Addressing climate change through true cost pricing

Let’s play a game. Which of the following should be taxed or not taxed? Music lessons, hand tools, fossil fuels, business profits, jobs, bicycles, cars, seeds, land, pollution?

Clearly since music lessons, hand tools, bicycles, and seeds do not contribute to climate change so they should not be taxed. And obviously fossil fuels, pollution, and cars cause climate change so they should be taxed. But what about jobs, profits and land? Since we want people to have jobs and we want businesses to be successful, incomes and profits should be untaxed. And since land is a gift from nature which we all own collectively, the people or companies which hold land should compensate the rest of the population by paying a Site Rental, rather than tax, to the government.

We all share the Earth and have a right to an equitable portion of its productivity. As individuals we don’t have equal access to the benefits of the earth so the tax structure should facilitate this. But some climate change tax decisions are self-evident and others are complicated.

Assessing the climate change impact of tens of thousands of products becomes a mugs game, so the optimal method is to tax resources like oil, coal, trees at point of entry into the manufacturing process. This approach will help green all aspects of manufacturing from extraction to the finished product.

Add to this an annual levy on the privilege of holding land which will “correct” the price of land to both reduce sprawl and compensate those who don’t hold land. The Site Rental should disregard how the land is utilised within the zoning. The fee charged should not be prejudiced by how the land is used.

Our present economic structure rewards wrong behaviour, and therefore should be modified to encourage right behaviour. To address climate change and to ensure economic equity, governments should untax incomes, profits and consumption and tax the use and abuse of the commons (land, resources, pollution). As well as addressing climate change this will encourage efficiency, innovation, re-use, repair, recycling, and used material recovery.

Side benefits are a large reduction in the number of points of taxation and the ease with which the assessments would be done and fees collected compared to now. The difficulty of avoiding green taxes would also dramatically reduce the underground economy and eliminate off shore tax havens.

Societies superimpose an economic system over their moral and ethical beliefs. If the moral and ethical systems don't respect the planet then they will construct their economic system so that it doesn't respect nature. However if the prevailing ethic is to conserve the planet then societies will choose an economic structure accordingly. As we become increasingly aware of the needs of the planet, we will increasingly morph our economic system to match our new belief system.