Today is Earth Day, the annual bacchanalia of self abuse invented by the environmental movement to remind everyone that the human race is a pestilence upon this planet. It is a celebration by the self righteous for the hysterical.
Anyone searching for a real pollution solution should try to: Save the environment one property right at a time.
Another related problem is that because regulators do not have the correct information, they typically mandate uniform technologies or performance standards for all parties. Those regulations do not account for the differences across firms in their abatement costs. In the case of electricity utilities, for example, the Environmental Protection Agency (EPA) under the Clean Air Act required that all utilities install flue gas scrubbers to remove sulfur dioxide even if some emitted little sulfur dioxide because they used natural gas or low-sulfur coal in their power plants.
Ideally, regulations should be flexible, allowing those organizations that can reduce pollution at lower cost to do so and be compensated, while allowing those that have higher compliance costs to cut back less, but pay a price. In this manner, a total pollution objective could be met at the lowest cost because most of the reductions would be accomplished by the organizations that can do so most efficiently. Further, these policies would gradually equalize marginal abatement costs across firms. What kind of program would meet these goals?
[. . .]
With property rights security, owners can plan ahead with investment in pollution abatement technologies, knowing that their benefits will be captured in saved emission shares that can be banked.
A lot of people in the environmental debate are big on the "Tragedy of the Commons," which holds that individuals will make decisions about "public" assets that are perfectly logical for their own personal gain but disastrous for the resources and the group as a whole-- we all take our share, in other words, with no regard to what it does for the resource being depleted. The great debate among those who use the Commons as a framework is whether the solution is more top-down regulation or greater respect for private property (since we take better care of what is ours).
But this debate may start to change because of the work of Elinor Ostrom, Indiana University's Nobel-winning economist, who has demonstrated how the Common can be less than tragic when a community works out a way to manage its own resources. Many progressives are delighted with her work because it "refutes the idea that privatization" is the only answer. But she also thinks governments might not be in the best position to allocate resources, either. Her solution is to sort of privatize the whole Common, give each individual "ownership" of a small share which he will then take better care of than when he only shared ownership of the whole thing. Thought-provoking stuff.