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effrenata @ 10:50 pm: Privatizing the Atmosphere
I've been thinking about free market solutions to global warming. It strikes me as a classic tragedy of the commons. Assuming that the global warming hypothesis is correct, the warming is produced by many small effects that are harmless individually and on a local scale, but which become harmful only cumulatively. The traditional libertarian solution for pollution, in which the polluter pays damages to the specific property owners who are affected, does not apply here because the effect is so diffuse. (To whom would a company owe damages for contributing one ten-millionth to global warming, for instance?)

I've been thinking about this could be handled by the free market. The idea I had was to privatize air. I don't mean privatizing the right to breathe, but privatizing the right to produce greenhouse gases. (Actually, human breathing does produce CO2, but, one would hope, the amount is negligible compared to that produced by mechanical means.) An international board of scientists would set standards for the maximum permissible percentage of hydrocarbons, CFCs & other pollutants in the atmosphere. Volumes of air would then be sold on the free market. The initial allocation could be determined by associating a "stack" of air with each lot of surface real estate (land and water). Each property owner would own the column of air above his land or water acreage. Companies could then trade air rights with other private owners. If the emissions produced by an owner exceeded the maximum amount for the volume of air owned, the owner would be subject to a fine. Emissions produced by vehicles would be factored into the air use of the manufacturer.

What are your thoughts on this idea? The main problem I see with it is the international agreement, and getting all the different countries to cooperate with the price and fine schedule. Is there a way that this sort of thing could be accomplished in a decentralized manner? Could an air market exist in an AnCap world?


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