Posts Tagged With: Pigou Club

Pigou Club, Mobility & Unemployment

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There has been a lot of talk recently about the idea that unemployment is correlated with home ownership. The idea behind the theory (as I understand it) is that people are unwilling to change homes, and so are not mobile enough to take full advantage of their workplace opportunities. Given this, would a carbon tax also lend itself to higher unemployment? If I am willing to drive to any job within three gallons of my home at the current gasoline price, but only one and a half gallons when gas is $4.50 a gallon... Cars, for all the pain they cause, are a very easy way to get around; taxing gasoline would most likely lead to a decrease in mobility. Comments are open... :-)

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Carbon Offsets & the Environment

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The Economist has a good post on why carbon offsets aren't a pass for consuming bad energy. I've stopped publicly advocating for environmental change, mainly because I fly a lot and consume lots of energy. My family's home is located about fifteen minutes drive from anything, which I bug my parents about constantly. I will continue to advocate for the Pigou Club, higher carbon taxes, and consumption taxes on our nation's roads.

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Pigou Club in the Economist

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Petrol taxes Pigou or NoPigou? Nov 9th 2006 From The Economist print edition An old debate gets a makeover in cyberspace ARTHUR PIGOU, an early-20th-century British economist, might well have shuddered at the thought of Facebook.com, a student networking site. A hermetic academic, awkward in the company of women, he surely would have balked at the dating and the picture uploads. But what would he have made of the “Pigou Club”, which has surfaced on Facebook and is giving him unprecedented—even cultish—exposure? His appearance on the internet is down to a contemporary economist clearly at home in cyberspace: Greg Mankiw of Harvard University. For months, Mr Mankiw, a former adviser to George Bush, has been blogging away in support of “Pigovian taxes” on petrol, believing that a levy of $1 a gallon would not only bring America $100 billion of extra revenue but might also reduce global warming. With his Pigou Club Mr Mankiw has whipped up a following behind an economist whose theories on unemployment came under attack from his colleague, John Maynard Keynes. On Facebook, 600 people have signed up to the Pigou Club. Mostly students, they join other Pigovians such as Larry Summers, Gary Becker, and Kenneth Rogoff. Pigou advocated taxation as a way to combat the negative externalities, or side-effects, associated with certain activities. These have been used to justify levies on cigarettes, alcohol and even traffic congestion. Their advocates argue that they could be used to wean Americans off their dependence on petrol, which degrades the environment, props up unsavoury regimes and clogs traffic. But governments are not perfect arbiters, say opponents of the Pigou Club. In the spirit of Ronald Coase, an intellectual nemesis of Pigou, a NoPigou club has taken shape on the internet, with its own Facebook following (though with only 59 supporters so far). Coase claimed that a Pigovian tax would penalise producers and consumers and might have other undesireable side-effects. People should be able to negotiate among themselves when there are side-effects, he said. Terence Corcoran, editor of Canada's Financial Post, writes a NoPigou blog, arguing that such taxes are blunt instruments and governments have insufficient information about them to wield them properly. Pigou did indeed accept that point, albeit rather late in life, so it is unclear how he would have felt about petrol and global warming. One thing, however, is certain: the reclusive outdoorsman would have found the effects of internet fame decidedly taxing.

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Pigou Club

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I started the Pigou Club campaign on Facebook. This is possibly the most unpopular, yet most necessary issue facing Americans today. A gas tax would change the way we live for the better. Check it out here. "The Pigou Club is described as an "an elite group of economists and pundits with the good sense to have publicly advocated higher Pigovian taxes, such as gasoline taxes or carbon taxes." Typically these pundits and economists also advocate lowering other taxes, such as the income tax or the corporate tax. These ideas are also known as an Ecotax or green tax shift." The Pigou Club was founded by economist N. Gregory Mankiw. Here are some reasons he has for a Pigovian tax on gasoline consumption: The burning of gasoline emits several pollutants. A higher tax on gasoline would reduce road congestion by encouraging other forms of transport. A consumption tax is the simplest way to reduce incentive to consume gasoline - easier than 'heavy-handed market regulation.' Our current budget deficit is far too large to be sustainable. We need to raise money to address the gap between revenues and expenses. As demand for gas decreases, the worldwide price of gas will fall. Consumption taxes are better than income taxes, because they encourage saving and investment We rely on Saudi Arabia and Russia, two corrupt governments, for oil. If we stopped feeding them money, then they would have less sway in world politics. Right now the Pigou Club is pretty exclusive, but there's no reason it needs to be. Here college students can express their interest in raising the consumption tax on gasoline. Hopefully, when political figures speak on your college campuses this fall, you need to ask them why the gasoline tax is so low and why we aren't trying to raise it.

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