Global Warming--The Compensatory Principle

Robert Samuelson recently wrote on global warming in the Post. In passing he said that global warming could do good as well as harm. For some reason, the statement irks me. Possibly there's no change from the present about which that couldn't be said, at least from certain perspectives. Suppose an unseen asteroid hit the earth tomorrow at 9:05 am and completely destroyed all life on the planet. Still, that destruction would do good--it would end the suffering of many people and prevent the doing of much evil.

But on to a more serious take. Yes, grant that global warming will change much, and some of the changes will be for the good. Some land now a desert may bloom, some untolerable environments may become subtropic resorts, inland areas will become great seashores. It's entirely true that global warming will create both winners and losers.

I know more history than economics. Henry George in the 19th century wrote a book pointing out that most increases in the value of land were due to society. He argued that was moral justification for taxing land values to take back the unearned increase.

Conservative economists (almost a redundant phrase) talk of "rent-seeking" behavior. From Wikipedia:

"The phenomenon of rent-seeking was first identified in connection with monopolies by Gordon Tullock, in a paper in 1967. It takes place when an entity seeks to extract uncompensated value from others by manipulation of the economic environment -- often including regulations or other government decisions."

I'm adopting the same moralistic attitude when I say that the winners in the global warming lottery will gain unearned value, and therefore do not deserve to keep it.

In a "rational world" (an oxymoron), we would tax the winners to compensate the losers. The people in Bangladesh, the Pacific island nations, Netherlands, Miami, New Orleans, and Wall Street would be compensated for their losses by those who gain, whoever they may be. If the Australian desert blossoms and the Midwest dries up and blows away, the Aussies would compensate the Yanks.

There's precedent for this--in time of war democracies tend to tax the profits of those who supply the armies at a higher rate--a "windfall profit tax". (That's an ancient metaphor, I assume coming from the apples that you find on the ground after a fall windstorm; no one had to climb the tree to pick the fruit.)