The court decision striking down the Clean Air Interstate Rule, a major loss for clean environmentalists, can be traced directly to the sulfur trading program often (mistakenly) considered an example of the success of trading over other forms of regulation. Because the new permitting process would have overwritten existing permits, the electric utility industry was able to successfully argue that these regulations would have resulted in economic damage.
You won't find this in the New York Times article itself but in the mp3 of a background interview in a sidebar of the NYT online story. Although the court was careful not to say so directly, in essence this was a "takings" argument. [Update] (In response to comments, I don't think I successfully make a case that this is a movement towards takings. I'll return to the subject of at a later date. But the main point of this post is that undermining the value of permits is one basis for this ruling - and they do say that right in the ruling (linked in a an early comment.)) The court ruled that that the EPA was not allowed to devalue certain acid rain permits. This is a damn good reason not to turn pollution into property rights (or pseudo property rights in the first place.
And thanks to Brian Tokar for his email -- sent to a list I'm on -- that pointed this out.
