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> It implies that the alternatives aren't good enough. That's only true in the absence of any market failure, but in this case we have mispriced negative exter
by hackerlight 3y ago
> It implies that the alternatives aren't good enough.
That's only true in the absence of any market failure, but in this case we have mispriced negative externalities.
EDIT: Changed "unpriced" to "mispriced", since gas taxes exist as pointed out below.
- troyastorino 3y agoGas taxes are a direct mechanism to price the negative externalities. Yes, gas taxes also cover road infrastructure, but the amount of gas purchased (and therefore taxed) is directly proportional to the negative externality of CO2 emissions.
- hackerlight 3y ago> the amount of gas purchased (and therefore taxed) is directly proportional to the negative externality of CO2 emissions. This doesn't mean the gas taxes are big enough to correct the market failure. Your comment would be true even if we multiply gas taxes by 0.01, 0.1 or 10.0. I would prefer it if we just used properly calibrated (larger) gas taxes as the single mechanism. But voters hate that, so we're left with second best solutions.