Free Markets Won’t Save Us From Global Warming

John WhiteheadThe water market will never be a “free market” in the true sense of the word. A plea to the water authority (ie, government) to price water more rationally is a plea for policy reform towards a better use of incentives. Free markets only exist when there is no government regulation of buyers and sellers, no taxes, no subsidies, and no nothing. An efficient free market for water is a difficult thing to pull off since it is a common-pool resource. It is easier for the pizza market to operate efficiently since pizza is a private good.

I don’t think adaption to climate change can be accomplished efficiently by government taking a hands off approach. You can’t privatize much of the natural environment.

—John Whitehead
Water Pricing, “Free” Markets and Climate Change

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