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> As the company sold 5,000 cars in the quarter, though, $13,600 per car was paid by other manufacturers, who are going to pass at least some of that cost on to

by vec 13y ago

> As the company sold 5,000 cars in the quarter, though, $13,600 per car was paid by other manufacturers, who are going to pass at least some of that cost on to buyers of their products. The article compares pollution credits to bribery and a shakedown, but I don't quite get the case. Tesla doesn't get them for free, it actually has to produce low emission vehicles. And no one is forcing Honda to buy them from Tesla specifically (or technically at all). Honda isn't prepared to produce low emission cars, so the carbon credits market means they don't have to, so long as they're willing to bear the external costs in some other way. Pollution credits are a relatively lassiez faire mechanism for converting a specific type of external costs to internal ones, and they seem to function pretty well. Not a leading question, but I'm honestly curious. What is the conservative or libertarian argument against them, and what approach would conservatives or libertarians prefer we took to the problem of large externalities?

icebraining 13y ago
Well, there are multiple capitalist libertarian schools of thought, not to mention left-libertarian, but from what I've understood the Rothbardian position (which, I believe, is pretty hardcore in general) to be, it boils down to: 1. It's impossible to calculate the true costs of an externality like "air pollution", therefore any number that the government chooses is arbitrary and unjust. 2. When an externality can be defined concretely as in "Action by person A harms person B or her/his property", then B can sue A to stop it and get compensated (e.g., a factory dumping chemicals to someone's land). 3. On the other hand, it's unreasonable for people to individually identify and sue car owners, therefore the best solution is to privatize roads, and then the road owner would be liable for the pollution, so he would have an incentive to raise prices or ban high polluting cars. That said, this is not necessarily the position of the CATO Institute; I'm not sure where they stand.
dragonwriter 13y ago
> what approach would conservatives or libertarians prefer we took to the problem of large externalities? For focussed negative externalities, a fairly common libertarian position is that they should be handled through civil damages in cases brought by those harmed. For diffuse negative externalities, there's a mixture of a civil damages approaches and assumptions that, on balance, assessing and addressing diffuse negative externalities from market actions by any other means (even acknowledging that the civil damages approach is far from complete) creates additional negative externalities that are more significant than the original negative externalities, so you just have to give up.

by vec 13y ago

icebraining 13y ago

Well, there are multiple capitalist libertarian schools of thought, not to mention left-libertarian, but from what I've understood the Rothbardian position (which, I believe, is pretty hardcore in general) to be, it boils down to: 1. It's impossible to calculate the true costs of an externality like "air pollution", therefore any number that the government chooses is arbitrary and unjust. 2. When an externality can be defined concretely as in "Action by person A harms person B or her/his property", then B can sue A to stop it and get compensated (e.g., a factory dumping chemicals to someone's land). 3. On the other hand, it's unreasonable for people to individually identify and sue car owners, therefore the best solution is to privatize roads, and then the road owner would be liable for the pollution, so he would have an incentive to raise prices or ban high polluting cars. That said, this is not necessarily the position of the CATO Institute; I'm not sure where they stand.

dragonwriter 13y ago

> what approach would conservatives or libertarians prefer we took to the problem of large externalities? For focussed negative externalities, a fairly common libertarian position is that they should be handled through civil damages in cases brought by those harmed. For diffuse negative externalities, there's a mixture of a civil damages approaches and assumptions that, on balance, assessing and addressing diffuse negative externalities from market actions by any other means (even acknowledging that the civil damages approach is far from complete) creates additional negative externalities that are more significant than the original negative externalities, so you just have to give up.