Hacker News Reader

Comment by 3pt14159 | Hacker News Reader

I remember trying to explain basic Econ 101 to a classmate while in third year engineering. Peak Oil was a religion back then.

The same isn't true for the environment. Unlike Peak Oil where economic incentives simultaneously would encourage smaller cars with more efficient engines while also directing research into more advanced oil retrieval (or at the very worst biofuels) the environment is not something the market will automatically solve. Quite the opposite. It will push up against it until there is sufficient political resistance to overcome market resources attempting to maintain the status quo. We have a real problem, but it isn't oil or cobalt.

View on HN

Polluting the environment is damaging someone's property (private or state), for which they will eventually demand restitution. It's part of market forces.

Conversely, a certain amount of pollution/environmental destruction is a price people are willing to pay.

What market forces allow them to convert their demands into action?

Aren't all market forces in the end the result of private property and contract law? Without those, people would quickly stop being able to trust any deals they made, and would have to resort to cash, and even then only in cases where they have a high level of social trust in the person they're trading with.

I’m not sure how that connects with what I’m asking. The other comments said that market forces would result in people demanding reparations for the damage done by pollution. But in the absence of a legal framework giving them some rights regarding pollution, those demands won’t go anywhere.

That is all nice and true in theory. But property rights don't exist from nowhere, they need to be created by private actors or governments.

Global property rights issue will not be solved by simply law-suit the way you might fix a noise problem. Governments are not only not establishing property rights they would actively prevent anybody that did.

If your read the literature on the economics of property rights and Ronald Coase own writings you will see that he did not believe simplified version of the 'Coase theorem' that was formalized by Stigler.

The point is not that "the market fixes everything", the point is these are still market forces.

Even in a completely free market, you can get screwed over.

In the real world the cost of figuring out who is polluting your property when it comes to acid rain, engine particulates, etc dwarf the cost imposed by this pollution. I'm all for trying to minimize pollution in an economically efficient way but thinking you can do this by suing each of the 10,000 car owners who drove past your house for $.15 each is ridiculous - we really do need government regulation here.

lol if you think the government is going to be able to sue for the profits paid from then-bankrupt gas companies at any point in the future

and how would displaced Bangladeshi people even be able to sue Exxon Mobil for the environmental damages they are currently suffering from? This is a really dumb libertarian fantasy

> the environment is not something the market will automatically solve

Not quite true. The market can easily solve for it. You just have to internalize the external costs. Usually done through taxes (ie carbon tax).

I want you to realize that you just said "the market can easily solve for it" followed by "done through taxes".

Either the market (which has no tax-levying power) can solve it on its own, or it can't. What you're describing is legislators fixing the market because it's stuck in a vicious circle — not the market fixing itself, let alone easily.

A market doesn't exist in a vacuum, there is always a framework of rules or fees in place. A carbon tax is simply a convenient way to recoup the true costs of market activity.

That's the political employing the market to solve the actual. The market is the policy maker's tool. Take carbon taxes, if implemented incorrectly they may change incentives so harshly on CO2 that industries start creating more methane (a much worse GHG). This isn't "the market solving it" it's policy makers solving it because the tax base is used to fund the studies used to create the regulations necessary to harness the market intelligently. I'm not arguing against the market, far from it, but I do not think it solves things like the environment easily.

By that definition the market can never solve anything because there is some overlying system of property rights, government or not.

But any economist worth their salt would never discussed these issues in the simple market<->government paradigm because it simply breaks down.

There is lots of research on property rights and institutions, whole sub-fields of economics are devoted to it you are vastly oversimplifying and projecting a idealistic view of government and their intensives.

I was responding to a simplification. It is of course more complex that I'd expressed, but I tailored my criticism in the least convoluted way I could to make the point. If you want to talk about political economy, international IP law, and Hobbesian traps we can, but it's fruitless when someone is saying that the market can "easily" solve environmental concerns.

The problem basically being what happens when you marry the logic of commodification (money, oil, grain, etc equally interchangeable) with the growth requirements of a debt-interest based economy. Either we have to make off-world into the new growth industry or financial capitalism will be the end of us.

This has nothing to do with capitalism. Any economic system would face the exact same problem. Growth is not inherently capitalistic, its just the system that can sustain growth while others can't so its running into these problems while others collapsed before getting there.

Its a simply property rights (or externalizes problem) that is universal and incredibly difficult to solve.

If you are interested in this sort of thing, and have already read Debt, the First 5000 Years, learning about gift economies is worth it.

And Graeber's Toward An Anthropological Theory of Value The False Coin of Our Own Dreams is worth reading for a mechanical account of how gift economies function, and the status of heirlooms and other valuable objects.

Charles Eisenstein can read as cloyingly new-age but if you get past that the message is legit: http://sacred-economics.com/sacred-economics-chapter-18-rele...

Why is biofuels the very worst? Are you an oil shrill? (I'll admit to having an interest in biofules)

Pretty sure he meant worst case in terms of reducing oil reliance, i.e. if use and demand can't be reduced to maintain existing supply then biofuels have to make up the difference.

Some biofuels, particularly corn ethanol, are bad for the environment. Given the low return on energy invested for corn ethanol, it's functionally a way to launder fossil fuels (e.g. diesel for tractors, natural gas for fertilizer production, coal or gas for distillation) into "green" fuel. With a nice side effect of further degrading valuable farmland.

Fud from the oil industry. The energy return on investment it actually pretty good and getting better.

Modern farming is actually building soil. You probably aren't aware of how farming has changed since the 1930s - that is the last your history books covered anything...

Reply on news.ycombinator.com