I understand the concept in libertarianism that if corporation A dumps toxic waste in a river and downstream of this river corporation B bottles this water for consumption, that corporation B has had its property rights violated and thus can sue corporation A for damages.

There is the case, however, of Chlorofluorocarbons (CFCs) which were phased out under the Montreal Protocol - which along with the related Kyoto protocol were the first universally ratified UN treaties. These chemicals, used as refrigerants, had been shown to be causing a hole in the ozone layer over the antarctic which could have spread across the globe.

If, under a libertarian model, a person is responsible for their infringements on the property rights of others, yet the results of an action are spread across the whole globe and intractable, how, if at all, would the person or company be held responsible? The real-world response of a global commitment by all states to regulate the use of such a chemical seems antithetical to the libertarian model.

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    Doss the libertarian model disavow a government acting as a proxy on behalf of its citizens when all are impacted?
    – Barmar
    Dec 26, 2018 at 21:56
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    @Barmar - depends on which libertarian model. However, in some of them, the conceptual thinking is that the power of government in general is so bad en masse, that granting powers in some rare circumstances where that power can be useful and good (as can be plausibly argued in the case of externalities) is on balance a bad thing as it will as a consequence grand the government powers in many other things where as per libertarianism it shouldn't have those powers.
    – user4012
    Dec 26, 2018 at 22:02
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    Note that some systems of libertarian thought consider an individual's property rights to extend upwards to the atmosphere. creativecommonlaw.com is one such system
    – blud
    Dec 27, 2018 at 22:58

4 Answers 4


Same way CFC problem was addressed. As you will notice if you look at the detail of the issue (e.g., this blog post - which is overall very pro-regulation and pro-environmentalism and aggressively anti-free-market), CFC regulation by the government happened after the CFC market shrunk more than 75% already. In other words, 75% of the problem was solved by means that were arguably within Libertarian tool-set - publicity, etc... - even before the "official" libertarian tool-set (tort lawsuits against offenders) were engaged.

You will note that this isn't a singular example. Same libertarian-acceptable approaches worked for many other negative externalities: obesity-causing companies (fast food, junk food) have changed their product offerings due to education campaign of their customers.

For completeness, there are two main types of libertarian approaches:

  1. Make sure people are aware of the externalities.

    Then, the externalities become costs via social pressure (brand damage; people preferring competing products that don't have same externalities - e.g. electric cars vs. carbon fueled cars).

  2. If the externalities are provable, use lawsuits for damage.

    If a specific harm can be proven, the sources of extrenalities can be sued for that harm. That imposes costs on externalities as well - both legal risk and financial cost if the lawsuit is lost.

Economic foundation for this can be found in the Coase theorem (discussed in detail in @lazarusL's answer). See this UCB paper for a specific examples.

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    Nitpick: A 75% reduction does not necessarily mean that the problem is 75% solved. It's often more reasonable to assume that an X% reduction always requires the same effort regardless of the initial level. If the target is 10% of the original, the first 75% takes 60% of the effort. If the target is 1%, we are just 30% done after getting rid of the first 75%. Dec 27, 2018 at 2:12
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    "Use lawsuits" is a very specific logical implication of the more general "externalities should be rolled into property rights", such as anglers' rights in English law. Dec 27, 2018 at 7:05
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    (+1) While this answers provides the libertarian point of view, it doesn't mean this POV is going to work. As Carduus points in their answer, negative externalities were quantified used public funded investigations - without them, the problem would have been detected when the ozone layer had vanished. And CFC use declined before restrictions because there were alternatives. Currently we have a problem with CO2, but no clear alternatives (renewables are expensive, so are electric cars) and, as such, the market is failing to solve this problem - and in fact, is preventing regulations.
    – Rekesoft
    Dec 27, 2018 at 13:05
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    @Rekesoft Which is also not to say that stern legislation would work either. Political will is rather independent of ideology - human action is human action and when we don't have any options the choices we make are rather transparent. China has been secretly going nuts with CFCs for the same reasons - it's a cheap alternative and they can't afford to play clean. The west has been applying pressure recently, but other than war it's all we can do. International politics is really quite libertarian in that regard - war is not a palatable option and so cooperation and convincing is all we have.
    – J...
    Dec 28, 2018 at 15:01
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    There are a lot of other potential barriers that would prevent lawsuits from magically ensuring the perfect marketplace. Getting broad participation on each of the tens of thousands of class action lawsuits would be a burden. Soliciting for plaintiffs may be a struggle as many people avoid strange phone calls and spam e-mails. There are many criticisms of the Coase theorem demonstrating its assumptions (perfect information, rational actors, etc.) virtually never exist in the real world and that there are other game theory problems obstructing its application.
    – John
    Dec 29, 2018 at 0:59

If someone was concerned about this impact (and no generous billionaires step up to fix it out of the goodness of their hearts) they'd first need to be able to quantify and qualify said impact in a way in which it can be attributable to individual sources. They'd have to fund that research themselves, with few hopes of an ROI for their labor. Once they could prove beyond a reasonable doubt that it was Exxon with the Oil in the Caribbean Sea (and its impact in dollars), then they'd task whatever bare-bones contract enforcement police exist to collect from Exxon. Repeat ad nauseam with each organization causing world-harm, or at least until the concerned individual ran out of money.

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    Or to put it more concisely, it doesn't. Dec 26, 2018 at 21:18
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    Sadly, 'It doesn't.' is only eleven characters, and SE requires fifteen. :P
    – Carduus
    Dec 27, 2018 at 13:31
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    You don't need billionaires. You just need Kickstarter and concerned people, or even concerned businesses.
    – jpmc26
    Dec 28, 2018 at 21:56
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    All of the conditions already exist to use kickstarter to bankroll class action lawsuits. To my knowledge, kickstarter-funded class action lawsuits against negative externalities are not having a noticeable impact on saving the environment. What would explain that? Other than the obvious explanation -- that it is limited by the average person's willingness to undertake a difficult endeavor, combined with the average person's belief that they probably wouldn't win a lawsuit if they pursued one, combined with lack of awareness of said kickstarters, low participation rates of anything, etc.
    – John
    Dec 29, 2018 at 1:18
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    Most Americans are not Libertarian lawsuit warriors, and no matter what you do, that isn't going to change. The average person just doesn't sue that often. "According to the most recent data, only 10% of injured Americans ever file a claim for compensation and only 2% file lawsuits. All told, tort cases represent just 4.4% of all civil caseloads and that percentage has been steadily declining." theguardian.com/commentisfree/2013/oct/24/…
    – John
    Dec 29, 2018 at 1:24

Very much what user4012 said, but there are other ways to convince and coerce people and corporations to do the right environmental thing.


The Inside Story Of How Greenpeace Built A Corporate Spanking Machine To Turn The Fortune 500 Into Climate Heroes

[They] unfurled a pair of 60-foot-tall banners on the front of each tower. The banners denounced Head & Shoulders, the antidandruff shampoo, for "putting tiger survival on the line" and "wip[ing] out dandruff & rainforests."

The problem is the aggressive manner in which the world's biggest palm-oil producers, based in Indonesia, have gone about meeting demand: burning and clear-cutting the nation's priceless tropical peat forests to the ground, then draining the underlying wetlands to make way for massive oil-palm plantations. As Greenpeace's banners made clear, that deforestation is destroying the habitat of the Sumatran tiger.

But truth be told, the animals are really beside the point. Greenpeace's tigers are a kind of decoy

"It's easy to say, 'If you're destroying forests, you're destroying tiger habitats,'" says Phil Radford, director of Greenpeace USA "It's harder to say, 'Do you know that forests store carbon and if we save the peat bogs we will trap all this carbon and methane in the soil?' We say both, but we start with the place that people are, the thing they care about the most first."

What seems to happen, inevitably, is the multinational company, eager to remove the stigma from its signature brand, promises to ensure that its products are sustainable and begins cancelling contracts with any third-party suppliers who fail to guarantee compliance.

Meanwhile, unlike several other environmental groups, including the World Wildlife Fund, the Sierra Club, the Environmental Defense Fund, the Audubon Society, Conservation International, and the Nature Conservancy, Greenpeace does not accept corporate or government funds. "We don't have anything for sale," says Rolf Skar, Greenpeace's forests campaign director. "What we learned from that is it was unrealistic to expect government to take the lead," Skar says. "In order for government to reform land use, generally they need some sort of consensus.

Giving Up On Government
Greenpeace's energetic crusade to turn corporate transgressors into eco-champions came about in response to a sudden realization that the traditional approach, pushing for government regulation, had become a spectacular failure.

"A lot of NGOs working on deforestation had a bit of a pipe dream that some sort of U.N. climate treaty or U.S. law, cap and trade or something, would save the day," says Rolf Skar. "The disappointment that was Copenhagen" — the 2009 U.N. climate summit widely regarded as a bust — "left a lot of us scratching our heads about what to we could go next."

In many of the key countries where Greenpeace operates, authoritarian regimes and rampant corruption can create further difficulties.

"What we've come to learn from Indonesia and other countries that are incredibly corrupt, is if you can flip enough companies, then civil societies and the companies together can get laws passed," Radford says.

Dealing with multinational corporations is a walk in the park. "Companies tend not to show up with automatic rifles and start shooting inches above your head," Skar observers, referring to the aggressive tactics employed by the Russian military in the arctic standoff.

They also worked to address the problem in your question about CFCs.

A Greenpeace staffer in Germany had worked with a scientist to pioneer a clean new refrigeration technology, dubbed Greenfreeze, which had since been widely adopted throughout Europe and Asia, resulting in a massive decline in the release of hydrofluorocarbons.

For an example with water and rivers (not air), Markets Not Capitalism, pg. 415 (PDF pg. 427)

The Clean Water Act versus Clean Water

For a perfect illustration of how legislative environmentalism is actively hurting environmental action, check out this short item in the Dispatches section of the May 2010 Atlantic. The story is about toxic mine runoff in Colorado, and describes how statist anti-pollution laws are stopping small, local environmental groups from actually taking direct, simple steps toward containing the lethal pollution that is constantly running into their communities’ rivers. Also, how big national environmental groups are lobbying hard to make sure that the smaller, grassroots environmental groups keep getting blocked by the Feds.

Near Silverton, the problem became bad enough to galvanize landowners, miners, environmentalists, and local officials into a volunteer effort to address the drainage… With a few relatively simple and inexpensive fixes, such as concrete plugs for mine portals and artificial wetlands that absorb mine waste, the Silverton volunteers say they could further reduce the amount of acid mine drainage flowing into local rivers. “In some cases, it would be simple enough just to go up there with a shovel and redirect the water,” says William Simon, a former Berkeley ecology professor who has spent much of the past 15 years leading cleanup projects. But as these volunteers prepare to tackle the main source of the pollution, the mines themselves, they face an unexpected obstacle – the Clean Water Act. Under federal law, anyone wanting to clean up water flowing from a hard rock mine must bring it up to the act’s stringent water-quality standards and take responsibility for containing the pollution – forever. Would-be do-gooders become the legal “operators” of abandoned mines like those near Silverton, and therefore liable for their condition.2

Under anything resembling principles of justice, people ought to be held responsible for the damage they cause, not for the problems that remain after they try to repair damage caused by somebody else, now long gone.


Why do property rights solve pollution problems? The answer comes from an important economic idea called the Coase theorem. Very simply, it states that if bargaining costs are zero, then an economically efficient resolution to any externality is possible by assigning property rights regardless of who you assign them to. A more detailed explanation can be found here. Property rights as a resolution work well when bargaining costs are low. For example if a wind turbine is imposing loud noises on a lone farmstead nearby it will be easy for the turbine and farm owners to negotiate whether the turbine operates. If the turbine is near a neighborhood and the property rights for noise are given to the turbine owners it may be very difficult for the neighbors to pool their resources and negotiate to buy back the rights to a quiet area. Even if they collectively value the quiet more than the profits of the wind turbine the coordination might be too costly to coordinate for an efficient outcome.

The chlorofluorocarbon example presents huge bargaining costs. Every person in the world has to be concerned about a growing hole in the ozone layer and many people can manufacture or use chlorofluorocarbons. Many libertarians might admit that this is too difficult to bargain and just assign responsibility to a regulatory body while still being biased towards assigning property rights in situations where bargaining costs are lower.

One libertarian option is to issue tradeable pollution permits. Private Environmental groups can then bid to buy these permits and prevent pollution from happening against companies that wish to use them to allow their factories. This option still involves significant government action as setting the number of pollution permits to is a big task that would have to be undertaken by the state.

Another option is to assign property rights to the people broadly and then litigate against the companies with a class action lawsuit. Lawyers could produce evidence for ozone layer depletion and then if they win, force polluters to pay damanges out to every citizen of the country. The legal system could assign damages according to common law understandings that would continue to pay out according to the rate of pollution. Many libertarians admire common law approaches to resolving externalities.

In terms of international policy, there is nothing inconsistent in a libertarian country taking action to protect the property of their citizens. If the property of local citizens is threatened by chlorofluorocarbon producers abroad, a libertarian government might be compelled to apply pressure legally, economically or even militarily to protect its citizens' property.

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    @pluckedkiwi I agree cap-and-trade isn't perfect, but ideally they would be auctioned off (with the proceeds used to pay for police and national defense) instead of given to campaign contributors ;)
    – lazarusL
    Dec 26, 2018 at 21:59
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    Asking me to buy a CFC pollution permit to keep it out of the hands of someone who would use it and thereby harm me is extortion. Dec 26, 2018 at 22:00
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    How is the judgement of a class action lawsuit enforced in a libertarian model?
    – Barmar
    Dec 26, 2018 at 22:10
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    @Barmar by the police. Many libertarians are minarchists who think that a minimal state is necessary to protect life, liberty, and property from criminals and hostile states. I'm not sure how an anarcho-libertarian state would resolve this.
    – lazarusL
    Dec 27, 2018 at 12:51
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    @DavidThornley Idk. Someone using their property rights to noisily generate power next-door and demanding that you pay them to stop is kind of like extortion. Similarly someone using their property rights to quiet to compel you not to noisily generate power unless you pay them is kind of like extortion.
    – lazarusL
    Dec 27, 2018 at 12:56

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