Sunday, May 13, 2007

Pollution credits defraud the people

The practice of putting unwanted materials into the air and water as a way to get rid of them places burdens on the other users of the air and water. The privilege of doing so is valuable to industry. The users of the air and water who degrade this publicly-owned resource ought to compensate the owners--ought to pay the people--in proportion to how much they use it.

A government that issues a 'pollution credit' that allows the bearer to emit pollution at a specified rate in perpetuity would seem to be usurping a right of the people who will inhabit this Earth in the future to decide what levels of pollution they will consider acceptable. But I suppose that any government that can decree that a permit allows, say, ten tons of emissions per year, can also decree that that same permit will subsequently allow only one ton of emissions per year, or, perhaps, 3% less emissions each year.

The all-too-common practice of government granting permits to pollute to those entities which have historically been big polluters is a travesty. It ought not be true that someone who has a history of fouling the air and water is awarded official permission to continue for some period into the future simply by virtue of their past tresspass on the commons. These permits ought to be valid only for limited periods of time, and they ought to be sold at auction to the highest bidder, to ensure that the limited resources are only used for those purposes that the people consider important enough that they are willing to actually pay a price that reflects the environmental costs along with all the other costs involved in the production process.

The problem with 'pollution credits' which give the bearer the right to pollute at a specified rate in perpetuity is that the market in pollution credits will not involve the public at large, the ultimate owners of the natural resources in question. Any trading of these 'credits' would only reflect changes in activity among polluters and users of resouces. The market would not reflect actual use.

The system of fees for the taking of resources and putting of pollution that involve time-limited permits avoids this problem. The transaction is between the user of resources and the public at large. The market reflects actual use of resources, and it includes the people as a party to the transaction. (If ownership of 'perpetual rights' permits were taxed at a rate close to the return earned on well-invested money, then a 'perpetual rights' system can be effectively transformed into a system of payment to the people in proportion to actual use.)

Polluters should pay the people when they degrade the value of what we all own in common.

A Capitalism-Communism Synthesis

Gaia Brain: democratic ownership and free market management of natural resources

Walter Cronkite at the first World Court

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