John Hood points out two areas in which free-market fundamentals (not fundamentalism ;) ) can go a long way to solving resource-use problems–that is, any resource. He believes these solutions are transpartisan and are a Win-Win for the left and right.
Hood has picked out a common, but often overlooked, problem known as the "tragedy of the commons." When
you understand the phenomenon, you see it everywhere. The idea: if no ownership rights exist over some resource, there are
powerful incentives to over-consume and over-exploit. But commons
problems can – and often do – exist for government-controlled
resources, where the government is considered the steward.
(Think: vehicle traffic; Nat’l Parks (forest fires and visitation);
municipal water over-usage; etc.)
With all these stories of
overconsumption in the public sphere, governments and the left are
starting to embrace market-based solutions, though with reluctance. It requires
they admit markets work, with all their decentralized price signals and
incentives. It also means abandoning some of those beloved
command-and-control regulations they were taught to embrace in the
Politburo. As Hood mentions, there is bi-partisan support for
congestion pricing on roads, as well as tradeable permitting systems
applied to migrating fish stocks and polluted air, lakes and rivers
(areas that are either tough to assign property rights, or in which
it’s politically inviable.) The key thing to remember is that wherever
there are commons, there is an "if I don’t take it, someone else will"
mentality that threatens over-exploitation of the resource. But if use
rights are "definable, defensible, and divestable," the incentives to
conserve are in place.
Now, we should take care to mention
that a system of common law + private property is a superior solution
anywhere it be worked out. We should also mention that the quasi-market
global CO2 trading system will not work due to a number of factors,
including: a) universal agreement with no defectors that is required
but virtually impossible to achieve; b) too many problems of
rent-seeking and regulatory capture; and c) disproportionate costs to
the poor (regressivity). In any case, the more leftists abandon their
elitist fixation on controlling people through legislative fiat and regulation, they are finding that markets work better–even
when they are not perfectly free markets.
But we already knew that, didn’t we.