Saturday, September 03, 2005

Polluter Pays

Can someone help me out here? I cannot comprehend how any principled capitalist or libertarian can oppose the sorts of eco-taxes proposed by the Greens. It's simple "user pays". In our current system, polluters get to pass the costs of their actions on to others, rather than taking responsibility themselves. This goes against everything that libertarians profess to believe in. Whatever happened to respect for others' property? They wouldn't like it if I dumped my garbage in their backyard, or spat in their face. So how can they condone others polluting our waterways and the air we breathe? The ideal free market has no such externalities. A real capitalist would want to bring our society closer to this ideal, by making sure that polluters pay the costs for their actions, rather than irresponsibly passing those costs along to others (including future generations).

So, I ask, where are all the genuine capitalists? All I see are a bunch of corporate feudalists, out to exploit others for all they're worth, reaping the benefits for themselves and letting others pay the costs. For shame!


  1. Actually I do support eco-taxes as long as they are matched by reductions in other corporate taxes to keep the overall taxation level the same.

  2. It does seem like most of the usual arguments against eco-taxes involve claiming that it would be bad for the economy as a whole. Either that it would simply stifle the economy to the point where society would be worse off than with a little extra pollution, or that the companies paying these taxes would be undercut by foreign companies and would lose all of their customers and be forced out of business entirely. I don't believe either of those arguments are compelling, but that's what usually comes up when eco-taxes are suggested.

    I think there are a large and growing number of people who do care about the environment enough to support eco-taxes, but the corporate feudal overlords have been successful so far (at least in the U.S.) at focusing attention on other issues, like totally irrelevant character attacks.

  3. one problem is who determines the exact damage being caused by the pollution.

    The other is that like many other isues it decends into a "level of taxation" debate (which splits it left vs right) with either the left or the right trying to hijack it (conciously or unconciously).

    David is right - theoretically if it is just the incentive we are concerned about it should reflect a drop in some other tax.

  4. I agree with David as well.

    The problem is the two taxes the Greens have actually proposed are an increase in the tax on diesel and carbon taxes.

    The diesel increase in mistaken. It's correct to tax petrol but not diesel for road use, because so much diesel is used for off-road activities. There is a separate road user charge for diesel vehicles.

    The Kyoto carbon tax is just bad economics for reasons that have been well covered elsewhere. We end up paying money to Russia just because they happened to have high emissions at the benchmark point. Meanwhile China etc can increase production to match our decrease. Their processes are less efficient so global emissions could actually increase. The tax will just not have the desired effect.

    More telling is what the Greens are not proposing - full user pays for water, sewage and waste disposal for example. Currently nobody cares how much water they use or how much waste they create because it is paid for by other people.

    The pattern is that the Greens care more about attacking businesses and vehicle users than protecting the environment.

  5. David, the Greens are going to reduce other taxes (making the first $5000 income tax-free) to keep the overall level the same. Happy to declare your support for them on this issue now? :)

    Nigel - some improvement is better than none, no?

  6. Lets take an example -

    If i wanted to start a activity that consumes fuel I might do some equasions and say - I want to convert 1 litre of petrol (or equivilent carbon fuel) and 1 dollar of materials into 1 product worth 5 dollars (minimal labour cost and fixed raw material etc costs) ex factory.

    I then decide where I will set up my factory - as long as petrol costs under lets say 4 dollars a litre I will be happy.
    In NZ i find that costs are $4.50 most of that being kyoto tax.
    In russia I find it is $2.00 with a tax
    and in china I find it is $1.50 with no tax at all

    I go to china, set up, out compete any one in any western country, and everyone still gets their Widgets!

    A brillient socialist policy since it gives third world countries and countries in recession lots of jobs - but fairly weak environmentally.

    Take for example an industry where there is a very large metal (eg aliminium) component - so you would use the large amount of energy to extract the metals. If you think this is not a big issue, being only one industry - check out how much energy the aluminium smelters use.

    Other big users of fuel are aeroplanes and other forms of international transport. But what can you do to stop them filling up in countries without taxes? Maybe we have adressed these issues?...

  7. By the way - I think the current strategy to tackle global warming is an incorect strategy. I usually am in favor of marginal improvements but in this case, to use a metaphore, we are trying to find land by swimming towards shallower water - but actually it is just an underwater reef - the island is BEHIND us.

    It would be better to admit there is a problem (and quantify it) AND then kill kyoto - then we would be forced to find a real solution.

  8. Western countries would have to impose trade penalties on others who try to pollute without paying for it. Though fat chance of achieving this while the U.S. and Australia are being so irresponsible.

  9. Indeed.
    I think that the US and Aust self justify their obstruction of it through the way they feel the kyoto protocol is unfair on them. Ie they would admit there was a problem if they ceased to percieve it as unfair.

  10. Yeah, given that they admit the principle, it's all the more puzzling how vocal they are in opposition to the Greens' eco-taxes. The two wing parties should be natural allies on this issue.

    I should add that I'm disappointed the Greens aren't doing more along the lines that Nigel points to -- e.g. user pays for waste disposal, etc. Still, they seem to be the only party that's serious about taking the first steps in the right direction here (though Labour at least seems willing to go along with them). I wish that more on the right would put pressure on their parties to do the right thing here.

    David Farrar at least has a fair bit of influence, but he seems more interested in trashing the Greens than learning from them. I would have thought that if enough Rightists started saying "Hey, National and ACT, the Greens are being better capitalists than you are on this issue!", they might be able to shame them into action.

  11. I can't believe how easily everyone in Canada has been had by Kyoto, that brilliant Rio de Janero collaboration between Liberal Democrat taxation experts and Europe, to facilitate the imposition of "Eco-tax" on all fuels (even the non-polluting in the true sense, like natural gas) and anything else from the hardware store or the parts department that could be construed as toxic.

    The sequence.
    1. The term "Global Warming" is embraced and money is funneled out to study groups who do the Kyoto proponent's bidding by convincing the paranoid public that we have a "crisis" on our hands.

    2. Record colds are happening; the canals in Europe are freezing for the first time in 40 years. . . so, the catch crisis-phrase "Global Warming" is cleverly changed to "Climate Change" so that no matter what the weather, Kyoto can be touted as the great be-all, end-all solution.

    3. another year passes and the hapless public has been coerced into believing that Kyoto actually has something to do with real pollution -- Like the Sulfur Trioxide, Formaldehyde, Acetaldehyde, Dioxin, Acrolene and soot of the diesel exhaust in peoples faces everywhere! Unbelieveable!

    4. Europe leans forward on it’s armchair and says, “Shame on Canada for even contemplating modifying the Kyoto treaty!” Not surprising at all since they stand to benefit financially by Canada’s signing.

    5. Kyoto gets signed and all the crisis mongering subsides.

    6. I go to the hardware store for a $5.00 can of laquer thinner and see an Eco-tax of 20 cents on
    the bill; I buy an oil filter and the Eco-tax is 50 cents; I buy enough oil for an oil change and the Eco-tax is $1.23; gasoline is over $4.00 a gallon and who the hell knows what percentage of that is Eco-tax.

    And the ultimate slap in the face and mockery at what fools we are. . . we have to hunt to try and find out how much of all that Eco-tax is being “shared” with Europe!

    Welcome to the first exercise in the utopian ideal of the “Global Village”, the equivalent of a new irreversible, global GST (Goods and services tax) all in the name of Kyoto which began having nothing to do with real pollution and will do nothing to address it as the brand new $60,000.00
    diesel pickups and “smart?” cars keep increasing on the roads.

    Stop the world I want to get off!
    Salt Spring Island.

  12. Terry Graham puzzles me.
    I lived in Courtenay,B.C. for 20 years and in Central Europe for 10 years.
    My experience is that Europe is not getting colder. The mountain lakes in Austria are tepid. Glaciers are shrinking. The Skiing season is shorter.
    Europeans have thier heads on straight about enviornment protection having a much denser populaton than coastal BC.
    Kyoto is not a hoax. Most coastal British Columbians do not have a lcue what industrial pllution looks like. I livewd near the Love Canal in Niagara Falls and I smelled the River. I watched the Great Lakes die in my life time.
    I can not be sure whichc meausres will work, but to deny that there is a crisis is to have your eyes closed.
    Dr. Richard von Fuchs, University of Western Hungary


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