Environmental Engineering Reference
In-Depth Information
First,
many producers of harmful and wasteful
goods would have to charge more, and some would go
out of business. Naturally, they oppose such pricing.
Second,
it is difficult to put a price tag on many en-
vironmental and health costs. But to ecological and en-
vironmental economists, making the best possible esti-
mates is far better than not including such costs in
what we pay for most goods and services.
Green Taxes and Fees and Tax Shifting
Taxes and fees on pollution and resource use can take
us closer to full-cost pricing, and shifting taxes from
wages and profits to pollution and waste helps makes
this feasible.
Another way to discourage pollution and resource
waste is to
use green taxes
to include many of the harm-
ful environmental costs of production and consump-
tion in market prices. Taxes can be levied on a per-unit
basis on the amount of pollution produced and the
amount of hazardous or nuclear waste produced, and
on the use of fossil fuels, timber, and minerals. Higher
fees can also be charged for extracting lumber and
minerals from public lands, using water provided by
government-financed projects, and using public lands
for livestock grazing. Figure 18-7 lists advantages and
disadvantages of using green taxes and fees.
x
H
OW
W
OULD
Y
OU
V
OTE
?
Should full-cost pricing be used
in setting the market prices of goods and services? Cast your
vote online at http://biology.brookscole.com/miller11.
Phasing in such a system will require government
action. Few companies will volunteer to reduce their
short-term profits in an effort to become more environ-
mentally responsible. Governments can use several
strategies to encourage or force producers to work to-
ward full-cost pricing, including phasing out environ-
mentally harmful subsidies, levying taxes on envi-
ronmentally harmful goods and services, passing
laws to regulate pollution and resource depletion, and
using tradable permits for reducing pollution or re-
source use.
x
H
OW
W
OULD
Y
OU
V
OTE
?
Do the advantages of relying
more on environmental or green taxes and fees to reduce pol-
lution and resource waste outweigh their disadvantages? Cast
your vote online at http://biology.brookscole.com/miller11.
Government Subsidies and Tax Breaks
We can improve environmental quality and
help phase in full-cost pricing by removing
environmentally harmful government subsidies
and tax breaks.
One way to encourage a shift to full-cost pricing is to
phase out
environmentally harmful subsidies and tax
breaks, which cost the world's governments about
$1.9 trillion per year, according to studies by Norman
Myers and other analysts. Examples include govern-
ment depletion subsidies and tax breaks for extracting
minerals and oil from the ground, cutting timber on
public lands, and using low-cost water for farming, and
measures that encourage overfishing by providing
low-cost loans to buy fishing boats.
On paper, phasing out such subsidies may seem
like a great idea. In reality, the powerful interests
receiving such benefits strongly oppose these political
decisions. They want to keep—and if possible in-
crease—these measures and often lobby against sub-
sidies and tax breaks for more environmentally benefi-
cial competitors.
Some countries have begun reducing environmen-
tally harmful government subsidies. Japan, France,
and Belgium have phased out all coal subsidies. Ger-
many has cut coal subsidies in half and plans to phase
them out completely by 2010. China has cut coal sub-
sidies by about 73% and has imposed a tax on high-
sulfur coals.
T rade-Offs
Environmental Taxes and Fees
Advantages
Disadvantages
Helps bring
about full-cost
pricing
Penalizes low-
income groups
unless safety nets
are provided
Provides
incentive for
businesses to do
better to save
money
Hard to determine
optimal level for
taxes and fees
Need to frequently
readjust levels,
which is technically
and politically
difficult
Can change
behavior of
polluters and
consumers if
taxes and fees
are set at a high
enough level
Governments may
see this as a way of
increasing general
revenue instead of
using funds to
improve
environmental
quality and reduce
taxes on income,
payroll, and profits
Easily
administered by
existing tax
agencies
Fairly easy to
detect cheaters
Figure 18-7
Trade-offs:
advantages and disadvantages of us-
ing environmental or green taxes and fees to reduce pollution
and resource waste.
Critical thinking: pick the single advantage
and disadvantage that you think are the most important.
