An Open Letter to Libertarian Candidates … (Part 4)

Part 4. Scaling Up. So, no matter what we do, will it matter, on a world-wide level? Or will our efforts simply be drowned out by all the noise (the actions and lack of action by other countries)?

      China comes to mind. But Russia too, a primary oil exporter, and no friend (under Putin) of the United States. For that matter, are our friends even our friends when it comes to climate change? Sure, the Europeans are on board (though not with respect to fee-and-dividend). But Saudia Arabia? Australia (which just repealed a carbon tax)? Who can you rely on? Who can you trust?

      Some countries may come along. Some will not. Some will come along but adopt their own (perhaps less market driven) approaches. (How can we complain, from a libertarian perspective? It is only individualism at a national level.)

      However, as the Citizens’ Climate Lobby notes, the World Trade Organization does allow a tax on goods at the border that levels the playing field (http://citizensclimatelobby.org/laser-talks/border-tax-adjustment/). So if country X does not impose an equivalent fee on oil at the point it is pumped from the ground, the fee can be imposed at the point where it is imported into the United States. And if the manufacture of some product (a pair of athletic shoes, a ton of wheat, a car) results in carbon emissions on which the fee was not paid, then the fee (on these emissions) again could be collected at the border.

      This solution is not perfect.

      It can be complicated to compute the emissions spent to manufacture a particular product. But it can be done (and precision to the Nth digit is not really necessary).

      Countries can refuse to trade with us to avoid the border tax. But few would.

      The United States is simply too big a market. And the combined US/European market (assuming the Europeans support us, a likely possibility) would be bigger still. Bring a few more like-minded countries on board and you bring the rest of world would have to follow. Make one of those countries China or India, and all resistance would crumble.

      Indeed, it would be to advantage of most of the developing world to join the settlement. What is the alternative? Suing a company in the United States to recover damages due to sea level rise in the Maldives is a lengthy and complicated business. It is much quicker and better to negotiate at a national level and join an international settlement, at least if the settlement is reasonable (more later, on countries that produce little in the way of emissions, but bear the brunt of the consequences).

      And it would be to the advantage of most companies to see things settled out of court. Companies like certainty. And having an enormous potential liability hanging over their heads world-wide (more even than their insurance companies would likely be able to pay) would do little good for the world’s business environment. Or for the world’s military security situation, if the courts (weak at an international level) proved incapable of dealing with things. Incapable of keeping up with ‘events on the ground.’

      No, if we want to avoid the risk of such consequences, it makes sense to settle now. And to do something (sooner rather than later) that reduces the risk of large-scale consequences (and damages, and worse—that, at least small chance, that the science is right).