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The decline of libertarianism — also known as propertarianism — has inspired a lot of discussion in the past couple of years. The economist Tyler Cowen recently disavowed the label, affirming his commitment to a modified version of the philosophy that he calls “State Capacity Libertarianism.” Cowen’s defection continues the exodus of intellectually serious figures from the libertarian milieu, most notably to the so-called liberaltarian Niskanen Center. Both Cowen and the Niskanen cohort have stressed the failure of mainstream libertarianism to formulate an honest response to the climate crisis.

Free-Market Environmentalism: Theory and Practice When the issue of climate change first received serious attention in the 1990s, for a time it looked set to establish common ground between environmentalists and libertarians. There was much interest in the concept of “free-market environmentalism” or FME, drawing upon the work of British economist Ronald Coase, who had suggested that environmental problems could be resolved through the proper allocation of property rights. Terry Anderson of Montana State University exercised a strong influence in these debates. FME’s key proposal for addressing climate change was the creation of tradable emissions permits, a model that had been successfully deployed in the case of sulfur dioxide emissions. According to this view, a market in permits would supply incentives to find the most cost-effective path toward reducing emissions, as long as there were appropriate limits on the volume of permits. Most environmental activists greeted the idea of “rights to pollute” with suspicion: they argued for more direct controls, as part of a broader shift away from mass consumerism. But many were won over by the prospect of forming an effective coalition to press for decarbonization. By the time of the Kyoto conference in 1997, support for carbon prices as the most cost-effective long-term solution, to be implemented through internationally tradable permits, had become the dominant view. Twenty years later, this vision is finally being realized in the European Union, where high permit prices are driving coal-fired power out of existence.

Trading Places But a funny thing happened on the way to Kyoto. Propertarians, who had often been keen on tradable permits as long as environmentalists opposed them, now rejected the idea with near unanimity, along with the rest of the political right. Since then, we have faced a paradoxical situation where they consider any kind of market-based solution to climate change unacceptable. Why did this happen? The problem was to some extent philosophical. Propertarian thought relies heavily upon the Lockean fiction that property rights arise naturally, before the emergence of a state (defined broadly to include any kind of authority within a group, tribe, or nation). Obviously, no such rights could have existed when it came to the atmosphere, so emissions permits would have to be the creation of national governments working through global agreements. Admitting that states define and enforce property rights was too big a pill for many propertarians to swallow. But the cultural barriers standing in the way of free-market environmentalism were even greater. Affluent white men who don’t like being told what to do are by far the most important constituency for libertarianism. Such men would consider it a dreadful imposition to have to pay, whether directly or indirectly, for the right to drive a car or use air conditioning. Environmentalists who insist that untrammeled individualism of all kinds has malign consequences lie at the opposite cultural pole. However, this created a dilemma for propertarians. Having rejected both state- and market-led solutions to climate change, their only remaining option was to deny that the problem existed at all. This required tremendous intellectual dishonesty, supplied in large measure by hired guns who had won their spurs in earlier fights over passive smoking and the ozone layer. This didn’t trouble the libertarian ground troops, who clung tenaciously to their baseless self-image as the smartest guys in the room. Lacking any scientific, economic, or statistical knowledge to back up their opinions, they seized upon the innumerable talking points that the denial industry churned out.