Air pollution and its unexpected solution

My family is currently staying in a rented apartment in the south of France. We’re a mere 30 meters from the sea, and everything is pretty much perfect – except for the incessant noise and air pollution.

There are so many vehicles, there’s almost a traffic jam all the time, and this continues well into the night. Sleeping requires closing the windows, which is somewhat uncomfortable with no air conditioner in 30 degree heat. All because the motorcycle users, who remove their exhaust silencers, seem to make disturbing other people a point of pride.

I’ve known motorcycle users who would push their bikes along the street if they arrived home late, not to disturb the neighbors. The guys here are mostly the opposite.

The noise is so bad that most of the time, I can’t even hear the birds. You know that sound the sea makes when the waves crash against the shore? Yeh – you can forget about that too.

All along the coast, for miles in either direction, there is a two-lane road. And since this is France, bicycles aren’t allowed on the sidewalks either. The current system creates disincentives for bicycle use, and prioritizes polluting vehicles at the expense of both clean forms of transportation, and every person staying here on holiday.

There are so many vehicles causing air pollution, the air smells more of gas than the salt that can benefit our lungs so much.

So what’s my point?

That this is a perfect example of government failure.

Free markets can solve air pollution

If this city was operated along free-market principles, the locals, especially those people who actually own apartments overlooking the sea, could create a fund to buy out the road, close it off, and make it a pedestrian and cycle only zone.

Since there’s a much wider road running parallel to this one, right on the other side of the buildings, no real accessibility will be lost. A few more traffic jams will be created, yes. But that’s only because people are using cars to do their shopping when they’re too lazy to go on a five to ten minute walk.

What about the free rider problem?

This is a classic argument leveled against free market solutions, and it rests on taking the limits of one’s own worldview for that of the world.

It’s also classically anti-entrepreneurial. Anyone who’s in my experience ever argued that this or that can’t work never really tried to find a solution. They didn’t sit down and think about how they could solve the problem, or create a business around it to make money. They immediately tried to criticize and destroy it.

It’s almost like people don’t want to solve problems, they just want to defend why the problems are there in the first place. It’s odd, but understandable – public education doesn’t teach true problem solving and critical thinking skills. It teaches memorization and regurgitation of set theories during exams. There’s no room for originality, initiative, or thinking outside the box.

So how is the problem solved? The same way kickstarter.com solved their problem. They used the threshold pledge system.

What is the threshold pledge system?

A project’s likely expenses are planned, and the approximate amount is set as a fundraising goal by some entrepreneurial fellow. If the target is reached, the project is funded, and everyone else who benefits without contributing can be thought of as a positive externality. Although in many cases it’s even possible to exclude others from the benefits, or increase benefits for those who participate.

Until the funding goal is reached, nothing happens. Participants’ money is merely pledged, it is not immediately donated. That way people have an incentive to put money towards the project, since they lose nothing if the project fails to meet its funding goal.

Social ostracism

There’s also the social aspect. Those who don’t participate despite being able to can be labeled as social pariahs and ostracized for their free riding. On the other hand, those who participated will gain respect and credibility in the local community.

So, an enterprising fellow contacts whoever the owner of the road is (currently the government), finds out a price they are willing to sell for (currently impossible absent a free market system), and sets up a project with that sum as the funding goal. Perhaps some expenses can be added for fencing off the area, or improving the roads for pedestrians, though that can be a later project.

The benefits are obvious. Not only will there be less noise and air pollution, but the value of everyone’s property that was erstwhile affected by the noise and air pollution will go up, thus justifying the expenditure on the fund.

How free markets can solve water pollution

This system can be extended to all sorts of situations. Factories polluting downstream externalize their costs because nobody really owns the river. By default the government does, but the relevant officials within the government can easily be bribed since they don’t themselves own the river – they only administer and manage it.

Government ownership of property always ends up no better than if the property wasn’t owned at all. The result is always the tragedy of the commons.

If portions of the river were purchased by the people living alongside it, they could then sue the factory upstream for ruining their drinking, fishing, and swimming water.

This is an excellent example of property rights forcing a pollutant’s costs to be internalized, by forcing that factory to feel the true, full costs of its own pollution.

An environmental activist group could even come together to buy out the entire river, and make sure that nobody could pollute it without being sued into oblivion.

What about other ways to deal with air pollution?

If we had true property rights and a free market to deal with air pollution, it might even be possible to take people to court for raising the level of air pollution on one’s property. Say I own a home near a factory creating heavy air pollution.

I buy an instrument that measures the levels of concentration of various pollutants in the air in the house, and if they’re beyond levels that are safe for my health, I can preemptively sue the people responsible. That is to say, before my health is actually damaged. If enough people do this, it begins to make more sense for a factory to deal with their pollution problem in-house, rather than just dumping it out into the environment.

Free markets and true property rights give power to the people

We no longer have to wait for some government busybodies to take action and start fining these companies. As victims of the pollution we can sue them ourselves. Not only are we, as victims, not going to be as easy to bribe as government officials who probably don’t even live near the affected area, but only free markets and property rights would result in the correct fine for the corporation’s pollution.

Any fine designated by the government is bound to be arbitrary, and probably too small. Or too big, putting the company out of business altogether, rather than just providing the incentive to clean up their act (pun intended).

These kinds of arguments demolish idea that free markets are at fault for the pollution we have in the world. Free markets can’t be at fault for air pollution – since free markets don’t currently exist! Moreover, free markets would provide an ideal framework for solving air pollution, water pollution, and all sorts of other environmental problems.

As it stands, when I close my eyes on the balcony, I don’t feel like I’m 30 meters from the sea – I feel like I’m in the middle of Paris on a busy street. And that’s got nothing to do with market failure. It’s because France doesn’t have a free market, that these solutions to air pollution are never taken advantage of.

 

p.s. For anyone who thinks we live in a world of true property rights, consider that you can’t actually own a piece of property without paying a tax on it. In other words, you’re only renting the property from the government.

Furthermore, what you actually do with your property is contingent upon various arbitrary government laws on zoning, and other restrictions. You can’t simply add a structure to your house – odds are you need to ask for permission from an apparatchik. You don’t own your property – you are merely given the illusion of ownership, because that makes the tax-paying population more productive.

After all, taxation is the ultimate protection racket.

8 thoughts on “Air pollution and its unexpected solution”

  1. Pingback: Free Markets and their Inherent Altruism

  2. Wait – so to get clean air in *my* house, I have to buy up the surrounding roads? And that’s a “solution”?

    Why should I have to buy up the roads? Why can’t my air be clean, regardless, without arbitrarily imposing extra costs on me afterwards?

    And that only helps for roads. If it’s factories, I can’t buy up the land beneath all of them, and even if I could, they’d just move. I could sue them — and lose, since they have a right to pollute. Or maybe I just lose because there’s no way to prove which of the 100 factories is causing the particular air pollution I’m seeing.

    Lord help you if you live near a major city, and you want to avoid the air pollution of millions of commuters. Are you going to sue them all?

    The basic problem is this: How do you apply property rights (and by extension, free markets) to a good that everyone has equal, unlimited access to?

    1. So from the beginning of your post you agree that my solution should at least work for water, right? Your main concern is with air. That’s a good start at least, as right now water is being polluted to no end.

      What I meant was that the solution is to internalize negative externalities. A negative externality (air pollution on your property from a nearby road or factory) usually carries no consequences with it. Under a polycentric legal system in which businesses can be better held accountable for their actions, you would be able to sue the business (whether they own a factory or a road) for damages. This is helped by the fact that businesses would no longer have protections such as limited liability given to them by the State. The combined lawsuits of people affected by pollution will determine whether it is cheaper for the business to:
      1. Pay the fines.
      2. Reduce pollution.
      3. Close down or move somewhere else entirely.

      This makes the decision a weighted cost-benefit analysis, which is exactly what we want. Sometimes the products whose side-effect is pollution are going to be far more valuable than their negative externalities.

      You mention that factories have a “right to pollute”. Perhaps under the current government system they do, but under a free market entitlements and positive rights cannot exist, and a right to pollute, just like a right to healthcare, would not exist. Google the difference between positive and negative rights to see what I mean.

      The truth is that air is not equal. The quality of air is different from place to place and the air each of us breathes has a different cocktail of chemicals in it. Prove in a lawsuit that the air on your property is polluted by dangerous chemicals from someone specific, and you have your solution for dealing with externalities.

      If this explanation is still not acceptable to you, please offer your own solution, since it’s clear that whatever the government is doing now is definitely NOT working, and is only enabling these corporations to degrade our environment further and further.

      1. “So from the beginning of your post you agree that my solution should at least work for water, right? Your main concern is with air. That’s a good start at least, as right now water is being polluted to no end.”

        It works partly for water, I think. I’m not sure how/if you can control water pollution that comes from runoff, but this might at least help handle active pollution dumping in waterways. So, yeah, my biggest concern with the libertarian solutions is with air pollution, as the harder of the two problems.

        I’m on board with a lot of your reply; it makes a lot more sense to me than the original post did. As you said, the goal is to bring the externalities into the system. A better legal system would be part of that, and in the US the introduction of class-action lawsuits really helped, by vastly lowering the “transaction costs” associated with fixing some externalities (in other words, the lawyers’ costs are spread out over a lot more people, for things like factory pollution or a faulty product, so it’s more feasible to actually get sue for owed damages).

        Limited liability is another aspect of the system that’s not going away any time soon, though. You can think of limited liability as letting corporations reap profits now, but push the costs into the future — at which point, the corporation may or may not have the money to actually pay them. So, it provides another way for a corporation to skip out on paying the real costs.

        Last, there’s the very real, very big problem of general pollution (in contrast to specific), for instance, pollution that’s coming from 10,000 cars, instead of a few factories. Maybe we can fix the legal system so you can sue the factories, but how do you sue 10,000 drivers?

        In class action lawsuits, many people can sue one entity. What about a corollary: a legal system that also allows one person to sue many other entities at once? …But I don’t think that can work, at least, for now, since you’d end up with 10,000 defenses, and figuring out the burden of proof would be nonsensical.

        Okay, but you could say “there are other solutions. Sue the guy who owns the roads, or the guy who makes the cars.”

        Right now, the former won’t fly in court, and honestly, I don’t know enough about our legal system to say why, or what you’d have to change. The dismissal latter case seems relatively obvious: you don’t sue a gun maker for a murder, because it wasn’t his fault that the gun was used to kill someone; guns have many other legitimate purposes. So you can’t blame a car maker for some pollution, either. Same as a cigarette maker, for that matter.

        But last, what do you do when it’s not clear who the air pollution is coming from? Is it that road, or this one, or that county, or this one? How do you know who to sue?

        Sometimes, it may just be easier to regulate cars and gas and factories. Though, for the most part, these aren’t mutually exclusive sets of solutions; there’s no reason you couldn’t both change the legal system and enact some regulation, and that might help fill in the holes in our solutions quite a bit.

  3. Just curious. Suppose your way was adopted and free markets reign supreme. Lets say NAS, North America Stainless Steel up river from my town decides unfettered by the regulations of the EPA decides to drop tons of methyl mercury into the water because, well, they just can.
    So, me and my fellow citizens decide to sue NAS to clean up our river and compensate the other health stuff from that. But, My organization’s few Millions of dollars can’t compete with their large reserve of cash as well as the fact 20% of the population of the area work for NAS thus they are threatened with pink slips for voting to sue their employer.
    Still a good idea?????

  4. I don’t think this is doing any more than re-arranging the problem whilst adding a new one. With respect to the former, it is simply re-arranging the burden from the government regulator to avoid pollution to the owners of private property, who must ultimately rely on the state (through the medium of the civil courts) to enforce any such protections. Presumably economic power will come into play here- it simply becomes a matter of not who can lobby government harder, but who can afford the best lawyers, or to buy up the most river. Your polluting firm can buy up whatever tract of river it is near and dump all the chemicals it can get away with after all, that river it its property it can do what it likes with, right?

    This is one side of the new problem I am talking about- that private property essentially becomes private tyranny, up to a point. Now, supposing your hypothetical conservation charity were to buy up a section of river- and then declare that in order to let it recover, a heavy-handed policy of barring anyone from strolling by the riverbank (to prevent erosion) or fishing in the river (to encourage fish stocks to recover). Suppose for a moment that these policies were proven to be too extreme to be justified- but the new owners decide to go ahead with it anyway, thereby depriving anyone else of any right to have a say in what used to be “everybody’s” river.

    The so-called “tragedy of the commons” so often talked about would seem to be, that it is a problem only when “everybody owns it” technically becomes “nobody owns it”- i.e. nobody takes any responsibility for it. If “everybody” did take responsibility for the commons, and managed it not by easily corruptible centralized state apparatuses, but by true democracy- local and direct, respecting the right and freedom of everyone to have a say unreservedly- and took all possibility of economic power out of the way, then that would be to me a much better solution. No solution is perfect, of course, and mine requires a level of engagement few would currently be willing to take, as well as whatever other issues essentially taking the cornerstones of capitalism out of the way would do. However, just as taking the tyranny of the minority and handing power to a tyranny of the majority would be counter to maximizing freedom, so is replacing either with many microtyrannies of the individual. True democracy with appropriate checks and balances is the way forward methinks.

  5. Without government, and thus courts, how is anyone going to sue a polluting company?

    An environmental group can just but up an entire river? I suppose those already owning this riverfront property will readily sell?

    What if the polluter is also the main employer in the region?

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