3 ms·

For anyone who reads this comment and is interested in this concept, it's economic academic name is "Pigovian Tax": http://en.wikipedia.org/wiki/Pigovian_tax ht

For anyone who reads this comment and is interested in this concept, it's economic academic name is "Pigovian Tax": http://en.wikipedia.org/wiki/Pigovian_tax http://en.wikipedia.org/wiki/Pigovian_tax

rdl 14y ago
Pigovian taxes are just the "tax externalities" part. I think it's just as important that it be operational on a long term scale, with a steady and predictable increase, to influence decisions. It would be unfair to tax a company overnight at a high rate for this stuff, because it would strand a lot of current investments. Replacing capital goods 20y ahead of schedule might actually have an environmental cost higher than doing so in 5-10 years, since there's a lot of energy and other pollution embodied in the capital goods. It also picks winners and losers based on something which wasn't made clear to people in advance. Just as bad is saying "in 10 years, we're going to heavily tax or ban X", which would cost industry (say) $1t. "Good" participants, say half the market, spend $500b fixing things. "Bad" participants spend nothing on remediation but $10b on lobbying and then strand the $500b improvements made by the "good" participants. In the US, it would essentially require a treaty or constitutional amendment to bind the government to a long-term plan which might otherwise be overturned through lobbying. An escalating tax at least has the benefit of being minor pain up front, and viewed as "fair", so industry is more likely to cooperate. It's not worth going to the mattresses over a 5% tax, particularly if it takes an immediate ban or 50% tax off the table. Over time, the revenue stream will become important to the Government and to other positive government programs, so it'll be harder for industry to lobby to overturn it. At most, they might be able to lobby for a "temporary" freeze at a certain level.

For anyone who reads this comment and is interested in this concept, it's economic academic name is "Pigovian Tax": http://en.wikipedia.org/wiki/Pigovian_tax http://en.wikipedia.org/wiki/Pigovian_tax

rdl 14y ago

Pigovian taxes are just the "tax externalities" part. I think it's just as important that it be operational on a long term scale, with a steady and predictable increase, to influence decisions. It would be unfair to tax a company overnight at a high rate for this stuff, because it would strand a lot of current investments. Replacing capital goods 20y ahead of schedule might actually have an environmental cost higher than doing so in 5-10 years, since there's a lot of energy and other pollution embodied in the capital goods. It also picks winners and losers based on something which wasn't made clear to people in advance. Just as bad is saying "in 10 years, we're going to heavily tax or ban X", which would cost industry (say) $1t. "Good" participants, say half the market, spend $500b fixing things. "Bad" participants spend nothing on remediation but $10b on lobbying and then strand the $500b improvements made by the "good" participants. In the US, it would essentially require a treaty or constitutional amendment to bind the government to a long-term plan which might otherwise be overturned through lobbying. An escalating tax at least has the benefit of being minor pain up front, and viewed as "fair", so industry is more likely to cooperate. It's not worth going to the mattresses over a 5% tax, particularly if it takes an immediate ban or 50% tax off the table. Over time, the revenue stream will become important to the Government and to other positive government programs, so it'll be harder for industry to lobby to overturn it. At most, they might be able to lobby for a "temporary" freeze at a certain level.