
Pigouvian taxes: When the interests of individuals and society do not coincide - ryan_j_naughton
https://www.economist.com/news/economics-brief/21726709-what-do-when-interests-individuals-and-society-do-not-coincide-fourth
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ZeroGravitas
_" Research may have guided the initial level of a British landfill tax, at £7
a tonne in 1996. But other considerations may have boosted it to £40 a tonne
in 2009, and thence to £80 a tonne in 2014."_

While it is a theoretical issue, this particular example seems overly harsh,
many tax introductions like this are phased in, so that people are given fair
warning and time to change their behaviour. I can't find full documentation
but certainly in 2009 it was already decided that the price should rise by £8
pounds every year until it got to £80

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clairity
great exposition about taxes on externalities often being sub-optimal. part of
the problem with pigouvian taxes as the solution to externalities is that
taxes are often viewed with skepticism because of the association with either
a big black hole of waste or one of greedy corruption, so you get all kinds of
resistance (not to mention the primary resistance of the "greedy wanting to
greed").

but the general idea of pricing in externalities is a neceesary, and possibly
an ingenious, way to keep our greedy selves in check for the good of the
whole. it's only fair that individuals and small groups of people shouldn't
exploit collective resources for only themselves. benefits shouldn't be
privatized while costs are socialized. they should go together (private
benefit with private cost, public benefit with public cost).

more to the point, "making sure all costs are paid for" by the prevailing
party is much more palatable over the vagueness of taxation. external costs
should be assessed and charged appropriately and the proceeds be used as much
as possible to prevent or restore the resources used and/or the damages
caused. the government will need to be involved at a regulatory level, but
taxation doesn't seem to be it's most successful intervention option.

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CalChris
Since the (excellent) Economist is behind a paywall, this is the description
of Pigovian Taxes from Wikipedia:

 _A Pigovian tax (also spelled Pigouvian tax) is a tax levied on any market
activity that generates negative externalities (costs not internalized in the
market price). The tax is intended to correct an inefficient market outcome,
and does so by being set equal to the social cost of the negative
externalities. In the presence of negative externalities, the social cost of a
market activity is not covered by the private cost of the activity. In such a
case, the market outcome is not efficient and may lead to over-consumption of
the product. An often-cited example of such an externality is environmental
pollution._

[https://en.m.wikipedia.org/wiki/Pigovian_tax](https://en.m.wikipedia.org/wiki/Pigovian_tax)

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londons_explore
I would like to see more taxes like this, with "free allowances" below which
one does not need to fill in any paperwork or pay anything.

For example, have a car and have it produce 50 tons of co2 per year, don't
worry. But if you have a power station and it produces 2500 tons, you have to
measure it, report it, and pay co2 tax on it.

But if you leave your car running at full throttle hooked up to powering all
the houses in your street, you'll have to pay.

~~~
benlorenzetti
An alternative would be have the pigouvian tax on power stations, but at a
rate where it is cheaper to buy from the line than hook up an ICE to a
generator. Tax regimes should always take market effects and enforcement into
account.

Thermal efficiency of a good ICE: 38%

Thermal efficiency of a good natural gas plant: 54%

Average power line losses: 8-15%

[http://www.greencarreports.com/news/1091436_toyota-
gasoline-...](http://www.greencarreports.com/news/1091436_toyota-gasoline-
engine-achieves-thermal-efficiency-of-38-percent)

[https://en.wikipedia.org/wiki/Combined_cycle](https://en.wikipedia.org/wiki/Combined_cycle)

[http://blog.schneider-electric.com/energy-management-
energy-...](http://blog.schneider-electric.com/energy-management-energy-
efficiency/2013/03/25/how-big-are-power-line-losses/)

