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Howdy!

(I'm an infrequent lurker in here, I occasionally stop in here and read.) Just got done reading the John Stossel "Give Me A Break" book (checked it out from my local library). I thought it was good and I learned a few things, although I found a few errors.

Hopefully I hope this does not come across as trolling, but just after reading this book, I seemed to be having a problem with one glaring omission, the topic of pollution.

I think there was really only one sentence in there that even mentioned it and that was that a lot of government regulation is unnecessary, etc., "except for pollution". But he didn't expound on that, nor deliver any further explanation one way or the other why governmental regulations on pollution are good, bad, or so-so. No explanations on how the "free market" system can or can't do a better job at limiting pollution. There was only a line on "the air is cleaner now than 30 years ago", but that addressed the topic of worrying, but it didn't address the reasoning and mechanics of how that was accomplished and was it attributed to regulation or the free market.

Unfortunately, one of my last posts in conversation with Ken (JohnGaltII) on another board was on this topic, but we never got to the answer of how/if pollution can be controlled/lowered by the free market.

Honestly I have doubts about it. The Stossel book did change my mind about a few things so I think I can be a bit open if presented with an example even I can understand.

Any info, articles, links, or just good examples would be most appreciated.

Thanks!


Duck
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I don't have any articles to point to, but I would state that my own opinion is that most of government regulation is unecessary.

What needs to happen is the government needs to go on a diet of deregulation.

At the start of every eyar, take the top 20% of government regulations that appear the most useless just cut right off the top. Then wait a year, and judge later if the law was worth keeping.

Next year cut another 20%, etc.

Every year a good gardner prunes. So should the government.

If we just did this, we'd have a lot less regulations, and we'd probably be a lot more productive.

The problem is, a lot of politicians are scared of cutting back some regulations because something bad might happen, even though the repeal of the law would do more good than harm.

I guess Stossel's point is that pollution regulations appear to him the most useful, and they're probably the last ones you'd want to "experiment" with. Anectodally, Pittsburgh looks a lot better today than it used to.

A pure Libertarian would tell you that it is societal pressure that forces corporations to behave, not government. Societal pressure is expressed through the government in our society because ours is not pure Libertarian.

As an example, in a pure Democracy (I realize our government is not), it takes a majority of all citizens to apply societal pressure, whereas in a pure Libertarian society, it takes only a significant fraction (much less than 50%) of those citizens on whom the corporation is dependent on.

The above philosophy can be applied to many classes of laws, like the drug laws, for instance.

-JAR
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Quack!

I also was very impressed with the Stossel book. I bought it at Costco because I had always been AMAZED when I would see what his specials were on. More or less the only "thinker" on network television that ever pierced my radar screen. So I bought his book.

I liked the idea that here was a libertarian with a good haircut and a beautiful wife. While I am a fan of libertarian ideology, I am an anti-fan of ideologuism. I DO believe the proper role of political parties is to participate in government, and it seems plausible to me that a significant fraction of third parties is dominated by people who would rather keep their ideology passing purity tests than to ever govern. Getting a network TV success story on the deck of the ship sure as heck made me consider the possiblity that this party might be relevant.

Stossel's book pushed me over the edge, at least to the extent of coming over to this board. I still need to mull over the relative benefits of voting the party of Reagan vs. the actual Libertarian party. Can my miniscule influence on things be better spent moving one of the actual elected parties incrementally in the directions of policy that help the country? Or is the world better served by my hanging out in the corner with the party of Stern (as in Howard, google if you don't know the story)?

But Stossel left me believing that yoiu could put a radical libertarian in the white house and it would be 20 years before you had to worry that he had possibly gone too far! We are THAT far away from getting ENOUGH free market and market-based solutions in this country. To paraphrase Churchill, we suck, but we are still (approximately) the best game in town, although you will find a bunch of libertarian theorists touting New Zealand and Ireland and other countries which are to the U.S. in importance as the Libertarians are to the Republicans.

Which brings me, ever so slowly, to the questions you ask. Where or where not is the market in pollution? Where is government? Must it regulate?

The answer for at least some of us is: yes, the government must regulate in pollution, but not all regulations are created equal. Simply stating "the government must regulate in pollution" is FAR from stating that ANY regulations they pass in the name of pollution have a net benefit to society, or that the net benefit might not be drastically increased with a very different approach to regulation.

http://www.epa.gov/airmarkets/trading/basics/ talks about some aspects of regulation where the regulation itself creates a market. The theory is: if the government's goal is to reduce pollution, and industry/business is pretty much expert at trading off the various tradeoffs they have to make, then why not regulate into a market? So pollution allowances are created, and issued to the players who are polluting. But those allowances can be bought and sold. So one industry is building a new plant, they can more efficiently reduce emissions tremendously when building a plant than by retrofitting an old plant, so they DO that and get a plant that emits much less than they are "allowed" to by the allowances they have been issued. They can then use the excess allowances to either 1) keep an older dirtier plant alive a little longer OR 2) SELL that allowance to another company which is keeping its older investment alive a little longer.

The upshot of this market type sollution is that the government doesn't have to "guess right" about the optimal way to achieve reduced emissions. They simply issue allowances for some total amount of allowable emissions, and the market moves the capital around to meet those goals. Since the essence of the failure of communism and even socialism was that government's SUCK at guessing right the details of how to run businesses. This seems like it would be a much better way to achieve the stated goal: reduce emissions.

Anyway, don't let my participation here scare you away from the ideas of libertarianism, or the other ideas expressed in Stossel's book. You will see a lot of us cranky types over here. But don't darn the ideas because of the nerdiness of their proponents. Just remember John Stossel has a beautiful house in the Hamptons, and ignore the guy wearing the bowtie who forgot to wash his hair this month.

R:)ph
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Duck,

My thoughts on pollution is that it is frequently an 'externality' to the free market decision, i.e., it is something that a single market participant can inflict upon society as a whole. To the extent that that is the case, then regulation is necessary to do what the free market cannot. However, regulation should be limited to what is absolutely necessary to achieve the result sought.

Environmental regulations should be primarily concerned with two things, and two things only: limits and penalties. They should NOT be telling people HOW to do something, only WHAT needs to be done, and what happens if they don't. I have a saying I tell my wife when she tries to act like the EPA with respect to the 'honeydo' list: "You can tell me what to do, or how to do it, but not both."

Unfortunately, the EPA is trying to do too many things, and there are too many people that have opinions as to what it should do more of. You can't please everyone, so I admit they have a tough job. But if all they do are enforce limits and penalties, that will be enough in the vast majority of cases. There are a lot of worriers, and most of them can and should be ignored. P.J.O'Rourke had a great saying along the lines of, "Environmentalists will do just about anything to save the environment, except take a science class." I think that's pretty accurate, as most of the 'scientists' that Greenpeace and other green organizations quote are hardly in the 'mainstream' or even 'accepted' camps. They're usually crackpots, in my opinion. I'm open minded to good science, but I just haven't seen much from the green camp. Just because the average temperature of the Earth has gone up in the last 50 years doesn't mean it's the greenhouse effect. Correlation is not causation, but I have yet to see a Greenpeace spokesman admit that. They're too busy pumping their agenda. Anyone who won't acknowledge the weaknesses of their argument as well as the strengths should be looked at with extreme skepticism, and they fit that description to me.

That said, I think it is entirely just if people who make messes are required to clean them up. That includes animal waste just as much as PCBs and sulfur. We need to set rational limits, based on accepted science, and then enforce them. It isn't rocket science, and it shouldn't be a political football. And I don't see a problem with CEOs being made to drink the water that they pollute, just to be sure it's clean. The fundamental concept of that sort of feedback loop, or 'eating your own cooking', is all that the EPA should be concerned with. The market will find a way to efficiently meet the objectives all on its own.

Dean
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http://www.epa.gov/airmarkets/trading/basics/ talks about some aspects of regulation where the regulation itself creates a market. The theory is: if the government's goal is to reduce pollution, and industry/business is pretty much expert at trading off the various tradeoffs they have to make, then why not regulate into a market? ...

As the EPA website presents it, this looks good to me. I think what I had a problem with was Dubya's "Clear Skies Act", which although that was an emissions trading program, too, his version was that he would allow total pollution to increase based on the growth of GDP. He didn't even want to attempt to lower emissions at all. If the proposed CSA addressed reduction in this trading program, then I'd go for it.

There was one problem brought up, though, but I can't remember the article or link. This kind of trading program (according to the article) doesn't work well on ALL pollutants. The mercury from coal-fired plants doesn't disperse regionally or nationally like sulfur-dioxide does with acid rain. Mercury emissions deposit VERY locally, like within 15 miles of the source. So a site could still be kept totally "dirty" as long as it doesn't affect the operator's trading credits and/or profitability. I think the problem was that a program like that had the potential of unintentionally theoretically causing some sites to be get even dirtier yet, or allowing a dangerous site to "stay" in a dangerous state. I'm not nit-picking or claiming this is 100% true, I'm just regurgitating what I think the article stated.

The next big problem of a trading program is, of course, how much reduction is enough (or too much) for each industry? But seeing how the Acid Rain Program worked, it appears they might have solved that issue.

Thanks!



Duck
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Dean

They should NOT be telling people HOW to do something, only WHAT needs to be done, and what happens if they don't. I have a saying I tell my wife when she tries to act like the EPA with respect to the 'honeydo' list: "You can tell me what to do, or how to do it, but not both."

Agreed.


There are a lot of worriers, and most of them can and should be ignored. P.J.O'Rourke had a great saying along the lines of, "Environmentalists will do just about anything to save the environment, except take a science class." I think that's pretty accurate, as most of the 'scientists' that Greenpeace and other green organizations quote are hardly in the 'mainstream' or even 'accepted' camps. They're usually crackpots, in my opinion. .... We need to set rational limits, based on accepted science, and then enforce them. It isn't rocket science, and it shouldn't be a political football.

I think one of the problems now is that science has been debased to the point where it's an opinion now anyway. FWIW, I've disavowed Greenpeace for other reasons, I still lean towards other organizations though. BUT, we can't even have mutually agreed concepts on science it seems, as you've stated about "green" organizations. On the "other side", you have leftists like me pooh-poohing anything that the current administration calls "sound science", which in my head means "evil, greedy, industry-supported pseudo-scientific lobbyists". So we're at an impasse. We've even gotten to the point where a lot of science is distrusted, regardless of the source.

On the topic of global warming, for example, the UN formed the IPCC for the purpose of determining the issue and still we have fierce debating even now. No, I don't want to get this into a flame war about global warming, I'm just stating that topics like this on what should be a "simple" scientific issue is still being fought repetitively and escalated into an ideological morass. It may not be rocket science, but you still have rocket scientists arguing infinitely on both sides.


Back to our topic, though. I think the objective setting of allowable limits can still have problems as not everyone may agree what is "safe"? Do we resolve that hurdle? I don't know. Will the free market fix it? If RalphCramden's suggestion of using the emissions trading programs is a good start, I'd say go with it. But determining what the limits and reductions should be might be another big problem. Not an insurmountable one I hope, but a problem for sure.

Thanks for the response!!!


Duck
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My thoughts on pollution is that it is frequently an 'externality' to the free market decision, i.e., it is something that a single market participant can inflict upon society as a whole.

Externalities are simply costs and benefits that the market has not (yet) matured enough to handle. The history of economic development is a series of externalities being internalized.

Example: Patents and copyrights internalize, to a signifigant degree, the external benefits.

However, often (not always) the process of internalizing an externality must overcome a barrier enforced (possibly even created) by government.

Example: the abolition of state-decreed monopolies, among other effects, internalizes marketing costs.

Meanwhile, government has also continued to externalize formerly-internal costs and benefits, to enrich itself and/or expand its power.

Example: legislation on hiring by ethnicity (whether formally in favor of, or formally opposed to, racial discrimination) externalizes the relative costs and benefits of an individual employer's desires on the matter. If Joe willingly hires the most qualified candidate regardless of ethnicity, while Fred would never hire a Slobbovian absent a law requiring it, the day a highly-qualified Slobbovian comes looking for a job the law transfers wealth (derived from Joe's greater wisdom) from Joe to Fred.

Example 2: legal-tender laws transfer the benefits of correctly judging the relative values of currencies from businesses to government - which promptly fritters them away by inflating the currency.

(If the government did not inflate the currency, there would be no need - and no benefit to the government - for legal-tender laws. The US currency is named for a one-ounce silver coin whose issuer DID NOT inflate it, and which therefore was accepted across the whole of Europe and quite a few other places even though it actually came from a TINY principality in what is now Germany. Unfortunately, the dollar is not nearly as sound as the thaler was: last time I looked there were nearly five dollars to the thaler - still a lot better than the British pound sterling, which it takes about 30 of to buy a pound of sterling.)
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As the EPA website presents it, this looks good to me. I think what I had a problem with was Dubya's "Clear Skies Act", which although that was an emissions trading program, too, his version was that he would allow total pollution to increase based on the growth of GDP. He didn't even want to attempt to lower emissions at all. If the proposed CSA addressed reduction in this trading program, then I'd go for it.

Indeed, as far as I presented it, the market based solution DOES NOT tell you what the right amount of pollution is to allow. The number of allowances initially issued in which the market then trades is, at least as far as we discussed here, a separate question.

Let me spin off into the weeds here. An extension of the market concept in pollution allowances could be to allow the fed gov't to issue more allowances if the going rate for them is very high, and to buy allowances back off the market if the going rate for them is rather low. The effect of this would be as follows. Suppose a particular pollutant is particularly expensive to clean up. Then allowances for this pollutant will trade at a very high price. Maybe the EPA sees allowances for some reasonably benign pollutant trading at a very high price because this pollutant is difficult to scrub out, while a more noxious pollutant trades at a lower price. Then the EPA could sell ADDITIONAL allowances into the first market to raise cash, and use that cash to BUY allowances out of the second market. In this sense, assuming the EPA can make a reasonable cost-benefit tradeoff of the relative value of eliminating different pollutants, the mix of accepted pollutants could simultaneously be brought down to a healthy level at minimum cost to industry overall. But this is just me getting clever.

There was one problem brought up, though, but I can't remember the article or link. This kind of trading program (according to the article) doesn't work well on ALL pollutants. The mercury from coal-fired plants doesn't disperse regionally or nationally like sulfur-dioxide does with acid rain. Mercury emissions deposit VERY locally, like within 15 miles of the source. So a site could still be kept totally "dirty" as long as it doesn't affect the operator's trading credits and/or profitability. I think the problem was that a program like that had the potential of unintentionally theoretically causing some sites to be get even dirtier yet, or allowing a dangerous site to "stay" in a dangerous state. I'm not nit-picking or claiming this is 100% true, I'm just regurgitating what I think the article stated.

Remeber in Stossel's book, where he talks about Dioxin and PCBs? And how in the USA, we closed at least two towns, (Times Beach MO and Love Canal near Buffalo, NY)? Whereas in Italy with the same problem, they simply buried all the contaminated stuff and built a park (!) on top of the burial mound?

The answer MIGHT be, if the industry blowing mercury into the environment is valuable enough, for them to find a location where they can afford to BUY 15 miles around their site, and run their factory there, and simply not worry about the Mercury. If the stuff is that localized, who cares if it soaks into a bunch of death valley or some such other landscape where it couldn't possibly matter? The point is there is ALWAYS a cost benefit tradeoff to be made, and that markets are EXCELLENT mechanisms for making those tradeoffs. The point is that an absolute statement "we shouldn't have mercury in the land" is, if implemented going to kill people, in at least the sense that resources that go to pulling mercury out of the land at the savings of perhaps zero lives, cannot be devoted to pulling other pollutants out of air, water or land at the savings possibly of more lives, or even more directly, cannot go into providing more medical care and better quality nutrition to people, at the savings of MANY lives.

The short answer is: it ALWAYS makes sense to look at the details. We claim the markets do a great job. It is RIGHT to bring up stuff like Mercury and its different spreading pattern when reading about a market solution that works for airborne or waterborne pollutants.

The next big problem of a trading program is, of course, how much reduction is enough (or too much) for each industry? But seeing how the Acid Rain Program worked, it appears they might have solved that issue.

Well this is actually a problem whether or not you are using a trading program. If you are going to declare that no smokestack can put out more than X, and there are 10000 smokestacks in the country, you are passing a law limiting annual emissions to 10000 X. The point of a market solution is that you might wind up with a stronger economy AND only 10000 X of annual emissions if you trade the allowances rather than mandating on a smokestack-by-smokestack basis some cookie cutter solution.

Thanks!

My pleasure!

R:
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Remeber in Stossel's book, where he talks about Dioxin and PCBs? And how in the USA, we closed at least two towns, (Times Beach MO and Love Canal near Buffalo, NY)? Whereas in Italy with the same problem, they simply buried all the contaminated stuff and built a park (!) on top of the burial mound?

Okay, now I remember. But I think he was referring to the reality/fallacy of what the effects of the pollutants to determine whether closing off a town was the right thing to do or the wrong thing to do. In the case of some pollutants we DO know what the effects are, e.g., acid rain.


But I enjoyed reading everything else and I think I have a better understanding now.

Thanks!


Duck
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For an overview of libertarianism, I'd recommend
Murray N. Rothbard, _For a New Liberty_, available from the usual sites, including www.lfb.org. On pollution, see pp. 75, 256-62.
You can read it at his archive at www.mises.org.

Rothbard wrote a classic essay on pollution in the _Cato Journal_ (Spring/Summer 1982) available at their website.

http://www.cato.org/pubs/journal/cj2n1/cj2n1.html

then click on the link to the article.

Robert Smith also wrote a libertarian book on pollution and property rights in the early 1980s and there have been many other articles in various libertarian publications.

VS
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