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Privatising climate policy

By Graham Dawson - posted Thursday, 17 September 2009

Climate change policy ought to be privatised. Government policy instruments including taxes, subsidies, regulation and emissions trading to mitigate climate change ought to be abolished. Instead property rights to a climate unchanged by human activity should be protected, if necessary, by tort litigation on the basis of strict liability.

There is no secure foundation in climate science for the current policy rhetoric; governments simply lack the knowledge to operate climate change policy effectively. Moreover, policy is based on the neoclassical economics assumption that climate change is a case of market failure. However, it is not markets that have failed but governments in failing to allocate property rights.

The earth’s climate has always been susceptible to change caused by natural factors over which human beings have no control. The IPCC uses its monopoly power in the dissemination of its own politically edited version of climate science to advance the hypothesis that climate change is caused by fossil fuel use. Even the IPCC’s scenarios of global average surface air warming for the next century range from mild temperature increases that would increase world food production to those that would have catastrophic effects on human life. We face radical uncertainty rather than calculable risk.


Privatising climate change policy entails the abolition of all existing climate change legislation. The tax treatment of fossil fuels should be revised to eliminate any tax contribution that had been imposed with the intention of reducing carbon emissions. Regulations aimed at reducing carbon emissions should be rescinded. National or supranational missions trading systems should be wound up. There simply should not be a public policy towards climate change.

It would be up to individuals or organisations who believed that climate change was infringing their property rights to seek redress in the courts. Instead the use of fossil fuels, like any other economic activity, should be subject to side constraints designed to avoid the infringement of other people’s property rights. Tort litigation on the basis of strict liability would protect people against others’ meddling with their climate. The courts will build up a body of common law and establish precedents to guide the actions of the users of fossil fuels - a privatised policy.

There is no need for new assignments of property rights. If A’s use of fossil fuels causes B’s land to be destroyed through inundation or desertification, this is evidently a tort. In general it seems that existing national legislation is adequate and property rights are simply waiting to be enforced or protected. Any assumption that individuals must leave it to governments to tackle the perceived threat of climate change is an aspect of dependency culture.

Under a privatised climate change policy, litigation will not impose a further burden of state intervention on industry. First, while some firms will face litigation, all will be free from the impositions of existing “climate change policies”, which will be rescinded. Second, there is no presumption of guilt. Third, the process of establishing guilt or innocence, probably through a series of court cases, will take time.

Privatising climate change policy will delay severe reductions in carbon emissions. This outcome is to be welcomed. If carbon emissions do cause climate change, it is their atmospheric concentration accumulating over a period of time that does so and not the additional carbon emitted in any one year. It is reasonable to exploit this opportunity to add to human knowledge of the possible effects of carbon emissions on the global climate and hence reduce the risk of incurring unnecessary costs through intemperate collective action.

The most valuable functions that litigation could perform concern climate science. First, litigation would improve the public understanding of the science of climate change. Reports of the testimony of a range of expert witnesses would disseminate a more balanced account of climate science than the biased and artificially constructed dogma of the IPCC. Second, litigation would further the advancement of climate science. It would achieve this worthwhile goal by intensifying competition among scientific hypotheses concerning climate change, so that in a form of “creative destruction” falsified hypotheses might be discarded and others accepted as provisionally true.


The courts would call expert witnesses as happened in the Microsoft case. So firms would have an incentive to fund research into the many uncertainties of climate change. This would give a boost to the growing number of climate sceptics and challenge the monopoly position of the IPCC. The advantage of litigation is that it would replicate the process of competition, and the friendly-hostile co-operation of scientists that Popper championed.

Litigation also holds out the prospect of action on behalf of those without the resources to undertake it themselves. Indeed litigation is a public good, in that its benefits are both non-excludable and non-rival. Litigation is non-rival in that A’s seeking to show that B is strictly liable for effects x does not entail that there is less litigation “left over” for others to use. On the contrary there may be bandwagon effects.

The possible benefits of litigation concerning putative climate change would be non-excludable. Climate change is, if it is a problem at all, a problem the world over. If carbon emissions are indeed causing dangerous climate change, it does not matter where they are reduced; wherever the reductions occur, eventually atmospheric concentrations of carbon will be reduced.

The free rider problem, which presupposes self-interest as the only motive that agents have, would not arise. However, some plaintiffs would be motivated by a desire to help the poor and the weak. Far from free riders being a problem, non-paying beneficiaries would be welcomed aboard.

Tort litigation on the basis of strict liability would protect the right to a climate free from human intervention, if it needs protecting. By providing a public arena for the competitive testing of scientific hypotheses concerning climate change, litigation would also promote the advancement of climate science.

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About the Author

Graham Dawson is Visiting Fellow in the Max Beloff Centre for the Study of Liberty at The University of Buckingham.

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Related Links
“Privatising Climate Policy”, Economic Affairs, Volume 29, Number 3, September 2009, pp. 57-62.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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