Building a coalition to support raising taxes on a particular polluting industry can be difficult, because the benefits may not be compelling to enough of the voting population. But by advocating tax shifting, Roodman believes that environmental advocates can show the public a direct, pocketbook connection between a cleaner environment and personal tax cuts. Denmark is the leader with 3 percent of its taxes shifted thus far. Some governments have taken another approach to harnessing the market. Instead of taxing environmental harm, they identify environmental costs by auctioning or giving away permits for pollution and resource depletion.
Businesses can then trade the permits among themselves, creating a market for the permits.
For example, the U.S. government established a system of permits for the emission of sulfur dioxide in 1990. Pollution permit trading will be a hot topic at the Buenos Aires climate change conference in November. If we can't protect these ecosystems in the short run, we cannot have economic progress in the long run. And when you explain our current tax and subsidy policies to people, they overwhelmingly support cutting subsidies and shifting taxes. Many political parties in Northern Europe have endorsed it, as have groups like the European Trade Union Confederation.