The Environment and Property Rights

Perhaps one of the most ambiguous subjects pertaining to liberty and the role of government is the question of the environment. I say ambiguous because there are certain assumptions that rule the subject, making counter-arguments seem trivial. For instance, it would seem silly for an atheist and a Christian to argue over the necessity of a certain religious rite. The atheist assumes that God doesn't exist, so to him, a religious rite would be inherently unnecessary. The argument is trivial to the atheist insofar as he assumes the non-existence of God.
In a similar manner, there are certain assumptions about the role of government with relation to the environment that must first be dealt with. My assumptions here are that individuals are free and cannot be punished for the actions of another individual or a group as a whole. This is not to say that whatever one does is morally right as long as it does not harm another person. There may be any number of moral responsibilities of an individual toward the environment. However, these responsibilities cannot be enforced by government without taking away the liberty that government purports to protect.
Those who argue for government protection of the environment often make the assumption that the environment is an entity in and of itself that requires or merits legal protection from the state. However, since the environment is not in and of itself a legally responsible entity, it also cannot be legally protected, only insofar as it is itself property of an entity that is legally responsible and protected. Thus, the "environment" can only be protected legally if it is property of a person and is in danger of being harmed by another person.
According to property rights, I can do whatever I wish with my own property. I simply cannot harm the property of others. If it can be shown that I have harmed the property of another, that entity has grounds for legal action against me. If no harm can be shown, there can be no punishment.
Now, let's take the case of pollution and its affects on the "environment". If a factory pollutes and it can be shown that this pollution harmed another's property, then those harmed can sue the factory. However, if the factory can somehow collect its pollution and recycle or store it such that it does not harm another's property, even if it does cause harm to the property of the factory itself, no one can claim injury and no legal action can be taken.
Now, there are cases when the pollution of an individual entity does not cause harm, but the collective effect of several individuals does. The most apparent case of this may be car exhaust which causes smog. If it were true that one individual driving one car could cause smog and harm the property of another, the individual driving the car would be responsible. However, if the actions of the individual alone are not sufficient to cause harm, he cannot be punished as part of a group for his actions, because he is not personally responsible for any harm.
Here are some other examples of what I mean. In the 1800's, people moving westward over the plains chopped down trees along the Mississippi River and its tributaries. This caused more runoff that normal from rain and the result was flooding in New Orleans. (At least, this is what is generally accepted as the cause of some flooding in New Orleans in the 1800's). So, the people of New Orleans built higher dikes to channel the water and protect their property. They had no legal recourse against a large group of individuals whose collective actions caused harm. Furthermore, it cannot be said that any one individual caused the harm. It cannot be said that any one person caused flooding in New Orleans. As such, the people of New Orleans treated it as an act of nature and dealt with it as best they could to preserve their property.
There may be another example. The same people, coming west, found that their herds were being attacked by wolves and so they, as individuals, took measures to protect their property and elminated most of the wolves in the Midwest. As a result, years later, there was an enormous increase in the population of deer. Could this be blamed on any one individual? No, and therefore, the people who settled there began to deal with the lack of wolves as if it were an act of nature, taking it upon themselves to control the population of deer. Such is the approach that could be taken toward the proposed problem of global warming.
Now, the common practice widely accepted is that government has to regulate harm caused to the environment so that these costs imposed on others, such as pollution, can be redirected upon those who caused them. This is the principle behind certain taxes and the 'cap and trade' system. There are several problems with these assumptions and proposals of regulation. The first is the denial of property rights. That is, one is not allowed to use his property as he sees fit. The government denies the right to pollute one's own property, even if the person considers this an acceptable cost to achieve his ends. But more importantly, the system of 'cap and trade' assumes that people have the right to pollute others' property. Businesses are given credits to pollute and they can buy and sell these credits in the market. The fact that a factory may be polluting my property is of no concern to the government if that given factory is within its "pollution credits". I have no legal recourse because it is assumed that the factory was given that right by government.
In addition, the 'cap and trade' system presents a problem of economic calculation. That is, the government automatically assumes that it knows how much pollution is optimal. It sets the limit at that level and then distributes credits accordingly. But how does the government know that this level of pollution is the most efficient for property rights of the individuals affected? The optimal pollution level may be lower or higher. The limit imposed merely assumes to know that level. But this is impossible for a government to know, just as a government cannot know the optimal production levels of goods.

For more on this topic, check out Murray Rothbard's article here. (Beware, its a bit long)