Catastrophe-- Part 4 of a series

The people who object to an energy policy for the U.S. and reject the Kyoto agreement, argue that it is too costly. The environmentalists say that the costs are not fully accounted for. They point to failures in the market. But the problem is not inherent in markets, but rather in the property rights that are prior the market. A steel plant would not pay for labor if slavery were legal. And, it would not pay for iron ore if the pits were not owned. The question is who owns.
If the distribtion of rights is acceptable, there is little need for regulatory/administrative rules. This may sound like the familiar "markets are superior to regulation," But, it is quite different. There is no way that market processes can change property rights to those that we might like. Rights are anteceent to the market.