Geraldine of Mount Pleasant Goes Back to School

Geraldine has been quiet over these past months.  She has been occupied with courses at the Fransisco DeLuca College, enrolled in a diploma program entitled The Economy and the Environment.  Geraldine has written several essays, one of which is published today in The Mount Pleasant Observer.

A CARBON TAX, PROS AND CONS

Exploring the complicated world of a carbon tax leads to issues on a larger stage.  For example, the purchase price of  a product does not include the disposal cost of any associated packaging material. This task is left to municipal garbage systems,  paid for by the tax payer who  has little, if any direct  association with the transaction.  Second hand smoke is another example in which involuntary exposure is harmful but at no cost to the smoker.

Alternately this same principal can have  a positive effect benefiting  unassociated parties. A honey producer’s bees provide an essential service by pollinating adjoining fields. The crop  grower  benefits at no cost.

Carbon dioxide is one product of combustion along with water vapor and other compounds.  Global warming is attributed, at least in part,  to carbon dioxide emissions. The general population has no direct involvement in the gaseous emission, however they are influenced by the carbon dioxide effect, whatever that may be.  The full cost to society is not reflected  in gasoline prices,  household heating and cooling, trucking costs and all manner of processes.

Here in lies the conundrum.  The cost of producing one BTU does not include subsequent treatment of the carbon dioxide by-product.  Hence the carbon tax concept.  Apart from the debate over the legitimacy of such a tariff, how can the amount be determined and will the added cost to the consumer cause a consumption decrease?

If the principle of any tax similar to that on carbon dioxide emissions is established, should the concept be applied on a much wider scale? In any event establishing the amount of the tax is arbitrary and likely political.

Editor’s Note

The Observers Editor, Rebecca Waldowski contacted Geraldine’s Professor for her assessment of the essay. Dr. Anita Scalbania  gave the paper a B+. Among her comments were “Your paper is provocative, introducing the economic concept of Externality, defined as a cost or benefit which results from an activity or transaction and which effects an otherwise noninvolved party who did not choose to incur the cost or the benefit.