Free-market environmentalism

Free-market environmentalism argues that the free market, property rights, and tort law provide the best means of preserving the environment, internalizing pollution costs, and conserving resources.

Free-market environmentalists therefore argue that the best way to protect the environment is to clarify and protect property rights. This allows parties to negotiate improvements in environmental quality. It also allows them to use tortes to stop environmental harm. If affected parties can compel polluters to compensate them they will reduce or eliminate the externality. Market proponents advocate changes to the legal system that empower affected parties to obtain such compensation. They further claim that governments have limited affected parties' ability to do so by complicating the tort system to benefit producers over others.

While environmental problems may be viewed as market failures, free market environmentalists argue that environmental problems arise because:

Though many environmentalists blame markets for many of today's environmental problems, free-market environmentalists blame many of these problems on distortions of the market and the lack of markets. Government actions are blamed for a number of environmental detriments.

Markets are not perfect, and free-market environmentalists assert that market-based solutions will have their mistakes. Through strong feedback mechanisms such as risk, profit and loss, market-driven have strong incentives to learn from mistakes.

The market is a non-political allocation device. Many environmentalists proposals call to return resources from markets to become political problems.

Some economists argue that, if industries internalized the costs of negative externalities, they would face an incentive to reduce them, perhaps even becoming enthusiastic about taking advantage of opportunities to improve profitability through lower costs. Moreover, economists claim this would lead to the optimal balance between the marginal benefits of pursuing an activity and the marginal cost of its environmental consequences. One well-known means of internalizing a negative consequence is to establish a property right over some phenomenon formerly in the public domain.

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