How would libertarians respond to climate change?

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I notice that a lot of libertarians don't believe in climate change, or at least not anthropogenic climate change. I'm sure that they are also happier thinking that it is not a threat or nothing can be done, because then there is not need to call for some sort of regulation/intervention to stop it. But let us say, hypothetically, that we knew beyond all doubt that climate change existed and was caused by human society releasing too many greenhouse gases into the atmosphere. Let's also say that we knew that we could minimise the damage if global greenhouse gas emissions peaked by 2025 and were cut by 80% by 2050 (these if anything are a bit on the optimistic side of the projections). How would they propose that we respond?

Normally one of the following is offered as a way to deal with climate change:
a) Carbon tax: a prices is put on each ton of carbon dioxide (or the CO2 equivalent) that is emitted. The only party proposing it in Canada calls for it to be $50/ton. Sweden has one that is something like $150-200/ton (I can't remember exactly). Most of the time the proposal also calls for a reduction in income tax, or some other tax, so that the government's net revenue stays the same and people aren't paying any more tax overall. This tax would give an incentive to use less polluting technologies and would make those technologies more competitive. It has the advantage that it works tidily within a free market. It has the disadvantage of being a regressive form of taxation, although depending on how income tax is reduced this can be mitigated.

b) Cap and trade: each business of a certain size, in a certain sector, is given a specific limit as to how much CO2 they can produce. If they produce less than that then they can sell their extra credits to another company that produced more than it should have. I think it can also involve investing in carbon offset projects. The advantage is that it isn't regressive taxation and that government can put absolute limits in place. The disadvantage is that it's rather complicated to implement, prone to fraud, and there are debates about whether some of the trading and offsetting is really all that effective.

You will occasionally here these proposals as well:
c) Sector by sector regulation: Stephen Harper's approach to things. I don't think anyone really understands how it works, probably because it doesn't seem to be doing anything. Presumably it regulates the minimum standard in clean technology that each industry can use. The disadvantage is that it takes a long time to regulate each sector (six years and we're still nowhere near done), and it's debatable at how effective it would be at reducing anything other than carbon intensity (ton of CO2/unit of GDP). It certainly has not been successful in Canada, as we're not even on track to meet Harper's distinctly unambitious targets.

d) Personal carbon quotas: The only group I've heard propose this is the Green Party of England and Whales. Basically every year the government would release a certain number of carbon credits. A large portion would be given to each individual, with everybody receiving the same number. The remainder would be auctioned off to organizations (including businesses, government departments, non-profits, etc.). Any time you pay for electricity (assuming it's not renewable or nuclear) or buy fossil fuel or a plain ticket etc. you would also have to use some of your carbon quota. If you aren't going to use all of your credits you can sell them to somebody else. This has the advantage of giving control over exactly how much CO2 will be emitted and in being fairly egalitarian. However, it would involve a lot of beurocracy and creates the question of what would happen if someone runs out of these credits. Do they freeze to death?

I have a hard time seeing libertarians being a fan of any of these options. So, what would you propose be done?

From what I can tell, Libertarians deny the importance of externalities, such as a factory that produces goods but also chugs pollutants into the air and water. All that matters is that the factory owner profits from the goods that he is able to sell.

Evil is defined as a government compelling the factory owner to reduce pollutants. "Regulation" is a very, very bad word.

Easy. Eliminate laws the prevent us from paving North America from coast to coast with thorium breeder reactors and wave front reactors. We would have boundless electricity and no excess CO2 in the atmosphere. The breeders have no waste as they use waste to make more fissile material. And the wave front reactors produce waste which can be fed to the breeder reactors. All the electrical energy you can ask for and non of the pollution.

In a libertarian society those reactors would be built.

ruveyn

Assuming we're talking no government intervention, they basically only have two real options:

1) Individuals independently boycott pollution and discourage it in their local communities and culture.

2) Individuals work together to create an organization that has a role in bargaining with polluters to persuade them to drop emissions. This can be done by encouraging mass action, or even with providing incentives to the groups with the greatest responsibilities to change their patterns.

3) Screw it. The damage is accepted, and market-based work-arounds are taken. (which I think you would not consider a real option)

I mean, the problem with libertarian solutions is that libertarianism really only has one libertarian-friendly way of handling externalities, which is Coase's Theorem. http://en.wikipedia.org/wiki/Coase_theorem

The problem is that in situations where we have lots of externalizers, and lots of people who suffer from this, transaction costs are extremely high. It's still technically navigable, and option 2) is really an interesting option, especially for speculative fiction purposes, also, if human beings had a different kind of psychology, it could probably be somewhat effective. The issue is that is it really plausible in the current understanding, to think that a private political organization could have a massive effect on oil production or consumption? Probably not. I don't think most governments will cut CO2 creation down by 80% by 2050 either and they do have some other tools. The simple issue is that they can't do this without putting a cost on voters, and on businesses, and these people and organizations are going to push back, regardless of the long-term because people are dumb about thinking about the long-term.

What's wrong with carbon sequestering technology? Global Thermostat products et al, carbon-negative power plants, carbon-negative vehicles?

I think what worries me is that the part above usually gets the "No no no no NO! It doesn't fix the spoiled, greedy, wasteful habits!", well....that's where it stops being an issue of global warming and starts becoming an issue of economic ideology - but no one's allowed to put it that way! It seems like a lot of the people who talk about it the most have a need to have it fused at the hip with economic austerity, that's also why I think you find so many people who'd rather deny global warming, climate change, etc., when arbitrary - often utopian in their eyes - economic ideologies are being forced down as the only acceptable 'solutions'.

You answer your own question before laying out a bunch of hypotheticals.

If hypothetically we have to cut emissions by 80% in 25 years after 2025 to "save" the world, we're already dead. That would be impossible regardless of any amount of regulation.

It doesn't even matter what type of totalitarian big brother state you cook up in our western countries. The billions of people in undeveloped China, India, Africa, etc will not take a permanent vow of poverty for our sake and neither will we.

I'll take my chances with supposed climate change if the only alternative is totalitarianism.

Decreased government intervention in the private market will not somehow allow non-carbon energy sources to thrive; they're still much too inefficient. And investors will have to be more motivated by long-term concerns rather than short term if they are going to put their money into private alternative energy and alternative energy technology--something I don't see happening en masse--at least not nearly to the extent needed for carbon energy to fall by the wayside anytime in the near future.

I think this post may be interesting to AstroGeek's question:
http://econlog.econlib.org/archives/201 ... _of_l.html

Ruveyn's solution basically amounts to stage 2, in that he claims that the government is just making non-carbon producing energy expensive, and without that, we'd have no problem.

ArrantPariah is basically talking about a stage 1 strategy of denying the problem.

Jacoby and Tequila's view is more like a stage 4 view, in that they accept the problem. They even don't contest that the government can reduce carbon emissions. They simply contest whether the government can improvement in this area under any reasonable circumstance.

Nuclear energy would be more competitive if the government would step back.