June 13, 2012
Carbon pricing is the generic term for placing a price on carbon through either subsidization, taxation, or emissions trading (‘cap-and-trade’). Release of carbon dioxide to the atmosphere causes climate change, according to the consensus theory of anthropogenic (produced by humans) global warming.
Greenhouse gas emissions result from fossil fuel-based electricity generation. As a means of avoiding dangerous climate change, associating an approximate cost to damage such as from increasing extreme weather, carbon pricing may incentivize a reduction of carbon emissions and the discovery or implementation of low-emission technologies.
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June 13, 2012
A Pigovian [pig-oh-vee-ahn] tax is a levy on a market activity that generates negative externalities (a cost not transmitted through prices that is incurred by a party who did not agree to the action causing it). For example, a tax on cigarettes might be intended to recoup public healthcare costs resulting from smoking. The tax is intended to correct the market outcome, which is not efficient and may lead to overconsumption of the product.
In the presence of positive externalities (public benefits from a market activity) those who receive the benefit do not pay for it and the market may under-supply the product. Similar logic suggests the creation of Pigovian subsidies to make the users pay for the extra benefit and spur more production. Pigovian taxes are named after British economist Arthur Pigou who also developed the concept of economic externalities. William Baumol was instrumental in framing Pigou’s work in modern economics.
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June 13, 2012
A fat tax is a surcharge placed upon fattening foods, beverages, or individuals. As an example of Pigovian taxation (a tax levied on a market activity that generates negative externalities), a fat tax aims to discourage unhealthy diets and offset the economic costs of obesity. A related idea is to tax foods that are linked to increased risk of coronary heart disease. Numerous studies suggest that as the price of a food decreases, individuals gets fatter. In fact, eating behavior may be more responsive to price increases than to nutritional education. Estimates suggest that a 1 cent per ounce tax on sugar-sweetened beverages may reduce the consumption of those beverages by 25%.
However, there is also evidence that obese individuals are less responsive to changes in the price of food than normal-weight individuals. To implement a fat tax, it is necessary to specify which food and beverage products will be targeted. This must be done with care, because a carelessly chosen food tax can have surprising and perverse effects. For instance, consumption patterns suggest that taxing saturated fat would induce consumers to increase their salt intake, thereby putting themselves at greater risk for cardiovascular related death. Taxation of sodium has been proposed as a way of reducing salt intake and the resulting health problems.
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June 13, 2012
A soda tax is a surcharge on soft drinks. It may focus on sugar-sweetened beverages (soda sweetened with sugar, corn syrup, or other caloric sweeteners and other carbonated and uncarbonated drinks, and sports and energy drinks). As an example of Pigovian taxation (a tax levied on a market activity that generates negative externalities), it may aim to discourage unhealthy diets and offset the economic costs of obesity.
France is in the process of introducing a tax on sugary drinks for 2012; following introduction, soft drinks are estimated to be up to 3.5% more expensive. The city of Richmond, California has placed a soda tax on its 2012 ballot. Soda consumption has been noted as a contributing factor to the obesity epidemic and medical costs related to obesity. In 1994, an early soda tax was introduced by Kelly D. Brownell, Director of the Rudd Center for Food Policy and Obesity at Yale. In 2009, 33 US states had a sales tax on soft drinks. Support for a soda tax has been higher when pollsters say the money will go towards health care.
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June 13, 2012
Canned water is drinking water packaged in tin cans or beverage cans, a less common alternative to bottled water. Canned water is used primarily where storage or distribution systems are set up for cans, or when canning systems are used to make emergency water supplies.
Anheuser-Busch has donated more than 68.5 million cans of water. Water was stored in steel cans, lined with plastic bags, under the United States Civil Defense program. Approximately twelve million 17.5-US-gallon (66 L) cans were deployed, and could hold water for more than ten years.
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