Karl Smith observes that, somewhat amusingly, in The Road to Serfdom Hayek ends up committing himself to a view of environmental regulations that’s well tot he left of where today’s center-left politicians are:
Nor can certain harmful effects of deforestation, or of some methods of farming, or of the smoke and noise of factories, be confined to the owner of the property in question or to those who are willing to submit to the damage for an agreed compensation. In such instances we must find some substitute for the regulation by the price mechanism. But the fact that we have to resort to the substitution of direct regulation by authority where the conditions for the proper working of competition cannot be created, does not prove that we should suppress competition where it can be made to function.
Of course the correct free market riposte to this proposal is that we can create a price mechanism. So instead of having the guys in the EPA building try to tinker with everyone’s factories, we could establish a legislative ceiling on the quantity of greenhouse gas emissions we’re willing to tolerate and then allocate permits to do it. That way the price mechanism — à la “the use of knowledge in society” — will be able to uncover the most economically efficient way of undertaking the reductions. But I guess Big Government Hayek doesn’t think that will work.
At any rate, I do think this is the issue that’s been underplayed in a lot of recent discussions of the institutional right’s funding sources. We’ve reached a point in the history of the world when the regulation of air pollution has become a first-tier political issues. And it’s naturally a controversial one since a lot of money is at stake. But there’s simply no support anywhere in the classical liberal tradition for the idea that an unrestricted right to pollute the air is part of “free markets” or any coherent conception of liberty or property rights. And yet opposition to carbon pricing and emissions regulations has become an article of faith across the American right. Some of that is political opportunism, some of it is ignorance, but a lot of it is the impact of corporate cash, especially from the extractive industries.