 We're going to start this afternoon's program with the F.A. Hayek Memorial Lecture, which has been generously sponsored by Butler Schaefer. The lecture will be Edwin Dolan. Professor Dolan is an economist and educator with a PhD from Yale University. Early in his career, he was a member of the economics faculty at Dartmouth College, the University of Chicago and George Mason University. In 1974, he served as the academic director and host of the Austrian Conference at South Royalton, which was really the first Austrian conference on the North American continent. From 1990 to 2001, he taught in Moscow, Russia, where he and his wife founded the American Institute of Business and Economics, an independent not-for-profit MBA program. Since 2001, he has taught at several universities in Europe, including Central European University in Budapest, the University of Economics in Prague, and more recently the Stockholm School of Economics in Riga. I assume a lot for you. During breaks in his teaching career, he worked in Washington, DC as an economist for the Antitrust Division of the Department of Justice and as a regulatory analyst for the Interstate Commerce Commission. He later served the stint in Almaty as an advisor to the National Bank of Kazakhstan. When out lecturing abroad, he makes his home in Washington, San Juan Islands. Dolan's publications include Tanstoffel, Libertarian Perspective on Environmental Economics, which was first published in 1971 and is still in print and is a very good book. I did use that early on in my teaching career. And it was most recent publication date is 2011. And as I look at it, it seems like it's extensively extended. He also has published Foundations of Modern Austrian Economics, or rather, he edited that book, which was the book that came, the volume that came out of the South Royalton Conference, and Introduction to Economics, which has been in print in numerous editions since 1974. And I also use that in my early teaching career. I'm delighted to introduce Ed Dolan, who speak to us on the Austrian paradigm in environmental economics. Welcome, Ed. Thank you. Good to be here. I was very pleased to get this invitation to give an actual named endowed lecture. Not I give a lot of lectures, but very few as distinguished as this one. So Joe's asked me to give some reminiscences about the South Royalton Conference, but that's going to be tomorrow at a separate section. And today I want to sort of do a little bit of case studies in the Austrian paradigm. In the introduction to the proceedings of the South Royalton Conference, that I know a lot of you have seen, I talked about the Austrian paradigm from the point of view of Thomas Kuhn's theory of scientific revolutions and speculated about whether Austrian economics would bring about scientific revolution in the sense that Kuhn meant where we have a new paradigm that would break through and change the way that people looked at the world, or at least looked at their world through their field of studies, whether it was economics or physics or whatever. And one of the remarks that I made in that introduction was that having a unique paradigm, which Austrian economics certainly has, is a necessary condition, but not a sufficient condition for touching off a scientific revolution in Kuhn's sense. That in addition to having the paradigm, first of all, the people that use that paradigm have to use it to address problems that people think are important. I think that the Austrian school has done very well in that job, especially looking at the variety of topics that are covered in the panel. Here you can see that Austrian economics has colonized all kinds of areas where it used to not being present, whether those are entrepreneurship and marketing, and not as Garrison was saying this morning in macroeconomics, no longer just business cycle theory, but also monetary theory and other areas of macroeconomics, and so forth. So in that regard, Austrian paradigm has done very well. A second thing that a paradigm has to do in order to spread is has to offer policy solutions that are of practical value to economic policy, not just pure theory. I think we're going to hear some of those, for example, at the panel later this afternoon on money in the Fed. And then also have to offer solutions. The practitioners of this paradigm have to offer solutions that are unique in the sense that they can only be arrived at or uniquely arrived at through that paradigm and can't just parallel solutions to the same problems that have already been solved by some other method. When I first started thinking about this, I thought, well, I'll just talk very generally about Austrian economics, but I really realized that that was way too ambitious. And instead, I'd like to look at these issues of the progress of the Austrian paradigm just through the lens of one topic that I happen to follow a little more closely than others, which is environmental economics. There's no separate panel here on Austrian environmental economics, but there's been quite a few things written on it over the past 40 years. So I'd like to evaluate progress of Austrian paradigm as applied to environmental economics. Now, when I say evaluate, evaluate by what standards, well, I'm not going to bring in saying the neoclassicals don't like the Austrian paradigm or say that the Austrian paradigm doesn't make sense from the point of view from some ecological collectivist point of view. There'd be no point in that. Instead, what I really want to do is evaluate it in the sense that saying is what Austrian writers on environmental economics say is it consistent with their professed methods that they are using and from the premises that they profess to begin from. In other words, evaluate Austrian economics by Austrian standards. I should say that my remarks here are just a summary of a longer paper. I was asked to submit something to the quarterly journal of Austrian economics. By the time I got done with it, it was 6,000 words. I don't think you'd want me to stand up here and read that. It would be here till dinner time. But I did post a draft of the paper on the conference website this morning. You can take a look at it. I ask you as the conference rules apply, please not to quote from or cite that draft. I will be revising it before it's published. But you can take a look at it. I would make a little preliminary warning that some of the remarks that I will be making today are going to sound rather critical. I hope, first of all, that they will be taken as constructive criticisms. But they're also going to sound critical because I only have a few minutes here this afternoon to talk. And there's no point in repeating all of the many principles of Austrian environmental economics that we all agree on because why waste time nodding heads about things that we already agree on. So let me get started here. First of all, what is the Austrian paradigm that's applied to environmental economics? Well, I think that it boils down to three propositions. Or first one is the idea that in contrast to the neoclassical view, which views environmental problems as a problem of optimizing or problems of efficiency, that Austrian view is that environmental problems are problems of coordination, coordination meaning coordinating the actions of separate parties that have conflicting plans for using scarce environmental resources, for example. But it runs a paper mill. They want to use a river for waste disposal. Somebody downstream may want to use the same water for drinking and farming. They have to coordinate or accommodate their plans to one another because they interact. Second key feature of the Austrian paradigm is applied to environmental economics. I think this applies more widely in environmental economics. It's the use of a comparative institutional method when we evaluate whether some approach serves the purpose as a coordination or not. What we're really asking is, which set of institutions best facilitates coordination? Or perhaps even we could say, which set of institutions least impedes coordination? And then the third key proposition, which all Austrian writers on environmental issues agree with, is that the key institutions involved here that determine whether or not actions are or are not well coordinated are those that are involved in the definition and enforcement of property rights. So let's take a look at these principles, see how they've been applied. And I would like to look at three problem areas. I would say here that I see three problem areas in the way these have been applied. Problem number one is what I call the institution gap. Now, if you read Austrian writers on environmental economics, sometimes we see the approach here in my paper of a quote from writer Graham Dawson, who says this more eloquently than I can summarize here. But the idea is that the proper approach is to privatize environmental policy in the sense that we're going to abolish all existing regulations and leave this coordination problem to the market as supervised by the courts. Let the courts sort out the relevant property rights when they've done that coordination will be carried out. The institution gap here is that there's a big gap between the ideal set of property rights and property rights enforcement mechanisms that's described in these writings and the actual set of property rights institutions and enforcement mechanisms that we have. Several pages in the paper devoted to discussing these in detail, but just to boil them down to some simple examples. What property rights should prevail in when we read, let's say, Murray Rothbard or Roy Cordotto or some of the most cited writers on environmental economics, Walter Block. We have concepts like key concepts of the Austrian paradigm. The idea of homesteading pollution rights, homesteading air rights, homesteading water rights and so forth, we have this is an example of a principle which is not widely recognized by courts that we have today, although it's a key to the Austrian approach. Then we have the question of what are the court institutions we're talking about? The courts, when Austrian writers say we should leave environmental problems to be educated in the courts, they're thinking about it quite a different set of courts than we now have. As you probably, everybody is well aware in this room, the courts that we have now in this country are not very friendly toward property rights. As a matter of fact, they can be quite antagonistic for them. For example, we have the problem of how courts have treated regulatory takings. We have in our US Constitution, the 5th and 14th Amendment are supposed to protect property rights against government taking so that we can't take property without due process and without compensation. But as the courts have narrowed this down, this means only that the government can't take title to property, but it can take the use value or the economic value of property through regulations. We've published some regulation on wet lands that suddenly reduces the value of some farmer's cow pasture to zero economically, but he doesn't get any compensation because he still has title to these useless wet lands and so forth. And another area in which courts aren't very protective of property is rights of privacy. We have this current flap about whether or not the activities of the NSA violate the 4th Amendment and the courts seem to be more protective of the NSA than of our constitutional rights. And finally, there are issues of legal standards. Suppose we have these courts, suppose we define property rights through homesteading or whatever, what standards are the courts going to apply? Austrian writers favor a standard of strict liability in many court cases where current courts apply a standard of negligence. Austrian writers often favor proof beyond a reasonable doubt where current courts would apply a standard of preponderance of evidence and so forth so that the courts, as described in writings on Austrian economics, are very different from the courts we have now. And what I don't see, the missing piece I see here is there's no roadmap for bridging the gap here. There's no, we're comparing the hypothetical set of property rights and enforcement institutions with an actual set of policies, environmental policies that are being criticized. This approach is something that Harold Demsets used to call the Nirvana fallacy, where the flaws of an imperfect reality are compared with a non-existent, ideal alternative. And I think Austrians have always been very sensitive to this Nirvana fallacy when it's committed by neoclassical economics. For example, when we talk about Austrian approach to antitrust economics, the first criticism we hear is that while neoclassical economics has set up this concept, this ideal concept of perfect competition, then they look out at the messy world of market processes that actually exist. They say, well, the current market process and market institutions don't look anything like perfect competition. So let's junk them all and bring in some ideal regulatory regime, some set of antitrust laws. Whereas what they should be doing, as people like Norm Armantano has pointed out very eloquently, what we should be doing is comparing the actual set of government regulations that we have now, that is our antitrust laws, with what happens in the actual set of markets that we have now, and as he shows in his writings, that our actual set of markets, despite being messy and despite not resembling the ideal perfect competition, do a better job of coordinating economic activity than markets do when antitrust laws intervene. But still somehow, when Austrian writers write about environmental economics, they're falling into the same nirvana fallacy. So I would say that task number one, unfinished task number one for Austrian environmental economics is to do more work to close this gap to compare present institutions with practical institutional alternatives, not ideals. Now, the second problem I would like to address, or the second gap in Austrian environmental economics, is the problem of what I call environmental mass torts. Now, let me explain what I mean by this term. Property rights approaches made practical progress and proved of great value in many areas where we need to coordinate use of environmental resources. For example, the folks up in Perk in Montana have written a lot about management of Western lands, water rights, fisheries, urban land use, forest resources, even wild game, and have shown that property rights solutions provide a practical alternative that works better than government regulation. But these types of solution are less successful when they're implied with environmental mass torts, by which I mean things like urban smog, acid rain, ozone depletion, ocean acidification, climate change, and so forth, which are characterized by the fact that there are very large numbers of pollution sources, large numbers of victims, and they are widely separated from one another. These, to quote Terry Anderson, somebody from Perk who's written on this, these strain the paradigm. Well, let me explain a little bit why the Austrian paradigm, as applied by writers like Cordado, or Block, or Rothbard, doesn't work for these environmental mass torts. So look, for example, about Rothbard. I think his 1982 Cato journal paper on economics of air pollution is one of the most detailed treatment. And we'll see why these don't work for these environment. Why the Austrian version of the property rights approach doesn't work for these environmental mass torts. Rothbard lays out a set of requirements for successful tort proceedings in cases of air pollution or other mass torts. There are things like victim bears the burden of proving actual harm. Proof has to be beyond a reasonable doubt. You have to prove strict causal connection between each source and each victim, not that my maple trees were harmed by acid rain coming from somewhere in the Midwest. It has to be from power plant A in Canton, Ohio, or something like that. And Rothbard imposes limits on jointer of plaintiffs and class actions by defendants, which means that there has to be a separate lawsuit for each polluter and each victim. Now, after going through this list of requirements, Rothbard himself openly concedes that the burden of proof is insurmountable in case of environmental mass torts. And in fact, he ends up this section by the admonishment that where the burden of proof is insurmountable, then pollution victims, to quote Rothbard, the victims have to assent uncomplainingly to produce it. So in other words, we go through this whole big study of tort laws applied to air pollution. We find out that it doesn't work. And what advice do you get, we say? We also affect what Rothbard is saying to put his words into my words is that, well, some of you may come down with lung cancer as a result of this smog. But hey, those things happen. And if you're going to abide by the standards of libertarian jurisprudence as I've outlined them, there's nothing you can do about it. So just suck it up and get on with your life. Now, there are alternatives to this approach in the property rights literature, although a lot of the alternatives come from people that write property rights oriented environmental economics strictly outside the bounds of the Austrian tradition, although some of these get a degree of support by more narrowly Austrian writers. For example, Walter Bloch seems to be fond. I'm sorry he isn't here today. I'm sure some of these things I'm saying really get him going. I was hoping to get a dialogue. The paper is going to catch up with him sooner or later. Bloch approvingly quotes Martin Anderson as saying that pollution is like garbage and that anybody that pollutes the air is just like taking a can of garbage and dumping it on your neighbor lawn. That ought to be illegal per se. And that there ought to be criminal sanctions for this. Terry Anderson, no relation. Economist Edward Perk has written a book on free market environmental economics from a non-Austrian version of that, but also within the property rights school, believes that pollution sources should be liable for harm. For example, if we had privatized roads, owners of roads would be liable for automobile pollution arising from their roads. And that the key differences between this and these approach and Rothbard's approach are three differences. First of all, if procedural barriers in the courts make it infeasible to totally protect the rights of victims and the right of polluters, which way are we going to lean? Are we going to lean over backwards to protect the rights, property rights of polluters, or are we going to lean over backwards to protect the property rights of pollution victims if for some reason or other it's difficult to protect both in full? Second key difference here is who initiates the action. Does the action have to be initiated through a tort process by individual victims or are we going to have intervention of some public prosecutor who's acting to prevent known harm even when the specific victims haven't filed suit or perhaps the specific victims haven't even been identified? And finally, there's a difference in remedies. What remedies are we going to have? We're going to have payment of damages or restitution of some forth through the tort system, which is the Rothbardian approach. Or we're going to have some kind of injunctive remedies or criminal sanctions, which is the alternative approach. So there's a difference here between even Austrian and non-Austrian versions of the property rights approach. Well, does any of this matter? Yes, it matters because regardless of whose side we come down on, regardless of whether we come down on the side of victims or come down on the side of polluters, unless we can equally protect the property rights of both the victims and the polluters, we are not going to solve the coordination problem. We started out by saying that, and this is something like Roy Cordado is always insisting on, widely quoted as saying that pollution is a coordination problem, but we can't solve this coordination problem unless we are able to protect the rights of both the victims and the sources. Otherwise, in the Rothbardian approach, where we protect mainly the rights of polluters, then there's no incentive for polluters to adjust their behavior to accommodate the conflicting interests of victims. And if we take the alternative approach, have criminal sanctions or injunctive approach against polluters without acknowledging individual victims, then the victims have insufficient incentive to adjust their activities or their plans to the interests of polluters. The system basically breaks down. What we have here, and now going to problem three, I call the problem of the missing piece. We have a missing piece. And what's the missing piece in a large amount of this Austrian economics literature is the missing piece is the price mechanism, at least as applied to environmental mass torts. It's a good Austrian principle that the best mechanism for coordinating the activities of large numbers of people who are widely dispersed is the price mechanism. I've been told, I don't know whether this is really true, but I've been told that Hayek's paper, 1946 AER paper on the use of knowledge in society is the single most widely cited work in Austrian economics. I don't know if that's really true or not, but some of these people that count citations say it's true. So how do we get the price mechanism to work here? Well, in areas where property rights are established and enforceable, prices arise naturally out of the interactions of supply and demand. But in the case of environmental mass torts, where we don't have any workable mechanism for protecting property rights of both parties or of all parties, then we're not going to get any prices. So if we're going to have prices at all, if we're going to solve the coordination problem, and if we're going to solve the coordination problem through the price system, since tort law, unaided by the price system seems not to work, then we have to have some kind of artificial insemination to inject prices into the system, which means that we have to look at alternatives like emissions trading and pollution fees. Now, I know that as soon as I mentioned these in an Austrian setting, we're going to get people rolling their eyes and saying, no, no, no, not that socialist BS again. But I really think that these mechanisms, that there's a purely Austrian case for reexamining these mechanisms. So I would like to, and at the same time, not only a positive Austrian case for reexamining them, but I think some of the Austrian critiques of emissions trading and pollution fees that have been widely advanced are misplaced. First of all, let me just briefly outline positive Austrian case for emissions trading. This seems to me like the most natural Austrian approach because in fact, emissions trading would emerge spontaneously from Rothbardian concepts of environmental property rights if they were given a chance, if they weren't blocked by some action of government to prevent recognition of these property rights. Rothbard uses an example of an airport that is established in the middle of nowhere and starts emitting noise. And he says that by emitting noise into a place where nobody hears it, then the airport homesteads rights to noise pollution, homesteads of noise pollution easement. Then later, somebody comes in and moves around and builds a house in the area. Well, at the time the guy builds a house, Rothbard says, suppose the airport is emitting X decibels of noise pollution. The new coming homeowner has no claim against the airport for that because the price he paid for his property reflects the fact that that nuisance was already there. He'd be coming to the nuisance to use Rothbard's term. But if the airport then expands and starts to emit two X decibels of pollution, then the homeowner has a case because the airport has exceeded the number of emissions that it homesteaded. So out of this homesteading process, as Rothbard sees it, we have a number of pollution existence which is greater than zero but less than infinity. In other words, pollution easements become the scarce good. Second principle that Rothbard insists on is that these pollution easements are separable property. If you want to trade in the noise pollution easements, you don't have to sell the whole airport in order to sell your noise pollution march. They could be traded separately. You could, for example, trade them among different airports, one of which was built in a denser area than another or one of which had a higher cost abatement technology. And furthermore, easements could be bought up by, let's say, a property developer who wanted to enhance the value of the property so he could buy up these easements and leave them unused and so forth. And as this develops, the price of these homesteaded easements, once congestion has put a cap on the number that were issued, would become, the price of the easements would become the price that you need to to coordinate ideas, the price signal would signal everybody from airlines, air travelers, homeowners, and so forth. So it seems to me that there's nothing at all here that's inherently objectionable from an Austrian point of view about emissions trading. It's a perfectly natural market mechanism. And I think that instead of dismissing this whole idea that Austrians ought to be willing to engage in practical discussion on how to facilitate the emergence of such markets and pollution easements with the least amount of state intervention and the least distortion to the market that would emerge. For example, Austrians should be willing to discuss issues like how do we determine which pollution rights have been legitimately homesteaded? How do we determine how these legitimate, the standards by which these legitimately homesteaded rights are enforced? How trading should best be implemented and so forth like that. So this is task number two here. I would like to see some discussion of these. I don't wanna talk a lot about pollution fees. If I'm talking about market mechanisms to a neoclassical audience, there tends to be greater sympathy for pollution fees than there is for emissions trading. Probably the opposite is the case in a more Austrian oriented argument. But I would just like to point out one thing, that the simple objections that no, no, pollution fees are just another form of tax and all taxes are bad and that's the end of the discussion. This is not an adequate objection. It's not an intellectually honest objection. The reason is that nobody in their right mind would simply propose adding pollution taxes on top of all the taxes we have now. Instead, we want to introduce pollution taxes as part of a revenue neutral tax reform in which pollution fees replace some other form of taxes like payroll taxes or corporate taxes or taxes on capital or whatever that also distort the coordination process. In other words, what we need here is an Austrian theory of tax reform into which we can insert this particular type of taxes. To say that in some anarcho-capitalist utopia, there would be no taxes at all is beside the point. That's simply another example of the nirvana fallacy. Instead, we should be taking a more realistic approach, a Hayekian or classical liberal approach which admits the notion that the state is going to exist, that it has some legitimate functions, that its legitimate functions are going to have to be supported by some level of taxation, and the discussion then switches to which kinds of taxes are least objectionable. And I would argue, in fact, to have argued elsewhere some length that pollution taxes in many ways are less objectionable than many of the taxes we have now. Now, let me turn. I said that we could make a positive case for emissions trading and pollution fees, but I would also like to deal with a couple of what I think are misplaced Austrian objections to these mechanisms. I'll look at these, particularly as developed by Roy Cardado. I was disappointed to find he wasn't going to be here. He's another person I could probably get some reaction out of. But the first objection that Cardado raises equally against emission fees and emissions trading and pollution fees is the calculation objection. He says, and there's a long quote in my paper that goes, basically, to the effect everybody knows to the litany that the central authority in order to implement an optimal pollution fee or an optimal pollution cap would have to know and advance the exact amount of externality costs and the exact harm done to each victim and the exact debatement costs, not only under current but future technologies and so on and so forth. I don't think that this is a valid objection. For several reasons, the most important one is that this calculation objection really is borrowed from the socialist calculation debate. But the analogy between the applicability to environmental economics and to the socialist calculation debate is misplaced because the socialist calculation debate concerned the allocation of goods for which perfectly good functioning market institutions were an existing reality, goods like wheat, rubber, tin, and so forth. And basically the argument there was whether or not some hypothetical set of central planning or socialist pseudo market, Oscar Longa type institutions could do a better job of coordinating these activities than could the actual functioning markets we have. And of course, as everybody knows, here we got the cover of the book right over there, Economic Calculation, Socialist Common Wealth. When you put the question that way, hands down real world markets work better than socialist planning. But in the case we're looking at, there are no functioning markets, and this is the whole reason we have a problem. There are no markets for air rights. There are no markets for many types of water rights. There are no markets for ozone pollution and so forth. So the calculation problem is irrelevant there, really. And we're thrown into a situation where we can't make an exact calculation, but nonetheless, we have to either choose to act or not to act. The position of an administrator of a emissions trading system is not like the position of a socialist planner. It's more like the position of a marketing manager. Marketing manager is supposed to say, well, as corporate president asks the marketing manager, how much should we spend on advertising our new car? Well, there's no scientific way to calculate an optimal marketing budget. Marketing is an art, not a science. It goes by rules of thumb, seat of the pants, judgment, and so forth. So the marketing manager comes up with a number full well knowing that this doesn't represent any exact calculation. But one thing that the marketing manager does know that the fact that he's unable to come up with an exact calculation of the optimal amount does not in itself constitute proof that the optimal amount is zero. Whereas Cordata's objection to pollution taxes or emissions trading really amounts to saying that because we don't know what the optimal level of the tax is or what the optimal, you shouldn't even say tax, because we don't know what the optimal price is for pollution rights. Therefore, we should do nothing, which means to assume that the optimal price is zero. I think that's, in my view, demonstrably false. Now, the second objection which Cordata and others bring out against both pollution fees and emissions tracking is what I call the compensation objection. The fact that these are deficient in that they do not compensate victims as tort law ideally would do. Well, on a philosophical level, I'm completely in agreement with that. I agree that the harm done by pollution should be compensated to the victims. But again, as an objection in practice, this fails. Again, we have to take a comparative institutional approach. The proper approach is not to compare the official price mechanisms with an ideal tort institution that would accurately compensate victims. We have to compare them with the available institutional alternatives. Available institutional alternatives happen to be either a tort law system which in practice gives pollution victims no opportunity of redress or existing alternative B is our current system in environmental regulations which operates largely on a command and control basis and is notoriously faulty. The second problem here is that if it's impossible both to deter wrongful actions and to compensate victims, it seems obvious to me that it is better to deter harmful actions than to do neither. Ideally, we would both deter and compensate. If we can't both deter and compensate, the fact that we can't compensate doesn't mean that we shouldn't deter. It means that we deter as best we can. Everybody accepts these principles if we apply them to things like shoplifting or rape or murder or something like that. Shoplift or rapist or murder, the cops grab them and they throw them in jail from points of view of some theories of libertarian justice, which I think are legitimate. Ideally, in some ideal world, there would be some way by which the victims of those crimes would be compensated. But the fact that we can't compensate doesn't mean that we should just let rapists and murderers run around and do whatever they want. We deter even when we can't compensate. In other words, what we need here is an Austrian theory of the second best. Well, I'll try to wrap up here and still leave a couple minutes for questions. Let me come back to the questions I started with. What progress has there been toward making progress toward a scientific revolution with the Austrian paradigm in this one narrow area that I'm looking at of environmental economics? Have Austrians address problems that people think are important? Yes, to a degree, they have addressed properties that they think are important, although I would have to say that there's a disturbing, to me, disturbing tendency in the literature which purports to be on Austrian economics to drift off into Austrian science, or I should say in the pseudoscience. That is that when Austrian writers encounter a problem like climate change, which they realize that their economic tools are incapable of solving, they react by pretending that the problem doesn't exist. Well, it may exist or it may not exist. I don't want to get into that argument here. I got into a long, long discussion of that in a paper in the Cato Journal in 2006 that I'll refer you to if you want to see that. But the point here is it's not sufficient to show that the science in these areas is unsettled. It's not sufficient to show that the science is unsettled because as economists, Austrians ought to be prepared to offer hypothetical solutions on the basis of what if chicken little is right to use how Terry Anderson puts this. In his book on Austrian economics, he also expresses some skepticism about these scientific issues, but he says, okay, what if I'm wrong? What if the climate change is real? What would we do about it? And then the second question was, do Austrians offer practical policy proposals or just pure theory? Again, in case of land use, water rights, urban land, fisheries, forestry, these things, yes, the property rights approach in the hands does offer practical alternatives. In fact, these are getting some real respect even within the environmental community that was originally skeptical about it. But in the case of these environmental mass torts, smog, acid rain, climate change and so forth, really, the leading Austrian writers have very little to offer but pure theory and they reject out of hand practical alternatives that might actually accomplish some of the goals that they profess to pursue. The third question I asked was, whether Austrians have offered solutions that are unique, not just a different way of achieving the same result as the dominant paradigm? Well, I don't think that the Austrian economics, the Austrian literatures applied to environmental economics is really always unique that this property rights approach has been also well developed within neoclassical or mainstream economic traditions and comes to much of the same conclusions. On the other hand, in areas where Austrians do have something unique that they can contribute to this discussion, for example, a theory of emissions trading that was built on free market principles of Rothbardian homesteading of pollution rights, here is an opportunity to make an original, purely Austrian conclusion that I don't see, that I just don't see. So when we put all these things together, really what I would end by saying is it seems to me that Austrian economics, Austrian paradigm is applied to environmental economics as a sort of a split personality. On a theoretical level, Austrian writers seem to delight in claiming the moral high ground and saying, yes, we're environmentalists too. Pollution is a violation of the property rights of pollution victims and it's naughty and we shouldn't allow it. But on a practical level, really, many concrete upshot is that a lot of the Austrian literature leaves pollution victims in the lurch. They invite them to sue but then they construct a set of legal standards which leave the pollution victims with zero chance of prevailing in court and that although tort law fails to solve these problems, unaided many Austrian rights oppose all government measures to protect pollution victims, however these are done, whether through regulation or through measures to make pollution pay and so forth. So really it comes down to it the environmental economics as professed by some Austrian writers at least ends up being a polluter's dream and the victim's nightmare offers very little of practical value to secure property rights, does nothing to encourage coordination and really ends up not doing very much to promote libertarian justice.