Seems like you'd either have lots of road owners each owning small bits of road, which puts you back in the many-to-many problem, or a small number of owners each with a lot of roads, at which point they basically become local governments.
As I wrote in the other post, this is just one idea. Don't assume there aren't better proposals by people who actually thought about it for more than a few minutes :)
That said, the many-to-many transactions don't seem a problem to me considering that homes and roads are fairly static. AirBnB alone manages 375000 people sleeping on homes owned by another dozens or hundreds of thousands of people every single night.
This kind of transaction, on the other hand, would probably just happened once a decade, if that.
I understand there may be better ideas, but this is the one you wrote, and it's the one I'm replying to.
You're right that many-to-many transactions are workable in general. However, they're workable when both participants are willing. For pollution, only one participant is willing. The polluter doesn't want to pay damages, you have to force him. Many people can come together to force one entity to do something (class action lawsuits) and one large entity can exert its power to force many people to do something (government), but it's really hard for many people to force many other people to do something. When both the source of the pollution and the damage it causes is spread out, the cost of enforcement overwhelms the damages. Imagine a metro area with 100,000 road owners who are being held liable for pollution-related damages to five million local residents. How do the individual residents collect, when the individual road owners don't want to pay? Do they sue each one for 1/100,000th of 1/5,000,000th of the total damages in the area? Traditionally, this is solved by the local residents organizing and then exercising power through that organization, i.e. government.
