"Follow the money" is often pretty good advice when evaluating the source of information, but in the think tank and public policy magazine realm money tends follow opinion, rather than the other way around.
But won't protecting the environment reduce the gross domestic product? Not necessarily--and anyway, so what?
At first sight, it might seem obvious that pollution taxes will reduce GDP. After all, any tax reduces the incentives to work, save, and invest. Thus a tax on exhaust emissions from cars will induce people to drive cleaner cars or avoid driving altogether. But since it will also in effect lower the payoff to earning extra money (since you wouldn't end up driving the second car you could buy with that money anyway), people will not work as hard as they would have without the tax. The result is that taxes on pollution (or anything else) will, other things being equal, tend to reduce overall monetary output in the economy--which is to say, GDP.
But things need not be equal, because there is already a whole lot of taxing and spending going on. Even in the United States, where the government is smaller than in any other advanced country, about a third of GDP passes through its hands. So existing taxes already discourage people from engaging in taxable activities like working or investing.
What this means is that the revenue from any new taxes on pollution could be used to reduce other taxes, such as Social Security contributions or the income tax (but not, of course, the capital-gains tax). While the pollution taxes would discourage some activities that are counted in the GDP, the reduction in other taxes would encourage other such activities. So measured GDP might well fall very little, or even rise.
Does this constitute an independent argument for taxing pollution, quite aside from its environmental payoff? Would we want to have, say, a carbon tax even if we weren't worried about global warming? Well, there has been an excruciatingly technical argument about this, mysteriously known as the "double dividend" debate; the general consensus seems to be no, and that on balance pollution taxes would be more likely to reduce GDP slightly than to increase it.
But so what? "Gross domestic product is not a measure of the nation's economic well-being"--so declares the textbook as soon as it introduces the concept. If getting the price of the environment right means a rise in consumption of nonmarket goods like clean air and leisure time at the expense of marketed consumption, so be it.
Suppose that there were ten thousand investment managers out there, which is not an outlandish number, and that every year half of them, entirely by chance, made money and half of them, entirely by chance, lost money. And suppose that every year the losers were tossed out, and the game replayed with those who remained. At the end of five years, there would be three hundred and thirteen people who had made money in every one of those years, and after ten years there would be nine people who had made money every single year in a row, all out of pure luck.
The abrupt acceleration of melting in Greenland has taken climate scientists by surprise. Tidewater glaciers, which discharge ice into the oceans as they break up in the process called calving, have doubled and tripled in speed all over Greenland. Ice shelves are breaking up, and summertime “glacial earthquakes” have been detected within the ice sheet.
“The general thinking until very recently was that ice sheets don’t react very quickly to climate,” said Martin Truffer, a glaciologist at the University of Alaska at Fairbanks. “But that thinking is changing right now, because we’re seeing things that people have thought are impossible.”
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