Put a price on pollution for cleaner growth
Over the past decade, sustainability and its counterpart pollution have proved to be
increasingly common topics of interest for governments, companies, and people
worldwide. It is certain that our behavior needs to change – or be changed – but the
question of how to do this effectively without harming the economy remains
unanswered.
However, several governments are now taking measures to improve their countries’
sustainability, typically by discouraging pollution. For instance, the Canadian
government argues that a price should be put on pollution as this is, according to
Justin Trudeau, “the single most powerful way to cut emissions while driving
economic growth”. Indeed, it seems fair to make polluters pay for the emissions they
cause. Moreover, studies have shown that putting a revenue-neutral price on
pollution will not only be beneficial for the environment but for people and the
economy as well (Lerman, 2018). Measures such as those proposed by Trudeau will
presumably encourage both firms and consumers to look for more sustainable
alternatives, enable greater social efficiency as the welfare loss decreases due to a
decline in overconsumption, and the revenues coming from such measures can be
spent on mitigating effects of pollution even further (Pettinger, 2019). As a
consequence, pollution will be reduced and the environment will become more
sustainable. Another example from the US demonstrates that such measures indeed
are an effective way to mitigate the pollution problem. The Energy Innovation and
Carbon Dividend Act (EICDA), which imposes a fee on greenhouse gas (GHG)
emissions and which has been introduced in February 2019, is expected to lead to a
substantial decline of 36-38 percent of GHG emissions by 2030 (Kaufman, Larsen,
Marsters, Kolus, & Mohan, 2019).
Despite the above-mentioned positive consequences of putting a price on pollution,
one could argue that this does not resolve but merely shifts the pollution problem.
Polluting firms that are reluctant to pay the pollution tax will, one way or another, find
ways to pollute in secret or shift production to countries without such regulations
(Pettinger, 2019). Although this is true, the same applies to other, established
Over the past decade, sustainability and its counterpart pollution have proved to be
increasingly common topics of interest for governments, companies, and people
worldwide. It is certain that our behavior needs to change – or be changed – but the
question of how to do this effectively without harming the economy remains
unanswered.
However, several governments are now taking measures to improve their countries’
sustainability, typically by discouraging pollution. For instance, the Canadian
government argues that a price should be put on pollution as this is, according to
Justin Trudeau, “the single most powerful way to cut emissions while driving
economic growth”. Indeed, it seems fair to make polluters pay for the emissions they
cause. Moreover, studies have shown that putting a revenue-neutral price on
pollution will not only be beneficial for the environment but for people and the
economy as well (Lerman, 2018). Measures such as those proposed by Trudeau will
presumably encourage both firms and consumers to look for more sustainable
alternatives, enable greater social efficiency as the welfare loss decreases due to a
decline in overconsumption, and the revenues coming from such measures can be
spent on mitigating effects of pollution even further (Pettinger, 2019). As a
consequence, pollution will be reduced and the environment will become more
sustainable. Another example from the US demonstrates that such measures indeed
are an effective way to mitigate the pollution problem. The Energy Innovation and
Carbon Dividend Act (EICDA), which imposes a fee on greenhouse gas (GHG)
emissions and which has been introduced in February 2019, is expected to lead to a
substantial decline of 36-38 percent of GHG emissions by 2030 (Kaufman, Larsen,
Marsters, Kolus, & Mohan, 2019).
Despite the above-mentioned positive consequences of putting a price on pollution,
one could argue that this does not resolve but merely shifts the pollution problem.
Polluting firms that are reluctant to pay the pollution tax will, one way or another, find
ways to pollute in secret or shift production to countries without such regulations
(Pettinger, 2019). Although this is true, the same applies to other, established
