Appalachia, coal will remain profitable during Obama’s term and central to US energy supplies.  Hooray!

But I wasn’t quite clear on all of Rob’s message, so I asked him a few questions in the comment thread:

Rob, are the John Badens, Terry Andersons, Bruce Yandles, Elinor Ostroms
and others who want to find ways to manage our commons better – by
improving ownership, incentives and pricing signals – also part of a[n
evil] “Malthusian crusade”?

I just wanna make sure I know who to hate.

As for that big fly-ash breach/spill in
Tennessee, I’m glad that you didn’t point out how this was a result of
government ownership of TVA, with the added benefit that costs will be
borne not only by direct and indirect victims, but by taxpayers as
well. No sense in pointing out how government is so often in the way,
particularly if it detracts from our “we hate enviros!” message. Last
thing we ever want to do is to reach a shared understanding with
enviros of the institutional underpinnings of problems, since that
means our funders might lose some of their fairly purchased,
government-given special privileges.

While it’s clear that “free-market” Rob cares little about whether the coal industry continues
commercial activities that shift the environmental costs and risks
(including potential costs arising from GHG emissions) to others
,
I forgot to ask Rob whether, as a hearty cheerleader for those poor
coal underdogs, he also supports their position that the government
should subsidize their change in business model by (a) having Uncle Sam pay the bulk of capital costs for IGCC (integrated gas combined cycle plant) [something like $1 billion for the first one with CCS], (b) giving them a further break (reduced royalties) on the sweet deals they already have
for stripping coal from public lands and (c) – now that the federal
government is getting into the busy of running the financial sector –
making sure that power producers that want to use coal have easy access
to credit, by twisting the arms of those uppity Wall Street financiers
who with their fancy new “Carbon Principles” and “Enhanced Due Diligence” seem a bit too reluctant to extend credit for coal-fired power plants.

Here’s hoping Rob weighs in further.  I want to make sure I’m not
messing up when I try to distinguish the “white hats” from the “black
hats”.   From what I can tell so far, seeking to manipulate government
policy for your own benefit is evil – as long as you’re not a coal
firm – and we call the evil ones “Malthusians”.  Right?

7.     More stupid from Tierney; this time on “Kuznets curve” and the dynamics of “wealthier and greener”, May 12 2009:

Tierney seems to believe that the Kuznets curve means that greater
wealth magically makes for a cleaner environment.  To the contrary, it
is the hard work of people, expressing their desires to protect their
own property and to realize other preferences regarding shared
resources, to increase wealth by finding means (property rights
institutions, litigation and government regulation) to end tragedy of
the commons-type situtations, who improve their environment.
 That is, working to close externalities leads to both wealthier and greener societies.  

(I`ve remarked on the Kuznets curve before; interestingly, conservatives seem to misunderstand it more than liberals.)

So
I tried to offer a more libertarian understanding, which I`ve taken the
liberty of memorializing here (with typo correction and emphasis and
further links added):

Andrew, food for thought on enviro Kuznets:

http://mises.org/Community/blogs/tokyotom/search.aspx?q=kuznets
http://mises.org/Community/blogs/tokyotom/archive/2008/01/22/poor-countries-need-capitalism-not-climate-change-welfare.aspx
http://mises.org/Community/blogs/tokyotom/archive/2007/09/27/too-many-or-too-few-people-does-the-market-provide-an-answer.aspx

Unfortunately, Tierney simply fails to understand that the enviro
Kuznets curve does not tell us that problems relating to environmental
cost-shifting or to the over-exploitation of unowned commons are best
resolved by ignoring them and simply hoping for the best. Rather, it
affirms that as people become more wealthy, they care more about
protecting the environment and put more elbow grease into achieving
improvements – via improved property rights protection, improved
information disclosure, greater consumer pressure and even through
greater regulation (which is the path the West has largely followed),
and reaching agreements with others sharing the relevant resource).

In other words, the work relating to global, regional and various
national commons (atmosphere, seas, forests, water, etc.) is still
ahead of us. Libertarians can advocate for property rights (and
privatization of public lands) as ways to have a more efficient (and
just) path on the curve, or they provide implicit support for powerful
and dirty industries by standing by and waiting until citizen pressure
groups force government to act in heavy-handed ways.

  •  
    • Andrew. I suggest that you start with this short article by Yandle.

      I have plenty more links on my blog to him, Terry Anderson, Mises, Cordato, Block, Rothbard and others on Austrian approaches to environmental issues, fisheries, and climate. Ron Bailey (at Reason) has good posts on fisheries; leading enviro groups all agree that more privatization is desirable:http://mises.org/Community/blogs/tokyotom/archive/2009/01/15/for-crashing-fisheries-coalition-of-mainline-us-enviro-groups-calls-for-property-rights.aspx

      Commons remain commons either because government ownership
      prevents privatization (as in the Amazon, US public lands and most
      fisheries management) or because full privatization is difficult. There
      are many examples of the latter case that involve semi-privatization
      and commons management,
      like traditional forestries, fisheries and water rights. Elinor Ostrom is the expert on commons; I have plenty of links to her too. …


    • People and firms invest all the time in doing
      things in response to incentives, both positive and negative; viz. they
      also try to reduce costs, including the costs their activities impose
      on others if those they injured have rights of recourse. The effort to
      reduce costs is one of the chief factors driving technological advances.

      Surely you`re not suggesting that the best way to encourage
      wealthier societies is to free people from responsibility for the
      damages they cause others? That`s hardly a Lockean or libertarian view.
      A “Laissez Faire approach” leaves government out, in favor of voluntary
      transactions and enforecment of property rights, including rights not
      to be injured. The regulatory state has in fact been a boon to the most
      powerful producers, by giving them rights to pollute, often
      grandfafthering dirty plants, while forcing the highest costs on more
      nimble and cleaner producers.
      If you^re interested in learning
      about libertarian approaches to the environment, again, I suggest you
      look at Rothbard, Cordato, Block and others, whom I link to on my blog.

      You seem to make reference to the enviro Kuznets curve, and how
      wealthier societies bring pollution dow, while completely missing the
      dynamics. Wealthier societies clean up because they insist on
      bringing an end to tragedy of the commons-type exploitation of
      resources. A society that focusses on property rights typically has a
      lower curve than societies that fail to enforce property rights (needed
      for Coasean bargaining) in favor of government regulatory approaches.
      Our own curve remains too high, because wealthier investors prefer to
      use regulation to shift costs to the rest of society.

8.   Libertarians to lefty-enviros: without community-based property rights, sustainable fisheries are impossible, May 11 2009:

Elinor Ostrom has
also been a leader in documenting the ways that a community of users
(NOT the dread and sloppily misused “soc-ial-ism”) may effectively
manage a shared resource.

Readers might be interested in the World Bank`s Oct 2008 report, “The Sunken Billions; The Economic Justification for Fisheries Reform”.

With support from the World Bank, PERC is in the middle of hosting a conference
on approaches to sustainable fisheries (and on ending the massive
over-harvesting and wasted subsidies and mal-investment under current
regulatory approaches).

I also urge readers to look at what the organization Defying Ocean’s End (co-founded by Conservation International, The Nature Conservancy, Natural Resources Defense Council, The Ocean Conservancy, Wildlife Conservation Society, The World Conservation Union, and World Wildlife Fundhas to say about protecting fish:

“Most of the solutions that have been
implemented or proposed to fix the world’s fisheries center on
command-and-control measures: regulators or courts telling fishermen
how to fish through the imposition of controls on effort (e.g., fishing
vessel length, engine horsepower, gear restrictions, etc.).
Prescriptions like these work against strong economic incentives for
maximizing catch, which are not addressed by such measures, and are of
course usually resisted by fishermen. Often, prescriptions create
incentives for “work-arounds” and set up a cat-and-mouse game between
fishermen and regulators – for example, if regulators impose a
restriction on vessel size, fishermen may purchase two vessels to
maintain high catch levels.

“As in most natural resource
problems, more effective solutions will address the fundamental drivers
of unsustainable fisheries. In this case, the key necessary reform will
be to designate secure catch privileges. It is important to understand
that such privileges can be allocated to different kinds of entities in
different ways, and indeed, they should be tailored to specific
fisheries and communities to fit with local customs, traditions,
values, and social structure.”

I`ve linked a number of my other posts on fisheries here.

9.   The tragedy of the panicked enviro II; understanding the “tragedy of the commons”, Aug 29 2009:

Sure,
the Western
world has managed to create many environmental problems, but we`ve
largely cleaned up our own messes, haven`t we?  While it by no means
excuses our own faults, far worse environmental problems have been
created and are still stewing in Russia and other state-directed
economies, and it`s no coincidence that the vast pollution being
created in China and India are tied to governement-owned enterprise and
an inability of injured people to sue for damages or to stop harmful
activities.
  And the great waves of extinctions created as man spread
around the globe tens of thousands of years ago can hardly be laid at
the foot of either the Western world or of private property rights (nor
can the collapse of earlier civilizations).

The
“tragedy of the commons” is NOT a “simplistic market morality”, but a
description of cooperation problems and incentives relating to shared,
open-access resources.  The tragedy of the commons and problems of
cooperation – and theft – are not even limited to mankind, but permeate
nature.
  This perceptive article by Bruce Yandle touches on competition
in nature, and links the ascendance of man to our evolution of
relatively enhanced cooperation
:
http://www.thefreemanonline.org/featured/the-commons-tragedy-or-triumph/

The
“tragedy of the commons” paradigm is useful to analyze, but the
paradigm doesn`t “seek to moderate” anything, and is just as useful in
looking at the ways Western nations still contribute to environmental
problems around the world (as I point out here:
http://mises.org/Community/blogs/tokyotom/archive/2007/09/28/too-many-or-too-few-people-does-the-market-provide-an-answer.aspx) as it is in examining:

– environmental devastation in Haiti (which has little or no property rights, and vast free-for-all “government” holdings),


deforestation in Indonesia and the Amazon:
http://mises.org/Community/blogs/tokyotom/archive/2009/05/24/capitalism-the-destructive-exploitation-of-the-amazon-and-the-tragedy-of-the-government-owned-commons.aspx,

– pollution in China: http://mises.org/Community/blogs/tokyotom/search.aspx?q=china, and


crashing fisheries around the world as a result of government of marine
resources (producing free-for-alls and fleet subsidies) and a
free-for-all for other unowned or unprotected resources:
http://mises.org/Community/blogs/tokyotom/search.aspx?q=fish.

You
say: “The rate of exploitation and the decline
of resources, water, energy, fisheries, soil, minerals, etc., all
occured under a free market, private property paradigm.”  This is
clearly demonstrably wrong, and draws entirely the wrong lessons. While
private property is certainly no panacea, neither are they what is
wrong.  Very often, is is governments that have been and are wrong,
though there is certainly some learning going on.

While
Garrett Hardin`s “The Tragedy of the Commons” certainly represents a
hypothetical situation, it is actually a very powerful analytical tool
for understanding and fashioning solutions to countless “real life”
problems. See Elinor Ostrom et al., Revisiting the Commons: Local Lessons, Global Challenges, Science, 04/09/99 http://conservationcommons.org/media/document/docu-wyycyz.pdf

“In real life,
corporations own, or vie to own, resources or access to them for the
purpose of extraction and profit and they seek to maximize profits
through economies of scale, that is industrial extraction methods,
drift netting, blowing up mountains, tossing mining waste into clear,
pristine lakes.

What
you describe here is a conflict between preferences over how resources
are used.  Do you prefer a free-for-all, or a situation where those who
use a resource can protect it, negotiate with others who wish to see
other values preserved, and who are responsible for negative
consequences caused to others (not always a part of some property
rights systems), or perhaps a situation where governments make all
resource exploitation decisions?”

“The money is in the resource and when the resource is
exhausted they will move on to the next one.”

The
money is never in the “resource”, but in the ways that people can use
it or otherwise value it (and of course people also value pristine
environments).

10.  Tragedy of the panicked enviro III: learning from Elinor Ostrom about cooperative action, Aug 29 2009:

Let me add some further nuance to Mr. Worstall`s comment by saying
that Hardin`s fertile observations have fuelled extensive further
research on common property problems, with Elinor Ostrom being recognized as a leading light.

Here is one general bibliography on commons research: http://www.indiana.edu/~workshop/wsl/tragedy.htm

Ostrom
has refined Hardin`s work in the following way (quoting from a review
of Ostrom`s 1990 ground-breaking and extensively researched book
, GOVERNING THE COMMONS, The Evolution of Institutions for Collective Action):

Ostrom uses the term “common pool resources” to denote natural
resources used by many individuals in common, such as fisheries,
groundwater basins, and irrigation systems. Such resources have long
been subject to overexploitation and misuse by individuals acting in
their own best interests. Conventional solutions typically involve
either centralized governmental regulation or privatization of the
resource. But, according to Ostrom, there is a third approach to
resolving the problem of the commons: the design of durable cooperative
institutions that are organized and governed by the resource users
themselves.

“The central question in this
study,” she writes, “is how a group of principals who are in an
interdependent situation can organize and govern themselves to obtain
continuing joint benefits when all face temptations to free-ride,
shirk, or otherwise act opportunistically.”

The
heart of this study is an in-depth analysis of several long-standing
and viable common property regimes, including Swiss grazing pastures,
Japanese forests, and irrigation systems in Spain and the Philippines.
Although Ostrom insists that each of these situations must be evaluated
on its own terms, she delineates a set of eight “design principles”
common to each of the cases. These include clearly defined boundaries,
monitors who are either resource users or accountable to them,
graduated sanctions, and mechanisms dominated by the users themselves
to resolve conflicts and to alter the rules. The challenge, she
observes, is to foster contingent self-commitment among the members
….

Throughout the book, she stresses the dangers of overly
generalized theories of collective action, particularly when used
“metaphorically” as the foundation for public policy. The three
dominant models — the tragedy of the commons, the prisoners’s dilemma,
and the logic of collective action — are all inadequate,
she says, for
they are based on the free-rider problem where individual, rational,
resource users act against the best interest of the users collectively.
These models are not necessarily wrong, Ostrom states, rather the
conditions under which they hold are very particular. They apply only
when the many, independently acting individuals involved have high
discount rates and little mutual trust, no capacity to communicate or
to enter into binding agreements, and when they do not arrange for
monitoring and enforcing mechanisms to avoid overinvestment and overuse.

Ostrom
concludes that “if this study does nothing more than shatter the
convictions of many policy analysts that the only way to solve common
pool resource problems is for external authorities to impose full
private property rights or centralized regulation, it will have
accomplished one major purpose.”

A
profile of Ostrom, who is a member of the National Academies of Science
and and Editor of its Proceedings, is here:
http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=1748208

Her work can be found here: http://scholar.google.co.jp/scholar?q=Ostrom,+Elinor&hl=en&btnG=Search and

here: http://de.scientificcommons.org/elinor_ostrom

One
thing worth noting is that the historical and ongoing records are rife
with examples – such as our crashing local fisheries – where government
intervention has done more harm than good.
  In these cases and in
others, Ostrom introduces an analytical approach that is acceptable
widely across the political spectrum, even if differences in opinion
will remain.  See, for example, this discussion at libertarian-leaning
George Mason U:  http://www.theihs.org/bunnygame/

Categories: ostrom, tragedy of commons Tags:

Beyond zero-sum games: liberal press is starting to realize how state grants of monopolies to public utilities are the chief obstacle to energy efficiency!

October 15th, 2009 No comments

Michael Giberson at Knowledge Problem points to recent press coverage of the profoundly negative and perverse role being played by public utilities and their regulators.

Who knows, but isn`t there an opportunity here for market liberals and environmentalists to push for deregulation and greater competition in retail power markets, spearheaded by the federal government, and to have a deregulatory effort included in the climate bill?

Says Giberson: (emphasis in original)

The New Republic has an excellent article by Bradford Plumer about the current state of the electric power industry and the prospects of the industry achieving what diverse interests expect of it. (Yes, in TNR, who’d a thunk it?)
The article highlights the political economy of regulated electric
utilities and their immense lobbying savvy and political sway, and how
the existing regulatory framework acts to perpetuate the status quo.

The article leads off with an anecdote about Tom Casten
wishing to develop a combined heat and power (CHP) plant for a chemical
plant in Louisiana in the early 2000s
– you know, one of those
win-win-win projects that recycle waste heat to make electric power,
reduce air emissions, reduce costs to the industrial company host, and
still makes a profit for the CHP company. The proposed project
never got off the ground due to the lack of support from the local
utility, and that lack of support was attributed to a regulatory
structure which rewards utilities for owning power plants rather than
minimizing the cost of power to consumers.

The article goes on to tell more stories, and delves into issues
like renewable portfolio standards, distributed power, smart grid
visions, and how a mostly-regulated industry is going to do tackle all
of these changes while not upsetting existing political deals and
getting paid a fair rate of return.

Giberson further reports on another story:

A story posted Tuesday at the New York TimesGreen Inc. blog provides another example: “Discord Over Regulation of Car Charging.”
The story reports that the three major regulated electric utilities in
California each advocate different models for the regulation (or not)
of electric car charging stations by the California Public Utilities
Commission. Entrepreneurial companies like Better Place, trying
desperately to provide the electric vehicles that many consumers,
environmentalists, and policymakers say the country desperately needs,
find themselves caught in a regulatory battle.

 

Elinor Ostrom? Austrians praise the Nobel laureate’s work on how human communities successfully manage resource conflicts

October 15th, 2009 No comments

Elinor Ostrom awarded the Nobel prize in economics? Who? no doubt some of you are wondering.

Well, sharp-eyed readers will have noted that I have referred to her any number of times (which I will reprise later, as this post has gotten too lengthy).

I excerpt below some of the praise Elinor Ostrom has been receiving from Austrian economists familiar with her (emphasis added).

1.  First, though, from the press release:

Elinor Ostrom has demonstrated how common property can be successfully managed by user associations. Oliver Williamson has
developed a theory where business firms serve as structures for conflict resolution. Over the last three decades these seminal
contributions have advanced economic governance research from the fringe to the forefront of scientific attention.

Economic transactions take place not only in markets, but also within firms, associations, households, and agencies. Whereas economic theory has comprehensively illuminated the virtues and limitations of markets, it has traditionally paid less attention to other institutional arrangements. The research of Elinor Ostrom and Oliver Williamson demonstrates that economic analysis can shed light on most forms of social organization.

Elinor Ostrom has challenged the conventional wisdom that common property is poorly managed and should be either regulated by central authorities or privatized. Based on numerous studies of user-managed fish stocks, pastures, woods, lakes, and groundwater basins, Ostrom concludes that the outcomes are, more often than not, better than predicted by standard theories. She observes that resource users frequently develop sophisticated mechanisms for decision-making and rule enforcement to handle conflicts of interest, and she characterizes the rules that promote successful outcomes.

The background explanation is useful and contains a pointed criticism of many centrally-directed approaches to common pool resources (emphasis added):

If we want to halt the degradation of our natural environment and prevent a repetition of the many collapses of natural-resource stocks experienced in the past, we should learn from the successes and failures of common-property regimes. Ostrom’s work teaches us novel lessons about the deep mechanisms that sustain cooperation in human societies.

It has frequently been suggested that common ownership entails excessive resource utilization, and that it is advisable to reduce utilization either by imposing government regulations, such as taxes or quotas, or by privatizing the resource. The theoretical argument is simple: each user weighs private benefits against private costs, thereby neglecting the negative impact on others.

However, based on numerous empirical studies of natural-resource management, Elinor Ostrom has concluded that common property is often surprisingly well managed. Thus, the standard theoretical argument against common property is overly simplistic. It neglects the fact that users themselves can both create and enforce rules that mitigate overexploitation.
The standard argument also neglects the practical difficulties associated with privatization and government regulation. …

There are many …. examples which indicate that user-management of local resources has been more successful than management by outsiders. …

[T]he main lesson is that common property is often managed on the basis of rules and procedures that have evolved over long periods of time. As a result they are more adequate and subtle than outsiders – both politicians and social scientists – have tended to realize. Beyond showing that self-governance can be feasible and successful, Ostrom also elucidates the key features of successful governance. One instance is that active participation of users in creating and enforcing rules appears to be essential. Rules that are imposed from the outside or unilaterally dictated by powerful insiders have less legitimacy and are more likely to be violated. Likewise, monitoring and enforcement work better when conducted by insiders than by outsiders. These principles are in stark contrast to the common view that monitoring and sanctioning are the responsibility of the state and should be conducted by public employees.

2.  Words of praise from libertarians:

Vernon L. Smith (2002 Nobel laureate for economics), Forbes, October 12:

For many of us she has long occupied our radar screen. Let me tell you why.

Relentlessly, Ostrom has pursued answers to two questions:

(1)
Since “everybody’s property is nobody’s property,” how is it that there
are so many cases where collectives of ordinary people with no
education and with none of the economists’ knowledge of “the tragedy of
the commons,” in fact discover ingenious rules (institutions) for
taking the “tragedy” out of a productive resource they hold in common?

Numerous other examples include Japanese lands held by thousands in
common under governance structures that avoided “tragedy;” also ancient
solutions to communal water and irrigation systems that create
effective enough private rights conferring benefits and costs that
constrain use.
This should not be too surprising, because “property
(originally propriety) rights” are about human rights and the challenge of defining them incentive-compatibly for mutual benefit.

(2)
As a distinguished political-economic scientist she will be the first
to tell you that there are also plenty of commons problems that
represent institutional failures and fragilities
; she has asked why,
and what makes the difference between success and failure? The
fragilities include inshore fisheries and groundwater basins with
continuing commons problems; failures include salt water fisheries and
irrigation systems hamstrung by the complexity of the rules.

Success is associated with clarity in the definition of and
bounds on individual rights (and opportunities) to take action, and the
geography of the commons; details for monitoring, operations, sanctions
and mechanisms for conflict resolution emerge from within the
collective and out of motivated people’s direct experience with
environmental context and each other.
When too many of these
problem-solving elements fail, the governance systems fail or require
continuing attention to their fragility characteristics. A fatal source
of disintegration is the inappropriate application of uninformed
external authority
, including intervention to prevent application of
efficacious rules to political favorites. Also detrimental to good solutions is the OPM (other people’s money) problem.

Peter Boettke, The Austrian Economists, October 12:

I told David [Henderson] that she is amazing and well deserving of the Nobel award for her pioneering work on rational choice theory (as if the choosers were human) and institutional analysis.  I then bent his ear about her work on governing the commons, institutional diversity, and learning. …

What Lin’s work demonstrates … is how individuals can in a variety of settings work to find (or stumble upon) institutional solutions that promote social cooperation and human betterment.  It is about voluntary civic association, a subset of which is commercial life, that her works highlights; not the absence of individual choice.  … My blurb on the back of her book, Understanding Institutional Diversity reads as follows: “What emerges from Elinor Ostrom’s book is precisely what the title suggests — an understanding of the diverse nature of institutions that exist in human societies to promote human cooperation or to hinder it.”

She is both a methodological individualist (rightly understood) and a spontaneous order theorists.  In this regard, Lin Ostrom (and Vincent) have represented one manifestation of the research program in the sciences of man (praxeology) by Mises and Hayek in the 1940s.  Actors of limited cognitive capabilities are studied for how the[y] shape and our [sic] shaped by the social structures that emerge in a variety of situations to provide voluntary solutions to complex and difficult problems, and they do so in a way that promotes social cooperation under the division of labor.  Read Human Action, chapter VIII, and Individualism: True and False, pp. 11-14 (in Individualism and Economic Order), and then look at Lin’s work in Governing the Commons; Understanding Institutional Diversity; and the 3 volume McGinnis, edited volumes, Readings from the Workshop in Political Theory and Policy Analysis and I think you will see what I am talking about. She has done fundamental research on the central idea of Ricardo’s Law of Association as Mises termed it.  Humanly rational choice and institutional analysis combine to address the most pressing question in the social world — why do some institutional patterns produce societies of peace and prosperity, while others produce societies that suffer under violence and poverty?

Lin Ostrom is firmly seated in the mainline tradition of economic scholarship from Adam Smith and David Hume to F. A. Hayek and James Buchanan …..  [H]er methods were chosen to be appropriate to the task she was pursuing.  Humanly rational choice, institutional analysis, field work, and experimental design were her tools for social understanding.  She did not limit her work to that of Max U notions of “choice” nor instituitonally antiseptic models of ‘markets’ nor one size fits all models of economic development.  Instead, she has been a major contributor to public choice economics, new institutional economics, and to our understanding of polycentricity and political economy.

[in comment] At the
home page for her institute — The Workshop in Political Theory and
Policy Analysis — they describe their work as a New Science of
Governance for a New Age. And they describe their task as follows: “The
betterment of humankind depends on the ability of fallible human beings
to make decisions, manage resources, and govern themselves. This is the
basis of democracy, and of civilization itself. It is also the basis
for more than 30 years of research and inquiry at the Workshop in
Political Theory and Policy Analysis at Indiana University in
Bloomington.

The Workshop’s teaching and research probes the inner workings of
human institutions—structures of rules used to govern people and
resources, in this usage—in order to better understand what works and
what does not. Institutions affect every facet of life, from public
services to family and community structures to natural resources and
beyond, and the Workshop’s research helps people design and adapt their
institutions so that they generate better outcomes.”

This is why the work is so intriguing. First, at the core is a model
of man as fallible — cognitively limited. Second, is a focus on the
emergence of institutions — not necessarily state-led institutional
impositions. Third, is a focus on governance, not government.

 

Peter Boettke, comment at Marginal Revolution, October 13:

She is a former President of the Public Choice Society, as was
Vincent. She uses game theory, she engages in institutional analysis,
she has conducted experiements in the lab, she has conducted field work
both in the US and abroad, she considers herself a political economist,
etc. Her presidential address to the APSA summed up her theoretical agenda as “A Behavioral Approach to the Rational Choice Theory of Collective Action.”

She
is most deserving of this Nobel, and she has made a unique contribution
theoretically and empirically to the study of self-governance. But
there is no need to pick a fight where one isn’t there. Her prize fits
nicely in a stream of recognitions ANALYTICALLY
by the committee to scholars such as Hayek (1974), Buchanan (1986),
Coase (1991), North (1993), and V. Smith (2002). These are all scholars
within the discipline of economics/political economy that recognize the
cognitive limitations of man, and focus analytical effort on
institutional analysis.

Lin Ostrom’s contributions come from
an analytical framework that grounded in rational choice theory (as if
the choosers are human) and builds to an institutional analysis
(as if
history mattered). The distinction between “rules in form” and “rules
in use” means she studies in close detail the social norms that
underlie self-governance in the management of resources and the
management of social relationships.

It is amazing body of work.

Alex Tabarrok, Marginal Revolution, October 12:

Elinor Ostrom may arguable [sic] be considered the mother of field work in development economics.  She has worked closely investigating water associations in Los Angeles, police departments in Indiana, and irrigation systems in Nepal.  In each of these cases her work has explored how between the atomized individual and the heavy-hand of government there is a range of voluntary, collective associations that over time can evolve efficient and equitable rules for the use of common resources.

With her husband, political scientist Vincent Ostrom, she established the Workshop in Political Theory and Policy Analysis in 1973 at Indiana University, an extraordinarily productive and evolving association of students and professors which has produced a wealth of theory, empirical studies and experiments in political science and especially collective action.  The Ostrom’s work bridges political science and economics.  Both are well known at GMU since both have been past presidents of the Public Choice society and both have been influenced by the Buchanan-Tullock program.  You can also see elements of Hayekian thought about the importance of local knowledge in the work of both Ostroms (here is a good interview).  My colleague, Peter Boettke has just published a book on the Ostrom’s and the Bloomington School.

Elinor Ostrom’s work culminated in Governing the Commons: The Evolution of Institutions for Collective Action which uses case studies to argue that around the world private associations have often, but not always, managed to avoid the tragedy of the commons and develop efficient uses of resources.  (Ostrom summarizes some of her findings from this research here).  Using game theory she provided theoretical underpinnings for these findings and using experimental methods she put these theories to the test in the lab.

For Ostrom it’s not the tragedy of the commons but the opportunity of the commons.  Not only can a commons be well-governed but the rules which help to provide efficiency in resource use are also those that foster community and engagement.  A formally government protected forest, for example, will fail to protect if the local users do not regard the rules as legitimate.  In Hayekian terms legislation is not the same as law.  Ostrom’s work is about understanding how the laws of common resource governance evolve and how we may better conserve resources by making legislation that does not conflict with law.

Bob Subrick, Stationary Bandit, October 12:

Ostrom’s “Governing the Commons” develops Hayek’s theme of spontaneous order through numerous real world examples.  Non-market institutions solve collective action problems that the price mechanism cannot.  That is the point of Hayek’s later writings– non-market institutions coordinate behavior.  Also, her emphasis on the lack of a “one-size-fits-all” approach resonates with those who are sympathetic to Hayek.

Paul Romer, Charter Cities, October 12:

Elinor’s fieldwork, followed up by her experimental work, pointed us in exactly the right direction. To understand BOTH why we don’t need police officers in some cases AND
why police officers don’t follow the rules in other cases, we have to
expand models of human preferences to include a contingent taste for
punishing others.
In reaching this conclusion, she arrived at a point
similar to that reached by Avner Greif (whom the Nobel committee
correctly cites.) They, more than anyone else in the profession,
spelled out the program that economists should follow. To make the
rules that people follow emerge as an equilibrium outcome instead of a
skyhook, economists must extend our models of preferences and gather
field and experimental evidence on the nature of these preferences.

Economists
who have become addicted to skyhooks, who think that they are doing
deep theory but are really just assuming their conclusions, find it
hard to even understand what it would mean to make the rules that
humans follow the object of scientific inquiry. If we fail to explore
rules in greater depth, economists will have little to say about the
most pressing issues facing humans today – how to improve the quality
of bad rules that cause needless waste, harm, and suffering.

Cheers
to the Nobel committee for recognizing work on one of the deepest
issues in economics. Bravo to the political scientist who showed that
she was a better economist than the economic imperialists who can’t
tell the difference between assuming and understanding.

Lynne Kiesling, Knowledge Problem, October 12:

Both Ostrom’s work on governance institutions and common-pool resources
and Williamson’s work on governance institutions and the transactional
boundary of the firm contribute meaningfully to our understanding of
how individuals coordinate their plans and actions in decentralized,
complex systems. …

Ostrom’s work highlights the ability of communities of
individuals, using their local knowledge and taking into account their
individual preferences and constraints, to develop governance
institutions that enable beneficial outcomes to emerge. As I put it in my book on institutional design in electricity,

Given the pervasiveness of incomplete property rights,
even in commercial transactions, how are we able to engage in so much
mutually beneficial exchange? We achieve it through the design of
institutions to govern the commons (Ostrom 1990, 2005). These
institutions can specify use rights, means for enforcing those use
rights, and penalties for violating those rights. Again, defining and
enforcing use rights is costly, but institutional design to do so
happens when its benefits are high enough
, and the institutional form
varies depending on the environment and context.

The Ostrom works cited therein, Governing the Commons and Understanding Institutional Diversity,
are full of rich insights that can be applied to environmental policy,
regulation, economic development, and many other areas of economics and
political science.

David R. Henderson, WSJ, October 12:

… I think it’s a great choice. The reason is that mainstream economics
has become highly mathematical and increasingly independent from
reality. Many economists sit in their offices and derive proofs. Few go
out and do the time-consuming work of examining the institutional
structures that humans build to solve their own real-world problems.
Among those few are Ms. Ostrom and Mr. Williamson.

Both draw on rich data from outside the field of economics. Ms.
Ostrom draws much of hers from case studies of common-property
resources and Mr. Williamson from business historians such as the late
Alfred Chandler. Some have summarized their work by saying that
institutions other than free markets often work well. But that
statement can mislead you to conclude that government solutions are the
answer. Free markets are only a subset of free institutions. A better
way to sum up their work is that what Ms. Ostrom and Mr. Willamson
really show is that voluntary associations work.

Most economists are familiar with the late Garrett Hardin‘s classic
article, “The Tragedy of the Commons.” His idea was that when no one
owns a resource, it is overused because no one can control its usage
and each person has an incentive to use it before others do. This
insight has helped us understand much human behavior and has led people
to advocate either having the resource privately owned or having it
controlled by government.

Not so fast, said Ms. Ostrom.
Examining dozens of case studies, she found cases of communal ownership
that worked—that is, that didn’t lead to the tragic outcomes envisioned
by Hardin—as well as ones that didn’t.
Were there systematic
differences? Yes, and interestingly the ones that worked did have a
kind of property rights system, just not private ownership.

Based on her work, Ms. Ostrom proposed
several rules for managing common-pool resources, which the Nobel
committee highlights. Among them are that rules should clearly define
who gets what, good conflict resolution methods should be in place,
people’s duty to maintain the resource should be proportional to their
benefits, monitoring and punishing is done by the users or someone
accountable to the users, and users are allowed to participate in
setting and modifying the rules. Notice the absence of top-down
government solutions.
In her work on development economics, Ms. Ostrom
concludes that top-down solutions don’t help poor countries. Are you
listening, World Bank?

In a 2006 article with Harini Nagendra, Ms. Ostrom wrote: “We
conclude that simple formulas focusing on formal ownership,
particularly one based solely on public [government] ownership of
forest lands, will not solve the problem of resource use.” …

Economists talking about real humans and not mathematical
abstractions and winning the Nobel prize for it? Good on ya, Nobel
committee.

John V.C. Nye, Forbes, October 12:

Oliver Williamson and Elinor Ostrom are both leaders in the growing
field of the New Institutional Economics. Both can be seen as pioneers
in understanding how markets work in the real world where transactions
costs are high, establishing smoothly functioning markets is costly,
information is incomplete, and hiring and production options are
limited. They show how firms, communities and organizations come to
solve these problems absent government regulation and how the choices
they make can be disrupted or worsened by bad state policy or sustained
by good rules that promote stable property rights and reliable contracts. …

Elinor operationalized the core insight of Ronald Coase that
creating and accessing markets is often quite costly and hence
organization, hierarchy and collective agreement can, under the right
conditions, serve as viable or even superior alternatives to market
competition.
While the lack of private property often leads to the
tragedy of the commons, it is surprising how often tragedy has been
avoided throughout the world. The answer is that small groups with
tight social structures can substitute community monitoring and peer
controls for a market that is non-existent and private property that is
neither well-defined nor reliably enforced. Of course, such local
enforcement tied to community norms, moral suasion, and restricted
geographical domains does not scale well to the modern world of
extensive impersonal exchange.
But she has studied areas as diverse as
police departments in Indiana to irrigation in Nepal.

But as
Elinor has demonstrated, ham-fisted reforms that attempt to bring the
illusion of modernity to the developing world by a naive adoption of
Western best-practice laws without the structures that support and
enforce those rules often leads to a destruction of indigenous practice
that works reasonably well without substituting a functioning and
reliable market of impersonal exchange.
Much of the disaster that is
foreign aid can be tied to the blunt importation of best-practice rules
without understanding how their implementation interacts with existing
practice.

Her work centers on a variety of case studies of
private associations throughout the world but is tied to the mainstream
methodologies in the social sciences through her use of game theory
and related analysis. She also tests her hypotheses in various
laboratory experiments designed to isolate the core behavioral
assumptions and in so doing continues in the tradition begun by
Nobelist Vernon Smith. Moreover, her work on real-world institutions
and the rules that sustain efficient outcomes is a natural complement
to the work of laureate Douglass North who also draws upon the ideas of
Coase and Williamson in understanding how political and social
institutions promote or retard growth.

Greg Ranson, Taking Hayek Seriously, October 13:

Peter Boettke, Lynne Kiesling, Peter Klein, Vernon Smith, David Henderson, Don Boudreaux,
and other Hayekian economists are all applauding the award of the Nobel
Prize in Economics to Lin Ostrom and Oliver Williamson. …

In many ways Ostrom & Williamson are very much contributing to an
intellectual tradition championed by Hayek and other leading
“Hayekians” like James Buchanan and Douglass North.

Henry Farrell, Crooked Timber, October 12:

[T]his is also a very interesting statement of what the Nobel committee see as important in economics.

Lin’s work focuses on the empirical analysis of collective goods problems –
how it is that people can come up with their own solutions to problems
of the commons if they are given enough room to do so. Her landmark
book, Governing the Commons, provides an empirical rejoinder
to the pessimism of Garret Hardin and others about the tragedy of the
commons – it documents how people can and do solve these problems in
e.g the management of water resources, forestry, pasturage and fishing
rights.
She and her colleagues gather large sets of data on the
conditions under which people are or are not able to solve these
problems, and the kinds of rules that they come up with in order to
solve them.

This is … a vote in favor of detailed, working-from-the-ground-up, empirical work, which doesn’t rely on
sharply contoured theoretical simplifications and flashy statistical
techniques so much as the accumulation of good data, which reflects the
messiness of the real social institutions from which it is gathered.
Quoting from Governing the Commons:

“An important challenge facing policy scientists is to develop theories of
human organization based on realistic assessment of human capabilities
and limitations in dealing with a variety of situations that initially
share some or all aspects of a tragedy of the commons. … Theoretical
inquiry involves a search for regularities … As a theorist, and at
times a modeler, I see these efforts [as being] at the core of a policy
science. One can, however, get trapped in one’s own intellectual web.
When years have been spent in the development of a theory with
considerable power and elegance, analysts obviously will want to apply
this tool to as many situations as possible. The power of a theory is
exactly proportionate to the diversity of situations it can explain.
All theories, however, have limits. Models of a theory are limited
still further because many parameters must be fixed in a model, rather
than allowed to vary. Confusing a model – such as that of a perfectly
competitive market – with the theory of which it is one representation
can limit applicability still further. (pp.24-25)”

One plausible characterization of her life’s work is that it is about
demonstrating the empirical weaknesses of a ‘cute’ economic model (the
Tragedy of the Commons) that assumed a role in policy discussions far
out of proportion to its actual explanatory power, and replacing it
with a set of explanations that are nowhere near as neat, but are far
more true to the real world. …

It is also a vote in favor of supplementing quantitative work with
qualitative understanding – Lin spends a lot of time (albeit less than
she used to) in the field, soaking up practical knowledge which informs
her work in striking ways. She is hands-on in a way that very few
economists, political scientists or sociologists are. It is also
interesting to note that the Nobel committee pays specific attention to the political implications of her work.

“Elinor Ostrom has challenged the conventional wisdom that common property is
poorly managed and should be either regulated by central authorities or
privatized.
Based on numerous studies of user-managed fish stocks,
pastures, woods, lakes, and groundwater basins, Ostrom concludes that
the outcomes are, more often than not, better than predicted by
standard theories.”

This reflects what she and her husband Vincent refer to as “polycentricity,” a normative approach to
governance which stresses the degree to which higher levels of
government should not crowd out self-organization at lower levels. Her
work implies that both pure marketization and top-down government
control can have badly adverse consequences for resource management,
because they rob individuals of the capacity to govern themselves, and
because they both lead to the depletion of important forms of local
collective knowledge.
… Ostrom stresses repeatedly that even the best
functioning markets are undergirded by an array of collective
institutions which order people’s market interactions
, and that in the
absence of such rules, self interested behaviour will have highly
adverse consequences.

Greg Ransom, Taking Hayek Seriously, October 14:

Elinor Ostrom Endorses Hayek’s Model of Economic Science

See Elinor Ostrom & Charlotte Hess, “Ideas, Artifacts, and Facilities: Information as a Common-Pool Resource”.

Ostrom also frequently cites Hayek’s work on social rules and local knowledge in many of her books & book articles and in her journal publications.

Most frequently Ostrom cites Hayek’s Law, Legislation and Liberty and Hayek’s “The Use of Knowledge in Society”.

As economist Art Carden says, “Ostrom’s win can be considered a win for the Hayekian worldview as opposed to the Samuelsonian worldview.”

Republicans (Sen. Lindsey Graham & others) give Dems a climate deal? In exchange for streamlining for nukes, "clean coal" subsidies, offshore drilling, carbon price ceiling & import taxes

October 12th, 2009 No comments

Senate Dems, who lack sufficient votes on their own to approve a cap-and-trade bill over a possible Republican fillibuster, have sought help from sympathetic Republicans, who have apparently used this leverage to broaden the bill and to extract key concessions on various issues; such  concessions are sure to please a wide range of lobbying groups, and it looks like there may be a good chance that they will be sufficient to slip a cap-and-trade bill past opposition from coal-producing and -burning states.

The framework of the bi-partisan package was spelled out on Sunday, October11, in a joint NYT op-ed, “Yes We Can (Pass Climate Change Legislation)”,  by liberal Senator John Kerry (D-Mass.) and conservative Senator Lindsey Graham (R-SC).

While details are sketchy (and details sure to still be fought over), it looks like Pres. Obama will have, if not final legislation, then at least high prospects for a cap-and-trade bill that he can use for the negotiations that will start in a few weeks in Copenhagen (over the shape of a global climate treaty to replace the expiring Kyoto Protocol).

Excerpts from the Kerry-Graham op-ed are here (emphasis added; with a few comments in brackets):

Many Democrats insist on tough new standards for curtailing the
carbon emissions
that cause global warming. Many Republicans remain
concerned about the cost to Americans relative to the environmental
benefit and are adamant about breaking our addiction to foreign sources
of oil
[Republicans are so easily jerked around over “energy security”].

However, we refuse to accept the argument that the
United States cannot lead the world in addressing global climate
change. [but do China, India and others want to follow?] We are also convinced that we have found both a framework for
climate legislation to pass Congress and the blueprint for a
clean-energy future that will revitalize our economy, protect current
jobs and create new ones, safeguard our national security and reduce
pollution. …

First, we agree that climate change is real and threatens our
economy and national security. That is why we are advocating aggressive
reductions in our emissions of the carbon gases
that cause climate
change. We will minimize the impact on major emitters through a
market-based system that will provide both flexibility and time for big
polluters to come into compliance without hindering global
competitiveness or driving more jobs overseas. [cap-and-trade]

Second, while we
invest in renewable energy sources like wind and solar, we must also
take advantage of nuclear power, our single largest contributor of
emissions-free power. Nuclear power needs to be a core component of
electricity generation if we are to meet our emission reduction
targets. We need to jettison cumbersome regulations that have stalled
the construction of nuclear plants in favor of a streamlined permit
system
that maintains vigorous safeguards while allowing utilities to
secure financing for more plants. We must also do more to encourage
serious investment in research and development to find solutions to our
nuclear waste problem
.

Third, climate change legislation is an
opportunity to get serious about breaking our dependence on foreign
oil
. For too long, we have ignored potential energy sources off our
coasts and underground. Even as we increase renewable electricity
generation, we must recognize that for the foreseeable future we will
continue to burn fossil fuels. To meet our environmental goals, we must
do this as cleanly as possible. The United States should aim to become
the Saudi Arabia of clean coal.
For this reason, we need to provide new
financial incentives for companies that develop carbon capture and
sequestration
technology.

In addition, we are committed to
seeking compromise on additional onshore and offshore oil and gas
exploration
— work that was started by a bipartisan group in the Senate
last Congress. Any exploration must be conducted in an environmentally
sensitive manner and protect the rights and interests of our coastal
states.

Fourth, we cannot sacrifice another job to competitors
overseas. China and India are among the many countries investing
heavily in clean-energy technologies that will produce millions of
jobs. There is no reason we should surrender our marketplace to
countries that do not accept environmental standards. For this reason,
we should consider a border tax on items produced in countries that
avoid these standards
. This is consistent with our obligations under
the World Trade Organization and creates strong incentives for other
countries to adopt tough environmental protections
.[probably just a signal to China & India; any bill would have to leave flexibility to the Administration.]

Finally, we
will develop a mechanism to protect businesses — and ultimately
consumers — from increases in energy prices. The central element is the
establishment of a floor and a ceiling for the cost of emission
allowances.
This will also safeguard important industries while they
make the investments necessary to join the clean-energy era. We
recognize there will be short-term transition costs associated with any
climate change legislation, costs that can be eased. But we also
believe strongly that the long-term gain will be enormous. …

If Congress does not pass legislation
dealing with climate change, the administration will use the
Environmental Protection Agency to impose new regulations. Imposed
regulations are likely to be tougher and they certainly will not
include the job protections and investment incentives we are proposing. 

The message to those who have stalled for years is clear:
killing a Senate bill is not success; indeed, given the threat of
agency regulation, those who have been content to make the legislative
process grind to a halt would later come running to Congress
in a panic
to secure the kinds of incentives and investments we can pass today.
Industry needs the certainty that comes with Congressional action.

Joe Romm on the left applauds the proposed deal (though there is sure to be disagreement about support for coal, nuclear power and offshore oil & gas exploration), and Bill Scher says “Sen. Lindsey Graham Crosses the Climate Rubicon” and thus “made a deal all but inevitable”.

On the right, Michelle Malkin reports that she was right to warn about Republican turn-coats, the National Review `s Gore-haters are dispirited, and MasterResource, the coal-funded “free market” energy blog by libertarian Rob Bradley, has nothing to say.

Political scientist Roger Pielke, Jr. notes the lack of precision and suggests that Republicans now have the upper hand in negotiating the bill.

More reaction and background that readers may find useful is here:

Let’s Try This Again: Are There GOP Senators Who Will Back The Climate Bill? (Bill Scher, Campaign for America`s Future, October 7, 2009)
Senators link drilling with cap-and-trade (Houston Chronicle, October 6, 2009)
Is Lieberman at it again? (Politico,

9/21/09)


On the Climate Bill Fence: How Sen. Graham Got There by Bill Chameides (Dean of Duke U`s school of the environment) | Aug 27, 2009

– More on other senators by Bill Chameides

From a libertarian perspective, I ask other libertarians and those on the right whether it is not too late to get a leaner climate/energy bill, that would:
  • instead of a cap-and-trade program (that hands out emissions permits free to existing fossil fuel users, with costs being borne regressively by energy users), use upstream carbon taxes, with the revenues rebated per capita to all Americans;
  • allow limited use of offsets in lieu of taxes (effectiveness of eligible offsets to be insured for a period of 50 years) by Lloyd`s of London);
  • eliminate subsidies for all energy technologies (including ethanol and biofuels)
  • provide that at least half of all revenues taken in by the federal
    government and state government for offshore oil & gas leases and for coal leases will be paid per capita to citizens (and state residents);
  • allow nuclear fuel reprocessing and breeder plants, while eliminating federal insurance for nuke plants;
  • eliminate the grandfathering of dirty coal-burning plants under the Clean Air Act;
  • allow immediate tax deduction of a ll capital expenditures (eliminating multi-year amortization limits);
  • eliminate mandates that public utilities increase use of green, renewable fuels, in favor of the removal of antitrust protection for the grant of local monopolies (and other measure that introduce real competition into the retail power sector), and application of Commerce Clause protection to those who want to sell power out-of-state;
  • establishes energy efficiency targets, as opposed to mandates, with awards to category winners, and publishes results;
  • privatize the TVA (by distributing shares per capita to all who are served by TVA);
  • publish information on the locations of coal fly-ash storage sites;
  • make it clear that federal and state licenses for energy facilities and mines are not licenses to pollute, do not extend any immunity for actual damages caused, and do not prevent injunctions for facilities identified as causing particular damage; and
  • to dampen NIMBYism, establish compensation schedules for federally-licensed facilities, and encourage states to do the same (based on distance and like wind and water flow).

Beyond zero-sum games: Instead of mandating "green power" and greater efficiency, why not mandate MORE COMPETITION in power markets?

October 11th, 2009 No comments

To my disappointment, it turns out that Joe Romm, who  maintains the Center for American Progress` Climate Progress blog, didn`t let through my prior comment about how our discussions about green/efficiency mandates ignore the 800 lb. gorilla in the room, namely, inefficiency stemming from the lack of competition in consumer electricity markets.

But I`m not so easily discouraged; on the heels of Google`s roll-out of software and a monitoring device specifically to enable consumers to more efficiently use electricity, I tried again (toned down so he would not have to see how guys like Steven Milloy mirror him).  Here`s the comment I submitted:

Joe, on the issuie of mandates, both you and Henderson fail to consider WHY our power system isn`t MUCH more efficient and doesn`t provide greater consumer choice – namely, grants by local governments of power monopolies and related regulatory balkanization.

Let`s not forget that the “ethical” argument for interfering with the market for electrical products is based on the fact that local governments have prevented competition in local markets for power generation and distribution.

That there are huge efficiency gains to be made in improving consumer electricity markets is precisely why Google is focussed on providing consumers with greater information about their electricity consumption.

Thus we see one of the continuing problems presented by the fight for control over the wheel of government: those who want to steer it their way are so sure they`re right – and convinced that the others are stupid or evil – that they can`t be bothered to try to notice or try to achieve shared objectives.