TT's Lost in Tokyo — by TokyoTom

Since I`m in Tokyo and deprived of Bob Murphy`s enviable access, via talk radio, to cutting-edge climate science, I thank him using his blog to bring it to the attention of his audience (which occasionally includes me). Says Bob (emphasis added):

Chip Knappenberger explains
the significance (and remaining holes to be plugged) in the recent
Lindzen-Choi paper that’s got talk radio in such a tizzy. The opening
sentence: “MIT climate scientists Richard Lindzen and collaborator
Yong-Sang Choi soon-to-be published paper (Geophysical Research
Letters, American Geophysical Union) pegs the earth’s “climate
sensitivity”—the degree the earth’s temperature responds to various
forces of change—at a value that is about six times less than the “best
estimate” put forth by the Intergovernmental Panel on Climate Change
(IPCC).”

Well, well, if talk radio is covering a new article that purportedly downplays climate risks, then others who have invested time in casting doubt

I`ve blogged previously about my various conversations with Chip Knappenberger, who is employed by the self-described “advocacy” group of Pat Michaels, New Hope Environmental Services.

I went to pay a visit to his post at Rob Bradley`s pro-coal, “free market” MasterResource blog, which I have discussed on any number of occasions here – especially after Mr. Bradley unceremoniously withdrew the welcome mat for libertarian critics (yours truly) while in mid-conversation with (and without notice to) several of his guest bloggers.

I reviewed Chip`s precis of the Lindzen-Choi paper and attempted to leave comments at MasterResource, but they were “disappeared” as soon as they were posted, so I forwarded a copy of my comments by email directly to Chip, which I copy below (with minor edits):

Chip, I couldn`t resist trying to comment on your post at MR, and
checking to see if Rob still has his blog set up to automatically
exclude all of my comments. Unfortunately, he still seems to be
convinced that a principled and libertarian approach (or his clients`
needs) requires maintaining his echo chamber by excluding me.

To check the sophistication of his method, I have for the first time
just tried commenting anonymously (I have until stayed away and simply
hoped Rob would change his mind), and to my surprise the comment went
through – though it is “awaiting moderation”. [update: this post has now received immoderate , “echo chamber” moderation]

I thought I would give you a head`s up on my pending comment, which I
do not expect to see published – but who knows?  Strange things
sometimes happen, such as Rob quoting with approval a link to a
comment that I have made:
http://mises.org/Community/blogs/tokyotom/archive/2009/08/26/fun-with-partisanship-and-self-deception-the-climate-follies-and-rob-bradley.aspx.

My comment is below; I will wait until tomorrow before cross-posting
at my own blog.

Sincerely,

Tom

[comment left at MasterResource]
“It is too early to tell whether Lindzen and Choi’s findings will
prove to be the end-all be-all in this debate.”

But it`s not too early for you, for others who act as paid mouthpieces
for fossil fuel and others who wish to avoid policy action, to trumpet
this as yet unpublished paper all over the intertubes, is it Chip?

By the way, continuing studies on the “sensitivity” of temperatures to
GHG increases should not lead us to ignore either the problem of ocean
acidification from our accelerating CO2 build-up or the very exquisite
sensitivity of the Earth`s climate and ecosystems to the 0.6 C average
temp increase that we have experience over the past 50 years
(remaining stuck at a peak for the past 10).  The Arctic and temperate
zone glaciers continue to rapidly thaw, and other changes affecting
ecosystems and human livelihoods are still underway.

I note I have seen very preliminary remarks by James
Annan here, and by

I note that Bob Murphy is no climate expert, but simply posting blindly about something that he thinks cuts in the direct he wants; in a similar vein, Knappenberger also evidently is puffing the importance of a scientific article that is hot off the presses, but can`t be troubled to link to any articles providing additional context. (A recent blog post and comments by Steve McIntyre at Climate Audit also point out the difficulties in reaching conclusions from the new research.)

I also note, as I have previously, that not only Chip but Bob as well – when he has on his “economist for IER” (which is a coal and public utility front group that was de-funded last year by Exxon) hat – are, at least in part, being compensated to undercut climate change policy.

In this context, we all are prone to note evidence that fits into our existing world view, while discounting contrary information, such “confirmation bias” is readily apparent in the internet and radio coverage of this piece.  While climate change and climate policy are certainly hot topics, it doesn`t seem to me that the so-called “skeptics” are at all taking this new study skeptically, but are instead eagerly lapping it up, assume it is good news, are are loudly trumpeting it. Now who`s fooling whom?  Many “skeptics” look just like the “alarmist” “global warming cult” “believers” whom they abhor.

Unfortunately, while it`s impossible to know what Rob and Chip are actually thinking and why, it`s clear that a dangerous mix of self-deception, confirmation bias and rent-seeking permeates the tribal conflicts that we are seeing in current over the use of government, not the least in the case of climate change, which is a difficult scientific and policy issue.

 

Robert Murphy, Austrian school economist and blogger, is in my book a remarkably thoughtful and insightful commentator on current economic issues, even as I find some of his arguments on climate policy and energy to be shallow.

Bob`s balance and relatively rare introspection are on display in his recent blog post, I’m Starting With the Man in the Mirror, in which he directly addresses the way that people with differing views on health care and climate change policy tend to see their own views and actions as virtuous, while seeing “the other side” as having evil motives and acting unfairly.  Bob had started a blog post in such a vein, but then checked himself and realized that questioning the motives of all of the other side was probably unfair. 

My own thoughts are that Bob`s post is as fine as far as it goes, but that it remains partisan and fails to discuss the way that rent-seekers deliberately seek to exploit our partisan predilections. This failure is not particularly surprising, given not only Bob`s evident self-identification as a partisan, but the fact that he works for the Institute for Energy Research, a Rob Bradley-founded think tank that, along with its partner, the American Energy Alliance is a front for a particular set of rent-seekers – the fossil fuel interests.

Bob`s entire piece is worth reading, but here is the introduction:

“OK I must confess that this Wonk Room hit piece on my compatriots really ticked me off. I had originally wanted to blog it with the title, “Definition” and the comment, “If you want to know what ‘ad hominem’ means, just check out this Wonk Room piece on the AEA bus tour.”

“But then I calmed down a bit, realizing that the Wonk Room piece is really just the mirror image of what Glenn Beck did with Goldman Sachs, which I praised.”

The piece concludes in a similar vein:

“I’m just saying that, as ridiculous as Krugman’s paranoia over old people is, that’s how ridiculous some of our side’s rants against Obama fans must seem to people who know that they are really just trying to stem abuses they perceive in the health care system and so forth. They know they’re not socialists, just like we know “our guys” aren’t Nazis.”

Bob adds a brief meta-insight that I wish he had explored further:

“Don’t get me wrong, it is still perfectly consistent to think the elites in Washington are power-hungry liars. “

I left my own observations in a comment on Bob`s post, which I copy below:

Bob, on Goldman Sachs, you might enjoy this piece by Matt Taibbi at Rolling Stone.

Bob, I appreciate your attempt at even-handedness, and your implicit acknowledgment of how we are all plagued by problems of self-deception and confirmation bias, particularly with the context of battle with ideological enemies.

I hope you will continue the effort, even though it may come at a cost to effectiveness – sometimes there`s nothing like a broader understanding of the truth to get in the way of a good rant about the Truth.

The problems of self-deception, tribal division/conflict and their roles in rent-seeking are deep indeed, and you`ve barely scratched the surface.

I note, for example, that even though you try to be even-handed, you ironically identify those listed in the Wonk Room piece as your “compatriots”; if by implication the Wonk Room writers and others who support climate change action are NOT your compatriots, what country then are they citizens of?

I also note that those you call compatriots are officers of the Rob Bradley-founded American Energy Alliance, which is clearly an energy industry pressure group (and Republican-linked). You work at the free-market IER that Rob also founded, but apparently self-identify yourself with a group of fairly naked rent-seekers.

While it`s in our human nature to fall into partisanship, what`s more disturbing is the ways that rent-seekers deliberately try to take advantage of this penchant by fanning the flames of partisanship as a means of masking their own agendas while attacking others with competing preferences. This has been very clearly at work in battles over energy and environmental issues, where influence over government is the battleground.

I have made the point a number of times previously that such rent-seeking deserves much more attentions, but you have always professed puzzlement: what, ME, Bob Murphy, involved in a rent-seekers game?

To refresh your recollection, here are links to our previous discussions:

Bob Murphy, the Heritage Foundation and “green jobs” – ignore coal! We only pay attention to rent-seeking from greens/the left; and

In which I try to help Bob Murphy figure out just what the heck I`m talking about (when I say he`s entangled in a partisan, rent-seeking game).

I’m just saying that, as ridiculous as Krugman’s paranoia over old people is, that’s how ridiculous some of our side’s rants against Obama fans must seem to people who know that they are really just trying to stem abuses they perceive in the health care system and so forth. They know they’re not socialists, just like we know “our guys” aren’t Nazis.

Well said. Now how about acknowledging how the rent-seekers are busy at work trying to manipulate our partisan impulses to take everyone for a ride?

I of course am aware that rent-seeking is ubiquitous in our current political debates, and on climate and energy issues, there are many rent-seekers in addition to fossil fuel interests. My point is that it behooves us to pay attention to the manipulations of rent-seekers generally.

James Hansen, a leading climate scientist at NASA (head of NASA’s Goddard Institute for Space Studies) and Columbia University, last week`published a scathing criticism of the Waxman-Markey cap-and-trade bill in the Huffington Post, and Bob Murphy noticed.

Bob offers a rather schizophenic view, expressing both:

• admiration of (a) Hansen`s insistence – despite pressure from others on the left to dampen his criticism – that, given the risks posed by emissions of greenhouse gases, the Waxman-Markey bill is far from adequate and (b) Hansen`s criticism of the driving role provided by rent-seeking fossil fuel interests; and
• amusement at the “fireworks” on the left that Hansen`s criticims will set off.

Oddly, it doesn`t seem to occur to Bob that Hansen`s criticism, despite flack from others, that Waxman-Markey is too weak in in the face of the risks that Hansen perceives, lends further credibility to Hansen and his concerns.  If Hansen takes his concerns THIS seriously, then perhaps othes should take him more seriously as well.  (Though to his credit, Bob does link to Hansen`s latest attempt to explain his understanding of climate risks).

It`s also odd that Murphy completely fails to explore Hansen`s criticisms of all of the subsidies to coal that the Waxman-Markey bill gives away, and ignores Hansen`s strong recommendation of a much leaner carbon-pricing strategy, rebated carbon taxes, of the type actively supported by Exxon and many others (not solely on the left).  Why is that libertarians refuse to criticize the 800 lb. gorilla in the room, while refusing to support carbon taxes?  For some at least, it appears that there is a decided lack of interest in biting the hand that feeds them, but wouldn`t a push against subsidies for coal and for a more transparent and less-burdensome climate still be salutary?  In a blog post that addresses Hansen`s stance, the Wall Street Journal asks the same question.  The NYT covers Hansen`s position as a news story.

I copy below a few remarks that I left at Bob`s blog (light editing):

Bob, it`s nice to see you respect Hansen for sticking to his gunds, but
it sounds like you`re mainly expressing schadenfreude, with the hope
that he might forestall W-M.

But Hansen is not taking his own
“rhetoric” seriously, but his own views of the SCIENCE. And those
views, while they hopefully turn out to be wrong, are no laughing
matter. (Presumably you know how to check Hansen`s website directly for
his scientific publications.)

On policy, as I have pointed out a number of times, Hansen has come out strongly in favor of pork-lite, rebated carbon taxes;
too bad that libertarians have showed so little interest in pushing for
carbon policies that are least damaging, but instead, but fighting
everything tooth and nail have instead contributed (inadvertently?) to
massive subsidies for coal.

You might also enjoy the sight of Dennis Kucinich, for reasons similar to Hansen, voting against Waxman-Markey.

But pork aside, I think that Joe Romm, in his response to Hansen, has the better arguments. On the question of pork, I note the continuing lack of criticism of old King Coal [by yourself and by Rob Bradley].

I just stumbled into Bob Murphy`s June 8 post at the LvMI Daily site, and submitted a few comments.  As it looks like my links prevented my comments from posting, I`ve copied them here (with a few typo tweaks and links added):

Bob, I didn`t realize you had put a post up here.

Allow me first to copy here a few points that I made on your related post at MasterResource, but which freedom- and open-debate-loving Rob Bradley blocked (your truly has been banned there for the past few months):

“The below is copied from MasterResource, where I remain on permanent moderation – IOW, banned – even though Bob and the authors of various threads seem perfectly interested in engaging me.

“TokyoTom { 06.09.09 at 12:53 am }

A few comments, if I may (in the hope that springs eternal that even the “unclean” will be allowed to post): [Note to readers:  rest easy; that the final “I`ve been banned!” reference.]

1. “Cost/Benefit Analysis Cannot Justify Waxman-Markey’s Aggressive Targets”

Why this headline, which is completely unsupported in the post?

You do link to a prior post, where you try to draw the conclusion that “If the whole world adopted the stringent emission cutbacks in Waxman-Markey, then the costs to the global economy would far outweigh any reasonable estimate of the benefits (measured in avoided climate damage)”, but both there and here you fail to address Weitzman, much less more fundamental problems regarding the validity of CBA (aggregating preferences across persons situated vastly differently, ignoring the problems of frustrated preferences, enrtrenched rent-seeking and the continuing lack of property rights or other mechanisms to manage an important commons).

And far from “agree[ing] with you”, the RFF paper much more fairly illustrates some of the complexities in applying CBA to the moving ball of international negotiations.

2. “the costs to the global economy would far outweigh any reasonable estimate of the benefits (measured in avoided climate damage)”

“Yet mainstream models of the global economy and climate system show that worldwide adoption of Waxman-Markey would be foolish as well. It takes heroic assumptions both of lurking climate catastrophes and of international dipomacy to justify support for the current bill.”

Again, you offer conclusions not established here or elsewhere. You appear to acknowledge your overstatements when you say: “If proponents of aggressive government measures want to say the benefits justify such costs, fair enough; but let’s not kid ourselves that this is going to be cheap.”

3. “RFF study, which says the cumulative cost through 2050, expressed today in present-value terms, is up to $43 trillion worldwide.”

Actually, don`t the RFF authors make clear that this estimate is based on universal adoption worldwide and least-cost reductions – 70% of which would take place in developing countries – with a clear indication that such countries are not likely to act agressively for decades? Accordingly, the RFF study implies that global costs will fall below the straight estimate.

4. It is interesting to me that you ignore the dynamics of the international context of climate policy and negotiations. Why no comment on the observations in the RFF paper that likely “leakage” of carbon-heavy industry to developing countries and dampening Western demand for fossil fuels will constitute net subsidies that spur development in poorer parts of the globe?

Your comment is awaiting moderation.”

Thanks for putting these up at your own blog.

Further, let me note:

1.  Your criticism of W-M on conventional CBA grounds is limited to W-M, and doesn`t address the many CBA analyses that conclude (as Nordhaus has done weakly for decades) that carbon pricing mechanisms are now justified.  Economist Richard Tol last year summarized the economic literature as follows:

“Firstly, greenhouse gas emission reduction today is justified. Even the most conservative assumption lead to positive estimates of the social cost of carbon (cf. Table 1) and the Pigou tax is thus greater than zero. Yohe et al. (2007) argue that there is reason to reduce greenhouse gas emissions further than recommended by cost-benefit analysis. The median of … peer-reviewed estimates with a 3% pure rate of time preference and without equity weights, is $20/tC. …. The case for intensification of climate policy outside the EU can be made with conservative assumptions. … Secondly, the uncertainty is so large that a considerable risk premium is warranted. With the conservative assumptions above, the mean equals $23/tC and the certainty-equivalent $25/tC. More importantly, there is a 1% probability that the social cost of carbon is greater than $78/tC. This number rapidly increases if we use a lower discount rate—as may well be appropriate for a problem with such a long time horizon—and if we allow for the possibility that there is some truth in the scare-mongering of the gray literature.  Thirdly, more research is needed into the economic impacts of climate change—to eliminate that part of the uncertainty that is due to lack of study, and to separate the truly scary impacts from the scare-mongering.”

[Cato`s Jerry Taylor has a good summary of Tol`s review here.]

2.  Granted that you focussed narrowly on W-M, but by doing so you completely fail (a) to acknowledge the atmosphere/climate system as an open-access commons under growing infuence by man, and (b) to put forward a “free market” agenda that would serve as a win-win response to the wide array of people, firms, institutions and nations that are concerned about man`s role in ongoing climate change and about the likelihood of future climate change stemming from the growing use of fossil fuels and other human activities.

Are you indeed interested in addressing people`s legitimate preferences regarding climate, and pushing for freer markets?  This is a question that I have asked Rob Bradley at his self-declared “free market” MasterResource blog any number of times.

Rob has stated there in response to me [before he banned me] that: “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 he and his co-bloggers (including you) haven`t  seen fit yet to actually recommend ANY free market approaches to climate concerns!

Failing any effort to actually offer policy suggestions, is it unfair to wonder whether you guys are, consciously or not, simply providing cover for the rent-seekers who benefit most by generating pollution and other risks in the manner permitted by current regulations?  (Why did Exxon stop funding Rob`s Institute for Energy Research, BTW?) 

[It`s very clear that Joe Romm and others perceive you this way; are you not seeking to persuade them?]

Regards,

Tom

PS:  Your chief post doesn`t actually link to the comment thread, which readers have to search for.  You might want to fix that.

 

Robert Wenzel has a couple of posts up on his blog that rightly ring alarm bells about the plans of the Obama administration to seek legislative changes that would allow regulators to oversee executive compensation (1) in the financial sector (“The United States of Obama Has Arrived“) and (2) for all public companies generally (“It`s Worse Than I Thought:”). 

And make no mistake, Wenzel is VERY alarmed:

“Treasury Secretary Timothy Geithner’s statement on
executive compensation packages is a clear signal that a dictatorship
has arrived in America. Make no mistake, the compensation package
regulations that are about to be instituted will go way beyond
regulations on banks and other financial institutions that took TARP
money. It is about controlling the entire financial sector–which will
ultimately result in controlling the entire economy.”

“Now that the government is moving in to control the financial sector,
the rest of the economy will be a lay up. Money controls the economy
and Barack Obama is about to take over the money infrastructure. Money
is going to end up going to some very funny places. Mostly to people
who control lots of votes in the next presidential election, and to
those who finance such election campaigns. In other words, the
connected. In the first group, we are talking unions, in the second
group we are talking about Goldman Sachs, Carlyle Group and the like.

“When
this is all over, the United States of Obama is not going to look
anything like the America we now know. Think Cuba, think North Korea,
that’s how all dictatorships end up.”

“The compensation oversight programs announced by Geithner will not be
limited to financial companies. The Treasury will propose legislation
giving the SEC the power to ensure that compensation committees are
more independent, for all publicly traded companies, according to Sperling.”

“What should be of major concern is that this is going to bring to the
compensation table all kinds of people with all kinds of agendas”.

“In short, there appears to be Herculean oversight of executive
compensation coming that is likely to turn into more regulation than
oversight. And there is enough wiggle room in these proposals, at this
point, that the Administration can drive the programs in any direction
they want, any time they want or need to. It sounds like a Paulson plan
all over again. Throw everything up against the wall, get legislation
passed and interpret all these broad generalizations any way you want,
down the road.

“Very scary.”

But in his rush to tell us that the doctor is about to enslave the patient, Wenzel neglects
to offer an opinion on whether the patient is sick, if so, why, and what treatment might be more apt.  Such analysis must be offered if one wants to persuade – either the patient that the doctor is a quack (and to run), or those with the lobotomizing tools to put them down (in favor of a more appropriate diagnosis and treatment). 

Have faulty incentive structures in the financial sector and within public firms not contributed to the financial crisis?  If indeed they have – as seems to be universally acknowledged –  how did those incentive structures arise, and what are the best ways to remedy them? 

While the discussion can become quite nuanced, it seems to me fairly clear that root causes lie in financial regulation and in the regulation of “public” companies, both of which have served to loosen shareholder/investor control over management. 

This loosening of control, of course, has an even deeper root, namely, the grant of limited liability to shareholders for the torts committed by company executives and employees.  This grant incentivized lighter oversight by shareholders (as gains from risky activities could be captured, with losses in excess of  assets being shifted to the public), and in turn has led to a continuing cycle of federal regulation intended to rein in risks – particularly on environmental, health and safety areas, and regulation of stock markets and “public” companies – with resistance from and rampant rent-seeking and gamesmanship by larger risk-generating firms.  Sometimes forgotten by advocates of “free markets” is how larger firms utilize their political influence to co-opt regulators and regulations, both to raise barriers to entry to keep smaller and nimbler competitors at  bay and to ensure that they can continue in business without facing the full external costs of their business activites.

This dynamic – and the way free market advocates miss it – can be seen in Wensel`s most recent post, where he notes:

“The Treasury will propose legislation
giving the SEC the power to ensure that compensation committees are
more independent, for all publicly traded companies, according to Sperling.

“Sperling
championed this as putting standards into effect for compensation
similar to those put in place for audit committees as part of the
Sarbanes-Oxley Act.

“I know of no one, including most legislators
, who don’t think that Sarbanes-Oxely was a big mistake, that it costs
companies millions of dollars annually in compliance costs, with zero
benefit. Setting up such a nightmare for all publicly traded companies
will make it even more difficult, if not impossible for small companies
to raise money and go public, and will force others to leave the public
markets and go private (or overseas).”

Sarbanes-Oxley vastly extended the reach of federal securities regulation, and raised costs for public firms.  But while Wenzel can see this, why has he failed to note that such regulation also greatly raised the costs of access to the public capital markets, thus benefitting public companies by insulating them from potential competitors?

The whole system of public company regulation is rotten.  We need less regulaton, and greater self-policing by investors and market counterparties of the risks they face.  The alternative of lightly-regulated private companies (especially unlimited liability structures like partnerships) ought to be more vigorously explored.

I quote  a summary of my views on this subject from another recent post:

“I share Ariely’s concern that we are likely to be distracted by a
focus on big “bad apples” that may satisfy our needs to string someone
up, but that will ignore the rot at the core – the systemic
cheating that, in the American system, is very much related to the
institution of state-granted “limited liability” to corporate
investors/shareholders.  This grant (1) frees investors from the
downsides of losses suffered and borne by third parties as a result of
corporate actions, (2) limits investor incentives – and abilities – to
monitor and control risks faced by and generated by executives,
managers and other employees, (3) thus incentivizing risky behavior and
providing greater freedom of action to executives and managers –
including freedom of action to seek favors from government , (4)
leaving executives and managers freer to loot their companies by taking
large bonuses, which shifting downside risks to shareholders and
taxpayers, and (5) fuelling pressures by consumers and others adversely
affected by corporations to seek to use legislative, regulatory and
judicial mechanisms to check corporate behavior.  In sum, limited investor liability has proven to lie at the core of the moral
hazards which have produced the Great American Ponzi scheme that our
fearless leaders are now struggling mightily to patch together and
profit from.

“Did I leave anything out?  (Ah, maybe how various firms, investors and their political handlers profit while socializing climate change risks?)

“Anyone game for exploring ways to reduce the destructive gaming and rampant cheating in the American system?”

I`ve done a bit of blogging over the past few weeks regarding the “The tragedy of climate commons” post by climate scientist Gavin Schmidt and ensuing discussion at the RealClimate website.  Schmidt wrote the post in response to the implied suggestion by Chip Knappenberger at the MasterResource blog that, since unilateral policy action by the US would by itself be unlikely to significantly affect future climate (given the the rapid growth in CO2 emissions by China, India etc.), the wisest course for the US would be to do nothing.  

Knappenberger has now responded to Schmidt, this time with a parable of his own.  Knappenberger has good points, but he and Schmidt are talking past each other.  Since Rob Bradley, CEO of the Institute for Energy Research (BTW, no longer funded by pro-carbon-tax Exxon, all of you Exxon-haters out there) and founder/manager of MasterResource, won`t let me post at his self-proclaimed “free-market energy blog”, I put up a few thoughts at RealClimate, which I copy below (one typo fixed and link added below):

 

Allow me to stir the pot a bit, as it doesn`t appear that anyone has noticed Chip Knappenberger`s response to Gavin, in tbe form of his own climate parable, using the “Emperor`s new clothes” theme.

http://masterresource.org/?p=2751

Waxman-Markey appears as the new clothes, with Chip apparently taking on the role of the bright and persistent voice of the insufficiently jaded little boy who can`t help but to see the truth, and bravely refuses to be cowed.

Some of the criticisms of W-M seem fair to me – after all, they manifest precisely the reasons that Jim Hansen has taken a strong stance in favor of more transparent and rebated carbon taxes over the pork and bureaucracy that comes with cap and trade.

1. But Chip is still failing to address the main premise of Gavin`s tragedy of the commons fisheries analogy: there is a commons problem that requires coordinated action (a multi-player, repeated Prisoner’s Dilemma), and the only way out requires initial measures at trust-building, with more effective measures to follow when the parties can agree on burden sharing and enforcement.

Thus Chip is simply perpetuating the problem that I have noted here:

“Unfortunately, what passes for discussion on climate change (and other environmental issues) is too often people talking past each other (frequently with all of the hallmarks of a tribal battle): some correctly see a looming commons problem that requires government regulation but ignore the risks of pork, partiality and wasted resources in the policies themselves, while others, not anxious for government to expand its regulatory purview, downplay or dismiss the resource problem and focus on the downsides of government action or the motives of those calling for government action (while ignoring those invested heavily in a status quo that is replete with moral hazard).

Capitalism, the destructive exploitation of the Amazon and the tragedy of the government-owned commons

2. Further, while Chip has good reason to criticize all of the pork that is loaded into the W-M hairshirt – there certain ARE plenty of corporate interests seeking to use climate policy to get sweet deals from government – it`s more than a bit coy of him to paint the critics of W-M as relative innocent truth-tellers, while somehow failing to note all of the sweet deals built into the status quo that fossil fuel firms, utilities, automakers and their investors have long enjoyed. (Not to mention that these interests have hardly been turned away from the W-M and other pork troughs.)

Chip`s convenient oversight might have something to do with the fact that the public advocacy firm he shares with Pat Michaels is funded by coal interests, as Marion Delgado points out in #677, and as I have previously discussed directly with Chip: Pat Michaels – scientist AND paid advocate. Correspondence with Chip Knappenberger.

It doesn`t end there, unfortunately, as Chip is posting on the “MasterResource” blog run by Rob Bradley, who is CEO of the coal-industry-funded Institute for Energy Research. For the sin of pointing out the political-favor-protection game that IER and MasterResource are engaged in, Rob Bradley has exercised his Constitutional right to ban me from the MasterResource blog (mid-conversation with, but without notice to, Chip, as it turns out).

So sure, let`s fight the pork as best we can, Chip, but let`s not ignore the fact since there are NO property rights in the atmosphere or climate, markets are not protecting it, but instead steadily producing an ever-growing tragedy of the commons. Care to acknowledge that, or to offer any suggestions?

 

The incessant calls for – and criticism of – government-funded/mandated “green/clean power” pork both ignore root causes and potential common ground.  As a result, both sides of the debate are largely talking past each other, one talking about why there is a pressing need for government policy to address climate change concerns (concerns underscored by the May 19 MIT study), while the other is concerned chiefly about the likelihood of heavy-handed mis-regulation and wasted resources.  This leaves the middle ground unexplored.

While there are plenty of root causes for the calls for legislative and regulatory mandates in favor of clean / green / renewable power, such as:

• concerns about climate change,
• the political deal in favor of dirty coal under the Clean Air Act, 
• the enduring role of the federal and state governments in owning vast coal fields (the royalties from which it does not distribute to citizens but go into the General Pork Pool), 
• the unwillingness of state courts, in the face of the political power of the mining industry, to protect persons and private from pollution and environmental disruption created by mining,
• the deep involvement of the government in developing, encouraging and regulating nuclear power,

the most obvious and proximate root cause is something that attracts far too little attention – the frustration of consumer demand for green energy, and the inefficient and inaccurate pricing and supply of electricity.  It`s prettty clear that the grant of public utility monopolies and the regulation of the pricing and investments by utilities greatly restrict the freedom of power markets, from the ability of consumers to choose their provider, to the freedom of utilities to determine what infrastructure to invest in, to even simple information as to the cost of power as it varies by time of day and season, and the amount power consumers use by time of day or appliance.

With freer markets, we would see much more competition, better pricing, much more cost-saving (and conservation), and more money flowing into green power. So why is so little attention being paid to all of the gains that could be achieved from less – and more rational – power regulation?

Allow me to provide a few quotes and links to those interested:

1.  Lew Rockwell, President of the Ludwig von Mises Institute, “The Real Cause of Blackouts” (July 27, 2006):

Now, if markets were in charge, a heat wave would not be looked at as a problem but as an opportunity. Entrepreneurs would be swarming to meet demand, just as they do in every other sector that is controlled by markets. The power companies would be praying for heat waves! …

Just who is in charge of getting electricity to residents? A public utility, which, in the absurd American lexicon, means “state-run” and “state-managed,” perhaps with a veneer of private trappings. If you look at the electrical grid on a map, it is organized by region. If you look at the jurisdiction of management, it is organized by political boundaries.

In other ways, the provision of power is organized precisely as a central planner of the old school might plan something: not according to economics but according to some textbook idea of how to be “organized.” It is “organized” the same way the Soviets organized grain production or the New Deal organized bridge building.

All of centralization and cartelization began nearly a century ago, as Robert Bradley points out in Energy: The Master Resource, when industry leaders obtained what was known as a regulatory covenant. They received franchise protection from market competition in exchange for which they agreed to price controls based on a cost-plus formula — a formula that survives to this day.

Then the economists got involved ex post and declared that electrical power is a “public good,” under the belief that private enterprise is not up to the job of providing the essentials of life.

What industry leaders received from this pact with the devil was a certain level of cartel-like protection, the same type that the English crown granted tea or the US government grants first-class postal mail. It is a government privilege that subjects them to regulation and immunizes companies from business failure. It’s great for a handful of producers, but not so great for everyone else.

There are many costs. Customers are not in charge. They are courted only for political reasons but they are not the first concern of the production process. Entrepreneurial development is hindered. Our current system of electrical provision is stuck in time. Meanwhile, sectors that provide DSL and other forms of internet and telecommunication services are expanded and advancing day by day — not with perfect results but at least with the desire to serve consumers. …

How New York and California consumers would adore a setting in which power companies were begging for their business …. Competition would lead to price reductions, innovation, and an ever greater variety of services — the same as we find in the computer industry.

What we are learning in our times is that no essential sector of life can be entrusted to the state. Energy is far too important to the very core of life to be administered by a bureaucracy that lacks the economic means to provide for the public. How it should be organized we can’t say in advance: it should be left to the markets. …

What we need today is full, radical, complete, uncompromised deregulation and privatization. We need competition. That doesn’t mean that we need two or more companies serving every market (though that was common up through the 1960s). What we need is the absence of legal barriers to enter the market.

2.  Lynne Kiesling, Senior Lecturer in Economics at Northwestern University and former director of economic policy at the Reason Foundation; participant in debate at Reason online “Carbon: Tax, Trade or Deregulate?“

3.  Paul Joskow, current President of the Alfred P Sloan Foundation and former head of theMIT Department of Economics (now on leave) and former director of the MIT Center for Energy and Environmental Policy Research; speech at the National Press Club in September 2008:

For almost 50 years this sector was stuck in an organizational and regulatory framework that may have been well matched to the electricity generation and transmission technology available in 1935, but was surely poorly matched to changes in technology, new technological opportunities, contemporary investment needs, or current economic and environmental challenges. Then in the early 1980s, electricity sector reformers began to stir, responding to concerns about the system of regulated vertically integrated monopolies inherited from the 1930s. The “good old days” of regulation represent a view to the past with rose colored glasses. The system of regulated vertically integrated monopoly was plagued by cost overruns associated with nuclear power plants, poor operating performance for both nuclear and large fossil-fueled plants, poor fuel procurement decisions, wide price differences between neighboring areas, excess generating capacity, inefficient dispatch and economy energy trading between generating companies, regulatory incentives to keep old inefficient plants operating rather than retiring them, too many small utilities to take advantage of economies of scale, institutional and technological barriers to using the transmission network to access lower cost power, productivity lags, and inefficient retail prices. The system …was unnecessarily costly and inefficient.

Reformers looked to the favorable experience with restructuring, competition, and regulatory reform in other sectors and with electricity in other countries to help to solve the problems associated with the fragmented electric power sector made up of over 100 vertically integrated geographic monopolies. Municipal distribution companies and large industrial customers were especially aggressive at promoting reforms focused on open transmission access, the creation of transparent organized regional competitive wholesale markets, and (in the case of large industrial customers) retail competition.

A large number of states initially embraced this restructuring, competition, and regulatory reform vision and began to implement it. In 2000 it looked like restructuring and competitive market reforms were going to sweep the U.S. electric power industry.

Then came the California electricity crisis, the collapse of Enron and a number of merchant generating companies, increased volatility to natural gas markets and associated volatility in wholesale electricity market prices, and a long march upward in fossil fuel prices ultimately resulting in rising retail electricity prices in both regulated and restructured states. Most of the states that were leaders in restructuring during the late 1990s, when natural gas prices were low and there was excess capacity, initiated reforms during a period when regulated prices for generation service were expected to be much higher than perceived comparable competitive wholesale market prices. The expectation was that over time retail prices would fall. This forecast was based on the assumption that low prices for natural gas in particular would continue and that a new system built on efficient CCGT technology would evolve. At that time, a major “problem” that many of these states had to cope with were the “stranded generation costs,” primarily associated with what were perceived to be costly nuclear power plants, that were expected to result from the introduction of real wholesale and retail competition. This was expected to be a “transition problem” because it was expected that competition would result in market prices that would fall to levels below the embedded costs of nuclear plants and older fossil plants that would have otherwise been used to calculated (higher) regulated retail prices.

However, as natural gas and coal prices continued to rise far above anyone’s expectations, many of these states soon found that competitive market prices were rising dramatically along with natural gas prices (which affect competitive wholesale electricity prices in most regions of the country) — arguably rising to levels above what regulated prices would have been today under the status quo ante (though this requires a difficult counterfactual analysis). This, of course does not mean that these electricity sector reforms were a failure. In states that adopted the restructuring, wholesale and retail competition model, retail prices now reflect marginal supply costs, as they should to give consumers the right price signals to use electricity wisely. Rather it means that regulated prices are or would have been too low to give consumers appropriate incentives to make wise consumption decisions.

In evaluating restructuring, competition and regulatory reform one must understand all of its efficiency and distributional properties, not just at short run price effects. From an efficiency perspective, the restructuring reforms implemented at the federal level and in some states have led to numerous cost reducing successes in the face of rising fossil fuel prices.  These include dramatic improvements in the performance of divested nuclear plants, significant improvements in the performance of fossil plants that now face market incentives, roughly 200,000 GW of new (mostly merchant) gas-fired generation has been added to the system between 1999 and 2004, while the risk of cost overruns, fuel price fluctuations, demand variations, and availability problems experienced by some of these plants were shifted to their owners through the market rather than borne by consumers through cost-of-service regulation. There is good empirical evidence that the expansion of the boundaries of RTOs (e.g. PJM) have led to significant changes in power flows and more efficient dispatch of power plants, while inefficiencies are observed at the boundaries of RTOs that have not agreed to be consolidated (e.g. NY/NE). Gradual improvements in wholesale market designs have increased the efficiency of these markets and have restored investment incentives. Moreover, retail prices now respond quickly to changes in wholesale market prices, providing consumers with the right price signals rather than the wrong price signals resulting from retail price regulation. And these price signals are properly differentiated by time and location to reflect marginal supply costs, rather than the depreciated original cost of generating plants built 50 years ago. Demand management programs linked to short-term supply and demand conditions are expanding quickly as well in the reform regions.

Of course, the full reform program has not been implemented in large areas of the South, the West, and portions of the Midwest. The partial electricity reform equilibrium that we appear to be in now will not serve the country well and is potentially quite unstable. We have a system that is 1/3 reformed and 2/3 stuck in the structural and regulatory paradigm of the 1935s or somewhere in between.

The problems created by an antiquated industry structure and incompatible mix of state and federal regulation have not gone away. They are lurking out there to undermine achieving the goals that I enumerated earlier. Absent a comprehensive national electricity policy framework this sector is and will perform poorly in meeting the four sets of goals that I discussed earlier.

Joskow has spelled out his specific proposals for reform, which I note here.

4.  Google, September 19, 2008 press release – “Partnering with GE on clean energy“:

Today we announced that we’re joining forces (PDF file) with GE to use technology, information and corporate resources to drive the changes necessary to empower consumers with better energy choices. We will focus on improving power generation, transmission and distribution – a combination of technologies that could be known as the “smart grid.” (It would be fair to refer to electricity technologies in common use today as a “grid of only average intelligence.”)

The existing U.S. infrastructure has not kept pace with the digital economy and the hundreds of technology opportunities that are ready for market. In fact, the way we generate and distribute electricity today is essentially the same as when Thomas Edison built the first power plant well over one hundred years ago. Americans should have the choice to drive more fuel efficient cars – or even electric cars – and manage their home energy use to reduce costs, and buy power from cleaner sources, or even generate their own power for sale to the grid.

We all receive an electricity bill once a month that encourages little except prompt payment. What if, instead, we had access to real-time information about home energy use? What if our flat screen TVs, electronic equipment, lights and appliances were programmed to automatically adjust to save money and cut energy use? What if we could push a button and switch the source of our homes’ electricity from fossil fuels to renewable energy? What if the car sitting in our garage ran on electricity – the equivalent of $1 per gallon gasoline – and was programmed to charge at night when electricity is cheapest?

This vision is what unites Google and GE. We’ll start by working together in Washington, D.C. to mount a major policy effort to enable large-scale deployment of renewable energy generation in the United States.[deregulation? mandates?] We’ll also work on development and deployment of the “smart” electricity grid that will empower consumers, utilities, and technology innovators to manage electricity more efficiently and lower their carbon footprint. Finally, we’ll collaborate on advanced energy technologies, including technologies to enable the large-scale integration of plug-in vehicles into the grid and new geothermal energy technologies known as enhanced geothermal systems (EGS).

As I have noted elsewhere, 

While Smart Meter / Smart Grid programs have been growing, there is still considerable market fragmentation and rights of consumers have not been clearly spelled out. According to Google, while some state regulators have ordered utilities to deploy smart meters, their focus has been on their use by utilities and grid managers, and not on consumer rights to the information they generate.  As a result, Google is engaged in policy advocacy as well; says Google:

“deploying smart meters alone isn’t enough. This needs to be coupled with a strategy to provide customers with easy access to energy information. That’s why we believe that open protocols and standards should serve as the cornerstone of smart grid projects, to spur innovation, drive competition, and bring more information to consumers as the smart grid evolves. We believe that detailed data on your personal energy use belongs to you, and should be available in an open standard, non-proprietary format. You should control who gets to see your data, and you should be free to choose from a wide range of services to help you understand it and benefit from it. For more details on our policy suggestions, check out the comments we filed yesterday with the California Public Utility Commission.”

 

 

5.  Jerry Taylor, senior fellow at Cato Institute, “The Right Way to Fix the Grid“, August 19, 2003 (New York Post):

Yes, the need for more investment in the grid seems clear. The system was designed to handle a limited number of transactions, not the large interstate exchanges of electricity now common. Moreover, transmission capacity has been stagnant relative to the growth in power generation, stressing the system even more.

Why has the grid deteriorated?

* Transmission projects are considered, approved and paid for at the state level – but the benefits cross state lines. And state-level decision-makers understandably resist using ratepayer dollars to pay for investments that will mainly help out-of-staters.

* In much of the country, incumbent utilities and state politicians actively resist improving the grid. Vertically integrated companies (which own the generating plants, transmission lines and distribution networks within a service territory) often fear that a more robust transmission system would boost potential competition.

Many politicians also oppose grid improvements because new transmission capacity would make it easier for out-of- state customers to bid-away the cheap power from in-state consumers.

* Returns on transmission are regulated, so utilities have found that they can make more money by investing in virtually anything besides transmission infrastructure.

* With many regulatory fights still unresolved, and the potential for profit thus unclear, investors have delayed risking their money on the grid.

The solution now in vogue to solve these problems is to give the Federal Energy Regulatory Commission more authority over transmission investment. State regulation of transmission is, after all, an archaic relic of another era; and all who use the transmission system are vulnerable to the weakest links in it.

But forcing utilities to invest in transmission upgrades through increased federal regulation is too crude and blunt a policy hammer. It may get the job done to some degree, but running industries by federal dictate is less efficient than ensuring that proper incentives exist for the industry to operate efficiently on its own.

Instead, why not try deregulating the grid? Kill the cap on transmission profits. Jettison the state regulations that protect transmission companies from competition. Cease the endless political debate over how the transmission lines ought to be organized and managed and let grid owners discover for themselves how to most efficiently run their businesses – something market agents are more adept at learning than legislators or regulators.

Most analysts are convinced that the transmission system is a natural monopoly, and so recoil at the very thought of competition to the grid. But it already exists, in the form of natural-gas pipelines.

All new power plants, after all, are natural gas-fired. They can be located far from urban areas and their product shipped to urban areas via the electricity-transmission system, or they can be located in urban areas and their output shipped locally.

The competition between gas and electric transmission is no worse than the competition between cable and satellite television service providers.

Deregulation would also mean an end to rules that force grid owners to do business with anyone who wants access to their wires. Transmission providers should be allowed to negotiate the terms and conditions for both putting power into the lines and for taking it off.

Those who own the power lines, after all, have a greater incentive to ensure that their lines run safely than do the regulators who watch over them, particularly since they wouldn’t be able to rely on regulatory bodies to guarantee them a rate of return on their investments.

Deregulation can’t guarantee that blackouts would never again occur. But it would almost certainly lead to a faster flow of dollars into overdue investments in reliability and a far wiser use of such dollars than would the orders and mandates being contemplated in Washington.

More by Taylor on power regulation here and here.

Any Austrians who have read through this may be familiar with these words from Roy Cordato:

“by placing environmental problems within the context of personal and interpersonal plan formulation, we discover that they are not about the environment per se but about the resolution of human conflict. …

“Humans cannot harm the environment. Instead, they can change the environment in such a way that it harms others who might be planning to use it for conflicting purposes.”

“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.”

“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.” 

Do Austrians and others have their problem-solving caps on, focussed on aiding conflict resolution?  Or are they instead simply fighting over the wheel of government, in a way that ensures the continuing frustration of the concerns that many have about apparently very serious climate change risks? 

Last year around this time I criticized Reason science correspondent Ron Bailey, for a rather empty post trumpteting dark warnings of “green fascism” in the wake of last year`s grain shortages.  This year Ron is back, with a new post out (“Never Right But Never in Doubt“) in which he attempts to make light of the concerns that “Famine-monger Lester Brown” recently outlined in the May 2009 Scientific American Magazine (“Could Food Shortages Bring Down Civilization?“).  While Ron has dressed up his act a bit this time, the old reflexive enviro-bashing remains, along with an inclination to dodge the hard questions that Brown raises.  Instead, we are left to wonder, has Scientific American been taken over by the green fascists?

Disappointingly, Ron`s latest attempt to bring down Lester Brown also disappoints – not because Ron doesn`t have fair criticisms to make, but because he can never bring himself to engage on the fair concerns of Lester Brown and the editors of Scientific American on issues of population, unmanaged commons and the environment.  Instead of throwing light on the areas of institutional failure that underlay the concerns of “green fascists”, “famime-mongers” and neo-Malthusians, Ron likes rhetoric, and closes by calling Brown an “old charlatan”.

Does Brown deserve all of this rhetoric?  No, even while it is perfectly appropriate to disagree with some of his analysis.

Let me set the stage for my review of Ron`s latest piece by citing some of my comments on his prieceding post:

Ron, I’m surprised that you would go to the effort of spreading rather thin hype about “Green fascism” without bothering to explore from a libertarian perspective whether the Green fascists have grounds for concern, what the institutional underpinnings of environmental and “overpopulation” problems might be, or what our own connections to those problems are.

It’s rather simple, really: we see both cleaner environments and the demographic shift in relatively wealthy nations that protect property rights, as families and other economic actors are largely forced to bear their own costs, which provide incentives to keep both pollution and families under control.

Where populations are still growing rapidly – and environmental degradation continues apace – are societies that do not protect property rights, so that economic actors do not internalize all costs, and families to a significant degree face a free-for-all over resources that are not effectively owned or protected.

“Development” thus presents many aspects of a “tragedy of the commons”, a tragedy that we feed with our own consumer, commercial and industrial demand, which is sourced from assets that are not clearly owned, but are simply up for grabs – whether we are talking about the strip-mining of the oceans, the replacement of the Amazon and SE Asian tropical forests with soybeans and palm oil/biofuel plantations, or industrial and commercial enterprises that don’t bear the costs of their pollution (or of the power plants supplying their electricity).

The “Green fascists” see the destruction at the end of the chains of demand that we in the West pull and the destruction resulting from population growth that is unchecked by the pricing signals from effective ownership, and they are rightly concerned. That they fail to understand the institutional underpinnings is of course to be regretted, but it is a failure that can be remedied by a little education.

That you chose not to use your knowledge of the dynamics of “tragedy of the commons” to educate but instead to decry “Green fascists” is a similar failure, and one that I hope you will regret and try to remedy.

As it is, it seems as if you enjoy the emotional rewards of partisan struggle more than really exercising your noggin or making a contribution to directing attention to where solutions to where real problems might lie – in improved property tights protection and governance in the developing world.

Care to contribute, or just to raise an alarum about the evil greenies?

Regards,

Tom

In his latest post, Ron summarizes Brown as “argu[ing] that the world’s food economy is being undermined by a troika of growing environmental calamities: falling water tables, eroding soils, and rising temperatures.”  But even this miscasts Brown, who except for concerns about the over-pumping of the Ogallala aquifer in the high plains of the US Midwest, is clearly focussed mainly not on threats to agriculture in the developed nations, but in the developing ones.  Puzzlingly, Bailey largely agrees with some of the principal areas that Brown points to as reasons for concern, but brushes them off without real discussion or apparent justitication, mainly by telling us how things are no so bad in the developed nations.

First, regarding water, Brown mentions both obvious unstatainability of agriculture as is in places with rapidly falling water tables (particularly China and India) and where the melting of mountain glaciers means lower water supplies during the summer (including China).  Bailey shows off his understanding of the underlying dynamic of an unowned aquifer and the failure to price water correctly, but assumes, without aparent foundation, that water pricing policies will be adjusted without before any agricultural disruptions occur:

“It is true that water tables are falling in many parts of the world as farmers drain aquifers in India, China, and the United States. Part of the problem is that water for irrigation is often subsidized by governments who encourage farmers to waste it. However, the proper pricing of water will rectify that by encouraging farmers to transition to drip irrigation, switch from thirsty crops like rice to dryland ones like wheat, and help crop breeders to develop more drought-tolerant crop varieties.”

Who`s going to make sure that water subsidies will be ended and that water will be “properly priced”?  It doesn`t happen by magic, Ron.

Next, Ron attacks Brown on soil erosion – by conceding the point in developing nations but then presenting a red herring by switching focus to developed nations:

“To be sure, soil erosion is a problem for poor countries whose subsistence farmers have no secure property rights. However, one 1995 study concluded that soil erosion would reduce U.S. agriculture production by 3 percent over the next 100 years. “

The developing world is rife with problems of unsecure land tenure – heck, Zimbabwe is crashing as we speak for that very reason – but instead of enaging on this, we hear that everything is peachy in the US.

Finally, we turn to Brown`s fear of the effects of man-made global warming on agriculture.  Here, too, Bailey completely ignores the developing world in favor of looking only at the US.  Even in our case, Ron first notes that there is “an ongoing debate among experts”, but concedes that  some researchers have concluded that the impact of global warming on U.S. agriculture is “likely to be strongly negative.”  But by pointing to biotechnology research in making crops more heat and drought tolerant as a basis for optimism at home, Ron has essentially conceded that Brown (and the scientists and those funding them) have a basis for concern.

Further, Bailey notes that he agrees with Brown on two points:

“Brown is right about two things in his Scientific American article: the U.S. should stop subsidizing bioethanol production (turning food into fuel) and countries everywhere should stop banning food exports in a misguided effort to lower local prices.”

But rather welcoming Brown`s correct analysis on these points – notwithstanding Bailey`s prior warning that Brown and others were sure to call not for freer agricultural markets but for “green fascism”  –  Bailey can`t resist dissing Brown:  “Of course these policy prescriptions have been made by far more knowledgeable and trustworthy commentators than Brown.”

But despite this evidently weak dismissal of Brown`s concerns on the merits raised in the Scientific American article, Bailey somehow feels justified in completely dissing Brown.  Why?  While it is true that (1) advances in agronomy to date have expanded food supplies to meet the demands of a burgeoning world population (so Brown`s population “bomb” has yet to explode) and (2) Brown lost a famous bet with economist Julian Simon over future commodity prices, how are we doing on the institutional and environmental front in the developing world?  

– are we continuing to wipe out the ocean`s fisheries (which lies behind the Somali shift to piracy), to change ocean chemistry, and to replace important estuaries with shrimp farms?

– are we destroying “public” tropical forests (wrested from natives) and convert them to soybeans and oil palms, despite a long desire by the West to protect their inhabitants and wildlife?

– how sustainable is agriculture in China?

– aren`t we facing continued pressures from population in the developing world to convert wild lands to marginal agriculture?

– how are we doing with water supplies, water tenure and water pricing?

– aren`t we facing continued problems with insecure land tenure?

As I noted recently in comments on the Real Climate thread on tragedies of the common, where markets are unchecked by property rights (and consumer pressure, regulation, trade agreements), they are very effective machines of destruction.

It`s a lack of understanding of this that makes market conservatives right / enviros wrong on SMALL issues (such as Brown`s bet with Julian Simon on commodity prices), but wrong on the BIG ones. Those ranting about “neo-Malthusians seeking to destroy civilization” are simply ignoring or are blind to how consumer and other markets are destroying unowned, unmanaged Nature around the world.

These are the types of problems that have long troubled Lester Brown – and I think Ron Bailey as well.  In any case, Bailey should recognize all of them as problems that stem from a lack of clear and enforceable property rights, in some cases driven by government theft or incompetence.  So why does Bailey feel that the most constructive approach to persuasion is to abjure the elucidation of underlying problems, facilely dismiss concerns and to attack Brown`s motives, by calling him an “old charlatan”?

Disappointing.

But this is the type of engagement that we continue to see from “libertarians” and conservatives (such as Robert Bradley and George Will), who seem to reflexively regard enviros as the “enemy”, as opposed to the lack of property rights or the underlying statism that gives rise to the problems that bother the enviros.  Thus we see not a triumph of reason, but of partisan hostility and mudflinging, sometimes as a mask for support for status quo rent-seekers.

It`s all enough to make an inquiring mind ask, will the real charlatans please stand up?  Or sit down?  Or start living up to the principles they say they espouse?

 

Further to my prior posts, here are my more recent comments over at the remarkable RealClimate thread started by climate scientist Gavin Schmidt, to specifically discuss the “tragedy of the commons” paradigm in the context of domestic and international wrngling over climate policy:

 

544:  TokyoTom Says: 

15 May 2009 at 7:04 AM

530: “our temporary endowment of hydrocarbons … [is] currently almost a monoculture and it has developed a set of entrenched players who feel very threatened when confronted with the possibility that consumers may have a choice about where to plug in their toasters.”

Doug, you`ve correctly identified that SOMEONE feels threatened about where people plug in their toasters, but it ain`t the fossil fuel industry. but the so-called “public utilties”, which are NOT owned by fossil fuel producers, and have persuaded states to give them local monopolies and to wall them off from competition, in exchange for regulation of how rates are set.

Consumers get screwed all around, since they can`t purchase power from whom they want, by type of generating source, by time of day (peak v. off-peak), largely can`t easily monitor their own use, have limited ability to put back power to the utility, and because the utilities have no incentive to invest in long-range transmission (which would allow greater competition among generators) unless the local regulator is willing to allow cost recovery.

As the whole pent up demand for green energy is caused by the state/local grants of monopoly, perhaps environmentalists, rather than pushing for more government involvement, might consider asking for and end to public utility monopolies:

http://mises.org/daily/2264

 

545:  TokyoTom Says: 

15 May 2009 at 7:49 AM

#438: “But Rene isn’t talking about incorporating private ownership as part of a management strategy, but rather selling off the resources and getting rid of any collective from-above management strategy altogether, from forbidding government managers from setting goals (for instance, sustainability) at all.

When these schemes work it is typically due to some sort of collective mechanism above and beyond the whim of the individual owner of a fishery or other stock.”

dhogaza, you persist in finding an enemy in every friend. Nowhere has Rene (or I) advocated ANY form of privatization scheme, much less insisted on one that eliminates all government oversight (which of course, for as long as governments exist, is impossible anyway). In any case, in all of the cases where open-access-type resources are centrally managed, we can only expect gradual steps away from that, as politicians like to maintain their positions as gatekeepers for favors and we rarely see bureaucrats volunteer to lighten their own oversight purview.

“We have exceptions where individual owners put long-term sustainabiliity and non-economic values as a priority (I mentioned Gilchrist lumber here in Oregon as an example). But these are notable precisely because they’re *exceptions*.”

I understand your concern about the timeframes in which humans act, but there is an irreducible difficulty in fashioning institutions with longer-term views, as they are all populated by people. Even resources in the hands of governments are subject to human whim, such as Cheney`s allocation of scarce water in Oregon in ways that favored Republican farmers over salmon, Native Americans and fishermen, and Bush`s widescale gas leasing in the Front Range, against the opposition of ranchers and hunters.

Further, you and others keep forgetting that many private owners lead the way in environmental protection; many state parks have their roots in privately preserved land that, in order to avoid the tax man, were subsequently handed over to the state. The Nature Conservancy (which represents its individual members) protects valuable parcels not by seeking government regulation, but by buying them (or conservation easements) outright.

Another problem you point to is that of conflicts between community interests and the interests of individual owner and interloping buyers (individuals or firms). It seems to me that the greatest problem relates not to the ownership of property, but to the willingness of giant corporations to listen to the communities in which they operate. Some do a better job than others, but I do think that the problems with corporations also has its roots in gifts by governments to relatively wealthy investors:http://mises.org/Community/blogs/tokyotom/search.aspx?q=limited. Many large firms are run in order to put money first in the pockets of executives, with employees and investors next, under circumstances that encourage risk-taking rather than truly conservative behavior (as can be seen from the financial crisis).

 

547:  TokyoTom Says: 

15 May 2009 at 7:59 AM

#408: “The “climate commons” are the biggest ones of all. They cannot be contained, users cannot be easily left out. Even market-based solutions demand an international enforceable regulation to forbid, tax or at least know who´s emmitting how much, and who has to pay to whom for what.”

Alexandre, thanks for your comments; I largely agree.

The fact that the atmosphere is a global commons means no government can act effectively alone; that`s why Gavin`s metaphor of the multi-party international negotiations as a tragedy of the commons is apt. It`s also why fear of government “fiat” is rather misdirected, as in essence all major emmitting governments (and their chief constitutencies) have to reach a COMMON agreement. The situation is much like ranchers reaching terms of use on a range, and fishermen agreeing how to manage a fishery:

http://mises.org/Community/blogs/tokyotom/archive/2008/07/14/are-pigovian-taxes-coasean-if-they-are-not-fixed-by-one-government-but-rather-the-product-of-negotiations-among-many.aspx

 

550:  TokyoTom Says: 

15 May 2009 at 8:31 AM

#484: “Tosh, to put it bluntly. The ratio of greenwash to real change is vast. Moreover, only retail businesses are subject to any significant consumer pressure even to undertake greenwashing. It has been legislation and in some cases international agreements that have mitigated damage from food adulteration, lead in fuel and paint, acid rain, and ozone-destroying chemicals.”

Nick, “tosh”? Now I`m really offended! 

I never argued that consumer pressure was by itself adequate in all cases. Presumably you agree that consumer pressure has proven to be useful, even as you downplay it. The fact of greenwashing is itself an indication that consumer opinion matters, even as people remain susceptibly to deception – which is why there remain entrepreneurial opportunities for certification organizations. consumer reporting, etc.

I would love to see some consumer boycotts of unsustainbly caught bluefin, in order to lead the way for regulatory/treaty changes that I certainly agree are needed, and the role of moral suasion and struggle for the moral high ground is not to be denied on the climate change issue (which is why Gore in some ways is a self-hamstrung figure – the man wouldn`t know a hairshirt if it hit him in the face).

 

608:  TokyoTom Says: 

15 May 2009 at 10:53 PM

#419: Missed this:

“Slavery was brought up because of the idiotic contention posted that owning something means you take good care of it. And, BTW, some Libertarian philosophers have touted “voluntary slavery” as a solution to unemployment. You see, you have a property right in yourself, so you also have the right to sell it.”

Barton, I don`t speak for Rene, but I think the chief point is the largely uncontroversial contention that people are more likely to take better care of things that they own, relative to the possessions of others or things that nobody owns. Feel free to quibble about the failures of property rights, but are we completely disagreeing on the big picture and what drives the “tragedy of the commons”?

As for slavery, surely you can recognize that what those libertarians are discussing are still voluntary transactions between consenting person, not the theft and enslavement of others by violence and force. They are just not the same.

As to the former, do you have any idea about the ways that many of our forefathers funded their expensive passage to the young colonies/US? Ever hear of “indentured servitude”?

 

[some snark in the title, reflecting the heat of the fight over the wheel of government]

Further to my prior posts, here is the full list of my comments over at the remarkable RealClimate thread started by climate scientist Gavin Schmidt, to specifically discuss the “tragedy of the commons” paradigm in the context of domestic and international wrangling over climate policy. 

 

So far, comments by yours truly are as follows:

134. TokyoTom Says: 
8 May 2009 at 11:56 AM

Gavin, thanks for a thoughtful post that I hope will be brought to the attention of every so-called “skeptic” – none of whom has any basis to deny that there are simply NO property rights protecting the atmosphere (or the oceans).

As a result, to prevent a continuing “tragedy of the commons” the nations of the world, we need to make a collective effort to manage what is, after all, a shared resource.

It`s nice to see that others see that where there are no formal or informal property rights or similar mechanisms, all incentives point to ruin.

 

171. TokyoTom Says: 
8 May 2009 at 7:42 PM

Property rights are not an end-all or be-all, but they are a linchpin in understanding the dynamics of the tragedy of the commons problem. Resources that are owned – formally or informally, in common or privately – are husbanded, at least much better that when they are not.

This is a key point to keep hammering home with “conservatives”, “skeptics” and ordinary people, whom can all recognize that market demands produce a tragedy of the commons whenever valuable resources are not owned (or cannot be protected) by those who use them.

When there is ownership, (1) users have incentives to invest in protecting what, after all, supports their own livelihoods and, even further, (2) those who also care about the resource have an ability to also protect the resource – by investing it themselves, or by making other private, market decisions, such as to boycott particular owners and to favor others.

When there is no ownership, there is very limited ability by anyone to protect the resource directly, and what we are left with is a battle of words.

Of course a corollary problem that requires attention is that when resources are “publicly” owned, such resources may in fact be treated as a commons, or something that politicians and bureaucrats dole out to whomever is in favor – witness the environmental destruction in communist states, the logging of “public” tropical forests, and our own continued mismanagement of public lands.

In that case of fisheries, this is so readily apparent that even the mainline environmental groups are now calling for giving fishermen property rights in the fish they catch in order to end the destructive race to catch them:

http://mises.org/Community/blogs/tokyotom/archive/2009/01/15/for-crashing-fisheries-coalition-of-mainline-us-enviro-groups-calls-for-property-rights.aspx

Meanwhile, concerned citizens continue to misunderstand the key dynamics of environmental problems, and to miss opportunities to rub the faces of “market” fundamentalists and “conservatives” in the obvious lack of property rights in the atmosphere (and a related inability of those adversely affected by using the atmosphere as a dumping ground to seek redress from those who profit from using it as one):

http://mises.org/Community/blogs/tokyotom/archive/2009/03/12/overlooked-by-those-warmed-by-climate-rhetoric-quot-alarmist-quot-or-quot-skeptic-quot-the-fact-that-our-most-important-commons-have-no-property-rights-rules.aspx

 

 

194.  TokyoTom Says: 

9 May 2009 at 7:03 AM

Chip, the last time we chatted, you were going to look into why Rob Bradley had decided – in the middle of an exchange of comments with you on a previous post at his supposedly “free market” Master Resource blog – to block a libertarian like me from commenting, even taking that decision away from you:
http://mises.org/Community/blogs/tokyotom/archive/2009/03/11/rot-at-the-core-rob-bradley-at-quot-free-market-quot-masterresource-blog-shows-his-true-colors-as-a-rent-seeker-for-fossil-fuels.aspx

Do you fail to understand that the fact that Master Resource is a soapbox for the coal industry, which has up to know had the political establishment in its pocket (a small investment that has created great profits while shifting costs to the public and future generations)? Or that this affects the willingness of people to listen to you?

Your hope for a deus ex machina government investment program to somehow save us further illustrates your lack of understand how markets malfunction with respect to unowned resources.

Far better for the government to simply impose rebated carbon taxes, as both Exxon (which no longer funds Rob Bradley`s ventures, BTW; see link above) and Jim Hansen have called for, than to have government itself try to guess what technologies to invest in.

 

240.  TokyoTom Says: 

10 May 2009 at 7:21 AM

#195: “The tragedy of the commons isn’t actually a tragedy of the commons – it’s a tragedy of the free-for-all. There are any number of ways to overcome the tragedy of the commons – from Mutually Assured Destruction, to consensual co-operation – (and in many societies around the world, the latter has worked for centuries to millenia), but the free market ain’t one of them.”

This is confused. The “free market” certainly pulls on the chain of destruction where resources are not owned or managed, and may, by introducing new technologies, even accelerate the destruction of commons and to the breakdown of communal systems. But broadly speaking, where there are adequately defined and protected “property rights”, the free market does not itself generate the destruction of commons.

And property rights, broadly speaking, are simply instituitions that societies have gradually developed to side-step tragedy of the commons situations

 

241:  TokyoTom Says: 

10 May 2009 at 7:33 AM

#196 Tamino, I share your sentiments.

Many of those who profess to be interested in protecting “free market capitalism” really have no clue themselves as to how it works, and why it DOESN’T work in the case of environmental problems.

By likewise, many “environmentalists” have very little understanding of how and why markets can go wrong.

A little discussed aspect of the problem is that there is also a rather apparent tragedy of the GOVERNMENT commons, as governments both tend to do a poor job of managing assets and frequently end up either serving special deal to special interests or as public battlegrounds (since different people can`t simply do independent deals to accommodate their differing perspectives).

It`s the battle to influence and win favors from government that leads to partisanship (and “ludicrous rationalization”), which is often hijacked by special interests.

It`s not clear to me how much Chip Knappenberger understands markets, or understands how his posts provide cover for fossil fuel firms/investors who profit while shifting risks to all of us.

But there`s plenty all around. I note that even Jim Hansen strongly favors taxes over cap and trade bureaucracy and green pork.

 

278.  TokyoTom Says: 

10 May 2009 at 11:16 PM

#188 / 245: Neal & Jim, thanks for the references to the successful experiments in Iceland, NZ and the Alaskan pollock fishery to replace the tragedy of the government commons with property rights approaches that gives the fishermen a stake in protecting the resources they harvest, instead of simply an incentive to invest in a mad race to catch fish before others do in a continually shrinking fishery with shorter and shorter seasons.

I continue to have problems with the spam filter (links and bad words?), so I have excised most of this post and put it up separately at my blog, linked at my name above (with links to some of my other posts on fisheries)

 

282.  TokyoTom Says: 

11 May 2009 at 12:20 AM

#262 Cardin, do you seriously think that there is ANY possibility of “the U.S. cap[ping] emissions independently of the rest of the world”?

US legislators (and presidents from Bush Sr through Clinton and Dubya) have made it crystal clear that we won`t act alone.

Rather, we face classic collective action problem with respect to a shared resource – like fishermen regulating a fisheries, ranchers agreeing on how to manage a range or farmers managing streamflows – with respect to which we have long been the major user (and remain so by far on a per capita basis), and very few are willing to act (other than to posture) unless we are.

We have long recognized that there are shared gains (in the form of avoided losses to ecosystems and economies) to acting to limit human-induced climate change and ocean acidification, and to improved environmental management in the third world – real costs that your “cost-benefit” analysis neatly ignores), and we have ample carrots and sticks to persuade others to follow.

The problem is that the wheel of our own government has long been captured by the investors and industries that reap short-term profits while shifting costs to all of us and future generations.

IOW, the supposedly cool and rational approach is, at its core, a mask by which particular interests continue to hijack the rest of society.

It`s this fact that drives others – frequently wealthy – who are not invested in fossil fuels to support the PR campaigns of Gore and others (not enviro-facists out to destroy capitalism).

 

284.  TokyoTom Says: 

11 May 2009 at 12:30 AM

270: Hank, what you`re bemoaning is the “property” is only as good as one`s ability to defend it. The battle we all face with spam is another example.

The rest of creation has long confronted the same, unending battle over resources; unfortunately nature is relatively defenseless before mankind, and our continuing technological/organizational innovation continues to ramp up our assault on “wild” nature.

The flip side is that progress also makes it easier for us to identify polluters and to protect assets.

 

288.  TokyoTom Says: 

11 May 2009 at 2:17 AM

#145: Jim, it seems to me that you and others have misunderstood Rene and are attacking strawmen rather than his points, which are fairly general – and fully acknowledge the undeniable point that resources that are unowned or unmanaged are abused.

Rather than seeing common ground or exploring how to address these classes of problems, you ll prefer to offer what are essentially red-herrings about how private property is itself imperfect, which is not a point that Rene has at all contested.

“Yeah, let’s just domesticate and privatize everything, that’ll solve it! You have absolutely no idea what you’re talking about, either with regard to endangered species protection, management of a commons, or the interaction between the two. Zip.”

Is Rene or anyone saying that we have to privatize all resources? Rather, he is giving you a great talking point for all those supposed “free-market” “skeptics” out there, who fail to recognize that markets don`t work with respect to resources that nobody owns or are not collectively protected/managed.

You are all so ready to fight that you are having great difficulty distinguishing friend from foe.

 

322.  TokyoTom Says: 

11 May 2009 at 2:08 PM

I`ll let Rene correct me if I`m wrong, but I don`t think that Rene has asserted that all resources MUST be privatized (as opposed to being owned and managed by communities or subject to some public regulation) or that private ownership is perfect, but that he`s simply pointing out that resources that are un-owned and are subject to open-access commons exploitation get trashed.

There is ample room for disagreement over the best approaches to such resource problems, as corruption, favoritism and incompetence are inescapably linked to government action. I think Rene was referring to this in connection to tropical deforestation, where what others call “commons” are in fact either lands held by indigenous peoples and stolen by government, or otherwise government-held “parks” and “reserves” that are liquidated by elites (look at the the Amazon, Kalimantan and the sources of the Marcos family wealth, for example).

But Rene is clearly on the side of those who want to see resources protected, and he should be credited for trying to give you guys tools to fight your real enemies – the so-called “skeptics” and “conservatives” (like George Will) who think that “markets” will magically solve problems relating to un-owned (and un-managed) resources (and who serve as deliberate or unwitting fronts for those who are happy to take profits now but leave costs for others).

I keep trying to make this point – see the post linked at my name – but some of you seem to be in “full hackles” mode, certain that you see an enemy, and single-mindedly dedicated to chasing your own tails.

 

325.  TokyoTom Says: 

11 May 2009 at 2:30 PM

#320: Jim, I think I just answered you in a pending post – the REAL point is that the REAL enemy in the climate change struggle are people ((VERY DIFFERENT from Rene) who think that modern markets work great but forget to note that they undeniably produce destruction where resources are either UNOWNED or UNMANAGED.

On bison and whales, I invite you to a quick read of my own writings:

http://mises.org/Community/blogs/tokyotom/archive/2007/12/16/bison-markets-the-tragedy-of-the-commons-and-the-indian-war.aspx

http://mises.org/Community/blogs/tokyotom/archive/2008/02/15/whales-and-fisheries-quot-standing-up-to-japan-quot-or-enclosing-the-commons.aspx

I think I have provided links upthread on fisheries, but the people who understand these issues best are the free market environmentalists at PERC who have documented how Indians used to own and manage fisheries and other resources. If the tribes` treaty rights and traditional rights to salmon, etc. had been respected, then there would be a resource owner that would have every incentive and right to sue landowners for destruction of watershed habitat; instead, the resource became a state-owned free-for-all, subject to further federal mismanagement.

As Mike G has noted, the successes in marine resource management have all come by restoring some measure of private ownership to “public” resources, which is the reason, as I have already noted, the even the mainline environmental community is united in calling for more property rights-related approaches to crashing fisheries.

 

328.  TokyoTom Says: 

11 May 2009 at 3:11 PM

Let me link to a post that makes my point – and I think that of Gavin`s extended metaphor – fairly clear:

“Overlooked by those warmed by climate rhetoric (”alarmist” or “denialist”) – the fact that our most important commons have NO property rights rules”

http://mises.org/Community/blogs/tokyotom/archive/2009/03/12/overlooked-by-those-warmed-by-climate-rhetoric-quot-alarmist-quot-or-quot-skeptic-quot-the-fact-that-our-most-important-commons-have-no-property-rights-rules.aspx

The point is not that “property” is an easy panacea to every problem, but that the biggest problems lie where there are no property rights (or other mechanisms that give users incentives to invest in sustainability) in place.

Why don`t you guys see that using this as an argument on climate change is what like throwing holy water in the face of almost every climate change vampire?

#326: Hank, who say there IS a purely private solution to every problem? Certainly not me.

 

336.  TokyoTom Says: 

11 May 2009 at 9:21 PM

#333: Yes, Silk, there are still “a few people are willing to take the Exxon dollar and sell their soul.”

However, as I noted upthread, Desmog Blog has shown that Exxon no longer funds Robert Bradley or his blog where Chip appears:

http://mises.org/Community/blogs/tokyotom/archive/2009/03/11/rot-at-the-core-rob-bradley-at-quot-free-market-quot-masterresource-blog-shows-his-true-colors-as-a-rent-seeker-for-fossil-fuels.aspx.

It wouldn`t surprise me if Exxon is joining others in pushing for oil & gas development at home, but for now they`re no longer funding climate denial shops – and like Jim Hansen actually calling for carbon taxes!

http://mises.org/Community/blogs/tokyotom/archive/2009/03/08/exxon-rex-tillerson-no-longer-willing-to-be-quot-conservative-quot-on-climate-risks-advocates-carbon-taxes-and-invests-in-carbon-lite-tech.aspx

So where is their money going? How about the Stanford University-centered Global Climate and Energy Project (GCEP), the world`s largest privately-funded effort to conduct basic research on energy technologies to reduce GHG emissions, which they are funding over 10 years to the tune of $100 million?

http://mises.org/Community/blogs/tokyotom/archive/2009/03/08/exxon-rex-tillerson-no-longer-willing-to-be-quot-conservative-quot-on-climate-risks-advocates-carbon-taxes-and-invests-in-carbon-lite-tech.aspx

Exxon is now a climate change story that the right no longer wants to hear, and is one of the reasons I`ve been banned from the “MasterResource” blog.

 

337.  TokyoTom Says: 

11 May 2009 at 9:41 PM

#328: “You completely ignore the numerous examples that have been given of property owners trashing natural resources for a quick profit.”

Nick, no I haven`t. Rather, as I note in 327, I`m making a different point, that as Gavin points out with his metaphor, one of the best arguments to make to denialists and skeptics is that, as their OWN principles tell them, the “market” reality is that the worst cases of resources abuse are where there are no property rights at all.

Unchecked by property rights (and consumer pressure, regulation, trade agreements), markets are very effective machines of destruction, as I have tried to explain elsewhere:

http://mises.org/Community/blogs/tokyotom/archive/2007/09/27/too-many-or-too-few-people-does-the-market-provide-an-answer.aspx

It`s a lack of understanding of this that makes market conservatives right / enviros wrong on SMALL issues (such as Ehrlich`s bet with Julian Simon on commodity prices), but wrong on the BIG ones. Those ranting about “neo-Malthusians seeking to destroy civilization” are simply not ignoring or are blind to how consumer and other markets are destroying unowned, unmanaged Nature around the world.

This partisan blindness is readily understandable; after all, we see the same thing here among enviros!

http://mises.org/Community/blogs/tokyotom/archive/2008/07/06/mind-games-how-an-absence-of-functioning-markets-means-that-i-m-right-but-you-re-a-delusional-neurotic-quot-zealot-quot.aspx

 

376.  TokyoTom Says: 

12 May 2009 at 12:10 PM

#338 Ike, thanks for the interesting link on Polynesia.

But spare me the slave economy argument, not only because slavery is hardly something libertarians would find at all morally justifiable, but because it`s unrelated from my point – and, I think, Gavin`s – which is not that there is an ideal form of ownership/management, but simply that, where resources are unowned or unmanaged, they tend to get trashed.

This is a long, tragic and continuing story. The primary point is that we need to start better managing our commons, including our shared atmosphere. The ancillary point, for the purpose of political jousting, is that it is highly effective to ask skeptics to show you where the property rights (or other management mechanisms) are in the air that ensure there is is no tragedy of the commons. This is a show stopper, because you`re talking a language
is familiar to them, but they are forced to realize that the market system does NOT work for the atmosphere, because it is a commons and without property rights.

Are you with me?

[I responded to this before, but it apparently didn`t post.]

 

378.  TokyoTom Says: 

12 May 2009 at 12:27 PM

#331 : “Nah… it’s the same gut reaction I have when folks are asserting that Jesus loves me, or giving me free links to mises.org… not my religion, and I’m beyond redemption thank you very much. I like to live on the reality side of things.”

I can understand your “gut” reaction, but it`s rather obviously getting in the way of your higher faculties. I am barely tolerated by many at Mises (to whom I come off as a commie left enviro Nazi fascist) and offer links only to my own thoughts there, and similarly have been shown the door by RedState, Freepers, NewsBusters and now the place that Chip Knappenberger blogs from. And I`ve spent many a comment thread at Mises battling similar nonsense that people concerned about climate change have drunk the the Koolaid of some religion or another; e.g,http://mises.org/Community/blogs/tokyotom/archive/2008/07/06/mind-games-bret-stephens-of-the-wall-street-journal-panders-to-quot-skeptics-quot-by-abjuring-science-and-declaring-himself-an-expert-on-quot-mass-neurosis-quot.aspx

Feel free read further or test me.

 

382.  TokyoTom Says: 

12 May 2009 at 1:21 PM

#349: John, George Reisman is your uncle? I`ve had the nerve to joust with him on the LvMI pages and my own blog over the past few years on environmental matters, where he is simply emotional and not reasonable:
http://mises.org/Community/blogs/tokyotom/search.aspx?q=reisman
http://blog.mises.org/archives/005916.asp

Thanks for your various questions and observations. I don`t think that we are actually that far apart, but we are drifting a bit off-thread. Let me make a few specific responses.

“Mankind did not create the resources so by what right has he to own them? People own oil, but oil is being drilled and used to its inevitable extinction of the resource. It might be better to think of the global resources as being lent to us by the mere fact of the existence of such resources, so what right of ownership should exist?”

My own view is that “ownership” is chiefly not so much about our individual relationships to “property” (can we really “own” any other life form? aren`t we just as much owned by the bacteria in our gut, parasites, diseases and predators that use us for food?), but more humbly about our relationships with each other regarding relative priority of claims to make use of particular things we find valuable. What those things depends upon place, time, culture and individual.

“Many owners have exploited a resource wile abusing it and destroying its capacity to survive simply to finish with it and move on to another resource to exploit.”

I don`t disagree. In fact, I think that this is endemic whenever there are open-access commons remaining for such exploiters to move on to. (In this regard, we differ from the rest of nature only in the leverage that technologies give us to wreak devastation.) While we have developed property rights institutions (communal and private, informal and formal) precisely to get a handle over tragedies of the commons (and even evolved possessive and cooperative behaviors) only a blind ideologue would assert that creating property has somehow changed human nature. But it is worth noting that property IS helpful, as it makes it possible for others to acquire and manage more beneficially resources that others mistreat.

“There is also ample room to see that corruption, favoritism and incompetence are inescapably linked to corporate greed through over manipulation of markets. The users and the looters are not always the government and the belief systems, they are also corporations.”

Again, I agree; my point is not that all use of government should be avoided (indeed, it might even be needed), but simply that use of government itself no panacea, but fraught with danger – as corporations and their owners are far more effective in Washington than the citizens who continually have to organize to do battle with them. Some corporations (not all, by any means) are looters, and use government to achieve their ends.

This goes back a long way, with the chief roots in the grant of limited liability to shareholders for bad acts by corporations:http://mises.org/Community/blogs/tokyotom/search.aspx?q=limited+liability

Sorry, but I need to wind this up.

 

383.  TokyoTom Says: 

12 May 2009 at 1:32 PM

#354: “So the protection of your property DEMANDS an overwhelming force and a force that no other power can bring against you.”

Mark, this is too simplistic. What is “property” and how it can be defended depends on context. In close communities, people don`t lock their doors, do deals based on handshakes and reputation, and little resort is made to law, police or courts. In other cases, weapons – or thick contracts or physical or technological locks – and constant vigilance are required.

Maine lobstermnen have an easier task defending their resources than do indigenous fishermen or forest-dwellers.

So what will work in the case of climate depends on available technology and the level of trust (and enforcement) that can be established.

 

385.  TokyoTom Says: 

12 May 2009 at 1:41 PM

#365: “Just as the Newfoundland fisherman remained blind to the consequences of their actions. In both cases, what was happening was obvious, yet in spite of the evidence of diminishing resources, they cut/fished as if there were no problem whatsoever.”

JSM, thanks for bring us back the tragedy of the unmanaged/government commons. Who owned the fishery, the government or the fishermen? Except in places where fishermen are being given transferable harvesting rights (or being completely locked our – very rare) government-management fisheries are all crashing, which is why mainline environmental groups are calling for more property rights in fisheries.

Ironic captcha: bickers Salmon!

 

416.  TokyoTom Says: 

13 May 2009 at 3:39 AM

#391: “A corporation which takes other factors than money into account can be taken over with money when their book value gets too high for their stock value. You forget that some resources are too large for a single owner (and single owners eventually die), and so crowd theory takes over. In a sense, corporations are a tragedy of the commons for everything they own.”

Richard, these are extremely important nuances, to be sure, but it is still helpful for Rene to generalize by saying that “Those who own a forest are not compelled to harvest it against their wishes.”

Rene was talking about what ownership of a forest (or a transferrable fishing permit, first use water rights, etc.) implies – and was surely correct – while what you are talking about what we mean by ownership of a public corporation, which is also an important area of inquiry.

Starting with the first state grant of limited liability to investors/owners for damages that corporations do to third parties, to other extensions of unlimited life, unlimited purposes and the Consitutional right as a “legal person” to lie and to purchase influence, moral hazard and risk-shifting has become rampant in the businesses closest to government:
http://mises.org/Community/blogs/tokyotom/search.aspx?q=limited

Back to resources, what we typically mean by “ownership” is the right, vis-a-vis non-owners, is to determine who has access to the resource and the terms under which they can use it. The nature and preference of the individuals, community or government that owns the resource may make all the difference between how well a resource is used and protected, but markets do allow people and groups with differing preferences to make deals regarding ownership and management.

It`s where there is NO ownership, or where ownership is in the hands of a kleptocracy or poorly-run bureaucracy that either the “tragedy of the commons” takes place, or deals cannot be done and everyone is stuck in a struggle for control over the wheel of government: http://mises.org/Community/blogs/tokyotom/search.aspx?q=wheel

“Private” and “community” property systems that put control in the hands of users are by no means perfect, but they avoid the worst of the tragedy of the commons, which is why mainline environmental groups are now together calling for property rights in fisheries (as linked above).

 

417.  TokyoTom Says: 

13 May 2009 at 3:56 AM

#373: “The increased logging clogged many salmon streams, in many cases permanently degrading them. This has been a large factor in the collapse of West Coast salmon fisheries (along with increasing diversions of water to agriculture and rising river water temps).

Now, if the salmon fishermen owned the redwood forests that surrounded all the salmon streams, they might have had a very different take on what the best thing to do was – a very different view from Wall Street bond traders. Which one is right?”

Good questions, but you`ve missed an important one – what would the result be if salmon fishermen actually owned rights in their FISHERY (as opposed to land, as you query), instead of just being allowed to catch fish when the government allows?

Wouldn`t they have an ability to sue landowners for messing up streams, and to make deals with then to enhance and maintain habitat? This (and water rights) in fact underpin river and stream fisheries in various parts of the world and US. It`s mainly the government ownership of the resource – after stealing it from the Indians – and the fact that users have no rights that they can protect or trade that is the reason why the great salmon fisheries are surely dying:

http://mises.org/Community/blogs/tokyotom/archive/2008/07/23/destroying-the-salmon-the-socialized-commons-and-climate-change-part-ii.aspx
http://www.perc.org/articles/article249.php
http://www.perc.org/articles/article884.php

 

433.  TokyoTom Says: 

13 May 2009 at 10:31 AM

#424 “Markets have their place, but they give individuals and corporations influence in proportion to their wealth – thus in practice, giving only corporations and very rich individuals any influence at all. This is why “libertarians” love them so much. “Propertarians” would be a far more accurate term for their views.”

Well said, but with more bark than bite. Consumer preferences on green issues – expressed by individual purchases and by group action – have done a great job of influencing markets and products provided, and there is ample room for more.

See Walmart working with fishermen and a sustainability certification group re: Copper River salmon:
http://mises.org/Community/blogs/tokyotom/archive/2008/12/09/save-wild-fisheries-buy-your-certified-sustainable-salmon-from-walmart.aspx

What we desperately need right now re: bluefin and other fisheries are consumer boycotts and demands for sustainability labelling.

 

#439:  TokyoTom Says: 

13 May 2009 at 11:14 AM

#429 Jim, people turn their backs on the rules because the rules create incentives for destruction and no incentives for compliance.

See what Defying Ocean’s End (cofounded by Conservation International, The Nature Conservancy, Natural Resources Defense Council, The Ocean Conservancy, Wildlife Conservation Society, The World Conservation Union, and World Wildlife Fund) says about protecting fish:

http://mises.org/Community/blogs/tokyotom/archive/2009/01/14/for-crashing-fisheries-coalition-of-mainline-us-enviro-groups-calls-for-property-rights.aspx

These crazy, dedicated cionservation groups are all pushing for poerty rights approaches to end the tragedy of this government-mis-managed commons.

[this is a short repost as it seems my initial post has been lost]