CitiesGoGreen - October 2008 - (Page 29) ecological costs are greater, or higher for larger withdrawals to encourage conservation. Why doesn’t the amount raised simply equal the 1/10-cent rate multiplied by 250 billion gallons (=$250 million)? Because such a tax might substantially increase conservation. And that, of course, would be a good thing. Agriculture, which makes disproportionately large withdrawals, might be exempt if it implemented water conservation practices, including water-efficient equipment that the larger fund could help pay for. That would recognize some of the ecological and social benefits of local farms. Where withdrawals are not metered, the tax could apply to the related water right. In addition to making the tax easier to administer, this would create an incentive to meter withdrawals and give up unused water rights, both important public policy goals in their own right. Would a water withdrawal tax be regressive? Not if it started low and increased steeply after 150 gallons a day per household, when almost all water is being used for irrigation. In an actual proposal, there would be other practical considerations to be taken When prices do not take actual costs into account, the free market can misallocate resources, sometimes disastrously. There is no better example than environmental costs. into account (e.g., perhaps the tax should be lower for those on well-maintained septic systems, where used water is returned to the ground instead of piped to sewage treatment plants). You get the picture. Natural market forces would not just discourage damaging behaviors through changed prices. The charges would also be effective education tools, by connecting our behavior to its environmental consequences on a regular basis, such as every water bill. We could raise even more money by beginning to address the environmental consequences of driving. This could be most easily accomplished through an additional gasoline tax, but it could also be done through tolls, vehicle taxes, emissions taxes and other means. Much of the rest of the world already has a high gasoline tax, but in the United States gasoline and vehicle taxes combined typically don’t even cover the full cost of constructing and maintaining our roads, let alone their broader environmental consequences. Our roads fragment habitat across the landscape. They make up the majority of the impervious surface that changes the hydrology of our streams and our wetlands. They are the conduit for some of our worst water pollutants—typically coming from our cars, which are in turn the source of many of our worst air pollutants. Greenhouse gases are unique in their global dimension. Almost all the other environmental costs of our transportation system are felt primarily or exclusively at the local or regional levels. If a tax is levied to address those costs, it ought to be both raised and spent at those levels—within the ecosystems and airsheds affected. Would taxes that all of us pay misplace the blame for environmental decline? Isn’t development really the root cause? Not necessarily. New development already complies with an array of environmental laws—federal, state, and Potential Annual Revenue from "Environmental Sin Taxes" in Puget Sound (in millions) 600 500 400 300 200 100 0 Water Withdrawal Fee October 2008 Gasoline Sales Development Tax Environmental Impact Fee Pollution Charges Impervious Surface Charge 29 http://citiesgogreen.com
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