Back to the Drawing Board : Justice, Climate Change

Cap and Trade vs. the Carbon Tax

Donny with an A — Fri, 13 Jun 2008 22:09:00 GMT

So I've been addressing the issue of anthropogenic climate change for some time now, and I haven't said much in the way of addressing specific policy proposals. But I was just given a delightful present by one of my fellow FEE associates: a copy of the American Institute for Economic Research's latest Economic Education Bulletin, entitled "The Global Warming Debate: Science, Economics, and Policy." I didn't read the whole thing, but my favorite part was definitely when William R. Cotton, a professor of atmospheric science at Colorado State, closed his completely science-oriented essay, "Summary View of Climate Change," with:

There are strong indications that our global climate is warming. But the question is, is the warming due to anthropogenic greenhouse gases, or is it due to some other forcing mechanisms (or their transient absence) and natural variability. As human population on Earth continues to increase, the chances of human-induced changes in climate due to greenhouse gases, aerosol pollution, or alterations in land use become increasingly likely. Thus, rather than consider climate engineering, we should devise methods of encouraging the reduction of population growth through economic and quality-of-life incentives.

Period, end of conversation. No comment on that gem anywhere else in the entire essay. Who's got two thumbs and loves it? This guy.

But anyway, that's not the point. Later in the publication was an essay by Kenneth P. Green, a resident scholar at the American Enterprise Institute, where it was argued that a carbon tax is superior to a cap-and-trade system. I bounced between frustration, amusement, and glee as I read it, and felt an immediate need to comment. Not because Green did a bad job--he did just fine--but because he was guilty of something which is very common among people who discuss climate change: he discussed the possible "solutions" to climate change without addressing the reasons that a policy was to be implemented in the first place, and how the different solutions worked to address those reasons. His argument for a tax scheme over a cap-and-trade scheme was simply that a tax scheme could achieve the same goals, but with better economic side-effects and less potential for failure. Fine, I'll even grant it. But taxes and caps are fundamentally different policies, which only make even a little sense when confronted by specific sorts of problems.

I should explain what I mean. I've discussed elsewhere the idea that in order to make any sense from an ethical point of view, pollution taxes need to be based on the idea that an individual is justified in polluting if and only if she pays compensation to her victims for any damage done to them. That idea is controversial, but for our purposes we don't need to address that controversy. The point is only that even if we accept that idea as true, there are still only certain kinds of instances in which the injustice of pollution can legitimately be dealt with through a tax on pollution. The paradigm cases are those instances in which the damage caused by pollution is directly proportional to the amount of pollution that there is, so that the tax becomes the "price" of compensating the victims of one's actions for the costs one imposes upon them.

Cap and trade schemes, on the other hand, are built for an entirely different kind of problem. In a paradigm cap and trade situation, there is a threshold level of pollution with which policymakers are concerned, and at the threshold, a certain amount of damage is anticipated. The cap and trade scheme accordingly sets the cap at the relevant amount of pollution, and then distributes "shares" of the "environmental space" below that threshold in some way (e.g., auction, grandfathering system...). Because the allocations may be economically inefficient for whatever reason, the shares can then be traded in accordance with the wishes of their owners in order to ensure that the right to pollute is distributed to those individuals who are willing to pay the most for it (note that the normal objections to the "willingness to pay" criterion are avoided by passing the buck to the distribution process, which of course must be justified separately).

The point I want to make here is that global climate change is a very different phenomenon than the sorts of phenomena for which either of these policies is built to provide a solution. As noted elsewhere, climate change is an emergent problem. That is, climate change is not the result of any individual's actions, but rather is the consequence of many individuals acting separately, so that no individual can reasonably be said to have been able to prevent climate change from occurring, and no individual could have caused climate change singlehandedly. Accordingly, it does not make sense to talk about the consequences of climate change in terms of marginal contributions. The amount of damage caused by climate change will not likely change recognizeably with an additional increment of CO2 (or any other forcing agent), so it's not reasonable to try to put a price on how much damage "a unit of climate forcing" (expressed, perhaps, in terms of GWP, or Global Warming Potential, as defined by the IPCC?) causes.

A tax on contributions to climate change, therefore, seems like a policy which would require a bit of shoehorning. Individuals paying the tax would not be paying the "social cost" of their particular contribution, taken in isolation, because that would be basically zero. They would need to be charged for their "portion" of the total amount of damage done by climate change. So what policymakers would need to do would be to determine the total amount of damage which would be done at the equilibrium price for pollution permits, and then sell the permits at that price. The problem then becomes one of economic calculation. It could be done to some degree, but it would be inherently imprecise. And remember: the end result needs to be that the victims get compensated, so the government would have to go into its own pockets (that is to say, the pockets of its treasury or, more realistically, the pockets of its Federal Reserve printing press) to take care of the balance if it aimed low. And as my wonderful economist friends would point out, there would be a considerable incentive to aim high, creating a surplus revenue stream for the government which would almost certainly not be returned. So the tax is doable, kind of, but the problem is not the kind of thing that the tax is designed for. It's just that you can use the tax to accomplish the end goal if you want.

The cap and trade system is a little harder to adapt to the task, but there are a number of ways that the idea can be useful. First, there is a level to which we could collectively exert a forcing on the climate system without producing objectionable consequences. This level of climate forcing is a threshold which could be amenable to a soft cap and trade scheme (soft like the baseball salary cap). In this kind of policy, the cap would be set at the level of forcing which would produce no negative consequences, and this "environmental space" would be allocated somehow (or, if people find this to be a bad idea, we would simply say that these shares should be allocated in proportion to one's contribution to climate change, so that the soft cap has no effect). People not receiving these shares, or polluting in excess of their shares, would be filling environmental space which represented something like "harmful social emissions". Because these emissions would not be legitimated by the soft cap, they would be the ones which would be subject to the obligation to compensate the victims (again, if the soft cap isn't being used, as mentioned above, it would just be that everyone would have to participate in compensating the victims).

Here a potential for another cap would become apparent: We might imagine that policymakers would decide on a level of pollution (corresponding to some amount of total damage) which was determined to be "socially desirable" somehow. Perhaps, using the same reasoning involved in the tax scheme discussed above, the policymakers would arrive at the level of pollution which would clear the market if everyone paid some price for it. Or perhaps the policymakers would identify a level of pollution beyond which unacceptable results would occur, and the cap would be set there. In any case, you would then have to set a cap and allocate the shares. So again, the policy could be made to work. But the problems are simply that it's difficult to identify a level of "unacceptable" pollution, it's just as difficult to identify a market clearing price in this scheme as it is with the tax (assuming that the shares are auctioned, of course), and any other way of running the scheme is sure to carry either difficulties of its own, or charges of arbitrariness which would sever the connection between the problem and the solution.

So ultimately, what we're faced with is a situation in which the only two policy suggestions that are on the table are not particularly well suited to the task of "solving" the problems arising from climate change (and I haven't even begun to address the question of how the compensation process would even work, or whether compensation could make climate change legitimate!), and the only way to make either of them work is to basically stretch and contort them until they are made to do the job acceptably. Doing so, it will be noted, requires in both cases that government decision-makers possess knowledge and foresight which they almost certainly do not have, and even then it's unclear that the policies would work properly.

Obviously, there's a lot more to say about this. I just wanted to get some preliminary thoughts down, and I think this was a good start.

Generational Rights

Donny with an A — Mon, 05 May 2008 22:40:00 GMT

[Cross-posted on the parent blog]

The conclusion that we cannot infringe upon future people’s right by causing climate change may not appeal to individuals who see injustice in the fact that by causing climate change, the world we leave behind for future people could be substantially less hospitable than it would have been if presently existing people had not caused climate change. One might argue that perhaps we do not infringe the rights of individual people by creating dangerous or otherwise undesirable circumstances which are necessary conditions for their existence, but we infringe the rights of their generation by leaving behind a “spoiled” Earth.

The appeal of this notion is in the fact that a generation is simply the group of people who come into existence during a particular period of time, and there is no requirement for who exactly those people are. So, for example, we may say that a woman, Charlene, is a member of some generation A. If Charlene’s mother had conceived a child with a different man than Charlene’s father, Charlene would never have existed. But so long as the child was conceived around the same time as Charlene was, that child would have also been a member of generation A. Because the identity of the generation does not depend on the identities of its members, one might see an opportunity for getting around the Non-Identity Problem by focusing on what happens to generations instead of individuals under different policy choices.

So do future generations have a right to inherit an unspoiled Earth? For that matter, do future generations have rights at all? We may once again recall that rights represent the respect to which we are due as individuals and as ends-in-ourselves. Because of the inclusion of individuality as a part of our conception of rights, it might be said that generations cannot possibly have rights, because they are not individuals. But it seems reasonable to say that to talk about respecting the individuality of a generation is only so suggest that it should not be sacrificed for the interests of others—namely, other generations.

One might point out that other groups, like corporations or organized communities, can be seen as “individuals” and “ends-in-themselves” in the sense that they are entities which utilize means in the pursuit of their own distinct ends. These entities can be “benefited” and “harmed” in a meaningful sense by impairing their ability to pursue their own goods, and so it would not be inconceivable to suppose that these entities had rights of their own which were not simply the sums of the rights of their members (whether they can truly be disrespected is a separate and controversial issue, which we will not address here).

It may be noted, however, that generations do not seem to have an analogous “good of their own,” and do not pursue their own distinct ends in any recognizable sense. Any discussion of “the good of a generation” seems like it could be nothing more than a vague statistical statement about the good of its members. Indeed, the aforementioned groups can be seen as ends-in-themselves only through an understanding of the way that they are organized. In the way that a body is composed of organs which have functions in terms of the good of the body, a corporation’s constituent parts are organized to promote the ends of the corporation. The members of a generation, on the other hand, have no identifiable function in terms of the good of the generation itself. Temporal coexistence does not seem to illustrate the sort of structure which could make it meaningful to talk about a generation as an abstract entity with a good of its own. And if a generation does not have a good of its own, then it is difficult to imagine how we could disrespect it. Accordingly, we may conclude that generations cannot have rights, and so cannot have a right to inherit an unspoiled Earth.

Rights for Future People in Light of the Non-Identity Problem

Donny with an A — Sun, 04 May 2008 22:08:00 GMT

[Cross-posted on the parent blog]

To this point, we have identified rights-infringements as occurring where climate change causes the climate system to become more dangerous. It might seem, then, that wherever the impacts of a more dangerous climate system are felt, rights will be infringed, into perpetuity. After all, the mere passage of time between a cause and its effects does not seem like the kind of feature which would lead us to deny that a rights-infringement has taken place.

But we might take a different view if we thought that those upon whom the impacts of climate change will eventuate will necessarily not be made any worse off than they possibly could have been. How could this be true? Consider the implications of climate change not being caused. Those who otherwise would have contributed to climate change would spend their money on different things, travel to different places, and get different jobs. More importantly, they would meet different people, and fall in love under different circumstances.

As Derek Parfit points out in his book, Reasons and Persons, “Each of us grew from a particular pair of cells: an ovum and the spermatozoon by which, out of millions, it was fertilized.” If our parents had conceived their children under substantially different circumstances than the ones through which we were brought into existence (perhaps even with different partners), the consequence would be that we would not exist; other people would have existed instead. Accordingly, Parfit observes:

If a choice between two social policies will affect the standard of living or the quality of life for about a century, it will affect the details of all the lives that, in our community, are later lived. As a result, some of those who later live will owe their existence to our choice of one of these two policies. After one or two centuries, this will be true of everyone in our community.

The changes in our lifestyles that would be necessary in order to prevent anthropogenic climate change seem like they would constitute the sort of differences which would affect the identities of future people within a relatively small number of generations. Even those communities which are completely isolated from the rest of civilization would likely be affected by the decision not to cause climate change, through differences in the climatic conditions in which they lived. Accordingly, we can say with a reasonable level of certainty that if humanity does not cause climate change, the people who will inherit the Earth will be a completely different group of people than would have existed if climate change had been allowed to occur.

Acknowledging this phenomenon, referred to as the Non-Identity Problem, we are faced with a startling conclusion. If we cause climate change, the people who will experience its effects will be people who could not possibly have existed if climate change had not occurred. Accordingly, they will be no worse off as a result of our choice to allow climate change to occur than they could have been in any other scenario. The climate change that they would face would be a necessary condition of their existence. Confronted with this fact, we must ask, do we infringe these individuals’ rights by contributing to climate change?

Perhaps the most intuitive response would be that we do not. There is a sense in which we generally think of rights-infringements as involving harm to their victims, and it difficult to identify any person among the future generations who will have to deal with the impacts of climate change who is harmed by the actions of the present-day contributors to climate change; none of them will be any worse off than they could have been in any other scenario. Essentially, the only thing that will have been done to them is that they will have been brought into existence. And while it is conceivable that in some cases, where a life is deemed to be not worth living, it might be seen as harmful to be brought into existence, this possibility does not seem to create problems for the overall notion that bringing a different set of people into existence is not a harmful act. If harm is a core component of rights, then, it seems that no rights are infringed when future people, who are only brought into existence because of climate change, have to deal with the effects of that climate change.

But some might point out that even if they are not technically worse off than they could have been, the impacts of climate change will involve definite costs for future people. Individuals have interests in certain things being the case, and it imposes a cost on them when those interests are hampered, even if their overall wellbeing is not made any lower than it otherwise could have been. An individual whose house is destroyed by a flood must still deal with the consequences of that destruction, even if the flood’s occurrence is a necessary condition of that individual’s existence.

Accordingly, one might coherently argue that individuals have a right not to have their interests interfered with by others, even if those costs do not result in the victim being made worse off as a result. For example, James Woodward writes:

In his moving memoir Man’s Search for Meaning, Viktor Frankl seems to suggest that, as a result of his imprisonment in a Nazi concentration camp, he developed certain resources of character, insights into the human condition, and capacities for appreciation that he would not otherwise have had. Let us suppose, not implausibly, that Frankl’s mistreatment by the was a necessary condition for the richness of his later life, and that, had the behaved differently toward him, his life would have been, on balance, less full and good. It seems wildly counterintuitive to suggest that it follows from this fact alone that the did not really wrong Frankl or violate his rights.

I think that Woodward’s suggestion is completely correct. It does seem as though Frankl’s rights were infringed by the ’ actions, even though he was not actually made worse off on the whole, and that this is so because of the costs that were imposed on him. As we have discussed, the contributors to climate change will bring about the occurrence of phenomena which will impose costs on future people. If we accept the view that the hampering of certain kinds of interests is sufficient grounds for identifying a rights infringement, then, we might be led to the position that climate change does infringe the rights of future individuals.

However, we must note a critical difference between what it means for the to hamper Frankl’s interests and what it means for the contributors to climate change to hamper future people’s interests. We can reasonably say that if the had not imprisoned Frankl (and nor did anyone else), then Frankl would have gone unimprisoned. This is not the case for those future individuals whose interests are affected by climate change. If the contributors to climate change had not acted as they did, it is not as if the future individuals in question would have gone unaffected by climate change. They would have never come into existence.

We may think of this difference in terms of a particular set of conditions’ “distance” from some baseline representing the fulfillment of some interest. For Frankl, the relevant baseline was a state of liberty, in which his interest in being free of unjust imprisonment was fulfilled. By imprisoning Frankl, the “moved” Frankl away from the baseline in a way that impeded his interest in freedom. On the other hand, the future people who will be affected by climate change will be born into a world in which they are inherently not “on” the baseline of freedom from the costs that will be imposed upon them by climate change. By the nature of their existence, this baseline is unattainable. Where Frankl is moved off of his baseline, the future people who will be affected by climate change are not.

It seems intuitive to me that in order to have a right that something be the case, it needs to be possible that that thing be the case. If the thing in question is the integrity of my interest, then it must be possible that my interest is fulfilled. But the future people’s interests which will be hindered by climate change cannot possibly be fulfilled. Accordingly, it seems reasonable to say that future people have no right to these interests.

Reflecting upon our discussion of the nature of rights, this conclusion seems to be the correct one. As we have said, rights reflect the respect to which individuals are due as ends-in-themselves. If it is impossible that a person exist unless certain things are the case, then it seems odd to say that we could disrespect that person by bringing it about that those things are the case (again, excluding the possibility that the person’s life is not worth living). Accordingly, it seems fair to conclude that we do not infringe future people’s rights by causing phenomena that will impose costs upon them, so far as the occurrence of those phenomena are necessary conditions of those individuals’ existence.

Climate Change and the Right to Culture

Donny with an A — Tue, 29 Apr 2008 20:30:00 GMT

[Cross-posted on the parent blog]

The Right to an Opportunity for Cultural Integration

Focusing only on property damage caused by climate change, it may be noted, seems to leave out a large part of the picture of why people are concerned about climate change. In addition to the impacts discussed so far, many would find objection the fact that climate change will deprive members of certain social groups of the opportunity to integrate themselves into the societies in which they were raised, as a result of changes in the physical context in which those societies have been able to flourish. In many situations, entire cultures will be forced to relocate in order to continue to exist, and in some, they could vanish altogether. Surely this is a troubling consequence of climate change. But does it represent an infringement of rights?

In examining this question, we must take care to isolate the deprivation of an opportunity for cultural integration from the other sorts of rights infringements which we have been discussing so far. For example, if you are so deprived because your farm was flooded by ocean water and you were forced to move, then the problem seems to be one of property rights, and we already know what to say about it. To avoid confusion, we will discuss cases where the deprived party’s property is not being damaged in any way, and the only harm being done seems to be the kind of cultural deprivation that we are concerned with here.

Accordingly, we will imagine a hypothetical scenario in which a young Pacific Islander, Akiko, is setting about deciding what she wants for her life. She owns no property, and has not settled in to any profession or living situation. She is simply evaluating her options in order to choose how she will begin her adult life.

The Intergovernmental Panel on Climate Change (IPCC) suggests that small island communities will be particularly vulnerable to climate change. In addition to submerging land on the island, sea level rise will likely make storm surges more dangerous and exacerbate erosion and other coastal hazards. On land, water resources will likely be seriously compromised, and the introduction of salty ocean water into the environment will likely make agriculture more difficult. In the ocean itself, changing environmental conditions could fundamentally alter ecosystems, possibly affecting populations of fish and other organisms on which the islanders rely. Further, a number of studies have concluded that the effects of climate change on the tourism industry will produce generally negative outcomes for island economies. All things considered, it might be unfeasible for Akiko to try to start a traditional life for herself on the island. Changing environmental conditions could make it impossible for her to live the kind of life which has characterized her people in the past, and she must act accordingly.

It seems clear that this is something of a sad story. But it might here be noticed that there are plenty of ways which one might deprive a person of the opportunity to live in the manner for which their culture is adapted, which would not involve any violations of their rights. For example, we might imagine a community of small-scale farmers who have fallen on hard times on account of the emergence of a large agribusiness corporation, whose greater efficiency and high output caused market prices for the farmers’ goods to fall below a level which could support their traditional lifestyles. Jebediah, a child growing up in such a community, would seemingly be faced with a set of circumstances similar to Akiko’s. Circumstances would make it impossible for Jebediah to take his place in the culture of his upbringing, much like Akiko was driven away from her heritage by the changing environmental conditions on her island brought about by climate change.

Presumably, we would not think that the agribusiness corporation, in bringing its products to market in higher quantities and better prices, was doing anything wrong, even if it had no significant moral reason to support its actions. In fact, we might applaud it for representing an increase in the wellbeing of its customers, who could use the money they saved on purchasing food products to improve their material conditions in ways that would have been otherwise unavailable to them. So surely its actions would not represent infringements of any rights held by the young members of the farming community, like Jebediah, who would be denied an opportunity to carry on in the traditions of their parents. And so we might think that in the same way, Akiko’s rights are not infringed when she is denied the opportunity to become integrated into the culture of her upbringing by climate change.

One might object that there is a difference between Jebediah’s case and Akiko’s, in that Akiko’s situation is the result of rights-infringing damage to the environment in which her culture existed, whereas Jebediah’s situation is the result of customers exercising their right to withdraw their patronage from producers who do offer noncompetitive products. Jebediah lost his opportunity because it was built upon an assumption of support from others which proved to be false, and neither he nor any of his predecessors had any right to this support. Akiko’s elders, however, did have a right to the things that Akiko would need in order to exercise her opportunity, and Akiko was only denied access to them because a third party actor acted in a way that infringed upon rights.

But as we mentioned at the beginning of this section, we have to be careful to avoid focusing on infringements of the rights of those whose property is damaged by climate change. Those factors have already been accounted for. And remember, we have stipulated that none of the property which is damaged belongs to Akiko. So this avenue of establishing Akiko’s rights seems closed: it seems fairly clear that Akiko has no claim to the property of other people, and her rights are not infringed when we damage that property.

Rights as a Member of a Community

However, one might point out that Akiko’s claim is not centered on the property damage itself, but rather its implications for the island community as a whole. Viewed holistically, Akiko’s community is composed of a system of interdependences which can be “benefited” or “harmed” in a way that cannot be understood simply as the sum of impacts on individual members. From this perspective, we harm the community not only when we harm a given individual, but also when we interfere with an individual’s fulfillment of her function in the community. For example, if a community depends on the agricultural products supplied by a particular farmer, and we damage the farmer’s land so that his productivity is constrained, then we not only harm the farmer, in that his property is damaged, but we also harm the community as a whole, in that the farmer filled an important “niche” as the provider of food for the rest of the community.

From Akiko’s perspective, climate change is not only damaging a great deal of others’ property, but it is also destroying the integrity of the community in which she was raised, and of which she expected and hoped to become a part. As we have described them, the opportunities that Akiko has been deprived of seem to have been dependent on the health of the community. So it might be that in objecting to the loss of her opportunity to be integrated into her culture, what Akiko is really objecting to is the loss of her community’s integrity due to the impairment of members’ functions due to climate change.

But what is so special about the “community” in this example which sets it apart from other instances where an individual’s social functions are impaired in a way that has negative implications for others? Imagine that Russell has been training himself to work as a laborer at a pogo stick factory in his town. But when he arrives at the factory to apply for a job, he discovers that it has been destroyed by terrorists. Unfortunately, Russell’s only hope of supporting himself in his town was to work at the pogo stick factory, and its destruction will force him to leave his community.

In this case, it does not seem that the terrorists infringed on Russell’s rights (though they almost certainly infringed on the factory owners’ rights). But it is nevertheless true that Russell depended on the factory’s ability to fulfill its function as a provider of jobs, and by impairing that function, the terrorists deprived Russell of the opportunity to integrate himself into his community. It seems as though the only difference between Russell’s situation and Akiko’s is that Russell’s situation was brought about by the impairment of the functioning of a single member of the community, whereas Akiko’s was brought about by the impairment of the functioning of multiple members. I see no reason to think that this difference is morally significant. Accordingly, it seems fair to conclude that, while her tale is a sad one (as are Jebediah’s and Russell’s), Akiko’s rights are not infringed as a result of her being deprived of the opportunity to integrate herself into the culture of her upbringing.

A First Glance at What Rights Could Be Infringed by Climate Change

Donny with an A — Mon, 28 Apr 2008 20:18:00 GMT

[Cross-posted on the parent blog]

Climatic Shifts and the Right to Environmental Conditions

The most obvious kind of rights infringement which could be caused by climate change involves damage done directly to individuals and property by environmental phenomena. Easiest to think about are the shifts in “normal” environmental conditions which are projected to occur in response to human influences on the climate system. One example of such a shift is the expected rise in sea level which will occur as higher global temperatures melt a portion of the ice which naturally covers part of the Earth’s land area, and cause thermal expansion in the world’s oceans. As sea levels rise, some coastline property will become submerged or otherwise damaged by encroaching water lines, and in other places, salty ocean water will mix with the water table beneath individuals’ property, potentially killing vegetation and destroying the conditions for certain agricultural practices. So far as these sorts of impacts are the direct consequences of anthropogenic climate change, it seems that we would intuitively want to say that those who contributed to climate change will have infringed on the rights of those who are harmed.

Similarly, as regional climates shift towards new equilibrium states as the result of anthropogenic forcings, it is likely that some of the natural processes on which people depend will be interfered with. For example, most organisms can only survive within a certain range of environmental conditions. Inadequate or excessive rainfall, increased average temperature, and other climatic factors could prove detrimental to the capacity of certain organisms to flourish in areas which have historically supported them well. Many individuals, notably farmers and fishermen, may be adversely affected by the effects of shifts in their regional climates for the organisms on which they rely. So far as these individuals have a right not to be interfered with in pursuing their livelihoods and wellbeing with the aid of resources which are naturally available to them, it would seem to constitute an infringement of their rights to push their climate systems out of their previous states, bringing about environmental conditions which are injurious to their interests and livelihoods.

It may be objected that the preceding discussion assumes that individuals have a right to certain environmental conditions, where no such right exists. I believe, however, that such an argument would fail to take into account our earlier discussion of rights. Conceivably, an objector would point to the inherent instability and variability in the climate system, and argue that clearly we are not entitled to complain about such changes. But as we noted before, to have the right to something means only that we are entitled to certain things from other moral agents.

For example, no rights violation would occur if a naturally occurring shift in your regional climate were to produce temperatures too high for you to continue to grow wheat on your land. But if your neighbor installed an enormous heater on the edge of his property and blew warm air onto your property, killing your wheat crop, we might find good reason to object. And it seems that the reason that we would object would be that you have the right to certain environmental conditions, of which you were being deprived by your neighbor’s actions. I think that this objection does reflect something which we have an entitlement against being deprived of in the absence of morally significant reasons, and so far as climate change does inspire this objection, it constitutes an infringement of rights of this kind.

Altered Climate Systems and Diverted Damage

Not all of the effects of climate change will occur as shifts in normal conditions. For example, a world impacted by climate change will likely see an increase in the frequency, duration, and severity of extreme climate events like floods, droughts, and heat waves. It seems that just as we have the right to have our property damaged by the direct actions of others, we should have a right against damage resulting from the amplification of an existing destructive force. Accordingly, by making the climate system more dangerous, the contributors to climate change would be infringing others’ rights to the extent that more damage resulted than would have in the absence of interference.

However, this intuition is muddied by the fact that in an altered climate system, we will almost certainly see an entirely different set of climate events than would have occurred if no interference had taken place. That is, it is not the case that we will see all of the floods, droughts, and heat waves that would have occurred naturally, except that many of them will last longer, and cause more damage, and there will be some new ones. Rather, the floods, droughts, and heat waves which normally would have occurred will never eventuate, and they will be replaced with an entirely new set of floods, droughts, and heat waves.

Going even further, even those extreme phenomena which are not made more dangerous (in a statistical sense) by climate change will likely occur in different patterns in an altered climate system. For example, while some scientists believe that a warmer climate will produce a greater number of more intense hurricanes, others believe that there will be no such change. However, even if these skeptics are correct, and hurricanes do not generally become more dangerous as a result of climate change, it is almost certain that there will be different hurricanes in an altered climate system.

Because they will be different events, affecting different areas at different times, the new set of extreme climate phenomena will impact different people in different ways. This raises an important difficulty in discussing these impacts from the perspective of justice and rights. Intuitively, it seems that we should take into account the fact that the climate system is naturally destructive, and individuals should only be held responsible for the additional damage that they cause. But in an important sense, every extreme weather event, and so every instance of damage, will be the result of the interference with the climate system. We can only talk about the “additional” damage caused by interference with the climate by aggregating the total damage done in the altered climate system and comparing it to the total damage which would have been done in the absence of interference.

But given the fact that the damage in question will be distributed differently, impacting some people more than it would have and others less, it is unclear whether such an aggregation would be justified. As many have pointed out in objecting to Utilitarianism and cost-benefit analysis, benefits to some individuals do not “cancel out” costs to other individuals. After all, the parties made worse off must still bear the entire burden of their new circumstances; they do not experience any counterbalancing good from the beneficial consequences which obtain for others. And intuitively, it seems reasonable to think that we have a right not to have damage inflicted on us, regardless of whether others are made better off as a result. Accordingly, we might say that those who interfere with the climate system violate others’ rights to the extent that they bring about consequences which are more damaging to those individuals.

Rights and Risk

One might object, however, that there are many ways of interfering with the climate system which ostensibly cause some redistribution of climatic events, producing winners and losers, but which we do not generally think of as involving rights infringements. Given the chaotic nature of the climate system, one might point out, very small interferences can have important consequences elsewhere; as the saying goes, the flapping of a butterfly’s wings in Brazil might cause a tornado in Texas. But surely we do not need a morally significant reason to fly a kite, or to go base jumping, or to operate a windmill, because of the tiny disturbances which will be imposed on the climate system. And if this is so, then what should we make of the idea that we have the right not to have climatic damage diverted at us? As we have said, to have a right to something means that others may not deprive you of it in the absence of morally significant reasons. If no reasons are necessary to justify interfering with the climate system in a way which could alter the distribution of extreme climate events, then this seems to suggest that we do not have a right against climatic damage being diverted at us.

If this is true, then are no rights infringed as a result of the diversion and amplification of the destructive force of the climate system? We have good reason for thinking that the diversion of climatic damage does not infringe rights. It will be noted that we might still identify a problem with the fact that by causing climate change, we cause a greater overall amount of damage. By contrast, the eventual consequences of flying a kite on the climate system could just as easily be positive as negative; a tornado might be caused, but just as easily, a tornado might be prevented. Taken together, all of the tiny interferences on the climate system which result from our everyday activities likely do not cause a greater or lesser overall amount of damage, especially on a long time scale. But what kind of right could an individual possess which would be contingent on the overall amount of damage done by the climate?

Perhaps the answer can be found in the concept of risk. By increasing the total amount of damage which will be inflicted by the climate system, contributors to climate change increase individuals’ risk of damage due to extreme climate events. And if we add together the increase in the expected value of the climatic damage done to all individuals over a given period, we will see that the total will equal the amount by which the climate system was made “more dangerous” by the interference in question. If we recognize a right not to be put at greater risk of climatic damage by the actions of others, then we arrive at a conclusion which matches our initial intuitions perfectly: Rights are violated to the extent to which the climate system was made “more damaging” by the contributors to climate change.

The debate over whether or not we can have rights based on risk is complex, and I will avoid addressing it here. But it will be sufficient for our purposes to point out that by dealing with the problem of altered climate systems in terms of risk, we arrive at just the kind of answer that we expected to find from the beginning. Of course, intuitions are often wrong, and we certainly have not proven here that we have a right against exposure to risk. But we might say that the fact that such a right matches our intuitions counts as evidence that it is closer to being right than to being completely wrong.

What Does It Mean to Advocate a Market Solution to Climate Change?

Donny with an A — Tue, 15 Apr 2008 06:22:00 GMT

[Cross-posted on the parent blog]

The purpose of this post will be to tie together some ideas I've been toying around with in other posts, in order to start working towards a coherent introduction to my thesis on the libertarian approach to thinking about climate change. Here goes nothing.

Moving Past the Science

As a group, libertarians have not dealt well with the prospect of anthropogenic climate change. As most of the world scrambles to find "solutions" to what they anticipate will be a serious problem for human civilization, the typical libertarian approach to the issue has been to deny that climate change is real, or to deny that humans have caused it. There are two problems with this position. First, the most vehement critics of what has become the "mainstream" view are not particularly well qualified for their missions, and often demonstrate a misunderstanding of their opponents' views which seem to indicate that they don't actually know what they're arguing against. Further, where there are well-qualified and well-informed "skeptics," their positions tend to be less vitriolic and more nuanced, being based more on uncertainty and imperfect knowledge, to the point where their views end up falling relatively close to those which are accepted by the mainstream scientific community. As far as I can tell, a relatively strong case can be made in favor of questioning our ability to know the precise truth about climate change, and our ability to predict future states of the climate; the same cannot be said about the position that climate change is not happening, or that humans are not causing it, or that it will not continue into the future in any significant way.

This leads to the second problem with the libertarian habit of questioning the scientific basis for concern about climate change: it does not address the question of what position libertarians would endorse if climate change were happening. There is no reason to believe that anthropogenic climate change, or some substantively similar phenomenon, could not happen. Accordingly, it seems extremely reasonable to ask what libertarians would say about such a phenomenon, if we knew that it was occurring right now. In this article, I will sketch the kind of answer we should be looking for.

Market Failures and Government Inefficacy

Where climate change has been discussed, by libertarians and others, it has generally been labeled as a market failure. Economic theory tells us that market failures occur whenever inefficient social outcomes result from individuals acting on their own desires. Looking at climate change from this paradigm, we would notice that for most individuals, the benefits of, say, driving a car instead of taking the bus more than outweigh any costs they would ever incur from their incremental contribution to climate change. Accordingly, it will be in everyone's interest to drive their car. But the predictable result of everyone making the sort of choices that result in driving everywhere, instead of using public transportation, is that we end up with climate change. As Garrett Hardin famously wrote "...we are locked into a system of "fouling our own nest," so long as we behave only as independent, rational, free enterprisers."

Simply recognizing this problem will not solve it. Mitigating climate change will involve sacrifices, and individuals will undoubtedly resist making these sacrifices if they do not have the assurance that others will follow suit. Unfortunately, getting individuals to voluntarily cut down on their contributions to climate change would be fraught with difficulties, ranging from the large costs of negotiating the agreement to the pervasive incentive to "cheat". These hurdles seem to rule out the kind of decentralized solution that the free-market is capable of providing. The most obvious and widely discussed solution is the one Hardin suggests: legislation. If we know that we will "foul our own nest" if left to our own devices, then it seems reasonable to impose rules on ourselves, and to punish those who violate those rules, in order to ensure that we don't bring about our own destruction.

But many libertarians bristle at the suggestion that central planning can solve the problems presented by market failures. It seems unreasonable, they argue, to suggest that we can fix an imperfect market by simply turning the matter over to the government. After all, governments have problems of their own. As Gene Callahan points out, "Government interventions and "five year plans," even when they are sincere attempts to protect the environment rather than disguised schemes to benefit some powerful lobby, lack the profit incentive and are protected from the competitive pressures that drive private actors to seek an optimal cost-benefit tradeoff."

Accordingly, a number of libertarians have apparently taken the stance that we cannot hope for an "optimal" level of climate stability, so our best option is to simply face the realities of our suboptimal state of affairs. And because, they continue, the free market is the most efficient system we know of for allocating resources to best suit the needs of society, the best way to face climate change would be to allow individuals the freedom to adapt in their own way. As George Reisman writes, "Even if global warming is a fact, the free citizens of an industrial civilization will have no great difficulty in coping with it - that is, of course, if their ability to use energy and to produce is not crippled by the environmental movement and by government controls otherwise inspired."

Climate Change: A Matter of Justice

This view of the issue leaves out an important consideration which is central to the libertarian paradigm: According to most accounts, climate change will have victims. This fact brings us out of the realm of mere economic efficiency and forces us to confront the issue from an ethical standpoint. Imagine if we were trying to determine the proper social response to a particular theft. It might be true that of all social systems, a victim of theft would be best equipped for dealing with her loss in an unfettered free-market. She would not need to consult a central planning board in order to replace the things that were taken, and her higher purchasing power – brought about by her participation in a thriving market economy – would enable her to afford the replacement with comparative ease.

But surely libertarians would not be satisfied with this “solution.” In our story, the thief violated the rights of his victim by stealing from her, and therefore he should be held accountable for fixing the damage he caused. It is crucial to acknowledge that holding the thief responsible does not represent a departure from the normal course of the free-market; the very functioning of the free-market is predicated on the recognition of rights. This reveals an important feature of the libertarian position that the proper response to climate change is to simply allow individuals the freedom to adapt to it: It assumes that climate change does not represent an injustice. If climate change were an injustice, then the proper response would not simply be to allow people to adapt: libertarians would need to advocate the enforcement of justice.

Accordingly, it seems like the proper libertarian stance on climate change needs to be stated in terms of justice. The scientific disputes and efficiency-based arguments which have thus far characterized the libertarian position are wholly unbecoming of a political philosophy built on the foundation of respect for individuals’ rights. The libertarian community needs to ask what kinds of rights, if any, are infringed by climate change, and what should be done about those infringements. Anything else would simply be unlibertarian.

Is There a Right to Culture?

Donny with an A — Thu, 03 Apr 2008 20:52:00 GMT

[Cross-posted on the parent blog]

Last week I had a conversation with my thesis advisor, Dr. Harry Brighouse, in which we discussed an interesting idea which I think might prove important in one way or another, and which I think is worthy of elaboration here. The idea was that a big part of what people are concerned about in discussing climate change is that members of certain social groups will be deprived of the opportunity to integrate themselves into the societies in which they were raised, as a result of changes in the physical context in which those societies were able to flourish.

To illustrate, we might travel to Bangladesh several decades in the future. In my imaginary scenario, sea levels are rising around the low-lying country, and the property of the locals is suffering considerable damage. However, because I am the master of this imaginary scenario, I'll stipulate that we have fully compensated all of these property owners for the damage done to them (regardless of whether or not they would actually be entitled to this compensation). So everyone whose property is damaged by climate change is fine.

But imagine that there is a child, Nadia, who has grown up in Bangladesh and is beginning to plan a life for herself. Perhaps it would be possible for Nadia to live in Bangladesh, but with the environmental damage being done to the area, perhaps it would be unfeasible for her to do so. It's not that she has such great opportunities elsewhere, but rather that the prospect of living a good life in Bangladesh looks bleak. Accordingly, the best choice for Nadia and her peers might be to assimilate into another culture which would offer a more promising future. Would Nadia have been deprived of something to which she was entitled?

We have stipulated that Nadia owned no property which was damaged, or that if she did, she was fully compensated for it. Further, we have stipulated that Nadia had not yet even chosen a profession, or settled down anywhere. She was simply deciding what she wanted for her life, and she saw that Bangladesh offered scarce opportunities for the kind of future she envisioned for herself. Given the way we normally think about rights violations, it doesn't seem like we have wronged Nadia in any real way.

But at the same time, I can see why Nadia would offer an objection. She might say that as a Bangladeshi, she would have wanted to be integrated into Bangladeshi society. Now, as a result of the effects of climate change, it will be extremely difficult for her to make that happen. Nadia's claim, then, would seem to be that she had some kind of right which is infringed by other people making it difficult or impossible for her to become a part of the culture of her upbringing. And it does seem like a good portion of the concern aimed at climate change is directed at the idea that we would be infringing this kind of right by contributing to a state of affairs in which Nadia is forced to find a way of life which does not reflect her native culture.

It's easy to sympathize with Nadia, and see how she would be frustrated by the state of affairs in which she finds herself. But does Nadia have any right like this? Do we act impermissibly when we put Nadia in this position?

In a previous post, I discussed the possibility that in cases involving inheritances, the would-be inheritors of some valuable object might claim injustice if that object were damaged or destroyed, even if the person or people who owned that object at the time of its destruction were compensated. I said that while I understood why someone might see things that way, it would seem to go very much against the way we normally think about property rights, and I wasn't sure I could defend the position. However, I didn't think that the problem could be dismissed as easily as that, because there was something intuitively reasonable about the objection. But I'm not dealing with that issue here.

In our story, Nadia isn't inheriting any property. Therefore, we avoid all of the problems associated with Akiko's case in the other post. Here, we're dealing with a particular right not to an object, but to a kind of opportunity which is being denied to Nadia. Namely, the opportunity to become a member of the culture.

But in spite of the differences between Nadia's case and Akiko's case, I want to reintroduce an example I used in the previous post:

...we might point out that the above case sounds a lot like a story where an agrarian community is "destroyed" by industrialization and mass production. Small scale family farms can't keep up with the low prices generated by the advanced practices of a local agribusiness concern, and can no longer support their old way of life. It's a sad story, but we wouldn't want to claim that any injustice has occurred. Perhaps as a society, we would want to help these farmers get back on their feet and find a new place in the market. But we wouldn't want to blame the agribusiness for doing something wrong.

It seems to me that if I were the offspring of one of the small scale farmers, I might feel frustration towards the agribusiness, but I would have no legitimate claim against them. So if we're going to attribute to Nadia the kind of right we're talking about here, we need to give some reason for thinking that Nadia's situation is fundamentally different from the industrialization case. In the earlier post, I pointed out that the small scale farmers' frustration is the result of relying on something which they never had any right to: the support of their customers. But the source of Nadia's frustration is less clear.

We might say that Nadia simply wants to be offerred an appealing job in the location in which she wants to work, and a place to live which matches what she hoped for. If we phrase Nadia's frustration this way, then it is clear that she has no right to these things, as they too require something of others. But this seems unfair to Nadia's case.

It seems to me that Nadia's objection is more holistic in nature. She sees her cultural community as a distinct entity, to which we could coherently apply the concepts of stability and integrity. When healthy and vital, that community would provide her with a range of opportunities to try to make a life for herself without any active facilitation by any members of the community. Certainly she could choose to pursue other opportunities, and this would not be a problem for anyone. But the option would be available to her if she wanted it. By causing climate change, we degrade Nadia's community, and diminish her opportunities. Nadia's objection seems to be that the degradation of her community, which is the result of the actions of those who contributed to climate change, represents a wrong done to her.

This is an interesting idea, but is not one which I know how to handle. I think it would be best to take some time to digest it. So having set up this discussion, I'll leave settling it for another time.

Climate Change, Vanishing Lifestyles, and Children

Donny with an A — Wed, 26 Mar 2008 00:56:00 GMT

[Cross-posted on the parent blog]

So in a previous post, I discussed a case in which rising sea levels, resulting from a warming of the Earth, caused the salinization of a Bangladeshi farmer's land, so that he could no longer grow rice on it in the way to which he was accustomed. I concluded that as the owner of the land, with full property rights, he should be entitled to compensation for any damage done to him by those contributing to climate change. And it seems like this could be extended to any member of the contributors' generation who were harmed by climate change.

But costs associated with climate change will not only be incurred by individuals who are alive now, they will be realized by future people as well. The nature of the cost to future people, however, is less clear than the nature of the costs to existing people. This post will explore a sort of impact which seems to be central to people's concern about climate change, but which is difficult to deal with in the framework of human rights. Namely, many communities will be impacted in a way that makes it difficult for them to continue their cultural existence, making it necessary for the children of those cultures to find fundamentally different ways of living.

For example, indigenous communities in Africa will see progressively more significant alterations to their natural setting as the climate continues to change. Plants and animals which were once prevalent in the region will no longer be fit for survival there, and new species will move in. Knowledge developed over centuries will no longer be effective. Being ill adapted for life in a fundamentally different climate, it is conceivable that these communities will be unable to survive in the manner in which they have for countless generations. They would have to find a new way to live.

What do we say about this? It is clear that a great number of people are concerned about precisely this sort of problem, and cite it as a reason to be worried about climate change. But does it tell a story of injustice? Many people's intuitions say yes.

However, we might point out that the above case sounds a lot like a story where an agrarian community is "destroyed" by industrialization and mass production. Small scale family farms can't keep up with the low prices generated by the advanced practices of a local agribusiness concern, and can no longer support their old way of life. It's a sad story, but we wouldn't want to claim that any injustice has occurred. Perhaps as a society, we would want to help these farmers get back on their feet and find a new place in the market. But we wouldn't want to blame the agribusiness for doing something wrong.

If there is no wrongdoing in the industrialization case, where communities might be unable to sustain their old lifestyles as the result of the actions of others, then can we consistently hold that there is injustice being done to indigenous people by climate change? Or are we simply setting indigenous communities on a pedestal because they're different and mysterious, and we somehow think that by being so unusual, these individuals come to have different rights than the rest of us?

It seems to me that there is a critical difference between the destruction of the indigenous community caused by climate change and the destruction of the agrarian community caused by industrialization. In the industrialization case, it's not as if the agribusiness made it impossible for the family farmers to continue farming. Rather, the problem arises because the family farmers were depending on the support of their customers in order to sustain themselves. Given that their customers had the right to remove their support at any time, it should be clear that the farmers were depending on others making choices which they could permissibly not make, or stop making at any time. The agribusiness, with its greater efficiency, could offer much lower prices than the family farmers, and their customers decided to withdraw their support, as was their right. It should be clear that in our story, the agribusiness never did anything to the family farmers. It simply revealed the fact that the family farmers could only continue to sustain themselves in their traditional manner if their customers continued to voluntarily purchase their products. The family farmers never had any right to that support, and so when it was withdrawn, no right was violated.

On the other hand, it doesn't seem like the indigenous communities in question depend on anyone for their continued survival. They require only that their environments not be modified so as to make them incompatible with their lifestyles. And as far as these indigenous communities have been making use of their environments for centuries, it seems fair to say that they have some legitimate claim to their not being negatively affected by the actions of other people.

I suspect that if we told the agrarian story in a way that matched the indigenous story, our intuitions would tell us that we were dealing with a rights violation. For example, let's say an agrarian community depended on an underground stream to bring water to the region with which to grow crops. Now imagine that someone diverted the flow of water through the area so that the community's land ran dry. Surely we would say that the diversion of the water flow represented a wrong done to the farmers, right?

In the same way, it seems that changing the climate in a way that would negatively impact indigenous peoples' ability to continue living in their traditional manner would be unjust. But this is not new ground. This conclusion is pretty much the same as the one I reached in my post about the Bangladeshi farmer and the rising sea levels. I want to go one step further here.

As I mentioned before, the intuition that people have about this sort of case is not simply that our alteration of the climate is wrong because it harms currently existing indigenous peoples' ability to live in the manner to which they are accustomed. The problem is also that their children will be unable to live in that manner. That is, the issue is not just what happens to the people whose lives are made difficult by climate change, but also what happens to the people who will be unable to live in the traditional manner dictated by their culture, and what consequently happens to the culture itself.

In order to isolate these factors from the harm done to the currently existing indigenous individuals, we might imagine that these individuals have been fully compensated for the damage done to them as individuals. This compensation not only takes into account the damage to their property, but also the damage to their character and psyche; the currently existing indigenous individuals recognize they were wronged, but acknowledge that they have been compensated adequately for all that they personally have endured.

Now we might imagine that one of these indigenous individuals has a child, Akiko. Akiko is raised in the indigenous culture, but sees that she will be unable to support herself in the traditional way. She will need to live a fundamentally different lifestyle from that of her people in order to survive. If we are to sustain that climate change will result in injustice to people like Akiko, then we must say that Akiko is wronged by having to find a way of life which differs from her culture's traditions.

At first glance, this might seem absurd. I grew up in Westport, CT; do I have the right to a house there? I have a friend who comes from a family of doctors; does he have the right to be one too? Surely we don't want to say that people have a right to live like the people who brought them up lived. We must find some other way to explain what is wrong with Akiko's situation if we are to be taken seriously.

A clue can be found in the fact that just like in the example with the agribusiness and the family farmers, my demands about a house in Westport and my friend's demands for a doctor job require things of others. Given that I have no right to anything from these people, it seems ridiculous to suggest that I am wronged if they do not provide me with something. I do have the right to try to buy a house in Westport, and my friend has the right to try to be a doctor. But given that having a house or being a doctor require the voluntary consent of others (in my case, the consent of the house's previous owner; in my friends case, the consent of the hiring institution and of the customers who choose to purchase his services), we cannot have the right to these things.

Akiko's demands would also be rooted in her getting others' consent. That is, she does not own her people's land; the older members of her culture do. But the kind of consent Akiko requires is very different from the kind of consent I would need in order to get a house, in that Akiko has that consent. Akiko's people, we presume, would gladly allow Akiko to use, and even to own, the group's land. In the absence of climate change, Akiko would be able to support herself in the traditional way using nothing but this land. But because of the effects of climate change, the land will not be able to support her in the traditional way. The substance of Akiko's complaint, then, might seem to be that she should have inherited enough resources to sustain herself, but that climate change diminished those resources to make it impossible for her to use them in the way her culture would have suggested.

This leads us to an interesting idea. Remember, we have said that the current owners of the land were fully compensated for all of the damage done to them by the effects of climate change on their land. Akiko's complaint is that there is a gap between what she should have inherited and what she actually did inherit. In order to satisfy Akiko (if we have interpreted her complaint correctly), we would need to take the view that by damaging the indigenous people's land, we not only wronged those people, but also the people who stood to inherit the land later. The "damage done" would be the damage done to the current owners, as well as the "damage" done to the future owners who "should have" inherited the land in its original condition, but instead inherited it in a damaged and less useful state. Accordingly, Akiko too would be entitled to compensation.

Of course, from Akiko's standpoint, this seems like it would be a fair solution. Because climate change destroyed her people's ability to live off the land, every generation of people in her community would be compensated for the damage done to the land. I'm not sure if this would actually be right, though. It seems to go completely against the way we normally think about damage and liability. I'd like to think about this some more, but I think this was a good place to start.

Climate Change and Market Definition of Property Rights

Donny with an A — Tue, 25 Mar 2008 06:35:00 GMT

[Cross-posted on the parent blog]

A fellow named Gregory responded to my post, "Can the Free Market Solve the Problems Posed by Climate Change?" with an argument which I think deserves to be discussed in some depth. Gregory wrote:

If the market has not arrived at an efficient means regulating itself (compensating those damaged) then a government certainly will not be able to affect such a regulation efficiently. The cost of the regulation must be weighed against the benefit it provides. If economic growth is retarded by inefficient regulations, do we not harm future generations more than by waiting for the market to develop a mechanism to efficiently distribute justice?

Gregory highlights the fact that the market has not yet developed an efficient way to enforce the property rights involved in discussions of climate change. I agree that on some level, to indict the free market for this fact would be problematic. In his essay, "Market-Based Environmentalism and the Free Market: They're Not the Same," Roy Cordato wrote

...environmental problems are not an unavoidable side effect of a free-market economy. Instead, they occur because the institution setting--the property rights structure--required for the operation of a free market is not fully in place. Because, in all modern societies, government has taken nearly complete responsibility for the establishment and maintenance of this institutional setting, environmental problems are more appropriately viewed as manifestations of government failure, not market failure.

Mark Pennington bolsters this view in his essay, "Liberty, Markets, and Environmental Values: A Hayekian Defense of Free-Market Environmentalism," when he writes, "Transaction costs are not the sole preserve of the market system...and we commit the "nirvana fallacy" if we suggest the alternative to an imperfect market is a government immune from the same sort of problems."

I completely agree with these two authors, and Gregory, in saying that ill-defined and unenforced property rights are at the root of most (if not all, depending on your definition of "property rights") of the problems associated with climate change.

Further, I agree that the free market can solve some of the inadequacies in the process of enforcing justice, but often only if allowed to work without interference. Pennington writes:

Although proponents of free-market environmentalism recognize that environmental markets have limits owing to the prevalence of transaction costs, they contend that these problems are more like to be overcome within an institutional framework supportive of private contractual arrangements. In this perspective, all environmental externalities represent potential profit opportunities for entrepreneurs who can devise ways of defining private-property rights and arranging contracts (via technological innovations, for example) so that those currently free riding on collective goods or imposing negative external effects (for example, water pollution) on their neighbors are required to bear the full costs of their actions.

That being said, I do think that we oversimplify if we simply suppose that the market will find a way to handle the problem in an acceptable manner, and leave it at that. In issues of justice, the "There are many ways to skin a cat" approach taken by the free market might not be acceptable. Improper conceptions of property rights are not simply inefficient, they are unjust. In his speech, "Another Take on Free Market Environmentalism: A Friendly Critique," David Roodman highlighted this idea when he said:

Fine, I own my car. And you own your lungs. Property rights are allocated, seemingly. So now can we reach happy agreement about how to resolve the conflict? Fat chance. More likely, thousands of drivers and breathers will end up suing each other and then the problem will end up in the lap of the court, which would have to decide precisely where the right to free enjoyment of one's car stops and the right to free enjoyment of one's lungs starts.

Later, he quipped, "Judges did not free the slaves; in fact, they tightened the bondage."

I don't mean to imply that libertarian judges would be unable to come up with a decent solution. I'm only suggesting that the answer might not be as simple as Rothbard made it sound when he wrote, in chapter 13 of his Egalitarianism as a Revolt Against Human Nature:

...it would not be a very difficult task for Libertarian lawyers and jurists to arrive at a rational and objective code of libertarian legal principles and procedures based on the axiom of defense of person and property, and consequently of no coercion to be used against anyone who is not a proven and convicted invader of such person and property. This code would then be followed and applied to specific cases by privately-competitive and free-market courts, all of whom would be pledged to abide by the code, and who would be employed on the market proportionately as the quality of their service satisfies the consumers of their product.

The problem, in addition to the simple fact that this could be difficult to do, is that this group of Libertarian lawyers and jurists would need to arrive at decisions somehow. Either they could do so in accordance with majority opinion or some other procedural way, or (as I suspect Rothbard is aiming at) they could do so in accordance with the true principles of justice. If the former were the case, then I see no reason why we would call the result "rational and objective." And if the latter, then we should be able to replicate the activities of these lawyers and jurists on our own. But as those who have been keeping up with my work have undoubtedly seen, the task is not quite as simple as Rothbard makes it sound.

One approach would be to take a somewhat left-libertarian angle and say that climate change represents injustice due to an over-enclosure of the atmospheric commons. Edwin Dolan took this approach in his essay, "Science, Public Policy, and Global Warming: Rethinking the Market Liberal Perspective." Dolan wrote:

Liberalism in America, in particular, grew up in a Lockean state of nature where it was really true, or at least seemed true, that homesteaders, loggers, grazers, and industrialists could take what they needed while leaving "enough and as good for others." What the environmentalist side of the global warming debate is telling us is that we no longer live in such a world.

Because those responsible for climate change have, according to Dolan, taken more than their fair share, they must be subject to the demands of justice. He insists, "Defending the rights of property that has been unjustly acquired is a conservative position, not a liberal one."

But this approach has its difficulties. One problem is the fact that the atmospheric CO2 sink is not really a limited resource. The problem is not that "...the atmospheric commons - namely, the Earth's carbon absorbing capacity - are finite and depletable," as Tariq Banuri and Erika Spanger-Siegfried characterized it in their essay "Equity and the Clean Development Mechanism: Equity, Additionality, Supplementarity." As far as we're concerned (though technically this isn't true), we can dump as much CO2 into the atmosphere as we want. It's not like one day we'll light a fire and the CO2 won't go into the atmosphere. The thing that's available in limited quantities is the atmosphere's capacity to absorb CO2 without causing any harm.

In light of this fact, the right way to allocate the resource in question is somewhat unclear. In a world in which we do exceed the total CO2 emissions we could release without causing objectionable climate change, what is the real significance of the amount of CO2 which we could have emitted without causing harm? This, I think, is a problem which reflects the fact that climate change is an emergent problem, and is therefore sort of different from other problems we normally face.

Of course, even if we figure out the significance of this "harmless sink capacity," there still remains a boatload of work to do in order to determine exactly who is responsible for what emissions, what rights are violated by climate change, whether non-rights-violating actions can be justly interfered with, what exactly we should hold people accountable for, who should bear what burdens, what accountability entails, what our accountabilities to future people are and how they should be enforced, and how we should administer all of this (I'm sure I'm leaving stuff out). Never mind the scientific uncertainty plaguing every step of the process.

At the end of the day, we can talk all we want about the market figuring out the answers to climate change through incentives for the enforcement of justice, but someone's going to have to figure this stuff out. If it can be done, hopefully I'll be able to figure out how, or at least set the process in motion for other people. I really hope that answers your question somehow!

Climate Change and Getting Out of the Way

Donny with an A — Sat, 22 Mar 2008 00:06:00 GMT

[Cross-posted on the parent blog]

Imagine for a moment that you are Abdul, a Bangladeshi rice farmer. You have farmed rice your entire adult life, and you plan to continue into the foreseeable future. Unfortunately, Bangladesh is an extremely low-lying nation; almost all of the country's land lies below 10m above sea level, and your farm is no exception. As global temperatures rise and progressively less ice covers the Earth's surface, the sea level will predictably rise slowly over the next century.

Fortunately, Bangladesh already has a system of dykes, originally built to withstand storm surges in harsh weather, which can be bolstered to hold back the rising ocean. Your land will likely avoid becoming permanently submerged. But as sea water mixes with the water table, your rice crops could end up unable to survive the increase in salinity.

Now let's say that we were able to satisfactorily trace the rising sea levels to global climate change, and were able to trace the changes in salinity directly to the rise in sea level, so that we knew that the impacts on your land were the result of climate change. Would there be any injustice here, and if so, what kind of injustice would it be?

On one hand, it does seem like you could reasonably object to any damage directly caused by the increase in sality. Clearly we would have a problem with a group of people directly dumping a bunch of salt on your land and killing your rice crop. It seems that the problem would persist if, using underground piping, they pumped salty water into the water table under your land, even if they never left their own property. I don't see why the injustice would disappear if, using a giant oceanic turbine, the individuals propelled ocean water towards the Bangladeshi dike system, resulting in the salinization of your land. If this would be a problem, then it seems odd to say that there would be no wrong done if, using a giant furnace, the individuals melted away Arctic ice until the sea level rose, sending ocean water into your water table. Finally, then, it seems odd to think that it would be acceptable if the group of individuals released a gas into the atmosphere which would predictably result in ice melting and sea level rise, which would in turn result in ocean water entering your water table. Accordingly, it seems that if we could establish a causal link between the emitters' actions and the salinization of your land, then you would be entitled to compensation.

An important question, though, is what exactly you should be compensated for. For example, what if there were a salt-resistant variety of rice that you could use instead of the kind you had been using? Or what if you could sell your land to prawn farmers, for whom the saltier conditions were ideal? Would these alternatives lessen the injustice done to you? As Nozick writes in Anarchy, State, and Utopia, "Does the compensation to X for Y's actions take into account X's best response to these actions, or not? If X responded by rearranging his other activities and assets to limit his losses (or if he made prior provision to limit them), should this benefit Y by lessening the compensation he must pay? Alternatively, if X makes no attempt to rearrange his activities to cope with what Y has done, must Y compensate X for the full damage X suffers?" Nozick doesn't provide an answer, but it's clear that this is a question that will need to be dealt with in any conversation like this one.

Do we have an obligation to "get out of the way" of damage? Do boundary crossers have an obligation to compensate us for the inconvenience of getting out of the way, and any residual damage? Or do boundary crossers have an obligation to compensate us for the damage that would have occurred if we didn't get out of the way, regardless of what we do? This is no trivial matter. Let's say that you anticipated the sea level rise, and purchased salt-resistant rice in order to be ready. If the salt-resistant rice worked as advertised, and you could continue to farm your rice, would that be the end of the discussion? Could the emitters simply say that you adapted, and therefore they were freed from responsibility? It seems clear to me that you could still reasonably demand compensation for the inconvenience of having to switch crop varieties. And if the genetically modified rice were more expensive, or more difficult to farm, I think you could fairly demand compensation for those things as well.

But would that be the end of it? I think that on some level, this is reasonable. I could see how someone might take the alternative view, and say that you were entitled to compensation for the damage that would have occurred in the absence of adaptive behavior, and that your adaptation should benefit you, and not the boundary crosser. However, I think that perhaps we might placate the holder of this view by conceding that perhaps you are not obligated to adapt, and if you don't, you might be entitled to compensation for the damage that is done, even if you could have prevented it. This too will be objectionable, but it at least offers a starting point for debate.

There is another reason we might want to say that you should only be entitled to compensation for the inconvenience of adapting and for any residual damage: such a policy would be more efficient. Efficiency is certainly not an overriding concern in matters of justice, but that doesn't mean it is unimportant. By compensating for the inconvenience of adaptation and any residual damage, the boundary crosser would be paying for all of the actual external costs produced by her actions. Making her pay for damages which never actualize would seem to mean that we would be, in a sense, "overcharging." For boundary crossings that we don't think are worthy of prohibition, we would effectively rule out an entire class of actually net beneficial actions which, if adaptive measures were not taken, would not be net beneficial.

In the preceding discussion, however, we have implied that by switching to salt-resistant rice, you avoided more costs than you incurred during the switch. In other words, we have assumed that in the absence of compensation, it was profitable for you to switch. Given the fact that in our story you switched, it seems pretty clear that you believed it would be profitable to do so. But what if you were wrong? What if the salt-resistant rice was not a worthwhile investment? Could you reasonably demand compensation for the additional costs produced by your bad decision? On one hand, it seems like you should be held responsible, since it was your choice to try the salt-resistant rice. But on the other hand, it seems like the only reason you bought the salt-resistant rice in the first place was because you knew your land was going to be, essentially, "invaded" by salt "sent" by the emitters. I'm not completely sure what to say about this.

So where do we stand? It seems like we can legitimately say that you have reason to object to the salinization of your land, and that if you could demonstrate a causal link, you could reasonably demand compensation from those responsible. But from there, things get a little less clear. I think I'm comfortable with the idea that you are entitled to compensation for the costs of adaptation, and for any residual damage. I'm less comfortable with the idea that someone should be responsible for "adaptation" costs that actually increased the total costs of the incident (we might make the case that such behavior isn't even properly considered "adaptive"). So I guess I've arrived somewhat short of a firm conclusion. But I hope this will be a good starting point for future discussion.

Can the Free Market Solve the Problems Posed by Climate Change?

Donny with an A — Thu, 20 Mar 2008 22:22:00 GMT

[Cross-posted on the parent blog]

When confronted by the possibility of climate change, many libertarians default to the position that the free market, with its ability to mobilize the ingenuity of the economy for the satisfaction of the desires of the people, will provide the solutions we desire. I want to discuss this view, because I think it is the result of a mistaken understanding of the nature of the free market. For an example of this view, consider George Reisman's comments in his essay, "Environmentalism in the Light of Menger and Mises":

The appropriate answer to the environmentalists is that we will not sacrifice a hair of industrial civilization, and that if global warming and ozone depletion really are among its consequences, we will accept them and deal with them--by such reasonable means as employing more and better air conditioners and sun block, not by giving up our air conditioners, refrigerators, and automobiles.

In his essay, "Global Warming Is Not a Threat But the Environmentalist Response to It Is," Reisman elaborates:

...if global warming is a fact, the free citizens of an industrial civilization will have no great difficulty in coping with - that is, of course, if their ability to use energy and to produce is not crippled by the environmental movement and by government controls otherwise inspired.

He goes on to say that global warming

...would certainly not be too great a problem for tens and hundreds of millions of free, thinking individuals living under capitalism to solve. It would be solved by means of each individual being free to decide how best to cope with the particular aspects of global warming that affected him.

Reisman makes an important point. When it comes to allocating resources efficiently, the free market is unparalleled in its effectiveness. In his essay, "The Use of Knowledge in Society," Hayek explained:

...knowledge of the circumstances...never exists in concentrated or integrated form, but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all...separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate "given" resources--if "given" is taken to mean given to a single mind which deliberately solves the problem set by these "data." It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge not given to anyone in its totality.

Hayek points out that

...there is...a body of very important but unorganized knowledge which cannot possibly be called scientific in the sense of knowledge of general rules: the knowledge of the particular circumstances of time and place. It is with respect to this that practically every individual has some advantage over all others in that he possesses unique information of which beneficial use might be made, but of which use can be made only if the decisions depending on it are left to him or are made with his active cooperation.

He concludes:

If we can agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place, it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them. We cannot expect that this problem will be solved by first communicating all this knowledge to a central board which, after integrating all knowledge, issues its orders. We must solve it by some form of decentralization.

This decentralization is the free market. Hayek explains that

...in a system where the knowledge of the relevant facts is dispersed among many people, prices can act to coordinate the separate actions of different people in the same way as subjective values help the individual to coordinate the parts of his plan.

And indeed, it's been demonstrated in practically every instance that the free market has the capacity to satisfy the wants of the population better than centrally organized alternatives. So I think Reisman is largely right in saying that when it comes to adapting to new problems, the market does do great work.

But when we talk about the free market, we generally have two things in mind. The first, which Reisman focuses on, is a system in which property titles are traded voluntarily in a mutually beneficial way, resulting in a continuous progression towards a more efficient allocation of resources. But the second, which underpins the first, is a system in which rights are enforced, so that individuals who infringe on the rights of others are punished, and those whose rights are infringed are compensated for the harm they suffer. It is my contention the Reisman's argument breaks down by completely brushing off this second feature of the market.

Imagine if we were trying to discuss the proper social response to a particular theft. It might be true that of all social systems, a victim of theft would be best equipped for dealing with her loss in a capitalistic free market. She would not need to consult a central planning board in order to replace the things that were taken, and her higher purchasing power, enabled by her participation in a thriving market economy, would enable her to afford the replacement with comparative ease.

And yet we would obviously not be satisfied with this "solution." The reason is simple. The thief did something wrong, and therefore, the thief ought to be held responsible for fixing it, never mind that we should perhaps have tried to stop the theft from happening in the first place. Accordingly, by suggesting that we simply allow the free market to operate so that adaptation will be easier, Reisman is smuggling in the claim that we do nothing wrong to the victims of climate change.

This seems obviously contentious. The question should not be, as Reisman seems to want to make it, whether or not the free market is the best system for facilitating adaptation to changing conditions. The question is whether we do something unjust by contributing to climate change. To be fair, Reisman briefly addresses this issue, as I discussed here. But my point is that by glossing quickly over the issue of justice, many libertarians have completely missed the point. If the free market is to be relied on to provide a "solution" to climate change, it must be through a strict adherence to the principles of justice. If we simply ignore injustice, and define fairness in terms of mere participation in the market, then we cannot claim to be advocating libertarianism.

Cost-Benefit Analysis in Light of the Non-Identity Problem

Donny with an A — Tue, 19 Feb 2008 17:48:00 GMT

[Cross-posted on the parent blog]

So earlier I wrote about the role played by discounting in doing cost-benefit analyses on the impacts of climate change. I concluded that discounting of future damage is unethical because it treats future people as if their interests matter less than present people's. But recently, I've also been discussing the implications of the Non-Identity Problem, and it should be clear that cost-benefit analysis needs to explain its relevance in light of this problem.

For those who haven't been paying attention (or have only recently begun seeing my blog at its spiffy new alternative location), I explained the relevance of the Non-Identity Problem like this:

If we were to act to prevent or mitigate climate change, we would bring it about that people would spend their money on different things, travel to different places, meet different people, get different jobs, and most importantly, have different children (just think how tiny are the chances of a particular spermatozoon fertilizing a particular egg!). In 100 years, it's likely (if not certain) that the world would be populated by an entirely different set of people.

As a consequence of this "fact" (I will accept it as one), we are pretty much forced to say that the people who inherit a world affected by climate change are no worse off than they could have been, because if we had caused less climate change, they wouldn't have existed. Accordingly, it seems difficult to see how we could say that climate change "harms" anyone; if we did anything differently "to" them, they'd simply not exist.

So if the people who would face climate change will be different people than the ones who would have existed if we didn't cause climate change, how can we reasonably talk about costs being incurred as a result of climate change? It seems like when we talk about costs, we do rely on some sort of counterfactual, based on what would have happened if the event in question hadn't happened. For example, let's say I'm talking about a cost imposed on me by a car accident. What I have in mind is that there is a difference between what actually happened to me and what would have happened to me if the accident hadn't happened.

And when we talk about costs imposed by climate change, it seems like we're using the same sort of thinking: the costs imposed by climate change represent the difference between what happens to people in a climate change scenario, and what would have happened to them in the absence of climate change. But as I've said, what would happen to them in the absence of climate change is that they wouldn't exist. So how can we say that a cost has been imposed?

It's my view that this is actually not a problem for cost-benefit analyses at all. When we talk about what would have happened if a particular event had not occurred, I don't think it's necessary that it would actually have been possible for the event not to have occurred. I might say, "What costs and benefits did I incur as a result of being born male instead of female?" I couldn't have been born female; if my parents had a female child, it wouldn't have been me. But I still think we can ask such a question without speaking utter gibberish.

Some might be quick to point out that doing so would involve a lot of serious difficulties, because we'd have to hypothesize exactly what kind of life "I" would have lived, and we'd need to somehow compare that life to the one I already have. In the same way, it's extremely difficult to establish what someone's life would have been like if climate change hadn't affected them, and probably harder still to compare that hypothetical life to the one that actually happens. But it's important to see that this problem isn't confined to situations characterized by the Non-Identity Problem. The same kind of difficulties seem to be present when we ask, "What costs and benefits did I incur as a result of majoring in philosophy?" And it seems to me that any cost-benefit analysis is going to have to face these problems.

So back to the real question: does the Non-Identity Problem create any new problems for cost-benefit analysis? It does if we think of costs as representing harmful deviations from alternative possibilities. As I pointed out earlier, the concept of harm seems to include the idea of being moved away from a baseline, and the sort of baseline we'd need to refer to here is one where the individual couldn't possibly be on the baseline. If you couldn't exist if certain things didn't happen, then it's hard to see why we would say that you're harmed by their happening. But costs don't need to be thought of as harmful to people. As I alluded to earlier, I wouldn't want to say that I was harmed by being born a male instead of a female. My being male seems to be a necessary condition for my existence. But I can still try to determine what costs being a male has imposed on me.

So the fact that we can't consider the costs involved in future cost-benefit calculations to be harmful doesn't prevent us from being able to conduct the cost-benefit analysis. But one thing we have to keep in mind is whether the costs that we'd be measuring have any ethical significance. I want to think more about that, so I'll stop here.

Does the Fact that Individuals Discount Entail the Existence of a Social Discount Rate?

Donny with an A — Fri, 15 Feb 2008 22:09:00 GMT

[Cross-posted on the parent blog]

In my last post, I discussed the idea of discounting as it relates to cost-benefit analysis. I reached the conclusion that discounting treats future people's interests as if they were less significant than our own, and that if cost-benefit analysis aims to make people the best off, then this seems like a bad practice. I received a reply from a fellow with the handle of TokyoTom, which said the following:

Donny, I don't think that you've at all demonstrated that we don't discount - viz., that we try to make decisions on the basis that the preferences of people who do not exist today should weigh as much as our own.

I would disagree with that conclusion myself. Clearly individuals act on the basis of their own preferences, which preferences may take into consideration the supposed preferences of others, including future generations. These others simply don't have a vote on what my preferences are - and is the collective actions of billions of individuals alive today that similarly make decisions that bring about tomorrow.

Tom (at least I assume his name is Tom) is absolutely right to say that individuals clearly act as though value in the future is worth less than the equivalent value today. If I were trying to argue that people actually do make decisions as if future people matter just as much as they do, I would be easily refuted. In fact, I would be hard pressed to believe even that people behave as though future people matter very much at all, never mind as though their interests were equal to their own.

But I never argued that individuals don't discount (in fact, I specifically acknowledged that they do), or that individuals consider future individuals to be just as important as themselves. Rather, I argued that discounting future damage in cost-benefit analysis is unjust. What's the difference? I'll try to illustrate with a series of examples.

Let's say that we're trying to decide whether to put a garbage dump in a neighborhood populated exclusively by an ethnic minority (say, Hmong folks). We perform a cost-benefit analysis to see what we should do. In the first scenario, let's say the Hmong folks in the neighborhood would prefer not to have the garbage dump in their neighborhood, and the folks who live outside of the neighborhood would prefer to have it there (not because of any malice, but rather because they would gain use from it). If (once we equalize for different valuation of money and all that) the cost-benefit analysis shows that the outsiders would be willing to pay more to have the dump than the Hmong folks would to not have it, then we'd say that there's a net benefit to putting the dump in; it's worth doing. And as far as we ignore all the problems with cost-benefit analysis (that is, we don't care what we do to the Hmong people as long as it represents a net gain, and we're okay with treating a single metric as properly representing the wellbeing of these people), then that's all there is to it. The cost-benefit analysis has worked exactly as advertised.

But now let's say that the outsiders didn't want the garbage dump because they would benefit from it, but rather because they're evil hillbillies and they despise the Hmong people. The benefit to them is not a self-interested benefit, but rather a benefit derived from the cost to others. Perhaps if we give this kind of benefit equal standing, the garbage dump goes in. But that seems like the wrong conclusion. We might say the same if the garbage dump doesn't go in because the Hmong people don't want the outsiders to get any benefit, even though they wouldn't really mind the dump being there. That's why most people who advocate cost-benefit analysis try really hard to ensure that the costs and benefits they're measuring reflect only the costs and benefits to the individuals they're surveying.

Accordingly, we wouldn't want to say that the importance of future individuals' wellbeing can be accounted for in cost-benefit analysis by seeing how present people value their wellbeing. What matters is how much they value their wellbeing. Once we recognize this, then it becomes clear what we do when we discount their costs and benefits compared to current people's costs and benefits. What we do is to say that their costs and benefits are less significant than those of present people. And it is this practice which I claim to be unjust.

Cost-Benefit Analysis, Discounting, and Climate Change

Donny with an A — Fri, 15 Feb 2008 04:29:00 GMT

[Cross-posted on the parent blog]

I wrote a paper last semester on the notion of discounting future damage (I'll explain what this means below), and I wanted to revisit the issue now that I've done a little more research, to see if I still agree with what I wrote then. Basically, my paper examined how our views of the proper role of discounting are dependent on our views about what social policy is trying to achieve, and what kind of problem climate change poses. Rather than putting my whole paper online and critiquing it, I'm going to split it up into pieces and post each separately. In my paper I examined four paradigms: (1) The goal of social policy should be to allocate resources to their most efficient uses, and climate change represents a challenge to accomplish this task in a changing world; (2) The goal of social policy should be to maximize the overall good, and climate change represents an obstacle in the way of achieving this goal; (3) Climate change represents an externality, and the goal of a climate policy should be to internalize the externalized costs; (4) Climate change represents an overenclosure of the commons, and the goal of a climate policy should be to remedy this injustice. In this post, I will first go over what I mean by "discounting future damage," and then I will address the first paradigm listed above.

So how does discounting play into discussions about climate change? The most significant impacts of climate change will not occur for a significant amount of time: we're talking decades or even centuries. The issue is how important that damage is compared to the equivalent amount of damage today. In his essay, "Global Climate Change: A Challenge to Policy," Kenneth Arrow wrote that the dispute "...surrounds the appropriate value for the social rate of time preference. This...allows for discounting the future simply because it is the future, even if future generations were no better off than we are. The Stern Review [a report released by economist Nicholas Stern discussing the effects of global climate change on the world economy] follows a considerable tradition among British economists and many philosophers against discounting for pure futurity. Most economists take pure time preference as obvious." So when we talk about discounting future damage, what we're concerned with is whether or not it's acceptable to treat future damage as being less important, just because it's going to occur in the future.

So with that in mind, let's look at the paradigm of cost-benefit analysis: policy should allocate social resources in the most efficient manner, and climate change just represents a challenge for doing that. In its most rudimentary form, cost-benefit analysis is a tool which allows decision makers to allocate resources in the way that best matches some relevant set of preferences. For social decision makers, the relevant set of preferences would clearly be those of society as a whole. Since groups are composed of individuals, advocates of the cost-benefit approach feel that it is reasonable to extrapolate society's preferences from the preferences of individuals. This view is implicit in the position taken by economist Jerry Taylor, who favors discounting future damage at a rate of 5% per year, because it "...matches the return on Treasury bills - or, put another way, [it is] the figure people apply themselves when considering the value of money today versus the value of money tomorrow."

Because the simple cost-benefit perspective considers society as if it were a single decision maker, needing only to allocate its own resources according to its preferences, it is immediately clear why discounting would seem obvious. The existence of a preference for value sooner rather than later is a basic economic assumption which is rooted in cold empirical fact. From this mindset, the question is not whether to use a discount rate, rather what discount rate to use. Some, like Jerry Taylor, use the discounting practices of the current marketplace. Others, like economists Richard Newell and William Pizer, try to predict how market discounting practices will vary over the discounting period, suggesting a plausible range of 2-7%. But to debate the validity of using discounting practices at all would be like asking a banker whether she thought she should charge interest on a loan, or asking an investor whether he cared about getting a return on his money.

So if we accept the view sketched above, it's clear that discounting is not only acceptable, but almost obvious. But what should we think of this view? I want to offer a few objections. First, cost-benefit analysis doesn't properly account for the individuality of its subjects, and does not take into consideration the idea that individuals should not be sacrificed for the sake of others. Second, cost-benefit analysis supposes that all harms can be quantified according to a single metric, which doesn't seem right. Third, even if we ignore the first two problems, it seems like discounting is problematic when you consider the goals of cost-benefit analysis. Let me flesh these out a little.

The first objection is basically taken from Anarchy, State, and Utopia, where Nozick writes, "...there is no social entity with a good that undergoes a sacrifice for its own good. There are only individual people, with their own individual lives. Using one for the the benefit of others, uses him and benefits the others. Nothing more. What happens is something is done to him for the sake of others. Talk of an overall social good covers this up...To use a person in this way does not sufficiently respect and take account of the fact that he is a separate person, that his is the only life he has. He does not get some overbalancing good for his sacrifice, and no one is entitled to force this upon him..." I think Nozick is absolutely right here; we can't weigh future people's interests and current people's interests as if they were all held by the same person. Some notion of proper respect for each group as ends in themselves seems necessary, and the paradigm discussed here clearly lacks that.

The second objection, that a single metric is a suspicious way to evaluate wellbeing, is taken from an essay, "Values in the Economics of Climate Change," where Michael Toman wrote, "One other critique of climate change economics as a guide to policy involves the use of a single-dimension new benefit measure for evaluating different outcomes. This reflects the standard assumption in economics that all costs and benefits are commensurable and interchangeable once expressed in a common metric (a monetary metric as a representation of unobservable utility). There may be serious measurement problems in implementing such a reductionist metric, but as a concept the notion of full tradeoffs and thus full potential compensability of losses from climate change is ubiquitous in the economic model. This view differs from alternatives that see different kinds of values as less commensurable, e.g., some losses of natural beauty or function simply cannot be compensated by other welfare gains." Personally, I tend to think that these latter kinds of views are probably closer to being right. For example, if the Hindus of India are forced to abandon the Ganges as a result of climate change, what kind of compensation could we reasonably expect them to be satisfied with?

But even if we ignored the fact that the cost-benefit model is ethically suspect, and that comparing every harm according to the same metric is methodologically suspect (never mind the fact that we could probably never conduct the kind of calculation necessary), there would still be another problem. The third objection arises from the fact that calculations of "costs and benefits" are supposed to reflect utility, and therefore social preferences. The problem is that, as we discussed earlier, the cost-benefit model is perfectly comfortable with the idea of discounting. In his essay, "Environmental Risk, Uncertainty and Intergenerational Ethics," Kristian Skagen Ekeli pointed out that "To discount the future implies that current interests and preferences count for more than those of future generations." When we say that future damage should be discounted, what we're basically saying is that "society," which is supposedly neutral between its individual members, prefers current people to be happy over future people, simply because they live earlier. How this makes sense is beyond me. It seems that if we were trying to allocate resources to impartially reflect their most efficient uses, we would need to weigh people's interests as being equally significant.

So hopefully those objections demonstrate two things. The first is that cost-benefit analysis is a really crappy way to deal with the issue of climate change. But if we use it anyway (which I suspect people will do, because that's how economics is done nowadays), then we shouldn't discount future damage. To do so would treat future people as if they mattered less than present people, and that seems obviously unacceptable. I am, of course, conspicuously ignoring the Non-Identity Problem completely, and I want to deal with that issue, but I guess I'll leave that for later.