Compensation for pollution

Been a while since I quoted Ross Gittins on these pages, but here he is in today's herald talking about why polluter's shouldn't get compensation under the emissions trading scheme. I couldn't agree more. One thing that constantly irks me about free-market capitalists, is the double standard. How come you can claim the market rules all over some things like electriciy demand, but have your hand out for pay-outs over others, like an attempt to stop the catastrophic effects of your industry.

There's no insurance against loss for capitalists in a capitalist economy. Market-caused change raises or lowers the capital value of businesses every day. No one suggests losers should be compensated by the taxpayer.

Similarly, businesses gain or lose from changes in government policy all the time. No one suggests the losers should be compensated, nor that windfall gains be confiscated. To wish otherwise would be to put elected governments in an intolerable straitjacket, greatly constraining their ability to act in the public interest.

No one compensated the tobacco companies when governments took to discouraging smoking, nor James Hardie when governments acted against asbestos. No one has compensated the smash repair industry for all the things governments have done to reduce road accidents and deaths.

In any case, any investor in power stations who didn't see restrictions on carbon emissions coming was a fool.

If the private owners paid too much for their power stations the capitalist solution is clear: cop the loss and sell to new operators at a more realistic price without the station losing an hour's production.