[SGVLUG] help save the world, pwr off game consoles

[David Lawyer]

Christopher Smith wrote:
> On Fri, 2008-11-21 at 13:37 -0800, Dan Kegel wrote:wrote:

>> Power is currently cheap because it doesn't factor
>> in the cost of future pollution and global warming.
>> Raising the price of power to accurately reflect that
>> is hard, and would retroactively penalize people
>> for inefficient devices they bought in the past.
> 
> Put me firmly in the Pigou Club on this one.
> 
> http://www.economics.harvard.edu/faculty/mankiw/files/Smart Taxes.pdf
> 
> That retroactive portion has pretty straightforward solution: you delay
> the implementation and graduate the tax increases. It would have the
> same effect of encouraging people to purchase energy-efficient devices
> but not necessarily drive them to buying *new* ones. Taxing energy
> inefficient devices (and then there is the whole mess of how you decide
> what "inefficient" is) also creates an unfortunate distortion in the
> trade offs between "less energy to make" vs. "less energy to use". The
> last thing we want to do is encourage consumption!
> 
> --Chris
It's OK for someone to purchase a new item if it will save energy, but
one should account for the energy it took to make the old item.  If
goods were made instantaneously, then there would be no reason to
graduate the tax increase.  But since goods are not produced
instantaneously, the price of a new good would not include the taxes on
the energy used to make it (including the energy used to make its
components, etc.) since the tax didn't exist in the past when the good
(and it's components) were made.

Shouldn't the energy tax be world wide?  Or would we estimate the energy
it took to make imported goods where there are lower (or no) energy
taxes, and then charge taxes on such imported goods based on their
embodied energy.

Note that taxing energy should automatically include the energy cost of 
human labor, since the cost of living will increase due to the energy 
tax which should result in a wage increase which will be reflected in 
the price of the good.