Thursday, December 14, 2006

Waste Tax

One way to adopt the economics of sustainability in the United States is as a steadily increasing “tax” on unsustainably produced products and services. Consider the following schedule:

Year, Waste Tax Rate:

2006, 0%
2007, 17%
2008, 30%
2009, 42%
2010, 51%
2011, 59%
2012, 66%
2013, 72%
2014, 76%
2015, 80%
2016, 84%

To use this tax, begin by estimating the fraction of the product or service produced unsustainably; this is the “waste fraction.” If necessary, the waste fraction can be estimated by dividing one by the minimum number of years the product will be used on a regular basis, where less than a year counts as one. If a product is either recycled or can be recycled, then the minimum number of years can be assumed to be 2; so the waste fraction would be one divided by two, or one half (1/2).

Next, multiply the waste fraction by the price of the product or service; this is the waste price. Apply the waste tax rate to the waste price and spend the resulting waste tax on products or services that have been totally produced using sustainable practices and resources.

For example, gasoline has a waste fraction of one (it can only be used once). At $2 per gallon, the waste price is one times $2, or $2. The waste tax in 2007 will be 17% (1/6), so the waste tax will be $0.34 per gallon (or, for my car that gets 30 miles per gallon, about a penny per mile).

If government were collecting the waste tax, it would be used to support renewable fuels (infinite years of use) and technologies that support reusability. As a responsible consumer, I can do the same thing.

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