He May be a Lobbyist But…

He\’s right here

Her one-time transport adviser, Rod Eddington, says that “to seek artificially to constrain the natural growth of air travel, once carbon pricing is fully in place, would pose a significant cost to the UK economy”.

This is the very point of carbon pricing. Once people are paying the external costs of their actions then you need do nothing more. We end up with the socially optimal level of emissions. That\’s actually the point, it\’s a feature, not a bug.

3 comments on “He May be a Lobbyist But…

  1. Tax is half the equation, does it not also make a difference how you spend it?

    e.g. have a tax on motoring to cover the costs of road building and traffic accidents. Have a tax on chewing gum and spend the money on cleaning up chewing gum. I can see the point of having a carbon tax and dishing it out as a Citizen’s Dividend, but that doesn’t actually halt pollution, does it?

  2. Agreed, Mark. This is one of the things I really differ from Tim on. I think hypothecation of taxes should be used in certain instances, e.g. Pigovian taxes. Where the tax is paid to purportedly save the Earth, the money should go to do just that.

  3. There’s no doubt that’s the case where the damage is specific. For instance if every time a jet plane took to the sky, a house in cambridge collapsed, then merely because the people flying were willing to pay the cost of that, wouldn’t mean it is was fair. The person would need to be compensated as well.

    With global warming, however, I think the point is that the negative externality is share equally, and as such just going into government coffers can be said to cover it.

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