What do Russia and California have in common?
 |
Russia is currently the world’s second largest oil producer, and will play a key role in determining the extent to which global oil production is able to increase over the next 5 years. Particularly promising are two megaprojects based on Sakhalin Island, just north of Japan. Sakhalin-1, in which the Russian state oil company Rosneft holds a 20% interest, along with ExxonMobil (30%) and a consortium of Japanese and Indian firms, is expected to be producing 250,000 barrels a day by the end of the year. Sakhalin-2 is an integrated oil and natural gas project on a similar scale that is operated by Shell Oil Company (55%), Mitsui and Co. Ltd (25%) and Mitsubishi Corporation (20%).
The Russian Natural Resources Ministry on Monday annulled the environmental permit it had previously issued for the Sakhalin-2 project. Environmental concerns about the project are real, and legitimate environmental groups such as Sakhalin Environment Watch, Pacific Environment and CEE Bankwatch Network welcomed the news. But it is hard not to be cynical about the role that environmental concerns actually played in the decision. Ruminations on Russia regards Sakhalinmorneftegas, a Rosneft subsidiary in Sakhalin, as a significantly worse polluter than Shell, and many analysts believe that the main goal of the move is to help Gazprom acquire a stake in the venture. Indeed, within days Mitsui and Mitsubishi announced intentions to sell part of their stakes to Gazprom. Time will tell whether the ultimate outcome of this week’s negotiations is a cleaner environment or an even greater degree of power exercised by Vladimir Putin.
 |
The temptation for any totalitarian government to change the rules of the game after a company has already made a huge financial commitment, and thereby divert the assets to the personal objectives of the rulers, is almost irresistible. Of course, if the firm knows that’s the way the game is going to be played ahead of time, the initial investment would have been more cautious, or nonexistent. An irresistible temptation, perhaps, but one that continues to impoverish millions of people throughout the world today. Geoffrey Styles laments:
If Russia were trying to build up its oil and gas technology into world-class competitors, it had a great opportunity with aggressive private firms such as Yukos to take the lead, instead of semi- or re-nationalized firms such as Rosneft and Gazprom. Post-Yukos, we see a clear strategy built around firm control of the resources and their logistics, and the steady application of state power to reduce the influence that international firms gained during the Yeltsin years. That approach will keep world oil prices higher than they would otherwise be.
Meanwhile, on the other side of the Pacific Ocean, California State Attorney General Bill Lockyer this week issued the following press release:
Attorney General Bill Lockyer today filed a lawsuit against leading U.S. and Japanese auto manufacturers, alleging their vehicles’ emissions have contributed significantly to global warming, harmed the resources, infrastructure and environmental health of California, and cost the state millions of dollars to address current and future effects.
“Global warming is causing significant harm to California’s environment, economy, agriculture and public health. The impacts are already costing millions of dollars and the price tag is increasing,” said Lockyer. “Vehicle emissions are the single most rapidly growing source of the carbon emissions contributing to global warming, yet the federal government and automakers have refused to act. It is time to hold these companies responsible for their contribution to this crisis.”
Filed in U.S. District Court for the Northern District of California, the complaint names as defendants: Chrysler Motors Corporation, General Motors Corporation, Ford Motor Company, Toyota Motor North America, Inc., Honda North America, and Nissan North America. The lawsuit is the first of its kind to seek to hold manufacturers liable for the damages caused by greenhouse gases that their products emit. Lockyer filed the lawsuit on behalf of the People of the State of California.
The complaint alleges that under federal and state common law the automakers have created a public nuisance by producing “millions of vehicles that collectively emit massive quantities of carbon dioxide,” a greenhouse gas that traps atmospheric heat and causes global warming. Under the law, a “public nuisance” is an unreasonable interference with a public right, or an action that interferes with or causes harm to life, health or property. The complaint asks the court to hold the defendants liable for damages, including future harm, caused by their ongoing, substantial contribution to the public nuisance of global warming.
I’m concluding that Lockyer must not share my current concerns about the grave financial challenges and likely further big job losses already facing American car manufacturers. In any case, there certainly appear to be legitimate environmental groups that welcomed Lockyer’s announcement, such as
this statement from Carl Zichella, Sierra Club Regional Staff Director. But the key question in my mind is not the extent to which reducing greenhouse emissions from vehicles may be a good idea, but rather whether, under previously existing U.S. law, it has been lawful to manufacture cars that emit carbon dioxide. I submit that it has, and if a judge somewhere now creatively determines that a company can be punished for such perfectly lawful behavior, then I fear that America is no longer a nation ruled by law, but rather ruled at the whim of whatever those currently wielding power happen to think might be a good idea. And if we are unsure about such a fundamental question as this one until a robed priest of the court can deliver the latest answer, then America has become a profoundly more difficult place in which to do business.
Fortunately, I see I am not alone in my reaction to Lockyer’s announcement:
We cannot help reacting to something so inane and specious that it leaves one wondering if it is a joke.
Even if the California’s lawsuit against auto manufacturers for the damages caused by global warming is, as Steve Verdon says, “a cheap political stunt,” it is still shocking. The idea that this could win votes tells you something.
[Lockyer’s] notion that internal combustion engines might not be unlawful in themselves, but constitute nuisance in this case because manufacturers could be doing more to minimize their impact, makes as much sense (which is to say, no sense whatever) as if he sued California’s own drivers on the grounds that they contribute to the problem by taking unnecessary trips.
Because, after all, the California attorney general is the one who should be deciding national policy on the global warming controversy.
Technorati Tags: oil supply,
global warming,
Sakhalin,
Gazprom,
Bill Lockyer,
tort law,
California politics
Calif. AG sues automakers for global warming
In a first-of-its-kind suit, California Attorney General Bill Lockyer is demanding damages from automakers for the impact of global warming. “Because, after all, the California attorney general is the one who should be deciding national…
1. What laws are the attorney general and judiciary violating? What is totalitarian about the AG’s use of the system? Is the AG gaming the system. Is the AG acting illegaly? Immorally? Certainly one can argue that what the attorney general is doing is uneconomic. But our laws are based upon an economic foundation. We have to ask what is illegal or immoral about the AG’s actions. Particularly since the AG isn’t accused of eneconomic thinking, but of totalitarian thinking.
2. Your list of fellow commentators reads like a who’s who of the libertarian anti-government priesthood. Would they say otherwise? Of course not. Therefore it doesn’t add much to the argument.
3. Should right and wrong be dependent upon the financial condition of the defendant? You imply as such. That is not legitimate reasoning. Culpability is not a function of ability to compensate.
4. Do you believe that our system rationally deals with externalities, particularly when those externalities are not immediately apparent in the product? Is global warming an externality? How do we deal with it within the social/political system that exists?
5. From the press releas: “Todays filing comes as Lockyer fights the auto industrys attempt to invalidate Californias landmark global warming regulations curbing tailpipe emissions.” The auto industry will do anything it can do fight, in the courts, the will of the California people to reduce emmissions from vehicles.
In summary, the auto companies are playing hard ball. The state of california has mandated that an externality–or whatever the right economic language is–be controlled, and the auto companies are fighting back–in the courts. So the state of california is countering.
6. I believe the right way to fight global warming is through a carbon tax, as supported for probably ten years by The Economist and now supported by Al Gore. You on board with that JDH?
1. Laws violated: Probably none. What’s totalitarian: Nothing, yet; however, it’s just a matter of time until the legislature rules all of the industry’s defenses illegal as Forida did with tobacco suits. And of course it doesn’t cost the AG anything to file the suit, expend taxpayer money to pursue it and force the industry to defend it. Sure, a few actual crimes may go unprosecuted, but that will be nearly undetectable in comparison to the headlines he’s going to get from this. Gaming? Yes. Illegal? No, the state gets to define this, see previous question. Immoral? That’s a big question, but I would conclude, yes. The guilt is being laid upon someone who only sells what is demanded, not upon the user. If we’re going to blame the auto companies, what about the organization responsible for building the infrastructure (roads, laws, traffic controls, etc.)? Oops, that would be the state, and we can’t have that: after all, the state is just the expression of the people’s will, right?
2. Granted. Arguments concerning popularity and authority are always just that. Much like an argument based on the “consensus of scientists”.
3. Yes, and remember that when you hear that criminals shouldn’t be blamed for being forced to commit crimes by their poverty. But also recall that it isn’t the auto companies that do the actual operation of the vehicles, or oil companies who burn the oil. The lawsuit completely misses the point and is intended as a burden, not a legitimate means to an end. It is furthermore a burden on those from whom the AG is expecting a solution.
4. Our system “deals with externalities”? This one, no, but neither does any other. Is AGW an externality? Yes. How do we deal with it? That begs the question – Should we deal with it? How? To what extent? And on whom should the burden fall?
5. If the California people have a single will, why don’t they all choose to stop using their carbon-burning vehicles? Are you sure their common will isn’t just the common will of a minority of politicians? The industry will not do anything of the sort you claim; they will, however, fight anything that is not in their interest and in which the cost. The day they have a solution to the problem, they will insist that their solution be mandated. See DuPont’s change of heart on CFC’s, for example.
6. Maybe, though a credible tradeable emissions credits seems much more promising. And the fact that The Economist and Al Gore favor them is simply a different version of the same argument we agreed was illegitimate above. In any case, once we agree that the problem is the burning, not the people who supply the fireplace, then it only underscores the silliness of the AG’s suit.
I’m not a libertarian myself, but I’m a little confused about which side libertarians would be on in this dispute. It seems to me that there are two ways to attack global warming. One is the statist approach, where the government imposes a solution (e.g. a carbon tax). The other is the minarchist approach, where the government has the function of adjudicating between citizens who claim certain property rights, and among those rights would be the right not to have ones air polluted by someone else. California is pursuing this minarchist approach. Why would libertarians be against it? (Not to say that California has abandoned the statist approach, but that’s a separate issue.)
Of course, it is quite obvious that the statist approach is the only one that will ultimately work. So granted, libertarians, like everyone else, should favor that approach just for reasons of not being lunatics. However, the usual approach among libertarians today seems instead to be to deny the problem. I suppose, since I don’t have children, I should be quite happy with that approach, but for those who do have children, and who plan to have grandchildren and great-grandchildren, and great-great-grandchildren, assuming they care about their descendants, the denial approach seems rather irrational.
California probably has more to lose from global warming than certain other places, so I can see how it might be in California’s interest to force the issue, given that national policy is largely ignoring it. The solution is definitely going to involve some difficult adjustments, and no matter how we do it, those adjustments are probably going to involve great damage (hopefully temporary) to the US auto industry. The ultimate objective, however, is probably not really to make the auto industry pay directly, but to force public policy to address the issue.
The State of California, the same entity that the attorney general represents, doesn’t have to allow the sale of pollution creating vehicles, by model or all of them.
The State can also through its existing entity mechanism kick up the level of emission improvements to any level desired.
Maybe the attorney general should be suing the state because the state, counties and municipalities are the builders of highways and roads.
I would like to see the auto manufacturers walk away from California. To hell with California and its airheads.
In Tradition, the State is the cultural leader, by providing a framework of environmental improvement, the mass merchants should follow the States lead and begin curbing pollution. California’s approach to the problem is stupid however and represents a problem to automanufactures, unlike the Traditional Statist model which would be cut and dried. California is that dumb and represents the cultural decay of the State which should be terrifying to everybody.
Two piecs of background for understanding the CA lawsuit (which, for the record, I agree is silly, even though I think AGW is a very big threat).
First, the Supreme Court will be hearing a case this session in which they will decide whether the EPA has the right or obligation to treat CO2 as a pollutant under the clean air act. IANAL, but if the Court rules that the EPA does have that obligation, then I think Lockyer’s suit will be the first of many.
Second, the car companies have sued Californai over its attept to raise fuel standards, alledging that only the federal government has the power to regulate fuel standards. This seems to me to be every bit as ridiculous as Lockyer’s lawsuit–they’re both nuisance lawsuits. I think Lockyer’s lawsuit should be thought of as a countersuit in the automanufacturers suit.
Kids will be kids.
1. If no laws are violated, then the slipper slope totalitarian argument is just that: a slipper slope fallacy. And I believe that our legal system allows attribution of liability to those who participate in an action, whether they are direct participantsdriving the carsor providing the equipment.
2. Not like a consensus of scientists. The scientific method has as its goal truth, notwithstanding the right wing talking point that the scientific method is a means to acquire funding for projects the right wing doesnt like (global warming researchbad, super motel 6 in the worthless space stationgood). A consensus of scientists on a topic is not comparable to an ideology. Libertarianism is an ideology or a political program. There are economic aspects to libertarianism, moral aspects, etc. E.g. property rights. There is no comparison between the two.
3. Criminals are tried, and more likely convicted, when they are poor. Thats a fact. There are reasons to consider the role of poverty in relation to crime, but there is no poverty excuse that you can point to, just an imbalance between the top legal defense available to the wealthy and the second rate defense available to the poor. The auto companies have gone out of their way to repeal and ensure no restrictions on what comes out of the tail pipe nor how much fuel is required to move the vehicle. There is nothing illegal about the representatives elected by the citizens creating regulations. The auto companies then spend large quantities of money to ensure these restrictions/regulations arent imposed. Thats the way the game works. And then libertarians pull their hair out figuratively on the internet (created by the government, by the way) that the totalitarian sky-is-falling.
4. Externalities and dealing with the problem: The governor of California, the consensus of scientists, the AG, and the population at large seem to think global warming should be dealt with. Its only the auto companies and the right wing or libertarian think tanks that are dragging their heels. Certainly cost/benefit analysis should be performed to determine what we should and should not do (e.g. a John Grey, recently reviewing Monbiots book, who thinks all is doomed and we need do nothing at this point other than build higher levies, invest in nuclear power, and watch the world get warmer).
5. Common will: polls show that people are concerned about global warming. Californians elected a governor who has expressed a concern with global warming. Al Gore is doing quite well with this whole global warming thing. Branson just kicked in a few billion. Google is kicking in a lot of big bucks on the topic. Looks like a lot of common will. Its the right wing theocrats and libertarian do-nothings who seem to be the most hesitant to do anything at all.
6. Carbon taxes versus credits: I believe the jury is out on which is better. Since trading credits still reduce the price of carbon use, it will increase the price of carbon. The AG suit is silly if (a) we have a system of carbon taxes or credits (we dont) and (b) the auto manufacturers are willing to meet the regulations of the state of California regarding carbon emissions (they arent). I think the AG suit is a logical step in the political process that is necessary to determine any distribution of externalities.
Anonymous: Regarding the cultural decay of the California state: You’ve not been around too long, have you? Politics has a long history. All this extremist language is expected and typical for the internet and political dialog–totalitarian california, decay of modern state–but is bunk, silly, and misleading.
“Second, the car companies have sued Californai over its attept to raise fuel standards, alledging that only the federal government has the power to regulate fuel standards. This seems to me to be every bit as ridiculous as Lockyer’s lawsuit–they’re both nuisance lawsuits. I think Lockyer’s lawsuit should be thought of as a countersuit in the automanufacturers suit.”
Michael: I agree. Maybe I missed it, but I’ve not seen any posts here screaming about the unfair use of the counters, the imperial priestly judged, who will decide the auto manufacturer case regarding fuel restrictions.
I worked at a well known technology company focused on IP for about ten years. A statement made often about that company: they have the best lawyers money can buy. That’s how business works. If you reduce regulation, there are a host of issues that have to be decided, particularly regarding intellectual property. For example, the courts are the only place to determine whether theft has taken place. Whether monopoly is an issue. And whether the state has the right to regulate.
Suits and countersuits are part of the game. That’s how the real world works. Some may not understand, but it really is how we make progress.
See Iraq to determine the other way of resolving differences.
Those are big words, JDH. Are they really necessary?
Californians have been taking the lead for years with their air quality regulations for cars. The federal congress is too much in the bag to the auto lobbyists, so it has been up to California to clean up the air for the rest of the country. The California market is too big to ignore, so auto makers design to meet the California standards.
As to the litigation, you can have a very strong regulatory environment as they do in Europe, or you can leave it to free market litigation as in the U.S. One way or the other competing social interests will be decided. Unfortunately, in the U.S. industrialists want neither.
Maybe the automakers should do a carbon utilization analysis of the attorney general’s personal life (i.e. unnecessary trips, huge house, electrical bill, etc) and file a counter suit for his excess use of energy contributing to global warming. On a per person basis, I’m sure he’s using way more than an “average” individual.
I just love California. They are great at trying kooky things and allowing the rest of the country to see how they work. This is the strength of the free market. Just think California has the highest gasoline prices of the contiguous states, housing and land are out of sight, the cost of living is crazy, and if you have been to the LA area recently we are seeing the results as the infrastructure is slowly falling apart.
Las Vegas really loves California as it expatriates its citizens to Sin City.
The world’s second largest oil exporter in the hands of former KGB agents and the world’s seventh largest economy controlled by Californians – may the saints preserve us!
“I just love California. They are great at trying kooky things and allowing the rest of the country to see how they work…Las Vegas really loves California as it expatriates its citizens to Sin City.”
“Kooky” things in california include agriculture, semiconductors, genetic engineering, software systems, and entertainment that is exported all over the world. We all know what “kooky” means in Sin City–a service economy focused on importing bodies, stripping them of their cash, and then exporting them back to wherever they came–to build up that cash supply. Plus a big convention center for all the above-mentioned californian “kooky” things.
Carnival of the Capitalists – Sept 25, 2006
Welcome! This makes my third time hosting the Carnival of the Capitalists over the last three years. It doesn’t get easier to sort and order the influx in the inbox of business-economics-finance-leadership-marketing-etc submissions even for a seasoned …
An irresistible temptation, perhaps, but one that continues to impoverish millions of people throughout the world today
Unless it doesn’t, as in for example Venezuela.
JDH:
“The temptation for any totalitarian government to change the rules of the game after a company has already made a huge financial commitment, and thereby divert the assets to the personal objectives of the rulers, is almost irresistible. Of course, if the firm knows that’s the way the game is going to be played ahead of time, the initial investment would have been more cautious, or nonexistent. An irresistible temptation, perhaps, but one that continues to impoverish millions of people throughout the world today.”
Excellent point, and one that I don’t think gets nearly enough airplay. Certainly not in Venezuela or Bolivia. Chavez and Morales are my two favorite examples to haul out for my populist friends.
Having said that, I’m not sure how that aspect of totalitarianism translates to the CA case. Sure the AG’s spending taxpayer $$ on a suit that’s frivolous, politically motivated, tit-for-tat or whatever. But surely the costs to CA residents from that are orders of magnitude less than in the Russian example.
I realize your main point was probably not the adverse effects of totalitarianism on the poor, but I found myself wondering what the analogous consequence would be.
Pray tell me what is in common between the two? In Russia a bureaucrat abruptly changes the rules of the game. Case closed. In CA the Attorney General files a lawsuit. In court. Under the spotlight, and already catching flack for it.
I’ll take California.
Small Investor Chronicles
Alex, you don’t think the lawsuit, if successful, represents a change in the rules of the game?
This looks more like a political move to get Lockyer’s name in the media since he is running for office. I doubt he even believe it will go anywhere. But what a dangerous game!
It does. IF successful. I believe the process whereby it does so makes a big difference, though. Rules do change all the time, otherwise we would still have segreration, or lead paint, for example (I’m not equating these, just use them as examples of changes in rules). I happen to believe that an open process with separated branches of government, court reviews and free press is superior to Chavez-Putin model. Even though it may often be silly, slow and inefficient.
Just to clarify, I think the lawsuit IS really silly, I and mostly agree with JDH’s description of it. I only object to equating it to Russia’s behavior. Not to mention that in case of California it is at least consistent with their overall “green” ideology; Russia’s commitment to the environment seems to be rather selective to me.
Small Investor Chronicles
Links and Minifeatures 09 25 Monday
Carnival of Investing
Carnival of Personal Fina…
What’s wrong with changing the rules? This lawsuit seems to be forward looking: it’s not trying to impose penalties for past behavior.
In this case, the definition of pollution is changing. The state of CA has redefined CO2 as a pollutant (which is clearly becoming the scientific and social consensus), and the car companies (domestic and foreign) are fighting that. This is, as stated before, clearly a countersuit – a bit of strategy. It would be nice if such games weren’t necessary, but it seems clear to me that the CA AG is on the side of both the rule of law, and the angels.
The lawsuit is indeed trying to impose penalties for past behavior; there are many references to “defendants having produced and continuing to produce”.
It’s gratuitous grandstanding at it’s very worst, and as Dick said, it’s calculated solely to get Lockyer’s name in the papers. What do they want GM to do – stop selling cars in California?
Wikipedia:
“Totalitarianism is a term employed by political scientists, especially those in the field of comparative politics, to describe modern regimes in which the state regulates nearly every aspect of public and private behavior.”
You might not agree with Attorney General Bill Lockyer’s lawsuit against the automakers, but isn’t
“totalitarian” a little over the top?
Anonymous, once Lockyer would get his way, the government would precisely be able to use its absolute power to ration energy to control “nearly every aspect of public and private behavior.” So it fits. And that power would have been handed down by a judge, not derived from a proper, constitutional legislative process. That would implement Wikipedia’s further discussion of the authoritarian aspects of totalitarianism. So it fits even better.
Peter, part of the reason the costs to CA residents might be “minimal” is that most of the costs of CA’s antics are regularly imposed upon the rest of us. The best possible outcome would be that CA would succeed in making an island of itself, auto companies and a wide variety of other overregulated businesses would withdraw from the CA market, and CA residents would pay through the nose for their own wacky nonsense. But the practicalities of capital barriers to market entry, and of economies of scale, preclude that happy outcome.
Oh, and by the way, if Lockyer is really concerned about CO2 or pollution, why doesn’t he sue to get LAX shut down? He might be able to succeed at that purely under state law. Oh, wait a minute, if he actually succeeded, he would never again be elected even as dog catcher, would he? Oops.
OK, the use of the term “totalitarian” was partly just to get attention. The phenomenon to which I am hoping to call attention is one in which the dictates of the rulers supersede any written law, and no one knows whether he or she is obeying the law because no one can predict what the rulers will next declare to have been prohibited.
JDH, the law progresses, as it always must, by superceding past formulations. At one time, bottlers of drinks could sell lethal product without legal consequence. Then came a case that superceded that law of earlier times.
Do you really intend to say that auto manufacturers have no unexternalized costs? If they have externalized costs, is it not more than less likely that, over time, people bearing those costs will, by whatever representative means, demand they be internalized (the examples are legion: asbestos is one)? I thought an economist instinctively prefers a world of full-internalization-user-pay.
–OK, the use of the term “totalitarian” was partly just to get attention. The phenomenon to which I am hoping to call attention is one in which the dictates of the rulers supersede any written law, and no one knows whether he or she is obeying the law because no one can predict what the rulers will next declare to have been prohibited.–
So it is essentially an _ex post facto_ argument.
Doesn’t this concept further invalidate all of tort law, e.g. an assertion that “if the parties have no pre-existing contract than no action can ever be taken from one to the other.” Is “Tort Law 101” the new Communist Manifesto?
The comparison to Russia is entirely inept; only if CA sued some auto manufacturers, banned them from the market, and then allowed CA-state-owned auto manufacturers to themselves sell and pollute at least as much, would there be any parallel. There isn’t.
And why is attacking the most profound threat to global human civilization since thermonuclear war “wacky nonsense”? This when the USA, as an national exception out of all other developed countries, ignorantly refuses to do or think about any mitigation? That’s what’s wacked, in my opinion.
Of course as an instigator of policy the lawsuit is rather inadequate, but then again so were Miranda rights, and many of the civil rights of the 1960’s. Brown vs. Board of Education preceded the legislatures by a decade.
I’m sure if CA legislature passed a law the same people would call it “wacky nonsense”.
“wacky nonsense” is priviliging your “right” to guzzle gasoline without limitation regardless of consequences.
“What do they want GM to do – stop selling cars in California?”
No of course not. They want a settlement.
How about GM no less than 80% of the fleet fuel efficiency of Honda in CA, and transitioning to 100%?
Thomas James: Excellent point. My exact response to the original post.
The problem I have: I agree with much of libertarianism (as always, one must ask, “who chooses”), but I’m sick and tired of libertarians automatically maligning government efforts as always corrupt, always grandstanding, always uneconomic, always stupid, and always regressive in some fashion.
I see society as a process, one in which there are players with greater power than others. My father had to drill holes through the frame of our car when I was a kid in order to install seat belts because the auto manufacturers, as far as I understand, did not want to provide them on all cars. I may be mistaken, but the car we purchased in 1962, a Chevy, had no seatbelts in the back, and no way to install them even if you wanted them. Except to drill holes through the frame of a car. He was a machinist, so he could do as such.
A society without government as a player would, in my opinion, be a dog-eat-dog plutocracy. Government plays an important role, and I’d like to see more efforts at good government, not attacking it at each and every opportunity.
As far as I can tell, at this point, we’ve got an AG who has essentially countersued the automobile manufacturers because of their exercising of similar legal recourse in order to avoid any restrictions or controls on the performance and emissions of their automobile.
Perhaps I’m mistaken, and I’ll happily be corrected, but I believe automobiles are significantly cleaner today because the automobile manufacturers were forced to clean them up, not because (a) the market demanded it (b) the auto manufacturers thought it would be a great idea to do so.
What is infuriating is that we as a nation have dedicated dollars and blood to an unnecessary and incompetently executed war in Iraq because of oil. No other reason. Yet we have people who absolutely refuse to take some easy logical steps to reduce our oil dependency. We can easily reduce consumption, and reduce CO2 emissions.
T.R.Elliott,
Are you aware that the primary contributor to pollution in the US is the federal government? And are you aware that most of the pollution regulations are waived for government pollution?
Private industry has always led the way concerning pollution control because people demand it and businesses suffer from the effects of pollution.
When the government enters the pollution picture they do not improve on what is. Instead they establish a cap for business, a point at which business can stop improving because it is the standard of the government. This would not be so bad if the government actually produced or created, but the government is constrained by what is and cannot at all create what could be.
Because the government is constrained by what is, that is all government regulation gives us. The end result is that they stifle innovation and actually impede pollution control through innovation.
Government is a good thing as long as it does what it does best, enforce contracts including fudiciary responsibilities, but innovation is not one of the governments strong points.
The plaintiff in a nuisance case isn’t seeking to “punish perfectly lawful behavior.” Lawful behavior, such as playing an amplified electric guitar, becomes a nuisance–and therefore unlawful–when the defendant undertakes such behavior, for example, in his backyard at 3 a.m. in a densely-populated residential neighborhood. Nuisance suits increase the costs of–remember this is a civil and not a criminal case–antisocial, selfish, and ultimately inefficient activities to the defendant when the market fails to do so. Or, to put it another way, a nuisance suit forces the defendant to internalize his externalities. As an economist, surely you can appreciate the need for such a mechanism.
Seeking redress for a grievance through the courts is very nearly the opposite of totalitarianism, which, in my mind, connotes a species of mindless, top-down regulation that the state enforces through coercion and violence. Whatever your views may be on judicial activism, right or left, a civil suit based on Anglo-American principles of evidence and procedure is one of the best mechanisms ever devised for determining the facts giving rise to–and resolvin–disputes between human actors.
“What do they want GM to do – stop selling cars in California?”
Wouldn’t hurt. GM opposed CAFE, opposes removing SUV loopholes for emissions (including CO2), and opposes any and all attempts to increase fuel mileage by other means as well. Toyota, to take another obvious example, plays by the rules (and didn’t lobby the Federal government for said loopholes).
“Are you aware that the primary contributor to pollution in the US is the federal government? And are you aware that most of the pollution regulations are waived for government pollution?
Private industry has always led the way concerning pollution control because people demand it and businesses suffer from the effects of pollution. ”
These claims are intriguing, if off-point. OTOH, they sound a lot like Reagan saying trees are the primary source of air pollution. Do you have any evidence for them?
Dick: In principle, one can make your argument that the government stifles polution control and innovation. In practice, I don’t believe it for a moment. The government can create a level playing field, stopping the race to the bottom when it comes to the commons. The air is a commons. One can argue that the supply of fossil fuels is a commons.
Here’s a personal case. Years ago, my wife had breast cancer. Long ago treated. If the state of california did not mandate that I can buy insurance, I could not purchase it. The insurance companies have no interest providing me with insurance. Period. At any price. It’s that simple. They don’t want to bother.
The state of california said to the insurance companies: “you will bother.”
There are countless examples.
Different example: the government funded the basic R&D for the internet and for spread spectrum communications. Private companies then ran with it. So, in fact, the government can stimulate innovation. It’s a fact.
“the government can stimulate innovation. It’s a fact.”
Heck, computers were developed entirely by the military in the 40’s and 50’s. They were expensive and unreliable and risky, and private enterprise wouldn’t have touched them until decades later.
Similarly, transistors were developed by Bell labs, which were an arm of a government monopoly. Purely private firms would NEVER have funded pure research like that, and now that Bell has been dismantled, the successor to Bell labs has been gradually downsized and moved to more commercial research, too.
Currently, much of the best research on solar and energy storage is being done by DARPA. I could add more (e.g., robotics), but the list would be very long.
“Wouldn’t hurt. GM opposed CAFE, opposes removing SUV loopholes for emissions (including CO2), and opposes any and all attempts to increase fuel mileage by other means as well. Toyota, to take another obvious example, plays by the rules (and didn’t lobby the Federal government for said loopholes).”
And yet Toyota got sued along with all the others. What does playing by the rules, in your words, get them?
Jake: Toyota is a member of the Alliance of Automobile Manufacturers. The Alliance is fighting the right of states to limit CO2. Therefore it makes sense that Toyota would be included in the California suit.
M1EK,
Here is a quick reference for you from Rep Paul Ryan of Wisconsin in the Congressional Record.
http://www.adti.net/environment/congressRecord_pryan102800.html
“Mr. RYAN of Wisconsin. Mr. Speaker, I would like to submit for the Record an article written by former Senator Robert W. Kasten, Jr. The Honorable Bob Kasten served in both the House of Representatives (1975-81) and the Senate (1981-93).
Mr. Kasten writes to remind us of the fact that the Federal Government is the largest polluter in the United States. He brings to our attention anecdotes from the states, which illustrate the states’ difficulties enforcing local environmental laws on the federal government. He writes about the federal government’s lack of accountability in cleaning up its own toxic waste sites and its attempts to push cleanup responsibility and costs to local levels of government and to private landowners.
According to a Boston Globe article last year, ”federal agencies have contaminated more than 60,000 sites across the country and the cost of cleaning up the worst sites is officially expected to approach $300 billion, nearly five times the price of similar destruction caused by private companies.” In contrast, private Superfund site clean up is estimated at a fraction of the federal government at $57 billion. The article goes on to say that the EPA Inspector General has found that, federal agencies are increasingly violating the law, with 27 percent of all government facilities out of compliance in 1996, the latest year figures available, compared to 10 percent in 1992.”
You can find Sen. Kasten’s article at http://www.adti.net/environment/bndunlop_kasten_1000.html
Dick, we’re asking for reliable sources. That’s not a source, that’s a campaign ad.
“Are you aware that the primary contributor to pollution in the US is the federal government? And are you aware that most of the pollution regulations are waived for government pollution?
and volcanoes, no cats on those babies
Nick,
If you can dispute any of Sen. Kasten’s statistics I am all ears.
You said:
Heck, computers were developed entirely by the military in the 40’s and 50’s. They were expensive and unreliable and risky, and private enterprise wouldn’t have touched them until decades later.
Similarly, transistors were developed by Bell labs, which were an arm of a government monopoly. Purely private firms would NEVER have funded pure research like that, and now that Bell has been dismantled, the successor to Bell labs has been gradually downsized and moved to more commercial research, too.
Currently, much of the best research on solar and energy storage is being done by DARPA. I could add more (e.g., robotics), but the list would be very long.
I repeat, the government works only with what is. These projects were in the pipeline before the injection of tax revenue. Certainly the government can fund one project over another but by doing so they suck funding from other projects.
You have fallen into the Broken Window Fallacy. You believe that the result from an action is the only possible result.
The market gives all possiblities a hearing and selects the best. The government selects the pet project of the bureaucracy and thwarts the market. In the end the market give us innovation while the government gives the bureaucrat a political slogan.
the common good is not always served by profit, and so government is the regulator
with reguard to this specific case, however, autos are anything but bare transportation – and it’s obvious that carmakers have run out of things to add to cars to raise their price (self parking awd 350hp anyone?)
better emissions wouldn’t injure any carmaker – alright, maybe the slow-witted ones (honda clean diesel in ’09!)
on the government pollution issue – is that not an example of what happens without another oversight body ?
I spoke with a person involved with remediateing some polluted areas – from what he told me they sounded quite old (cold war). nevertheless, what is the point here? – the government pollutes so everybody should be able to pollute? is private industry competing in building a-bombs?
the market gives all possibilites a hearing and selects the MOST PROFITABLE, and maybe the better, someday. the common good and the government are simply obstacles.
the common good is not always served by profit, and so government is the regulator
biker,
This is an important concept. If the government is the owner and supplier how can it be the regulator? The government must remain separate from business to properly regulate. Once there is the unholy alliance of business and government we lose the regulation function of government, because government has a vested interest.
The whole issue of pollution is important. Industrialized countries produce the most potential for pollution but the industrialized countries are actually much cleaner than the developing countries. This is not a difficult concept to understand. Countries that have more resources are able to devote more resources to pollution control, and people who have basic needs satisfied will demand greater needs be satisfied such as pollution control.
The polluted streams in developing countries are not that way because the people love pollution. They are that way because the people do not have the resources to solve the pollution problems. The people are doing their best to just stay alive.
Profit is nothing more than confirmation that the consumers are being provided with something they want. If the consumer does not buy the product there will be no profit. A business cannot increase prices or profits on a whim. The products must be demanded by people for the business to make a sale and make a profit.
Profit is not some magical element that evil businessmen extract from poor helpless consumers. Profit is what people pay in exchange for the right to tap into the businessman’s expertise.
yeah, I hear that “things are pleanty clean” arguement from time to time – the country is capable of better, too. Why did Whitman quit again ?
there is certainly no problem with profit – big profit – huge profit – unlimited profit – but certainly it has to be weighed against other factors if there is an impact. Government and the tort system are all we have to do this. It’s suboptimal – if populists and buisness are both unhappy I say “good”.
The exciting places top watch on these topics are developing nations. Not sure how polluted streams help people stay alive, because that sounds non-sustainable but in the long run we’re all . .
Russia is hardly a totalitarian government. That is a rather silly assertion. And comparing Russian manipulation of contracts in Sakhalin to California regulators is completely imaginary.
The Russian government is attempting to pressure the independent foreign oil producers to hand over a larger share of the profit, or to keep production costs down. The primary issue of concern is the production licenses under which these projects are being developed. Russia only collects monies for allowing these oil fields development after the developers have recouped their costs. Those initial costs have doubled from 10 to 20 billion in the case of Royal Dutch Shell and increased from 12 to 17 billion in the case of the BP project. The environmental issues are simply a way of bringing the renegotiations of the contracts issued in the 1990s (under unfavorable conditions) to the table. It has nothing to do with protecting the environment. Russia’s negotiating position is much stronger now and oil prices are much higher.
The California environmental lawsuit is completely unrelated.
1 more degree celius, JDH; that is all it will take.
http://www.newscientist.com/article/mg19125713.300-one-degree-and-were-done-for.html
“Earth is already as warm as at any time in the last 10,000 years, and is within 1 C of being its hottest for a million years, says Hansen’s team. Another decade of business-as-usual carbon emissions will probably make it too late to prevent the ecosystems of the north from triggering runaway climate change, the study concludes (Proceedings of the National Academy of Sciences, vol 103, p 14288).”
Now, you may choose not to believe Hansen and wish to continue with the “free market is great” chant, but you are going to find that more and more people will not put up with this nonsense.
Private enterprise is just not up to it: No vision, just myopic and profit driven–and damn few ideas.
Unless we are careful, the difference between liberatianism and totalitarianism will be a razor’s edge.
To put it another way: If things are not addressed now, then your worst nightmare will become true: Absolute governmental control in an effort to save the planet. No other option will be available.
Cheers.
Mr Hamilton it is ironic that you are calling for respect for the rule of law but mock the judiciary as “robed priests” before the court procedings have even begun. Unfortunately the article has less of a tone of serious commentary and more of a tone of a ad hominem polemic. Not one of the better posts on your blog, by a long shot.
Chris, does current U.S. law specify that companies that manufacture cars that emit carbon dioxide will be punished? Does it specify that people who drive cars that emit carbon dioxide will be punished? Do ordinary people– that is, the people who make the cars and drive them– know the answer to this question? Or do the ordinary people have to wait until those who have been ordained as judges declare to us whether or not this is the law?
One definition of the “rule of law,” and perhaps this is your definition, is that, if a judge declares it to be so, then it must be the law. My definition of “totalitarianism,” and perhaps this is not your definition, is a system in which whatever the rulers declare to be so, that is the law.
So, I do not think we need to wait until the courts have finished their deliberation to criticize this process. It is the very fact that courts are perceived by some to have the authority to, in effect, create a new law that I am critizing.
JDH, it seems you are confusing criminal law and civil law. There is no assertion that the car manufactures have committed a crime or broken any law. This is a civil suit to recover for damages. For example, if I accidentally run into your car, I have not committed a crime or broken any law. But you certainly have the right to recover from me in a civil court for damage to your car or physical injury. Civil damages do not require malice. Carelessness,disregard for consequences of actions, or creating a public nuisance are sufficient grounds. A judge and/or jury will decide if the claims have merit. It has nothing to do with creating a new law because it is a civil case. This is nothing new. It is in accordance with hundreds of years of legal precedence.
I am concerned when the government confuses criminal law and civil law. If the government asserts that there is damage against citizens this should be criminal. If the damage is not criminal then the government should stay out of the issue and allow the citizen to sue for damages. The coercive power of government makes it a very dangerous adversary.
Professor Hamilton, what I am saying is that your commentary begins by criticising X and then using that to launch an ad hominem on Y, without any link being developed between X and Y.
In general I agree with much of what you are saying that laws need to offer clear guidance so that individuals can plan their activities. However, in some cases laws need to be broadly written, as otherwise crafty individuals will find exceptions.
You make the point that if consequences are retroactive, it becomes difficult to plan. This is true. On the other hand, not having retroactive laws would allow private parties to socialize the costs of their activities. If an individual unintentionally pollutes the environemt in pursuit of private profit, who should cover the costs? Is not the privatization of profit and the socialization of cost also economically distortive?
Balancing these factors seems to me to require the executive, judicial, and legislative branches to function at a high level of competence. In this case, did the legislators do their job effectively? Did they write the law too broadly? How about the executive branch? Are they enforcing the law in a considered manner? I would ask about the judicial branch, but to my knowledge they have not even begun work on the case. And what of California’s case? Will they have to engage in cleanup as a result of private profit making activities?
I was disappointed that instead of turning your insight on any of these questions, that you concluded with a rather unilluminating personal attack on a party that thus far has had no involvement in the topic you are discussing.
I’m concluding that Lockyer must not share my current concerns about the grave financial challenges and likely further big job losses already facing American car manufacturers.
I find this statement blaming environmentalists amusing considering the latest news is that GM has chosen rabid right wing Fox News host Sean Hannity as its spokesman for the “You’re a Great American” ad campaign. Hannity, whose latest book is entitled “Deliver Us from Evil: Defeating Terrorism, Despotism, and Liberalism” is also known for saying that “a Democratic victory in the midterm elections could be a victory for the terrorists” and “making sure Nancy Pelosi doesn’t become the House speaker is worth dying for.”
I can only assume that the GM execs have decided that sticking a thumb in the eye of 50% of their potential customers is a brilliant marketing strategy. Or maybe they have reluctantly concluded that only ignorant rednecks will still buy their gas guzzlers.
At some point I think you have to admit that environmentalists are not the biggest problem facing car manufacturers. It is the stupidity and incompetence of the executives that are the problem. The environmentalists weren’t the ones who came up with this ridiculous ad campaign designed to insult half of their customers. And it’s not like they needed a crystal ball to figure out that gas prices might go up and their big cars become unpopular. And they didn’t need a modern computer to figure out the long term obligations of their pension and health plans when they made those deals long ago. Presumably they reasoned that by deferring worker compensation to the distant future, they could improve the balance sheet, collect on their stock options and be in retirement before anyone knew the difference.
Environmentalists are just a handy excuse for their own mismanagement. Toyota and Honda are doing just fine under the same environmental regulations.
knzn
Spot on on your analysis of libertarians and Global Warming.
The thread goes like this:
– it isn’t happening
– it isn’t caused by human activity
– it won’t be so bad except maybe for Bangladeshis
– we don’t know what will happen
– it’s too expensive to do anything about it/ it’s all a plot to ruin the US economy (neither happens to be at all true)
– we can’t do anything about it unless the Chinese and the Indians do, and they will never agree to (the first part is only half true, the second part is not true)
– it would be a grotesque violation of personal property rights to try to do something about it. There is no solution possible which wouldn’t take away too many of my personal rights.
You finally wear them down to the last argument, and there they stick.
I wouldn’t count on dying before the negative effects of global warming really kick in. I can cite you some serious disaster possibilities (large scale methane release in the Arctic), but will suffice with a small example:
My neighbour looked like she had a good few years left in her, although she was 80. However this summer’s heat wave (the hottest recorded in London since the 19th century) killed her (complications of asthma followed by heart failure in hospital).
Of course, we’ve just had the hottest September since 1629, so it’s a good thing that global warming isn’t happening ;-).
What good will a carbon tax do? What will they do with the money, create more bureaucracy?