How Libertarian Principles Would Protect the Environment

It may sound strange at first. But in fact, libertarians are likely to do a better job of protecting the environment than the environmental regulations they want to abolish.

The Story

A new article by Ryan McMaken at the Mises Institute offers an excellent summary of the libertarian* position on environmental regulation and pollution. If you’re not a libertarian, the conclusion might surprise you.

McMaken shows how a strict application of property rights could disincentivize pollution more than environmental regulations passed by the government. In the process, the article also explains why major polluters (and many free market economists) actually prefer government regulation to the property rights solution. To polluting businesses and some economists, environmental regulation offers the opportunity for greater profits and economic efficiency, respectively.

But to libertarians like McMaken, environmental regulation often gives polluters a free pass to violate other people’s rights.

The article discusses some economic jargon at times that may not be immediately familiar. However, the underlying points are still accessible without much prior knowledge. It’s another delightful issue where libertarian theory is surprisingly compatible with priorities typically found on the far left. Here’s the link:

Are Libertarians Too Anti-Pollution?

Why It Matters

The two-party system in the US often causes us to think of political issues along a single axis, with Democrats / progressives and Republicans / conservatives occupying different parts. This leads us to believe there are really just two positions on a subject. On some issues, this works well enough. There isn’t a lot of room for nuance in the torture debate for instance; for and against pretty much covers it.

But on environmental regulation,** this way of thinking fails quite miserably. Here, the standard idea is that if you care about the environment, you need to have the government protect it with regulation (Democrats / progressives). If you don’t care about the environment or you really care about jobs / business, then you want the government to regulate it less–and basically give businesses free reign to do whatever they want (Republicans / conservatives). In this binary game, libertarians usually get lumped in with conservatives because they support reducing regulation.

In reality, libertarians represent a third way on this issue. They don’t want to give businesses more power; rather they want to restore and protect property rights of all individuals. And in practice, this would tend to give businesses far less power. It also simplifies a great many political problems in the process.

Let’s take the Keystone XL Pipeline as an example of how these competing theories might work. Under the regulatory approach, the government prepares an environmental impact statement (among other things) to determine whether a project can proceed. If the government decided the impact was sufficiently small or acceptable, and it passed other standards, the project could proceed–even if the farmers and property owners in its path objected. An environmental impact statement could be costly, but convincing the EPA to approve a project is much easier than convincing every individual landowner in the vicinity the project is a good idea. In effect, the regulatory approach concentrates the decision-making power. This helps businesses get what they want because it is feasible to lobby / corrupt a centralized authority.

By contrast, in the libertarian framework, each individual property owner would have a de facto veto on the matter. The key question would no longer be whether or not the Keystone XL Pipeline would do irreparable harm to the endangered sage grouse. Rather, the fundamental question would be whether each property owner in the pipeline’s path voluntarily consented to the plan, either by selling their property outright or else granting access for a fee. And if anyone objected, the pipeline would have to either go around them, or be scrapped entirely.

The same logic would apply to a new coal power plant. Individual property owners in the vicinity would be subjected to reduced air quality as a result of the plant. If the reduction was noticeable, the power company would be committing harm against the local residents. To make them whole, the company would have to compensate them directly or else attempt to buy them out. If the company and the property owners could not come to an agreement, the company would have to shut down or face costly tort lawsuits. Again, the business has a lower probability of prevailing compared to the status quo where they simply have to convince politicians or regulators to approve a project that will create jobs and tax revenue.

Strictly speaking, libertarian theory does not take a position on environmental protection one way or the other. The focus is on ensuring that property rights and the nonaggression principle prevail. Environmental protection just happens to be a by-product. But ironically, the degree of protection created is likely to be much stronger than the regulatory protection deliberately crafted by the government.

*Libertarians don’t agree on everything, and there are several different kinds–not all of which sign on to the property rights solution to environmental regulation / protection. For instance, presidential candidate Gary Johnson has said that he believes the EPA is necessary. For the purposes of this article, the type of libertarian we’re referring to is the one that hails vaguely from the Rothbard-Ron Paul camp, which tends to emphasize natural rights theory.

**We’re primarily thinking about point-source pollution when we discuss environmental regulation in this piece. We’re not making a case for abolishing all environmental regulations. In our view, a reasonable case can be made for environmental regulations at a higher level when dealing with more distributed sources of pollution (like automobiles).

2 thoughts on “How Libertarian Principles Would Protect the Environment

Leave a Reply

Your email address will not be published. Required fields are marked *