Evangelicals continue to debate a proper response to climate change.
This is an interesting law and economics problem. The biggest issue is that the resources in question are essentially, in economic terms, “public goods.” Public goods are resources that are non-rival and non-excludable. “Non-rival” means that the consumption of the good by one person does not significantly diminish its availability to others. Non-excludable means that it is not possible to exclude others from consuming the good.
Considered broadly, a stable, temperate climate is a public good. The fact that I can flourish in a stable, temperate climate does not diminish anyone else’s ability to benefit from it. And, it is not possible as a practical matter to to exclude others from benefitting from a stable global climate.
In classical competition theory, public goods are among a small category of goods that are not strong candidates for supply by markets. The problem is that “free riding” makes it impossible to recoup an investment in a public good. If I invest in developing a public good, I can’t “sell” what I’ve created to you, because you can obtain it for free elsewhere, as it is non-rival and non-excludable. This means that no rational competitor will supply the good.
Though I’m generally in favor of market-based solutions to many resource allocation questions, because the environment / climate has characteristcs of a public good, I’m not convinced that markets will address the problem. Even for someone who leans libertarian, like myself, this seems like a case in which some government regulation is appropriate.
There is a very good essay that extends some of this economic analysis in this week’s issue of the (libertarian leaning) Economist magazine.
