Environmental tax

A place where general ideas can be submitted that could be applied across the board.
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Joined: Wed Sep 27, 2017 1:03 am

Environmental tax

Post by kenax » Wed Sep 27, 2017 5:37 am

Having studied environmental economics in university, there was one concept I particularly liked: attach property rights to the environment. For example, air, or water. We breath in air, but if some company pollutes the air, we suffer and are not compensated. Same with water, or even noise, or light pollution (you cannot see the stars in the city).

The principle of giving property rights to the environment is that it makes it possible for average Joe to sue any company which may damage this property, in any way. The market mechanisms then come into play. For example, a company makes lipstick in some neighbourhood and pollutes the air in the process. The locals take the company to court and get compensated for the damage it causes them. The lipstick company has to increase the price of its product to make up for these lawsuits. The end consumer decides if the lipstick is really worth its price.

At the moment the environment is considered a "free externality" which any company can basically shit into without any repercussions.
Obviously, such a system needs to be set up across the board, worldwide, otherwise you quickly get a situation where a government official in some poor country gets bribed not to implement such a law and all the companies quickly storm there in order to circumvent these obstacles, lower its costs and increase its profit margins. The poor people of such a nation are forced to inhale the pollution of the products we consume.

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