THE ENVIRONMENT

The environment is an ideal example of providing for the common good. The environment does not distinguish if the people breathing the air or drinking the water are rich, poor, white, black, male or female. Therefore, it is strictly in our common good to provide for the environment to the benefit of all. The key issue is what standard do we apply and what are we willing to pay for?

The missing part of our current policies is we apply unequal treatment to each form of pollution based on political clout. For example, power plants built 30 years ago that have not had a major renovation are allowed to pollute more than newly built plants. If we required all plants to meet the same pollution standards, we eliminate the distortion in the marketplace for power cost versus pollution. The correct policy is to make all polluters pay equally and eliminate distortion in the marketplace.

The solution to the dilemma is to make polluters pay for there pollution impact through domestic trading credits. First, we measure a zero baseline and then set a standard that is tightened periodically as technology permits. Next we require all pollution creators to offset there pollution by purchasing pollution trading credits through an open marketplace. This way there is a limit on pollution without any additional revenue to the treasury and a free market for good ideas.

The key to the implementation is to have all source providers purchase the trading credits. This will include fuel providers (natural gas, gasoline, diesel), electricity providers (power companies), and manufacturers (furniture, cars, cosmetics – anything with an environmental footprint). By going to source providers, you make sure it is early enough in the chain so that down stream players (such as airlines that provide a service) will make financial decisions based on the total cost of the product and its environmental footprint. This should include even the cost of waste disposal for nuclear. That way all products have there total life cycle cost without the government passing hard and fast rules about how you handle pollution but only focus on the results desired. This lets the free market determine the how that makes sense.

An example of the desired results would be to have those products that go to land fills but do not bio-degrade pay a higher penalty than those products that do bio-degrade. This would drive producers to use more bio-degradable packaging and provide more methane off gassing which can be used to fuel power sources versus inert plastics that will never degrade.

To make sure that we did not have a loop hole in our environmental strategy, we should impose tariffs’ to normalize the cost of avoided pollution laws. If a product was made in China that created pollution above what was required here, we make the importer buy pollution offset credits just like we would for a domestic manufacturer. This means that they may gain an advantage through lower wages, but not through lower pollution laws. The environment will not be polluted on our account and since those pollution credits are for domestic reduction, we gain a cleaner environment at there expense.