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> Just tax pollution the amount it costs to clean up pollution Even if Pigovian taxes were implementable[1], that's how they work. Since there is an optimal am
by nanis 6y ago
> Just tax pollution the amount it costs to clean up pollution
Even if Pigovian taxes were implementable[1], that's how they work. Since there is an optimal amount of pollution, the taxes are supposed to be set where the marginal cost to society of an additional unit of pollution is equal to the marginal benefit to society of that extra unit of pollution.
Note the hand-wavy terms "benefit", "cost", and "unit". The devil is in how those are measured. Since central planning authorities are horrible at figuring stuff like this out, one generally ends up in a situation worse than the one which one would like to fix.
As for the "clean up" aspect, I heartily recommend that one read and understand Nicholas Georgescu-Roegen[2]. Here is an excerpt[3].
Specifically, "clean up" is not free.
[1]: https://core.ac.uk/download/pdf/230475696.pdf https://core.ac.uk/download/pdf/230475696.pdf
[2]: https://www.hup.harvard.edu/catalog.php?isbn=9780674281653 https://www.hup.harvard.edu/catalog.php?isbn=9780674281653
[3]: http://webpage.pace.edu/dnabirahni/rahnidocs/law802/The%20Entropy%20Law%20and%20the%20Economic%20Problem.pdf http://webpage.pace.edu/dnabirahni/rahnidocs/law802/The%20En...