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I assume the rationale for energy efficiency rules is environmental.

Is there a coherent libertarian response to externalities? Absent a brilliant scheme to assign property rights to the atmosphere, is some government action necessary? It’s ok to question the gloomy climate change predictions, but that sidesteps the question. For the sake of argument, suppose that man made global warming is real and harmful. Then what?

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There are property rights-based ideas out there for managing externalities. They're not perfect, and there's disagreement about them.

But, the pitfall in all this is the "nirvana fallacy" trap. Imperfect market solutions are judged by their imperfection, and not by comparison to what governments are doing.

Frankly, if governments did nothing about climate change, we'd be better off than what they're doing now, even if AGW is of sufficient magnitude to be a problem. All they're doing now is burning wealth pointlessly, and that wealth doesn't just grow back like a lawn that's been mowed. Governments could facilitate market remedies - and that's beyond the fact that "green" is a product that many companies are already selling voluntarily and without government mandate.

Some have argued that a carbon tax would be a "market" remedy to AGW, but no one has told me how such a tax would be quantified. For it to be "market," there'd have to be some substantive and mathematical connection to the impact on the environment AND the money would have to move around the market, not simply be sucked up by the government to be spent as it desires. We simply don't know how much harm a unit of carbon emissions causes.

We do know, however, that the coercive decarbonization being imposed on Western societies is utterly pointless. The rest of the world isn't going to follow suit.

What *can* be done in anticipation of the rest of the world not following suit is, as I've blogged here before, three things:

1 - build lots of nuclear plants, domestically. Go with standard, modular designs that can be swapped in and out of plants, and export the tech to friendly nations.

2 - drill for natural gas, and export it to nation's that'd burn coal. Since it produces a quarter of the carbon per unit energy as coal, NG would advance "green," while benefiting the economy.

3 - invest in geoengineering research, in the event that we get to where that's the best remedy to cool the planet.

Yes, this is a government/market hybrid remedy and not pure market, but it's a major step in the right direction.

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