28
Jul

PIGOU AND THE POLLUTERS

Escrito el 28 julio 2010 por Jesus Guerro en General

Arthur Cecil Pigou, University British Professor settled, at beginning of last century, with his book “The Economics of Welfare”, the pillars of what is nowadays called, “Environmental economy”. The main principle enunciated is “economic activities whose toxic waste prejudice others must not be prohibited but discouraged” –
The same principle that aims the environmental directives suited by the European Commission: “The polluter Pays” principle, expanded later on to “extended producer responsibility “by which polluters comprises all those who obtain profits thanks to that economic activity. So that, manufacturers do not become the unique responsible for polluting but distributors do it,as well. The consumer does it for a long since he pays municipal taxes.
Pigeu proposed to impose a tax on companies, directly proportional to the amount of waste disposed by them and suffered by third parties. Even today this type of taxes are called “Pigeuians Taxes”. The experience has shown that this measure does not always reap the desired results. Tax increases for products such as diesel oil or electricity have barely provoked consumption drops.
Today the impact of CO2 on global warming is obvious, average temperatures rise and melting at the poles is more than evident, not only showed by photographs of the great ice caps, but in raising the sea level in some areas such as southwest France where water has reached some villages once away, far from the reef.
In the words of Nicholas Stern, a British expert, author of an environmental report requested by the Government “The emission of toxic gases and CO2 is the biggest mistake of the Humanity the world has ever known.”
James Hansen, a leading climatologist argues that much of the climate change problem is caused by burning coal, adding that the climatic equilibrium of the earth will not be maintained at present coal combustion rate, beyond the year 2030.
There is no factor that affects more forcefully on the conduct of the natural elements than the Sun. Small deviations in the solar impact parameters cause major climate disruptions. The gradual removal of layers of the atmosphere to filter its rays is an extremely pernicious phenomenon.
It was internationally accepted the system of CO2 Credits, by which governments set up redeemable for pollution credits. So who pollutes more must buy more credits and if you decrease your pollution you can sell them to other companies receiving cash on return.
This allows payments for pollution are not captured in government hands but is re inserted in the industry.
 Critics of this system argue, not without reason, that the beneficial effect is limited because the sum of all credits is always the same, so no overall profit remains.

On the other hand refer the moral problem of “purchasing with money the destruction of the earth. ” Some governments have shown to feel very comfortable in the system, so some of the largest U.S. and Chinese multinationals are the major investors in CO2 credits.
It is not an easy task, to find the formula for reducing pollution through punitive measures. Rather, the only solution and hope lies in Public Opinion, a change of human behavior of consumers requiring a correction in business practices. Possibly, only loosing sales, will force polluters to change their practices.
So education and social awareness will be again, the secret of a really successful Environmental Economy.

Comentarios

Adolfo 12 agosto 2010 - 18:34

CO2 Credits, Confussing business. I am afraid they will not the solution. Thank you Jesus for your clear explanation.

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