Comments on: A new green tax covenant

By: halima

halima — Tue, 03 Jun 2008 17:55:33 +0000

R for a site that wants to be progressive we have to stop using such phrases as ‘man ‘ is responsible for.. It’s not man, it’s men and women …

but anyways was going to say, we think people in Britain have cause to complain about fuel prices..I haven’t checked Indonesia recently .. but situation is unbearable in Nepal – and the environmental issues are rarely debated.

By: Dan

Dan — Tue, 03 Jun 2008 06:43:11 +0000

I don’t understand this fascination with having taxes serve one purpose, and one purpose only. Of course green taxes are about raising money as well as about changing behaviour: it’s politically ridiculous that a government would not care about revenue. But equally, governments are perfectly capable of pursuing two agendas at once – caring about the revenue doesn’t mean not caring about the environment.

Bishop Hill: ‘green surcharges have to be set at levels which make them Pigou taxes’. Not really, no. Setting a value on the environment is a political rather than economic decision. Economically speaking, any level of fuel tax is a balanced Pigou tax for some value of ‘how much we care about the environment’ (*). Following from this, the distortions to the economy don’t suddenly vanish when we hit a perfect tax-externality balance, or suddenly become worse when we move away from it.

* There will be distortions relative to other carbon sources, yes. But this would be true on an international level anyway (which is the only level which matters in terms of climate change)

By: digitalcntrl

digitalcntrl — Tue, 03 Jun 2008 00:18:17 +0000

There is a parallel debate over here in the US. Their is talk of eliminating the federal gas tax by many politicians. The funny thing is that our gas prices are only 0.53 Pounds/liter. People are still complaining about high gas prices, give me a break, while driving around in their SUVs. I drive a Prius btw : ).

By: Planeshift

Planeshift — Tue, 03 Jun 2008 00:14:37 +0000

BH – Not sure I follow the reasoning – what does distortion of the economy mean?

By: shariq

shariq — Mon, 02 Jun 2008 22:58:31 +0000

very sound reasoning. unfortunately, very unlikely to be implemented.

By: Bishop Hill

Bishop Hill — Mon, 02 Jun 2008 20:50:07 +0000

This is pretty much OK. The other point to make though is that green surcharges have to be set at levels which make them Pigou taxes, so there is no distortion of the economy.