We are consuming too much stuff. This is not just bad for the planet, it’s bad for our prosperity and happiness. As we look to recover from the Covid-19 pandemic and tackle not just climate change but broader environmental damage, this is a good moment to tackle this. Ramping up progressive taxes on goods – the bigger the car, the bigger the house, the bigger the tax – would fall on the rich more than the poor. The proceeds could be used to support jobs and services that would leave us all better off.
Crucially, the revenue potential for new green taxation is enormous. In the OECD countries, green taxes raised only the equivalent of 1.6% of GDP in 2014, and have been flat or declining for many years. Ramping this up would be a smart way to ‘Bill Back Better’ to pay for ‘Build Back Better’.
Take a look at my latest piece on this topic on Project Syndicate.