Bastiat's Bastions

Much of this past semester, in my environmental economics class, I have discussed various market-based incentive programs to reduce pollution of both our air and our water, regulatory reforms that were only discussed in economics classes when I was an undergraduate, but have become commonplace since then.    Sulfur dioxide emissions,  the primary contributor  to acid rain, have been traded in U.S. commodity markets for  over 10 years now.    

Another proposal we have discussed is  one that was recommended by A.G. Pigou many years ago, a tax on emissions.   Emissions taxes and charges of various types, just as with tradable permits,  are used around the world to bring about a more efficient reductions of emissions through these  market-based or “incentive compatible”  regulatory approaches.   These have mostly focused on controlling the emissions of industrial polluters.   The Kyoto Protocol, an agreement to reduce greenhouse gas emissions, calls for using these incentive compatible or market-based pollution reduction regulatory approaches, as they lead to more efficient reduction in pollution, or, cheaper means of achieving reductions in pollution.   The idea is that if we use a cheaper approach to reducing pollution, we will reduce pollution more, and will be less opposed to pollution reductions.  

Mostly, however, agricultural polluters have been given a free ride on pollution control and have faced far less regulation than other industries.   That is certainly true in the U.S. and around here in South Louisiana.   Our sugar farmers are some of our worst polluters, often burning their fields after harvest, sending tons of particulate matter into the air to attack our lungs and eyes, and to reduce visability.   Not all governments have been as soft on agricultural polluters as we have been in the U.S.  

The government of Estonia is serious about reducing greenhouse gases.   Recently, according to this article in Novosti, the government has started taxing cattle because, they, well, fart.   And do it alot.   According to the article, a  single cow produces about 350 liters of methane and 1,500 liters of carbon dioxide, both serious contributors to  global warming, each and every day.   New Zealand started taxing the flatulence of cows   after they signed the Kyoto agreement,  noting that cattle are responsible for 90% of its methane  (a very serious greenhouse gas cause) emissions and 43% of  its total greenhouse gas emissions.  

Of course, one reason cattle might be taxed in New Zealand  has much to do with the  eternal battle  between cattlemen and sheep ranchers, and New  Zealand’s long history with a substantial sheep lobby.  

As a method to reduce greenhouse gases and global warming,  Estonia’s and New Zealand’s cattle emissions tax is a good idea.  

Next, though, wives and girlfriends are going to begin to call for a similar tax.      

–MC

This entry was posted on Sunday, May 11th, 2008 at 7:58 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.