Robin Hahnel wrote:
> Max B. Sawicky wrote:
> >
> > > > If government gives away emissions permits, then clearly
> > > > corporations do not benefit as a group, since one firm's
> > > > sale is another's purchase. If the government sells them,
> > > > corporations are net losers in the aggregate.
>
> For every tradable pollution permit policy in which the government sells
> the permits there is an "equivalent" pollution tax policy that yields
> the exact same outcomes: same overall reduction in pollution, same
> individual reductions for each polluter, same overall cost of reduction
> to polluters as a whole, same individual cost of reduction to each
> polluter, same gain in government revenue (from permits sales in one
> case, from taxes paid in the other). EXCEPT...
>
> One must assume that the permit market is competitive and functions
> perfectly smoothly finding its theoretical equilibrium infintely
> quickly, etc. etc. -- the usual convenient and unrealistic assumptions,
> where no such assumptions are necessary for the pollution tax to be
> efficient.
>
> The above means there is always a pollution tax policy that is equal to
> or superior to any permit policy on purely technical grounds.
>
> When the government gives away permits to polluting corporations they
> implicitly award legal ownership of the environment to polluters rather
> than pollution victims. They make a summary judgement entirely in favor
> of polluters regarding the last remaining common property resource (and
> therefore still disputed property) on the planet. When the government
> gives away pollution permits to corporations it is like the government
> giving away not only the right of way land to the railroads in the 19th
> century, but all of the land within a thousand miles of either side of
> the track they lay. Except in this case we don't even get a railroad
> track!
>
> Pollution permit give-away programs have NO technical or efficiency
> advantages over pollution taxes, may be technically inferior (due to
> realistic probabilities of market failure), and are the worst imaginable
> policy on equity grounds.
>
> When governments do not collect pollution taxes (or sell permits), but
> instead give permits away for free to polluters -- model citizens that
> they have proven to be -- and therefore collect other taxes from other
> people to finance government programs, just who do you think they
> collect those taxes from? Last I heard the common working stiff not only
> held a job but paid more than his/er share in taxes as well!
There is one serious political problem with pollution taxes -- one I believe is
solvable. Much of the right wing of the environmental movement hopes to sell green
taxes by substituting them for all or part of the income tax. I would suggest that
progressives campaigning for pollution taxes insist that all revenue be divided among
ordinary people as a "green dividend", so that government programs continue to be
funded through other sources.
