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HELM TALKS: Natural Capital Lecture 6

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Dieter Helm's lecture series on Natural Capital

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HELM TALKS: Natural Capital Lecture 6

  1. 1. QUESTIONS Who are the polluters? Who should pay? Should we ever pay the polluter? What would a polluter pays charge look like? How much difference would it make?
  2. 2. WHO ARE THE POLLUTERS? • The popular view: "nasty companies" • What happens if we tax businesses? • Where do consumers come in? • What happens to historical pollution?
  3. 3. THE CORPORATE TAX CASE Tax on owners via dividends and capital gains Tax on workers and jobs via lower output Company taxes Tax on customers via increased price for products
  4. 4. WHO SHOULD PAY? • The polluter or the polluted? • Cause argument - it doesn’t matter • Bargaining problems • Fairness and equity
  5. 5. AN EXAMPLE: THE CHEMICAL FACTORY AND THE FISH FARM FISH FARMCHEMICAL COMPANY
  6. 6. WHEN SHOULD WE PAY THE POLLUTER? • Climate change, carbon taxes and developing countries • Kyoto and Paris • The rainforests and global biodiversity • When the polluters can’t pay
  7. 7. WHAT SHOULD A POLLUTER CHARGE LOOK LIKE? Version one: • P= SMC • Tax = difference between private & social cost Version two: • Tax and learn • Start low and increase to meet target Version three: • Levy and regulation where each context is different
  8. 8. WHAT DIFFERENCE WOULD IT MAKE? • Price of fertilisers, pesticides and herbicides • Chemical Applications • Carbon price • Result: Less water pollution, more biodiversity, more organic farming
  9. 9. LESS INTENSE PRODUCTION, LESS GLOBAL FOOD TRADE • What happens to the money? • Is there still a double dividend argument? • Should we recycle generally or specifically to renewable natural capital? • Who benefits from the increase in economic efficiency?
  10. 10. SUMMARY • Polluters are ultimately us • We live beyond our means • Polluters should pay • Leads to radical changes to relative prices • Yields lots of money • Can spend it on enhancing renewable natural capital
  11. 11. BOOKS WWW.DIETERHELM.CO.UK

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