When Green Values Clash, Coase has the Answer

Here’s an interesting case. In California, a solar panel owner found his access to sunlight blocked. Not by some man-made obstruction, but by California Redwoods:

In a case with statewide significance, the Santa Clara County District Attorney’s Office is pursuing a Sunnyvale couple under a little-known California law because redwood trees in their backyard cast a shadow over their neighbor’s solar panels.

Richard Treanor and Carolynn Bissett own a Prius and consider themselves environmentalists. But they refuse to cut down any of the trees behind their house on Benton Street, saying they’ve done nothing wrong.

“We’re just living here in peace. We want to be left alone,” said Bissett, who with her husband has spent $25,000 defending themselves against criminal charges. “We support solar power, but we thought common sense would prevail.”

Their neighbor Mark Vargas considers himself an environmentalist, too. His 10-kilowatt solar system, which he installed in 2001, is so big he pays only about $60 a year in electrical bills. He drives an electric car.

The case went to law, of course, but the judge came up with a solution that is almost Coasean:

In December, Santa Clara County Superior Court Judge Kurt Kumli found the couple guilty of one count of violating the Solar Shade Control Act. In a partial victory for each side, he ruled that six of the trees can remain and that the two generating the most shade must be removed. He also waived any fines.

As CEI regulars will know, Nobel laureate economist Ronald Coase suggests that most environmental disputes could be solved with compromises whereby the two parties find an acceptable median solution where one compensates another for the environmental loss – either the loss of sunshine or the loss of trees in this case. As long as each party is a rational actor, this should work. Unfortunately, in this case it appears that at least one of the party puts an irrational value on their amenity. The case is going to appeal.