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This Article argues that the failure of existing environmental trading programs to inspire serious democratic deliberation about environmental goals is caused in no small part by a fundamental conceptual flaw in our background assumptions about the natural world and its relation to our economic activity. Specifically, because mainstream economic accounts generally fail to recognize absolute limits imposed by nature on the ability of humans to appropriate and utilize natural resources, they also fail to provide an adequate conceptual basis on which to make the political judgments required by tradable permit schemes. Just as cost-benefit analysis seems incoherent under the moral absolutism of 1970s-era environmental statutes, setting aggregate limits to annual sulfur dioxide emissions appears nonsensical, or at least not urgent, within a theoretical model that recognizes no ultimate constraints to economic growth.

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