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Or you can internalise costs that normally get externalised. For instance, the government could make people pay a fixed-fee (i.e. a tax) for every tonne of co2

by spangry 10y ago

Or you can internalise costs that normally get externalised. For instance, the government could make people pay a fixed-fee (i.e. a tax) for every tonne of co2 they emit. You then just set the fee at a level commensurate with the total damage caused by emitting a tonne of co2 and then sit back and let people's natural self-interest do the rest of the work. I think it's noble and commendable to act ethically, and promote ethical behaviour. However, I don't think "people acting ethically" is the thing we want to be relying on when we're trying to avoid self-extinction. By a large margin, people are usually selfish and will act in a self-interested manner, so it's probably safer to harness this particular aspect of humanity. I'm not saying it's pretty, but it sure beats self-extinction.

7952 10y ago
I think social pressure is hugely powerful in defining peoples behaviour. That is why we act "ethically" out of a sense of peer pressure; it has little to do with the rightness of the underlying act. You see this with how smoking is viewed. People don't really care about the health effects to bystanders, they care about what others will think about them. That is human nature. The trouble with this kind of tax/fee is that it trivialises the issue. You are allowed to do something wrong as long as you pay a small fee. This sends a mix message, and even leeds to a sense of entitlement.
- spangry 10y ago
  Even if this were true, that levying something like a $50 tax per tonne would result in greater incentive to pollute (because we've replaced a powerful social disincentive with a less powerful financial one), it would still very likely reduce co2 emissions. Cost of energy is a significant cost in most mass-production processes (particularly in manufacturing). So, prior to the imposition of a carbon tax, when faced with the choice of purchasing one of two identical widgets, a 'co2 indifferent' consumer would choose the cheaper one. All other things equal, if widget manufacturer A can externalise some of their production costs (by polluting for free) and widget manufacturer B can't (or won't), widget B will likely have a higher price, even though their total social cost of production is lower. So there is more incentive to be a polluter. The situation is reversed if a tax is levied on co2 pollution, with the rate set to internalise the cost of all external harm. Now the 'co2 indifferent' consumer will purchase co2 free widget B, because it now has the relatively lower price (prices are now more reflective of total social costs of production because the global cost of polluting has now been internalised). I guess the other approach, that sidesteps this whole argument, would be to implement a 'cap and trade' scheme (my personal preference). The government auctions or allocates, say, 100,000 one-tonne permits: each permit allows a business to legally emit 1 tonne of co2. If a business needs to emit more co2, and what they produce is more valuable relative to what some other permit holder produces, then they can buy additional permits from this other 'less productive' business (and all businesses like it). Under this latter scheme there's a hard cap on emissions. So people can feel as entitled to pollute as they like; they'll still be breaking the law if they do so without owning sufficient 'pollution permits'. Might the latter sort of approach (cap and trade) address your concerns?

by spangry 10y ago

7952 10y ago

I think social pressure is hugely powerful in defining peoples behaviour. That is why we act "ethically" out of a sense of peer pressure; it has little to do with the rightness of the underlying act. You see this with how smoking is viewed. People don't really care about the health effects to bystanders, they care about what others will think about them. That is human nature. The trouble with this kind of tax/fee is that it trivialises the issue. You are allowed to do something wrong as long as you pay a small fee. This sends a mix message, and even leeds to a sense of entitlement.

spangry 10y ago
Even if this were true, that levying something like a $50 tax per tonne would result in greater incentive to pollute (because we've replaced a powerful social disincentive with a less powerful financial one), it would still very likely reduce co2 emissions. Cost of energy is a significant cost in most mass-production processes (particularly in manufacturing). So, prior to the imposition of a carbon tax, when faced with the choice of purchasing one of two identical widgets, a 'co2 indifferent' consumer would choose the cheaper one. All other things equal, if widget manufacturer A can externalise some of their production costs (by polluting for free) and widget manufacturer B can't (or won't), widget B will likely have a higher price, even though their total social cost of production is lower. So there is more incentive to be a polluter. The situation is reversed if a tax is levied on co2 pollution, with the rate set to internalise the cost of all external harm. Now the 'co2 indifferent' consumer will purchase co2 free widget B, because it now has the relatively lower price (prices are now more reflective of total social costs of production because the global cost of polluting has now been internalised). I guess the other approach, that sidesteps this whole argument, would be to implement a 'cap and trade' scheme (my personal preference). The government auctions or allocates, say, 100,000 one-tonne permits: each permit allows a business to legally emit 1 tonne of co2. If a business needs to emit more co2, and what they produce is more valuable relative to what some other permit holder produces, then they can buy additional permits from this other 'less productive' business (and all businesses like it). Under this latter scheme there's a hard cap on emissions. So people can feel as entitled to pollute as they like; they'll still be breaking the law if they do so without owning sufficient 'pollution permits'. Might the latter sort of approach (cap and trade) address your concerns?