The Review of Austrian Economics

, Volume 26, Issue 2, pp 183–206 | Cite as

Austrian economics and climate change

  • Graham DawsonEmail author


The aim of this paper is to outline and defend an Austrian policy response to climate change. A privatised climate change policy, based on Austrian welfare economics, is the only way to defend to the greatest possible degree the liberties both of fossil fuel users and people whose property rights will be violated if carbon emissions cause climate change. Neoclassical and ‘Post-Austrian’ analyses of climate change are both theoretically unsound and impractical, in requiring for their implementation a foundation in reliable scientific knowledge that is not available. Anthropogenic climate change is a putative interpersonal conflict rather than market failure. The use of fossil fuels should be subject to side-constraints designed to avoid the infringement of other people’s property rights. Tort litigation would protect these rights, where necessary. Litigation would also promote the public understanding and even the advancement of climate science.


Climate change Neoclassical economics ‘Post-Austrian’ economics Austrian economics 


B5 K3 Q5 


  1. Adler, J. H. (2009). Taking property rights seriously: The case of climate change’. Social Philosophy and Policy, 26, 296–316. Cambridge University Press.CrossRefGoogle Scholar
  2. Allen, M. (2003). Liability for climate change. Nature, 421(27), 891–892.CrossRefGoogle Scholar
  3. Anderson, T. L., & Leal, D. R. (2001). Free market environmentalism. New York and Basingstoke: Palgrave.CrossRefGoogle Scholar
  4. Baliunas, S. (2002) ‘The Kyoto Protocol and Global Warming’. Melbourne, Australia: The Lavoisier Group Inc.Google Scholar
  5. Byatt, I., et al. (2006). The stern review: a dual critique, Part II: economic aspects. World Economics, 7(4), 169–232.Google Scholar
  6. Burges Salmon, L. L. P. (2005). ‘Climate change litigation’. Environmental Legal Developments, Bristol, UK: Burges Salmon LLP, May.Google Scholar
  7. Carter, R. M., De Freitas, C. R., Goklany, I. M., Holland, D., & Lindzen, R. (2006). ‘The stern review: a dual critique, part I: The Science. World Economics, 7(4), 167–198.Google Scholar
  8. Cline, W. R. (1992). The Economics of Global Warming, Institute of International Economics, Washington, D.C.Google Scholar
  9. Coase, R. H. (1960). The problem of social cost. Journal of Law and Economics, 4, 1–44.CrossRefGoogle Scholar
  10. Cordato, R. (1992). Welfare economics and externalities in an open ended universe: a modern austrian perspective. Boston: Kluwer Academic publishers.CrossRefGoogle Scholar
  11. Cordato, R. E. (1999). Global warming, Kyoto, and tradable emissions permits: The myth of efficient central planning. Studies in Social Cost, Regulation and the Environment No. 1, Institute for Research on the Economics of Taxation, September.Google Scholar
  12. Cordato, R. (2004). Toward an Austrian theory of environmental economics. The Quarterly Journal of Austrian Economics, 7(1), 3–16.CrossRefGoogle Scholar
  13. EEA. (2004). Energy subsidies in the European Union: A brief overview, EEA Technical Report 1/2004, European Environmental Agency, Luxembourg: Office for Official Publications of the European Communities.Google Scholar
  14. Freddoso, D. (2010). Suing our way to a carbon-free world. Washington, DC: The Examiner, March 24.Google Scholar
  15. Grossman, D. A. (2003). Warming up to a Not-So-Radical Idea: Tort-Based Climate Change Litigation. New York: Columbia Journal of Environmental Law, Vol. 28, No. 1.Google Scholar
  16. Hayek, F. A. (1960). The Constitution of Liberty. Chicago: The University of Chicago Press.Google Scholar
  17. Helm, D., Hepburn, C., & Marsh, R. (2005) ‘Credible carbon taxes’, in Helm, D. (2005).Google Scholar
  18. Hope, C. (2005). Integrated Assessment Models. In Helm, D. (2005).Google Scholar
  19. Hoppe, H.-H. (2004). Property, causality, and liability. The Quarterly Journal of Austrian Economics, 7(4), 87–95.CrossRefGoogle Scholar
  20. Huerta de Soto, J. (2009) The Theory of Dynamic Efficiency, London and New York: Routledge.Google Scholar
  21. Hughes, A., Lin, E., & Nesser, I. (2001). Is the Climate Right? Climate Change Science, Legal Causation, and the Feasibility of a Climate Change Lawsuit. Yale Environmental Protection Clinic, Report No. 45.Google Scholar
  22. Jaeger, C. C., Krause, J., Haas, A., Klein, R., & Hasselmann, K. (2008). A method for computing the fraction of attributable risk related to climate damages. Risk Analysis, 28(4), 815–823.Google Scholar
  23. Johnston, J. S. (2010). Global Warming Advocacy Science: a Cross Examination. University of Pennsylvania Institute of Law and Economics Research Paper No. 10-08.Google Scholar
  24. Kirzner, I. M. (1997). How Markets Work: Disequilibrium, Entrepreneurship and Discovery. IEA Hobart Paper 133, Institute of Economic Affairs. Google Scholar
  25. Knutti, R. (2008). Why are climate models reproducing the observed global surface warming so well? Geophysical Research Letters, 35, L18704. doi: 10-1029/2008GLO34932.CrossRefGoogle Scholar
  26. Lawson, L. (2010). House of Lords, 22 December, quoted in, 23 December.
  27. Mises, L. (1949). Human action: a treatise on economics. New Haven: Yale University Press.Google Scholar
  28. Mishan, E. J. (1981). Introduction to normative economics. New York: Oxford University Press.Google Scholar
  29. Morris, J. (2003). Climbing out of the hole: sunsets, subjective value, the environment and English common law. Fordham Environmental Law Journal, 14(2), 343–374.Google Scholar
  30. Morris, J. (2008). Private versus public regulation of the market. In Copp (ed.) 2008.Google Scholar
  31. Nentjes, A. (2005). Austrian views on environmental protection. In Backhaus (ed.) (2005), pp.347–370.Google Scholar
  32. Nozick, R. (1974). Anarchy, State, and Utopia. Oxford: Blackwell.Google Scholar
  33. Pareto, V. (1906) Manual of Political Economy, A. S. Schwier (translator, 1971), Augustus M. Kelley.Google Scholar
  34. Pfeifer, S. (2011). Carbon floor price boost for “green” energy. London: Financial Times, March 23.Google Scholar
  35. Plath, S. (1981). Collected Poems. London: Faber and Faber.Google Scholar
  36. Prosser, W. L. (1971). Handbook of the Law of Torts (4th ed.). St. Pauls: West Publishing.Google Scholar
  37. Rothbard, M. N. (1990) ‘Law, Property Rights, and Air Pollution’, in Block (ed.) (1990) (reprinted from The Cato Journal, vol. 2, no. 1, Spring 1982.Google Scholar
  38. Royal Society (2010) Climate change: a summary of the science, September.Google Scholar
  39. Schäfer, H­B. (2000). Tort Law: General. In Bouckaert, B., & De Geest, G. (eds.) (2000).Google Scholar
  40. Schäfer, H­B., & Schönenberger, A. (2000). Strict liability versus negligence. In Bouckaert, B. & De Geest, G. (eds.) (2000).Google Scholar
  41. Sheppard, N. (2007). Law Firms Preparing to Sue Over Global Warming. NewsBusters, June 26.Google Scholar
  42. Singer, F. (1999). Human contributions to climate change questionable. EOS, Transactions American Geophysical Union, (80) p. 183 and pp. 186–7.Google Scholar
  43. Smith, A. (2000). The Petrol Tax Debate. Institute for fiscal studies, Briefing Note No. 8, July.Google Scholar
  44. Spencer, R. W., & Braswell, W. D. (2011). On the Misdiagnosis of Surface temperature Feedbacks from variations in Earth’s Radiant Energy Balance. Remote Sensing, July,
  45. Stern, N. (2006) The Economics of Climate Change: the Stern Review, HM Treasury,
  46. Stern, N. (2007). The economics of climate change: the stern review. Cambridge: Cambridge University Press.Google Scholar
  47. Stott, P. A., Stone, D. A., & Allen, M. R. (2004). ‘Human contributions to the European heatwave of 2003’. Nature, 432, 610–14.CrossRefGoogle Scholar
  48. Svensmark, H., & Calder, N. (2007). The chilling stars: A new theory of climate change. Triplow: Totem Books.Google Scholar
  49. Swanson, T., & Kontoleon, A. (2000). ‘Nuisance’ in Bouckaert, B., & De Geest, G. (eds.) (2000).Google Scholar
  50. Tietenberg, T. (2005). The tradable-permits approach to protecting the commons: lessons for climate change. In Helm, D. (2005).Google Scholar
  51. Tol, R. S. J., & Yohe, G. W. (2006). A review of the stern review. World Economics, 7(4), 233–50.Google Scholar
  52. Warne, P. (2010). Climate-change litigation post-Copenhagen. Energy, 14 October.Google Scholar

Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  1. 1.Visiting Research Fellow in the Max Beloff Centre for the Study of LibertyThe University of BuckinghamBuckinghamUK

Personalised recommendations