When I hear these messages, I hear that I’m going to have to sacrifice. If I do this to save the world and no one else does, I loose. I ride my bike down the street and get run off the road by my neighbor in the Hummer. We share the fate of the planet. I’m the one in the weeds. He’s driving past saying “thanks for doing your part, chump” You have to be pretty committed to put up with that deal. Those who are committed feel embittered. Those who are not committed won’t do it, even if they are inclined to. This is what Dick Cheny was alluding to. Not enough people are going to take conservation seriously on those terms.

Industry groups favor of voluntary programs to manage public costs, but when you consider the behavior of competitive firms in a market economy, the prognosis is even worse. Those that incur additional costs or forego revenue for the sake of the public interest are at a competitive disadvantage to those who continue to cost shift through pollution. The market considers this inefficient behavior and those firms will eventually be driven out of business. Even companies who want to do the right thing are punished by the market for doing so.

Now consumers can vote with their dollars for the good guys, but that green seal is just one of many factors consumers balance when they make a choice. That mechanism requires consumers to collect and synthesize more information and weigh another dimension of value when they make choices. This of course assumes that actually have a real choice in the first place. These factors will all interfere with the ability of consumers to send market signals that are meaningful. It is not realistic to expect consumers to enforce environmental standards.

We are all in this together and this means we have to act like it. So how do you change behavior without putting on the jack boots and becoming the carbon police? What we make easy and what we make hard define the default settings of American lifestyles. Rather than requiring individuals to make sacrifices, make the right choices the ones that are most convenient. We can make small and subtle changes in how we design streets, how buildings are oriented relative to their parking spaces, where the stairs and elevators are in a building. Changes like these influence but to not regulate behavior. If you want to drive or use the elevator, this is still a free choice. You just need to make doing the right thing a little easier and the wrong thing a little harder.
Here is where I think there is some room for us an the libertarians to find some agreement. Certain individuals can still make that choice, but subtle changes will affect the relative probability and this will add up to a measurable change in the aggregate. The sum total of all the choices individuals make can change, even if you do not force a different choice. When we talk about driving less, biking more, using less water, using less energy and all those good things, the environment is not affected in any measurable amount by the behavior of any one individual. It is only the behavior of people in the aggregate that matters.

For businesses, changes in what we require will help the market send the right pricing signals and will affect the relative competitiveness of businesses that engage in public behavior. If all businesses have to operate in the same way, the market does not punish the good actors and the playing field is level. Efficiency reflects real efficiency and not cost-shifting. Consumers are relieved of the burden of having to make tradeoffs across a public interest dimension and can instead focus on those attributes that mean the most to them. Both of these will require public policy changes. That is what “we’re all in this together” means.