From: jmorriso@ee.ubc.ca (John Paul Morrison)
Subject: Re: Transit Levy on BC-Hydro Bills
Organization: University of BC, Electrical Engineering
Distribution: bc
Date: Wed, 11 Nov 1992 08:53:01 GMT

In article <1dp37mINNf1c@iskut.ucs.ubc.ca> dkmiller@unixg.ubc.ca (Derek K. Miller) writes:
>In article <1992Nov8.061620.6455@ee.ubc.ca> jmorriso@ee.ubc.ca (John Paul Morrison) writes:
>>Let's make a deal: I'll agree to pay the full share of road costs for 
>>my driving, if transit users pay for the full cost of their transit
>>use. I won't face having to pay any more money though, because gasoline
>>taxes make up for at least 50% of the price of gas, and gas taxes already
>>raise exorbitant amounts of revenue for the government.
>>
>
>Sure. Provided that we can somehow factor into the cost accouning the
>indirect environmental costs of the fossil fuels you burn, pollutants
>you produce, and those of the mining a manufacturing for your car
>(and those of the buses too, of course).
> 

Any action has a COST and a BENEFIT.

Burning fossil fuels has a cost (in real $$) that can be measured 
ie. health costs, the cost of the fuel itself, the risk of permanent
damage to the environment, where the probability can be estimated, and
the risk discounted.

Burning fossil fuels has benefits (in reall $$) in economic activity and
growth.

These costs and benefits can be estimated and with reasonable safety
margins, a pollution tax can levied to recover that cost of actual and
potential damage.

A pollution tax (as is advocated by many leading economists) gives a cost
that the market can understand, and react to. Fixed taxes and regulations
provide no incentive to eliminate pollution etc. A pollution tax creates
an incentive people can understand in real terms, so if people reduce
pollution, they are rewarded by lower taxes. It provides a carrot and stick.

There is a problem with creating too high or too low a pollution tax.
A too high pollution tax overestimates the risk associated with pollution.
We live with risk every day, and an exaggerated pollution tax would
result in a very small (marginal) gain in improving the environment, 
and would sacrifice a lot of growth and economic benefit.
Too low a pollution tax would underestimate the cost of pollution
and would make the benefit from economic growth overvalued. If 
economic growth gets overvalued, people will rush to develop things, and
then cause a very expensive problem in the future.

>Ah yes, just let people pay for only those things they use. That wayu,
>no one will ever change.

People don't have to change for the sake of change. If you give people
the right incentives, people will automatically act to take advantage
of those incentives, and run away form disinsentives. The market is
is an efficient means of doing this, it is like water rolling down hill.
> 
>      :=:=> Derek K. Miller                 dkmiller@unixg.ubc.ca
>      Researcher, Alma Mater Society        thegrodd@tz.ucs.sfu.ca
>      University of British Columbia, Canada
>
-- 
__________________________________________________________________________
 John Paul Morrison                     |  
 University of British Columbia, Canada |  
 Electrical Engineering                 |   .sig file without a cause
 jmorriso@ee.ubc.ca              VE7JPM |  
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Newsgroups: ubc.general,bc.general