Wednesday, June 20, 2007

Green Taxes and Fairness -1

Planet saving activity is getting increasingly popular. Regulations get ever stricter against pollution and businesses face high fines if they transgress, thus there is commercial sense in finding greener solutions because they cut such costs. They also gain favour with consumers which is so important for marketing - see the example of Marks & Spencer (Blog: January 25).

But if the habits of tens of millions of ordinary people are to change in order to lower the use of natural resources on a meaningful scale, there will be a financial cost to them. The living standards of the mass of many voters are going to be cut. There is substantial resistance to the idea of green policies and anything that will help to overcome this should be tried to pacify the skeptics – just in case the measures will later be seen, even by them, to have been necessary.

The book The Free Lunch –Fairness with Freedom explains how one attraction of a Citizen’s Income, a regular payment to everyone, is that compensation is targeted at the extra cost of the basic use of essential resources if green taxes are imposed. High usage would be surcharged without a compensating Citizen's Income payment and thus force some lowering of consumption.

The other way to overcome the poverty-inducing effect of green taxation, is to extend means-testing of welfare benefits for more and more people. This would lead to higher taxation due to the increase in bureaucracy. Besides many of those who are entitled to help fail to apply due to the complexity and the risk of state claw-back when mistakes are made, or earnings rise.

There is a choice on how green taxes are handled and it depends on which viewpoint is taken as to the relative importance between the individual citizen and the state. The Citizen's Income idea is rising in international importance (see: ) - in the UK we already have part of it, in the form of the unconditional Child Benefit.

See: and buy the book.

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