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Comment by randallsquared | Hacker News Reader

Ideally, price would completely capture that information. Of course, in reality, pollution imposes a cost on others, but it's hard to calculate the external cost, because, like crime, the cost isn't paid by the decision-maker, and unlike crime, the actual cost is very small (individually).

In any case, there's no way to actually avoid all costs being imposed on others from your actions (waste heat, if nothing else), so it's unclear to me what's to be done about it.

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One thing you can do about it is to tax a commodity that acts as a proxy for the negative externality in question. For example, we could tax fuel sources relative to the amount of pollution and/or greenhouse gases that are produced, on average, when they are burned. So coal would have a given tax rate and gas would have another and propane another... this would capture the environmental cost of consuming those fuels in the price.

Unfortunately, such a simple and effective solution is politically very unpopular, which is why we have yet to see it passed into law. People want to take care of the environment, as long as it doesn't cost them anything. Well, most people anyway.

One reason I'm against such an attempt at a solution is that it would be very difficult to do this in such a way that it isn't worse than the original problem.

I don't think that's so. For example, a tax on fossil fuels based on carbon output would be simple and easy to enforce (importer/extracter pays the tax). It would cause all goods to reflect their true carbon cost. Why would that be worse than the original problem?

You could even couple the tax with an offsetting decrease in other taxes, if you're worried about increasing the total tax burden.

Except why pick carbon? There are many other pollutants I care far more about. VoC's for example (someone spray painting), smoke, NOx's, heavy metals. Trash litter. Spilled toxic fluids.

I consider those much worse than carbon.

If a pollution tax was implemented I would give the money back as cash to every person in the country. So the money would basically move in a circle, but those who are more efficient will gain.

"If a pollution tax was implemented I would give the money back as cash to every person in the country. So the money would basically move in a circle, but those who are more efficient will gain."

Well, I'm predisposed against this idea, but that sounds more like an argument for than against it. If everyone's paying in proportion to their cost to others (a big 'if'), then those who cost others less should be paid more than they pay, all else equal.

What makes you think I'd be against externalities taxes on all of the above? I think it makes much more sense to tax those things, which we don't want more of in our society, rather than say capital gains, which we do want.

One problem is that if it turns out that we enter a cooling period (due to solar activity decrease or something else), it seems unlikely that such a tax would be repealed just because it was actively harmful (cf. prohibition).

Presume for a moment that you believe global warm is a real and present danger. Then a carbon tax makes perfect sense.

I agree if you think that global warming is uncertain, or that perhaps we actually want to increase CO2 in the atmosphere, a carbon tax would be a bad idea.

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