[Jdanz]

pvn you are unquestionably right that once it's better for a company to produce other forms of energy they will. I can't argue the logic of the market.

What if by that time the pollution caused by shale oil burning (which would have been most efficent until recently) had caused massive negative externailities.

While it's correct that people will act efficently and invest in what they find important, it's a collective action problem here (again i know this is something that you have serious beef with). It is true that energy industries as a whole will continue to make a profit where they can, and when it's useful to them will work on other sources.

In your version of anachro captitalism, if i get it right, someone else should have property rights to clean air, and as energy producers worsen air quality they would have to pay for the rights to do so.

However in the world where we live, myself and everyone else would have to pay a great cost to get together and force energy companies to pay.

Essential in your schemata (sp) i believe that energy companies are stealing, insomuch, as they are using a resource (a non-polluted enviornment) that does not belong to them without paying for it. The typical arguement here is that if people value a clean enviornment they should organize and delinetate the rights to clean air, however i would argue that this organization is incredibly costly to the point of being nearly impossible.

I would agree with anachro capitalism if all rights could be perfectly delinetated, but since that is not possible, and the market neither accounts for, nor allows the trade or all valuable things, it remains imperfect.

So in this particular instance, i think that the status quo relies on an inordinate cost of organization, an inability to guarantee property rights over time, and profittering off a stolen resouce, not on the inherent value of R+D vs the status quo.

I personally think this can be rectafied (though imperfectly) by government interaction.

edit: I know one response is that government would not allocate reasources any better, but i don't think that's really true. In this case i think clean air has identifiably more net value then immediate cheap energy.
(Read i believe A>SQ)

The problem as i see it is organization + "air" delineating costs more then status quo

O + A > SQ

however government reduces the cost of organization to the point that i believe (and it's debateable)

O + A < SQ