April 21, 2018 by Anders Ingemarson
April 22 is Earth Day, and many environmentally concerned Americans will use the opportunity to create awareness of the Earth Day Network Climate Change campaign.
According to Wikipedia “Climate change is caused by factors such as biotic processes, variations in solar radiation received by Earth, plate tectonics, and volcanic eruptions. Certain human activities have been identified as primary causes of ongoing climate change, often referred to as global warming.” The Earth Day Network Climate Change campaign is concerned with the latter.
The degree of impact of human activity on global warming is contested, as is the question of whether global warming is largely beneficial or harmful. For example, an increase in global temperatures due to higher atmospheric CO2 levels will most likely increase agricultural productivity and diversity at less temperate latitudes, while potentially reduce productivity in arid areas.
Advocates of immediate action on climate change claim that we’re approaching an irreversible tipping point, but as the Heritage Foundation and others point out, the facts behind the claims are at best inconclusive. What is conclusive are the immense benefits that cheap carbon-based energy in the form of oil, gas and coal—the main sources of human generated CO2 emissions—have brought to mankind in the past 150 years. If human flourishing is our moral standard, as Alex Epstein argues it should be, the benefits vastly outweigh the possible but factually inconclusive dangers of human induced global warming.
However, for the sake of argument let us take those concerned with climate change at their word. Let us assume that (a) human activity does have an impact due to increasing CO2 levels primarily from the burning of fossil fuels, and that (b) the impact is harmful. How should humanity address the threat? What actions could we take to reverse the trend?
The only moral and practical solution is to create a political and economic environment that unleashes the potential for human ingenuity and invention.
As human beings, we apply our capacity for invention and ingenuity to do more with less. It is in our rational self-interest to always get more bang for our buck and use our time with quality—less chores and more of the stuff we love. This applies to all areas of our lives, including our use of fossil fuels. We are constantly on the lookout for ideas that will help us squeeze more value out of every resource at our disposal, be it time or money: a new car with better gas mileage saving money on our daily commute, new windows with higher energy efficiency keeping our house warm or cool while reducing our natural gas bill, a more efficient washing machine saving on our electricity bill and extending the life of our clothes, many of which use oil based raw materials—the examples are countless not only in our use of fossil fuels and other carbon based products such as synthetic textiles, but in every area of our lives. We have one life to live, and we try to extract as much as possible from it.
Businesses in every industry—groups of individuals working together as employers and employees—pursue the same goals. They try to increase profits by producing and selling more with less. They invent solutions that use less raw materials, that mechanize manual tasks, and that shorten time to market. And what they are not specialists in, they purchase from other businesses.
Oil and natural gas companies improve extraction, refining, and transportation technologies, car manufacturers develop more efficient engines, window and appliance companies strive to make their products more attractive and energy-saving while using cost effective raw materials and labor reducing manufacturing methods.
Over time, this results in a never-ending virtuous cycle of increasing efficiency, leading to better products and services offering more value per resource spent—money, time, raw materials. Today’s poster child is the cellphone which packs a wealth of time-saving, life-enhancing functionality into some 6 cubic inches, something that would have required rooms full of equipment only 20 years ago, and large swaths of land 50 years ago (had it been hypothetically possible to replicate the functionality with the technology available at the time). History is ripe with such examples from every industry.
As individuals and businesses trading and cooperating with one another, we form a resource-efficient society. We pool our capacity for invention and ingenuity, sharing an implied pursuit of doing more with less simply because it’s in our self-interest.
For a resource-efficient society to flourish, it needs a political system that protects the rights of individuals and corporations to pursue their desire for using resources efficiently. Only one such system exists: Capitalism.
Capitalism in its purest form holds that any interference by the state in the economy is immoral as it violates the individual rights, including property rights, of some for the supposed benefit of others.
In practice, such interference throws a wrench in the intricate machinery of voluntary exchange between individuals pursuing their goal of getting the most out of their lives, of using their resources—their time and money—efficiently.
What happens when Capitalism is not the political system of choice? The past one hundred years provide glaring examples of how anti- and semi-capitalist societies prevent resource-efficiency from taking place. The resource abuse and associated environmental disasters under Communism in Russia, the former Soviet republics, and in Eastern Europe. The current levels of pollution in China, a country that does not respect property rights, and that applies central planning to vast swaths of its economy—housing, infrastructure, banking and finance, manufacturing, etc.—resulting in enormous resource inefficiencies. The crippling impacts of regulations and subsidies in the welfare states of Western Europe and here in the United States—severe restrictions on nuclear energy development effectively killing promising, energy-efficient, CO2 reducing technologies such as LFTR, and government funding of unreliable energy technologies such as wind and solar power at the expense of CO2-reducing fossil fuel efficiency initiatives.
Many advocates of taking inter-governmental regulatory action to reverse global warming cite Capitalism’s inadequacy to address so called “market failure”. They claim that individuals’ aggregate pursuit of pure self-interest—in this case the use of fossil fuels—lead to results that are not efficient—global warming in this context—and that it can only be improved upon from the societal point of view by more regulation.
What they fail to understand, or choose to ignore, is that “market failure” is not a result of too much Capitalism but too little. Throughout history, every claim of market failure is in reality government failure—failures caused by government intervention through taxations, redistribution and regulation.
The only moral and practical solution to address the potential threat of climate change is to promote global unrestrained Capitalism.
Capitalism unleashes human invention and ingenuity and gives free reins to our ambition to do more with less, to use our resources efficiently. Over time, Capitalism leads to new and more efficient forms and sources of energy to be exploited, and to existing forms and sources to be more efficiently used. If increasing CO2 levels are harmful and need to be reduced, then Capitalism is the political solution.
The only role of government as it relates to the environment is to protect individual rights at home and abroad (the latter through international agreements) primarily through the legal system. For example, if my pasture is downstream from an oil-drilling site, and runoff poisons my cattle feed, my rights have been violated and I may sue the oil company for compensation. If my oceanic fishing property (fictitious but not farfetched example if human ingenuity is allowed freedom from government regulations) has been polluted by an oil spill, and my expected catch has been objectively reduced, I can take the polluter to court. And if someone objectively proved an individual rights violation caused by increased CO2 emissions from a specific source, the same principle would apply.
If you are troubled by the impact of human activity on the climate, then become an advocate for Capitalism. It is the only political and economic system that allows human invention and ingenuity to flourish by respecting our individual rights to manage our resources efficiently, while granting the same rights to our fellow men. It is the only system under which it may be even remotely possible to move the needle on climate change.