Gary Wolff observes that the DD is more likely if you are taxing natural resource rents rather than some form of produced capital. However, in this observation he does not go nearly far enough. The concept of Pigouvian externalities has, at least in simplified form, penetrated the debate over environmental taxes.
Society can hold environmental values distinct from the desire to reach a Pareto-efficient level.
However the fundamentals of natural resource economics, as opposed to environmental economics, have barely begun to enter the debate. One of the most basic results of natural resource economics, comparable to the efficiency of Pigouvian taxes in environmental economics, is the Hotelling result. Hotelling found that for resources which exist in the form a fixed exhaustible stock, like fossil fuels, efficient markets will cause the price to increase at an annual rate equal to the real return to capital. To the best of my knowledge, no major natural resource has a price that has followed that time path. In the absence of such a presumption, taxation of natural resources at a rate sufficient to assure steadily rising real prices at three to five percent per year seems to me to be the desirable default public policy.