In conversations around instituting a carbon tax and increasing potable water costs, perhaps one of the most controversial issues is maintaining fairness. Companies may say that a carbon tax imposed by a country makes international competition unfair because international firms who are not held to the same emission penalties have an advantage. Increasing water costs is also seen as unfair because if costs become too high then low-income families cannot afford it.
So then how do we reconcile these issues?
In regards to providing a fair carbon tax, in theory it is essential to tax all international companies in any given sector at the same rate. However, I would argue that this is not necessary in practice. Not all nations need to impose a carbon tax, rather only the nations with the largest market influence need to impose a carbon tax–or a fraction thereof. California is a good example of how a carbon tax imposed by the biggest players in the market could change emission world-wide. An article by Yale reported that policy implemented by California changed emissions in the automotive industry because as a state they purchase a tenth of all new car sales annually. Similarly, if the US and China (two giants in the industrialized world) were to work together to institute an aggressive carbon tax policy for companies operating and trading within their borders, then the effects would surely be felt world-wide. There are already many countries with progressive carbon tax policies; however, it will take the largest importers, exporters, and producers to align their policies with the environment to make a real change in emissions. It will also take all of the biggest players to implement these policies simultaneously for a carbon tax to be seen as fair.
In regards to increasing water costs, it is hard to maintain fairness because increasing the base cost is essentially a regressive tax on the poor. Furthermore, increasing costs in general–even for middle class families–will be seen as violating basic human rights to affordable water. (Whether or not this is a truly valid claim can also be debated as middle class and even low-income families purchase bottled water regularly which is priced higher than any water rate increases will likely rise.) A solution here would be to set water costs at a base price up to a point, and increase costs for any additional usage past that point based on property value. While tiered rates is not a revolutionary idea, basing higher tiers on volume alone is regressive and does not incentivize high-income users to use less.
Looking at water cost fairness from another angle, Patricia Mulroy (former General Manager of the Southern Nevada Water Authority) argues that while water access may indeed be a universal right, treatment and transportation are not. Although I believe clean water access should be a public right, certainly governments should not be required to transport water to every single person directly? After all, humans travel to get food, medicine, and other necessities for life, so why is water delivered directly to private residences a public expectation? It may sound radical, but one way to increase water rates while maintaining a sense of fairness would be to separate treatment costs from transportation costs and allow public access to potable municipal water at certain distribution points in each community. This would decrease frivolous water usage, while allowing clean water access to persons along all points of the economic spectrum.
So, while implementing a carbon tax or increasing water rates are both highly politicized topics, both measures can be conducted in a way that maintains fairness. Alternatively, if we do nothing, then we may reach a point where climate change and water scarcity impact our children or our children’s children. (And those generations, unfortunately, never had the chance to voice an opinion in this dialogue!) Therefore, I believe that implementing or increasing a carbon or water fare is fair.