Stuart K. Hayashi
The following is a section of the longer essay, “How Billionaires and Capitalism Save Billions of Lives — Including Yours.” The single-post, shortest version of the essay essay includes an index listing various case studies of a for-profit initiative saving lives. The blog post below is a sidebar on what free-market economics can do to mitigate industrial contributions to disruption of the Earth’s climate. You can return to Part Two of the essay of which this section is part, here for the index of the shortest version or here for Part Two of the two-post version.
Capitalism’s doubters continue to shake their heads. Even if they concede that capitalism drives innovation, they fret that something can reverse this progress. Anthropogenic climate change is frequently cited as the foremost exhibit of unregulated capitalism run amok. The famous progressive journalist Naomi Klein wrote an
entire book to propound as much. The idea is right in her book’s subheadline:
Capitalism Versus the Climate. To favor capitalism, she inveighs, is to be against the climate.
The assumption is that if energy companies emit carbon dioxide unimpeded, that is the complete exercise of free enterprise and private property rights. But this is actually an initiation of force. It is an initiation of force when industrial CO2 emissions wreak harm on human habitats on account of the emissions contributing to the globe warming by a margin that otherwise would not have occurred.
Despite the aforementioned gains in productivity among industries that emit fossil fuels, they still emit more CO2 than Earth scientists deem to be safe. John D. Rockefeller benefited us with oil that made possible Leo Baekeland’s lifesaving plastic medical equipment and Thomas Midgley’s lifesaving refrigerants. But these men did not anticipate the downside to fossil fuel emissions. These emissions will not cause the catastrophic end to civilization as depicted in Hollywood scare stories, but they will disrupt the climate to such an extent that they will impose more hardships on people, including in the developing countries, than would otherwise would have to be faced. This needs to be addressed.
More companies could gasify their coal and pump this gasified coal through pipelines. That would not eliminate CO2 emissions completely but it would reduce them. But, as the situation currently stands, it is still usually cheaper for that company to refrain from gasifying its coal. And in contributing more CO2 emissions than it otherwise would, that company is contributing to the destruction of waterfront properties. It is also making it more difficult for farmers to produce their output. Hence, the CO2-emitter is cutting its own costs by imposing those costs on other parties, damaging their private property.
I have
written on this before.
As those private parties' private property is being damaged, they should be able to sue the CO2-emitter for compensation. They are transferring the costs back to the CO2-emitter. We can reach a point where it becomes cheaper for the CO2-emitter to adopt methods that reduce CO2 emission, rather than continue with the status quo. Then the market shall signal how much more profitable it would be to adopt more-efficient technologies that produce consistent output while cutting the CO2 emissions.
A proposal aiming at similar results is the levying of a tax on CO2 emissions. That, too, is about returning those costs to the CO2 emitters. My issue with this recommendation is that it hands control over this matter to a government agency that will approach everything from the top down. The government agency will be collectivist in claiming to represent the victimized parties as a faceless whole.
There is no guarantee that the revenue collected from a carbon tax would reimburse the specific individuals who have been harmed by CO2 emissions. Even if politicians promise that the revenue collected will go specifically to the parties harmed, these parties will be treated as a collective — everyone in the group in general, and no one in particular. In contrast to individuals filing lawsuits, such a carbon-tax-collection program would result in greater mismatches between who was most hurt by CO2 emissions and who receives the most money in damages.
Justice is likelier to result from specific individuals filing lawsuits. This is a more from-the-bottom-up, private-property-oriented capitalist approach.
A common concern is that the private parties that will be most devastated by anthropogenic climate change are located in the developing countries. By contrast, the main CO2-emitters are in the developed countries. But, in legal theory, it is still possible to address this through a federal law called the Alien Tort Claims Act. It allows for non-U.S.-citizens to file suit against U.S. companies in a U.S. court.
This statute was invoked in a civil suit concerning the corporation Unocal. The allegation is that Burmese villagers were abducted to toil as slaves on one of the company’s pipelines. Western lawyers
invoked the Alien Tort Claims Act to say they could win a lawsuit against Unocal, on the Burmese people's behalf, in a U.S. court. This was ultimately privately settled. However, I think that Unocal would not have been pressured enough to settle the suit if not for the Alien Tort Claims Act being a viable option for the plaintiffs.
Capitalism is being practiced consistently insofar as every firm’s gains and losses are both private and internalized. By emitting more CO2 than is technologically necessary, firms take in privatized gains while socializing or collectivizing their costs. That is not pure capitalism.
Far from capitalism being the cause of damage to human life via climate change, a more consistent implementation of the principles of capitalism is the solution.
Return to Part Two of the essay where we last left off. Return to the short version where you last left off of Part Two of the two-blog-post version where you last left off.
