Free Market Solutions to Global Warming

Not everyone thinks man-made global warming is real.  But if it is, history shows that the best solution is to let the free market solve such problems without government interference. Here's how it might work.

Another global warming skeptic has dared speak up. Meteorologist John Coleman, founder of the Weather Channel, calls global warming “the greatest scam in history.”

“Environmental extremists,” he writes, “notable politicians among them ... create this wild ‘scientific’ scenario of the civilization threatening environmental consequences from Global Warming unless we adhere to their radical agenda. ...

“I have read dozens of scientific papers. I have talked with numerous scientists. ...There is no runaway climate change. The impact of humans on climate is not catastrophic. Our planet is not in peril. ... In time, a decade or two, the outrageous scam will be obvious.”

Meteorologist and Weather Channel founder John Coleman
I suspect he’s right.

But what if he’s wrong?

I’ve argued that even if global warming is something to worry about, it’s dangerous to look to government to fix the climate.

Government is a blunt instrument, riddled with self-serving politics and special-interest pandering.

To expect it to do something as complicated as calibrate regulations and taxes to fine-tune the climate — without making many people poorer and a few cronies richer — is naive.

But that doesn’t mean we can do nothing. We have a powerful generator of solutions if we let it work: the free market.

The market has solved environmental problems many times in the past. Before the automobile, America’s cities suffered from a terrible pollutant. It bred disease and emitted noxious odors.

It was horse manure.

As economist Nobel laureate Robert Fogel said, “There were 200,000 horses in New York City at the beginning of the 20th century defecating everywhere. ... When you walked around ... you were breathing pulverized horse manure.” From such air and water pollution, people contracted cholera, typhoid and other deadly diseases.

When the internal-combustion engine came along, the air and ground became much cleaner. Environmentalists romanticize the days before the car, but who wants to go back to that filth and disease?

How might the free market — which relies on consent, not coercion — be better than government at addressing global warming? Policy analyst Gene Callahan points out that government is a big part of the problem because it encourages overuse of fossil fuels.

For example, use of highways is not subject to market pricing, so it appears to be free. The resulting traffic jams are bad for the environment.

We’d use less coal if the government didn’t create regulatory obstructions to nuclear power.

The creative market process — if unburdened by state subsidies and regulations — would discover alternative fuels that bureaucrats can’t even dream of.

Today, an energy maverick is likely to be punished by the government, as Bob Teixeira learned when he had the audacity to run his Mercedes on soybean oil. If climate danger is real, the profit motive will drive entrepreneurs to find technologies to reduce CO2.

Markets outshine governments in innovation and flexibility. Those virtues would come into play if global warming does become a problem. “For example, the financial industry, by creating new securities and derivative markets, could crystallize the ‘dispersed knowledge’ that many different experts held in order to coordinate and mobilize mankind’s total response to global warming,” writes Callahan.

“Weather futures can serve to spread the risk of bad weather beyond the local area affected. Perhaps there could arise a market betting on the areas most likely to be permanently flooded. That may seem ghoulish, but by betting on their own area, inhabitants could offset the cost of relocating should the flooding occur.”

American political scientist Aaron Wildavsky (1930-1993)
A less-regulated insurance industry would have a strong profit motive to anticipate problems from any warming and set prices for property coverage appropriately.

Insurance companies would rely on the best scientific information because, unlike government, if they make a mistake, they face bankruptcy.

The most important thing we can do is not to impede production of wealth.

As the late Aaron Wildavsky said in his wonderful book Searching for Safety, “Wealthier is healthier.” A rich society is resilient and able to respond to unforeseen threats.

People in the developing world desperately need prosperity. Blocking their development on the flimsy promise of climate “fixes” will only make hard lives harder. Their primitive environments are killing them.

John Stossel is co-anchor of ABC News’ “20/20” and the author of Give Me a Break: How I Exposed Hucksters, Cheats, and Scam Artists and Became the Scourge of the Liberal Media (January 2005) as well as Myth, Lies, and Downright Stupidity: Get Out the Shovel — Why Everything You Know Is Wrong (May 2007), which is now available in paperback.

5 comments from readers  

To post comments, please log in first. The Atlasphere is a social networking site for admirers of Ayn Rand's novels, most notably The Fountainhead and Atlas Shrugged. In addition to our online magazine, we offer a member directory and a dating service. If you share our enjoyment of Ayn Rand's novels, please sign up or log in to post comments.
I believe that Mr. Stossel as usual, is dead right. I only occasionally watch his show, but I may pay closer attention to what he says on it, since he is one of my moral brothers. To paraphrase the late Al Capp, any friend of Rand is a friend of mine.
Mr.Stossel, as usual, is right on target. People of goodwill everywhere need his words for encouragement in their personal battles against those who erode our liberties with appeals to government as a solution to our problems. It often seems that one is alone in standing up for free markets against irrationality. Thank you.
You can't give the proponents of manmade global warming an inch. To do otherwise is to accept that manmade global warming is aximatic, and it's not.

Here's a fact: global warming is the last best hope for collectivism and totalitarianism. On that score, Stossel is right: there is nothing the government does that is less costly than what free markets can accomplish.
The Free Market is the best way to go.

The environment must be nurtured and protected.

People have brains, all they need to do is use them.

Government must be limited as it tends to overcompensate, and usually employs favoritism out of natural instinct.

Nothing is easy, but thinking makes it so.

John Stossel thinks.
I fully agree, as most readers in this forum likely would, that the free market would be a more efficient and effective solution to global warming, if it is in fact a reality and caused by CO2 emissions.

However, and this comes to mind after reading Mr. Coleman's article, we should keep in mind that this is not what most of the more vocal advocates of global warming are interested in. They seek a political solution for the sake of the political solution; whether global warming exists or not does not concern them.

In addition, they know that once a political solution has been enacted they will no longer have to bear the burden of proof because the 'problem' will have been solved and they will automatically be hailed as the saviors of civilization (though the intention of their political actions is the destruction of it).
To post comments, please log in first. The Atlasphere is a social networking site for admirers of Ayn Rand's novels, most notably The Fountainhead and Atlas Shrugged. In addition to our online magazine, we offer a member directory and a dating service. If you share our enjoyment of Ayn Rand's novels, please sign up or log in to post comments.