Who Needs LEED?

Which would you prefer: money or bragging rights? This is essentially the question that plagues environmental regulators around the world, as politicians bicker about taxes and incentives, the resulting cost to industry, and – in some countries – the merits of climate change science. As a result, environmental consciousness is effectively regulated on an industry-by-industry basis and with varying degrees of 400x300_carbon_taxsuccess. The US government
provides incentives for citizens to invest in solar and electric cars, yet subsidizes the oil and gas industry to the tune of $35.6 billion/year – nearly 2.5 times what it invests in alternative energy exploration. In the construction industry, many independent rating systems exist – LEED, Green Globes, GBI, and Greenroads, to name a few – yet incentives for green development are effectively limited to positive publicity. What if there was a simple method to create a better incentive for environmental consciousness, with minimal adverse effect to existing industry?

The concept of a carbon tax, or an additional cost levied on fossil fuels to mitigate environmental impacts, is not new and has been adopted in more than a dozen countries around the world. It’s simple. It’s effective. So why not base our entire sales tax structure solely upon environmental impact?

The chief advantage of an environment-based sales tax is quite simply the proven effectiveness of up-front costs. Whereas post-purchase incentives such as mail-in rebates and the plastic “bottle bill” taxes meet only minimal success, implementing a front-end tax motivates the purchaser to shop alternatives, which in turn will provide incentives for manufacturers and distributors to reduce their use of environmentally harmful materials and practices. In short, an all-inclusive environmental impact tax on all goods will prove far more effective than our current attempts at promoting green industry through industry-specific tax breaks.

So the question of the day: how does one go about basing an entire sales tax on environmental impact alone? It sounds complicated in theory, but is relatively simple in practice: Step 1 – We would first need to establish a standardized and universally-accepted method to quantify the environmental impact of any given material. This could be in the form of an impact study or even life-cycle cost analysis. Step 2 – We then simply tax products based upon their composition: polyethylene plastics see a certain tax per unit weight, Styrofoam another. In this way, goods are taxed according to their respective environmental impacts – an all-inclusive system offering the simplicity and effectiveness of a carbon tax, and without the rigidity of direct regulation.        picture1

The global stage has proven the effectiveness of a carbon tax as the most flexible and cost-
effective method to drive positive change. Companies are free to make decisions based upon their own economic pursuits – some will pursue green technology while others will pay the price not to do so. Additionally, regulatory and maintenance costs are relatively minimal for such a simple system. Ultimately, such a program would drastically reduce consumer use of environmentally detrimental goods as manufacturers reconsider their use of harmful materials and processes. In a world where we hope to reduce our global impact, an all-inclusive tax on environmental impact is the most effective, cost-efficient, flexible, and straightforward way to catalyze a change in thinking.

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