Tuesday, December 16, 2008

time for a cow tax?

It stinks for producers and consumers, but it smells like lilacs to economists and environmentalists. If cows produce pollution (most notably, methane), then a tax may be completely appropriate for dealing with that problem.

The idea: producers and consumers should be responsible for the pollution they produce. Without government intervention, they are unlikely to deal with pollution properly-- since its costs are external to them. (Economists call pollution an "externality" for this reason.) Ironically, this is one category where markets will result in socially inefficient outcomes-- and government regulation (at least on paper) can be efficiency-enhancing.

That said, producers of pollution would rather have the government ignore its unsavory social output.

Here's the article from the AP's Bob Johnson in the C-J...

For farmers, this stinks: Belching and gaseous cows and hogs could start costing them money if the federal government decides to charge fees for air-polluting animals.

Farmers are turning their noses up at the notion of a "cow tax," which they contend is a possible consequence of an Environmental Protection Agency report after the U.S. Supreme Court ruled in 2007 that greenhouse gases from motor vehicles constitute air pollution....

Kentucky is the largest cattle state east of the Mississippi River.

Sparks said Wednesday that he's worried that the fee could be extended to chickens and other farm animals and cause more meat to be imported.

A great point: one of the practical concerns for govt policy in this arena is that it would encourage importation of meat not covered by the regulations. In terms of global climate (if these gases matter), the ironic outcome is that pollution might increase because of anti-pollution regulations!


At December 16, 2008 at 3:09 PM , Blogger Chris said...

My uncle has a pig farm in the Netherlands. If I remember correctly (it's been a few years since I last visited), he has a pig limit/quota, which is based on the amount of manure each pig is supposed to produce. (i.e. manure = pollution, due to ammonia I believe.)
Not sure if they have figured out a way to ship that stuff to Russia and turn it into oil yet...


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