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Saturday, July 08, 2006

CCQ 10 The Free Market and the Environment

Squirrel would like to know

How would a free market model deal with human caused environmental problems, specifically those which the individual is unlikely to care about eg a farmer who is degrading his land over the long term. Or an individual who's lifestyle is contributing to long term environmental change

The key point about the free market is the de-centralisation of power it promotes.

In a corporatist, socialist or fascist state, huge projects or programmes, may be undertaken, millions dislocated or poisoned, huge environmental damage done and no-one is accountable.

Conversely, tour any state housing area in NZ and record the street numbers of the tidiest looking and best cared for houses.

I'll bet you dollars to doughnuts that the tidier houses are mainly privately owned.

Now back to the farmer. Why would he not care about degrading his land over time? I can understand that if he was on a five year lease and was just out for a quick buck-not if he actually owned the land and wanted to pass it on to his family, or sell it to support a luxurious retirement.

My point is that private ownership encourages wise stewardship. If you doubt this, assure me that you treat a rental car as well as your own car.

However I will accept that some inbred types may well pollute their rivers, dump car bodies all over their properties, burn off every tree on the place, overgraze their land causing erosion, blanket the place in dioxin, feed their pigs unhygenic meat products which promote disease etc etc.

Now here's the rub. If said damage is limited to the offenders property, nothing can or should be done. If a rare rich nutcase wants to turn his 10,000 hectare inherited sheep station into a desert, so be it,

If however, his pollution, erosion, spray drift, offensive smell, dioxin based pesticide, pathogens, rodents, rabbits, ragwort or possums, in any way impact on the property rights of his responsible neighbours, he is liable for full damages.

All the neighbours have to do is prove harm and Mr Inbred may lose his farm, or most of his remaining wealth in court, very quickly. Also, if Mr Inbred's proposed action was likely to cause harm, a legal injunction could be sought to stop the activity until the matter was clarified.

The free market rewards responsible stewardship of resources. It also heavily penalises irresponsibility if in any way harms the property rights or physical wellbeing of other parties.

A key difference is that in a state socialist system, like the Resource Management Act, the onus is on the property owner to prove that his proposed project will do no harm. As it is pretty hard to prove a negative, this is a very expensive process, wide open to corruption and extortion.

In the free market, the onus is on the plaintiff to prove harm. If you can prove that your neighbour's activities are physically harming your property or health in some way, you can shut him down or seek compensation. If you can't-mind your own bloody business.

I believe there may be implications for the genetic engineering of crops here. I think anyone should be able to re-engineer any plant they like. However, you must have some way of limiting the effects of that re-engineering to your own property. If you plant genetically modified corn in your own field, how do you stop the modified pollen getting into your neighbour's organic crops next door? If you cannot limit it, have you the right to do it?

Property rights are the ultimate environmental safeguard. In some ways they can be far more stringent than anything a government could dream up. They are also far more flexible and rational. Property rights and the free market are the real, long term answer to the world's environmental problems.


Anonymous Anonymous said...

What about things like Florocarbons which do damage to the ozone layer, it may be hard to prove that one individuals emissions is doing another particular person harm. However, overall, if lots of people use ozone depleeting chemicals, it will harm everyone. Would it not make sense to ban them rather than thousands of individuals take thousands of others to court. Would you agree? because banning seems to be a very unpopular word with libertarians.

7:15 PM  
Anonymous Anonymous said...

As water vapour is the primary Greenhouse gas and every human being exhales it in their breath how will "guilt" be determined there?

7:12 AM  
Blogger Trevor Loudon said...

Peter, the onus of proof is the plaintiff. If Greenpeace, or some other well resourced organisation could scientifically prove that fluorocarbons were a problem, they would only have to sue one major producer to send a major chill through the entire industry.

12:03 PM  
Anonymous Anonymous said...

I am by no means a socialist, and am an act supporter however, Im not sure that I can agree on this point.

For example If I produce only a small amount of flurocarbons, and you take me to court, the judge/jury may rule in my favour, or I may convince the court that my small amount would be insignificant in the great scheme of things(which would probably be true), then I and small producers could continue to produce harmful products which depleet the ozone layer.

If the law were such that any harm could be outlawed (ie the fact that my small number of flurocarbons would only increace skin cancer .001% chance) then that would mean that people could sue for a minor thing, "the second hand smoke from the guy smoking across the road will increace my risk of lung cancer by .001%"

If you see my point, if an effect is additive and one producer effectively has no effect how can you stop them without opening up the opportunity for people to be petty.

9:36 PM  
Blogger Trevor Loudon said...

Yes Peter I do see your point and it is a very ggod one.

The basic principle here, to me, is onus of proof on the plaintiff.

I would trust judges and juries to make common sense decisions, location by location, rather than regulatory authorities issuing blanket bans at will.

Take something like DDT. That has been banned world wide because of its alleged environmental effects.

Yet some scientists will tell you that the harm has been exaggerated and that the ban has killed thousands because of increased malaria etc in certain tropical countries.

In a free situation, DDT might be effectively banned in some areas and OK in others, depending on local courts.

The power to ban is a dangerous thing and in my opinion is more to feared than than many of the alleged threats it is used against.

4:20 PM  

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