POLITICAL STUDIES: 2012

doi: 10.1111/j.1467-9248.2011.00924.x

Progressive Environmental Taxation: A Defence

Paula Casal
Universitat Pompeu Fabra, Barcelona

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The need to use green taxes to protect the environment is urgent, particularly because of climate change, and can be justied via sound deontological and consequence-based arguments. One very inuential criticism of such taxes, however, claims that they disproportionately burden relatively poor individuals who tend to contribute to environmental problems far less than wealthier persons. Critics can also object that because of the link between economic inequality and environmental destruction it is preferable to adopt environmental measures that impede rather than accelerate the growth of inequality. Defusing these criticisms, the article argues that various types of green scal reform can both avoid disproportionally burdening those who pollute least and reduce the economic inequalities that income taxes leave behind, and slow down the collectively self-defeating consumption arms race that currently besets so many afuent societies. Global progressive environmental taxation is also a possibility, and even easier to justify.

Keywords: climate change; domestic and global inequality; geoism; Rawls

We must address the issue of green taxation but we must avoid making life more difcult for poorer individuals by causing prices to rise even more, and we must avoid following the countries outside Europe that employ subsidies and price regulations, which have proven a bad idea ( Jos Lus Rodrguez Zapatero).1

It has been estimated that climate change kills 300,000 people per year and causes annual losses worth $125 billion (Global Humanitarian Forum, 2009, p. 11). Humanitys contribution to this disaster is very unequally distributed. For example, each UK birth will be responsible for 160 times more greenhouse gas emissions ... than a new birth in Ethiopia (Guillebaud and Haynes, 2008). Inequality and environmental destruction are connected. One reason is that both afuence and poverty can be environmentally deleterious. Afuence often leads to waste. For example, North Americans consume and pollute twice as much as the average European but do not enjoy superior or safer lives ( Wilkinson and Pickett, 2009).2 On the other hand, sometimes destitution and indebtedness make the poor over-exploit the little land left for their subsistence, destroy rainforests and use resources in other short-sighted ways. Sitting back to study the best collective, long-term use of natural resources is often a luxury the poor cannot afford. The need to secure the survival of at least one child, for example, tends to lead to high birth rates, exacerbating existing problems. Even in the United Kingdom, the poor have a substantial environmental impact because of badly insulated rented properties that they have insufcient incentive to insulate more effectively. Nevertheless, the impact of the rich is far greater than that of the poor. The richest fth of humanity accounts for 86 per cent of global consumption, including 87 per cent of cars, 84 per cent of paper, 74 per cent of telephones, 65 per cent of electricity, 58 per cent of energy and 46 per cent of meat (United Nations, 1998, p. 4). In contrast, the poorest fth consume less than 10 per cent of all these items. Environmental destruction in poor countries, moreover, tends to be caused by consumer demand in the developed world.
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Economic inequality is linked to high aggregate consumption not only because both afuence and poverty lead to resource misuse but also because the capacity to control environmental destruction and to escape its effects is very unequally distributed. Inequality also fetters the search for solutions because it divides humanity into two groups, neither of which shares both the capacity and the urgent need to avert environmental disaster.3 Recent worldwide statistics suggest that less unequal societies are more sustainable, display higher levels of recycling and manage to provide public goods like education or health care at a lower environmental cost ( Wilkinson and Pickett, 2009, pp. 215ff.).4 The authors also link inequality to lower life expectancy and higher infant mortality, teenage births, homicide, drug use, length and quality of imprisonment, obesity, lack of community and trust, poor education and mental and physical illness. Other studies also associate equality with greater economic security and well-being (ILO, 2004). Even if Richard Wilkinson and Kate Pickett overestimate the perniciousness of inequality, the conjunction of all the above considerations favours solutions to environmental problems that diminish, or do not exacerbate, our current exceptionally high levels of economic inequality (Gentleman and Mulholland, 2010; Saez, 2008). This article examines and defends one such solution: progressive environmental taxation. The second section explains three types of argument for taxing pollution and resource use, and the third section offers three arguments against doing so regressively. The fourth section describes various ways of implementing progressive environmental taxes and the fth section suggests two ways of defending them either as distributive taxes or as deterrence taxes. The nal section returns to the global inequalities with which the article starts. Western societies tend to levy half of all taxes on labour, and hardly tax pollution, waste or resource use.5 The article argues that we can strike a much better balance, particularly now we understand better how to calculate the regressive impact of new taxes and the ways in which regressivity can be reduced. The articles normative arguments apply to the consumption of all materials and energy, and the assimilative capacity of the environment to deal with waste (Pearce, 1995, p. 114). The proposed reform, however, would have to be gradual, starting with the narrower base employed by existing environmental taxes, such as taxes on carbon use, which are the most urgent, and adding further taxes as doing so becomes practically and politically feasible. On the other hand, the reform may also include a broader base, as some methods of implementing progressive environmental taxes (see the fourth section) include progressive expenditure taxes, and some of the normative arguments (see the fth section) also apply to them. Including some expenditure taxes will broaden the base, as expenditure is just the portion of income that is not saved, and thus includes the purchase of any goods and services, rather than only those involving natural resources. The article is open to various options for implementation as it focuses primarily on the normative arguments rather than the practical details.

Environmental Taxation: Three Defences

Environmental taxation can be defended on several different grounds. The thought that all humans have an equal claim on planetary resources animates what I shall term geoist
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arguments whilst consequentialist arguments appeal to the benecial effects of environmental taxation. The value of transparency provides additional support.

Geoism
Geoism is a philosophical tradition advocating the rights of all humans to a fair share of the Earth.6 This tradition is often associated with John Locke and his concern that those who appropriate previously unowned parts of the natural world leave enough, and as good, left in common for others (Locke, 2004 [1890], p. 17). Similar intuitions, however, are held by authors who are not committed to a fully Lockean outlook (Beitz, 1975; Pogge, 2008, p. 211; Singer, 2001, pp. 2731). Natural resources have a number of features that explain why even those who do not condemn inequalities in welfare, income or capabilities may still insist that natural resources should be distributed equally among co-citizens or all human beings. First, unlike inequalities in cultural consumption, wealth, health or welfare, inequalities in the consumption of natural resources are always, in at least one respect, detrimental to the least advantaged. If I become happier, wealthier, healthier or buy more music, I need not reduce the amount of happiness, wealth, health or music available to others. In fact, I may even increase it, by stimulating further production, or by spreading some of my wealth, knowledge or happiness around. There is not a constant amount of these items in the world to be distributed among its inhabitants.7 Natural resources, by contrast, exist in limited supply, and are rival in consumption: if I consume some, others will have to get by with less.8 Second, while an individual can claim credit for his or her wealth, capabilities or welfare, natural resources are not created and thus nobody can have claims over them in virtue of a producers entitlement. This feature appeals to libertarians, for whom the fruits of labour are not taxable; the fruits of nature are (Steiner, 1992, p. 82; 1999) as well as to nonlibertarians.9 Finally, natural resources are uniquely essential to human survival. In fact, perhaps nothing else is essential for survival at all.10 A comparison with natural talents illustrates two additional considerations. One is that while the development of talent typically involves positive externalities, the consumption of natural resources typically results in pollution and waste. As a result, others will not only nd that the resource they were hoping to use has been depleted, but also have to deal with inescapable, perhaps highly dangerous, negative externalities. Another consideration is that, while beneting from an individuals genius requires his or her (forced or voluntary) involvement, natural resources can be easily distributed, and deployed by all and not only their initial possessors.

Consequences
The single most important reason to tax environmental destruction is, however, the urgent need to reduce it. The sooner environmental taxes are introduced, the sooner science and technology, industry, transport, urbanism and architecture will develop in the right direction. By contrast, having to x later millions of dark, energy-demanding buildings, for example, will be far less effective and more costly than making them green and luminous from the start. As Nicholas Stern emphasises, even a small delay in the needed scal reform can sharply raise the cost of achieving the same targets, making currently achievable goals
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simply unachievable (Stern, 2007, pp. 652ff.). This delay could thus kill millions of people and obliterate thousands of species.

Transparency
As many economists note, while other taxes distort prices and reduce outputs, environmental taxes enhance efciency by internalising costs currently passed on to third parties or borne by society as a whole. Information about the true cost of our choices is also important from a moral point of view. It matters that individuals understand why their government taxes tobacco and alcohol rather than fruit and vegetables, and it is even more important to understand the potentially lethal impact our actions may have on millions of innocent individuals. This feature should be attractive to those who, like John Rawls, stress the importance of ensuring that citizens understand public rules, and their justication, and gain awareness of the costs various activities generate and assurance that everybody will suffer the same penalties for non-compliance (Rawls, 1999, pp. 47ff.).We should not want to live in the dark about the harms we impose on others. I conclude that there are several weighty reasons to introduce environmental taxes as soon as possible. The urgency of an environmental tax reform, however, also gives us reasons to address objections that could delay their implementation.

Enviromental Taxation: Three Difculties Fairness

Poorer individuals tend to spend a greater proportion of their income than wealthier individuals, and to purchase goods with a natural resource component. Thus, if environmental taxes are introduced, poorer individuals will forgo a larger proportion of their income than wealthier individuals (see Vier et al., 2005). In very unequal societies, disproportionally burdening poorer individuals with environmental taxes is often deemed unfair not only because these individuals are poorer but also because they have typically contributed to environmental problems far less.

Political Feasibility
It is difcult to promote environmental taxes on the political agenda because: (1) their burdensome effects are usually more immediate and tangible than the environmental benets they produce; (2) many believe legislators have stronger obligations towards their co-citizens, particularly in the worst-off groups, than to those affected by environmental problems in other countries; and (3) when inequality is steadily growing, many regard the tax system as a way of softening rather than deepening this trend.11 In fact, most people support progressive taxation,12 and those more likely to support environmental taxes tend to be particularly opposed to taxes with a regressive impact because of the considerations about fairness just mentioned and a growing awareness of the links between inequality and destruction mentioned at the start. One may try to soften the regressive impact of some environmental taxes by granting tax exemptions, subsidies for environmental home improvements or reductions in national insurance contributions, which may stimulate employment. These reductions, however,
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may not help pensioners, single mothers, and individuals in areas where it remains hard to nd paid employment. None of these measures, moreover, eliminate the complaint that those who will suffer environmental taxes least are wealthier individuals who typically contribute to environmental problems most.

Effectiveness
A distinct though closely related complaint is that in a very unequal society a single rate is unlikely to be sufciently high to change the less elastic behaviour of the high consumers and sufciently low not to seriously harm lower-income groups, particularly when the market tends to deepen this problem by systematically rewarding high consumers. Frequent iers, for example, are rewarded with extra air miles rather than penalised for having contributed to climate change much more than occasional iers. Similar techniques to boost sales are employed in other areas, deepening the existing patterns of inequality in both income and environmental consumption, with the rich consuming up to ten times more carbon than the poor within the same society (Wilkinson and Pickett, 2009, p. 218). Some might respond that we need to reduce economic inequality greatly by making income taxes even more progressive, and then introduce environmental taxes regardless of what their regressive impact may be. This, however, may prove even less politically feasible than introducing environmental taxes straight away. Many oppose raising income taxes further much more than taxing pollution because they think that society should encourage industry but not pollution, or because they afrm a right to the fruits of ones labour but not a right to pollute. Moreover, as I later explain, progressive income taxes have only a limited ability to reduce inequality. Designing environmental taxes differently, however, may not only solve all the above-mentioned problems but may even remove inequalities that progressive income taxes leave behind.

Introducing Progressive Environmental Taxes

Suppose that instead of charging everybody at the same rate, regardless of how much they pollute, we tax those who cause average pollution at lower rates than those who cause above-average pollution but at a higher rate than those who cause below-average pollution. At least under the plausible assumption that frequent iers tend to be high-iers and that those with large, or multiple, cars and houses tend to be rich rather than poor,13 such a tax will avoid hurting lower-income households and be more effective at curbing the less elastic demand of the high consumers. By taxing high consumers at higher rates, such a progressive environmental tax combines the sensitivity to individual characteristics of progressive income taxes with the deterrence properties of tobacco or alcohol taxes. If the rate remained the same for all individuals, those in low-income groups could complain that they are being forced into a pointless sacrice, for richer high consumers would eventually consume what those on lower incomes (or stricter moral codes) had painfully saved. A higher tax rate for high consumers also lessens this problem. In some respects, moreover, progressivity is easier to justify in the case of taxes designed to deter depletion and pollution than in the case of taxes on income. First, unlike high earners, polluters clearly have undesirable effects on others. They worsen environmental problems and cause environmental taxes to rise in response to continued pollution. This
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makes penalties for repeat offenders easier to justify. In fact, it would be clearly permissible for a very egalitarian society to impose higher penalties for those causing well-aboveaverage pollution. Finally, by raising the rates on upper echelons, progressive taxes have a greater ability than at taxes to ensure upper environmental limits are not surpassed without risking social paralysis or depriving anyone of some minimum provision.

Implementation Methods
Nowadays, there are various methods to make environmental taxes progressive in the sense I have just indicated. Before the mid-1970s, by contrast, we did not even have sophisticated blueprints for household expenditure taxes,14 even though expenditure taxes had been levied on rms for several thousand years, and household income taxes had been used for over a century (Seidman, 1999, p. 6). The idea of progressive expenditure taxes is even more recent. An active debate on concrete proposals arose mainly in the late 1990s, following the 1995 USA Tax Bill, introduced to the US Senate by Republican Pete Domenici and Democrats Sam Nunn and Bob Kerrey, and the 1999 Fair Tax Act introduced by Republican John Linder in the House. The debate, which was revived in the 2008 presidential campaign, focused on some aspects of the specic proposal, and the need to simplify the tax system and stimulate savings. It had little to do with global justice or the environment. Barack Obama rejected the proposal as insufciently progressive.15 Progressive tax plans, however, can be made more or less progressive by altering the conditions attached to each tax band or by implementing them in combination with additional measures. Thus, in describing various ways to introduce progressive environmental taxes, it is important to stress that the case for progressive environmental taxes must be distinguished from the case for any specic method of implementing them. The most desirable tax-andtransfer package may differ across societies, and involve a variety of methods. After all, what matters is the net impact of all taxes and transfers, and various other aspects of the relevant society, such as how the poor travel or keep warm. The arguments supporting progressive environmental taxes, however, just like the arguments supporting progressive income taxes, can be discussed independently of any specic tax scheme.

Luxury Taxes
One simple way of reducing pollution without causing a regressive scal effect is to introduce luxury taxes on items like second homes, tropical woods, ights, fast cars, speed boats, water motorbikes and sports utility vehicles, which poor people are unlikely to purchase. John Stuart Mill advocated luxury taxes (Mill, 1994 [1848], pp. 2424) but noted that a necessity for some may be an item of vanity for others. This may justify exemptions in the case of revenue-raising luxury taxes. In the case of depletion or pollution-deterring luxury taxes, by contrast, compensatory funds (non-earmarked subsidies) may be better than exemptions because they preserve the desired incentives, and both recipients and society may benet from the possibility of individuals adopting greener alternatives so that they can employ their subsidies on the less harmful items they prefer. Additional luxury taxes may also be levied on cheap or free items like over-packaged goods or plastic bags, which the poor may, but need not, consume. These taxes are likely to be lower than those on items the poor cannot afford, because less wealthy buyers are easier to deter.
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It is perhaps worth clarifying here that though deterrence taxes whether on pollution or alcohol are supposed to be levied only on items of proven harmfulness, the exact tax per unit need not represent the exact harm a unit produces. This would be hard to predict, among other things because it depends on how other consumers behave. Instead, it represents the deterrence needed to reduce consumption to some desired level. For example, Ireland achieved a 90 per cent reduction in plastic bag consumption with a 15 cent tax in 2002.16 This gure does not represent the harm caused by each bag but the amount needed to achieve a 90 per cent reduction in a particular country and year where consumers have certain habits and alternatives. This is why taxes are often adjusted in view of the observed response to initial rates, as is likely to happen with all the implementation options considered here.

Tax Rebates
A more drastic option than luxury taxes involves taxing all items and either introducing partial or total exemptions for necessities or rebating a xed amount to each taxpayer annually. Imagine, for example, a rebate equalling the tax rate multiplied by the minimum wage. Supposing the annual minimum wage was $10,000, and the tax rate was 15 per cent, the rebate would be $1,500. Thus, a minimum wage earner spending all his or her income will actually pay no expenditure taxes at all. Since modest rebates are scarcely progressive among the wealthy, some authors combine them with progressive income taxes for high earners (McCaffery, 1992, p. 114; 1999; 2002). Further provisions need to be made for dependent children. Perhaps half of an adult rebate should be added for each, and granted to a maximum of two per family. This system can be employed to tax all spending, to tax mainly or only environmental consumption, or to tax something even more specic like carbon, taxing fuels at source and distributing the revenue equally, as James Hansen (2009, pp. 20922) has proposed.

Progressive Expenditure Taxes with Environmental Taxes

An individuals expenditure, which is the result of subtracting a persons savings from his or her income, can easily be subjected to a progressive tax.17 Since this will involve taxing all spending, then environmentally damaging items would have to be subject to additional taxes, so that the total tax paid by the less environmentally friendly consumers will also be higher. These additional taxes could themselves be luxury taxes, taxes on carbon and other substances or both.

Environmental Credit Cards

The environmental impact of an individuals consumption can be recorded much as we record individual savings. Individuals may be able to purchase goods without any additional charge, so long as they have not used up their allowance. As they use up their allowance, and incur so to speak an ecological debt, they will have to pay a surcharge, which will grow with the size of the debt. Given the difculty of taxing whatever damages the environment to any degree, the scheme might focus on the amount of carbon an individual uses and count only a few items like housing, ights, cars, boats, bikes, petrol and energy for heating and lighting. Additional
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items can be added after the pilot phase, including non-carbon global-warming agents, and substances involved in environmental problems other than climate change. Depending on political feasibility, and how much, and how urgently, consumption of certain resources must be reduced which crucially depends on the delay with which environmental taxes are introduced the relevant authorities would determine whether individuals will be permitted to consume some tax-free amount, how large this exemption should be and the rate at which the tax increases on those who exceed it. A tax-free ration can be justied by appealing to sufciency principles that grant special status to the satisfaction of our basic needs (Casal, 2007) and by noting that what is objectionable, and taxable, is not consumption as such but rather consumption exceeding some threshold.18 Exemptions, however, do not eliminate regressivity and neither the individuals below the threshold nor those far above it may be motivated to reduce consumption further. Both problems disappear, though, when tax rates rise as an individuals consumption above the relevant threshold also increases. Imagine that transactions are monitored by a computer, which species the appropriate rate, depending on the buyers consumption history. For example, one might be allowed to consume n units of carbon at a zero tax rate, and then be taxed at 10 per cent for the next n units, 20 per cent for the subsequent n units and so on. Belgians have cards with a magnetic strip indicating their medical consumption histories, which they hand in at pharmacies when purchasing treatment. A similar system could monitor environmental consumption. To secure compliance, appropriate discounts could be obtained only by presenting the card.19 Alternatively, an environmental payment card might be required to purchase certain items, and to protect privacy, computers could record only the amount consumed by each rather than details about specic items. If other taxes are not reduced the additional revenue could nance environmental improvements. Alternatively, low consumers could be allowed to obtain nancial rewards for their frugality by selling to the state, or on a permit market, their permissions to purchase goods at pre-tax prices. In the rst case, those whose total consumption remains below the allowed limit would receive a basic income (Van Parijs, 1995) nanced through progressive environmental taxes.20 In the second case, all consumption permits will have the same price and the initial progressivity will disappear.21 On the other hand, the scheme would still help to diminish inequality as well as pollution since individuals who consume less will have more permits to sell.22 The resulting basic income unconditional upon willingness to work but sensitive to consumption habits will be less likely either to generate resentment on the part of the industrious or to dampen incentives than one nanced exclusively through income taxes. The next section discusses the incentives problem further.

Progressive Environmental Taxes: Two Defences

Introducing environmental taxes involves shifting some of the tax base from income to expenditure. Some methods for implementing such a shift, as well as some arguments for progressive environmental taxes, apply not only to environmental consumption but to all expenditure to some extent. The rst such argument concerns redistribution and economic inequality; the second, consumerism and debt.
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Environmental Taxes as Redistributive Taxes

Edward McCaffery advances the rst type of argument when he challenges the assumption that income taxes are superior to expenditure taxes on distributive grounds. McCaffery (1994; 1999; 2001) and Laurence Seidman (1999, pp. 35ff.), among others, argue that income taxes fall on wage earners and not on property owners who can save, invest and increase their wealth in ways that do not produce taxable income. Moreover, as income taxes do not tax spending nanced by debt, wealthy property owners can borrow large sums and spend them all without paying a cent in tax. They often die leaving large debts and even larger stores of appreciated assets that are sold, tax free, to pay off the debts. If so, a fairer tax system might be constructed by combining progressive taxes on both income and expenditure. In fact, according to Joseph Bankman and David Weisbach (2006) the best expenditure tax is both more egalitarian and more efcient than the best income tax, even if one leaves aside implementation problems in taxing income. The need to preserve incentives is often regarded as a further limit on governments ability to reduce inequality through income taxation. Many are reluctant to increase the rate of income tax beyond the point where it deters individuals productive efforts in ways detrimental to the least advantaged or society at large. To justify their view, they can argue that the remaining inequalities pass Rawls test for just inequalities: an inequality in expectation is permissible only if lowering it would make the working class even ... worse off (Rawls, 1999, p. 68). Like Rawls, they might conclude that if the greater expectations allowed to entrepreneurs encourages them to do things which raise the prospects of [the] laboring class the resulting inequalities are not unjust. This inuential argument, however, is less applicable to taxes on expenditure than income taxes if individuals withdraw their labour to a lesser degree in response to the latter taxes. This variation in response is often likely to arise since the desire to purchase more goods and services is not the only motive to work in return for a higher income, and expenditure taxes, and even more clearly environmental taxes, will dampen these additional motives to a lesser degree than income taxes (Bankman and Weisbach, 2006, pp. 1448ff.; Murphy and Nagel, 2002, pp. 101ff.). Employing a combination of income, expenditure and environmental taxes thus increases the possibility of reducing inequality without jeopardising the incentives necessary for economic efciency. Progressive environmental and expenditure taxes can thus help remove some of the inequalities that other taxes leave behind. A consequence of this is that various inequalities that appear to be necessary to benet the worst off, and for that reason not unjust, could instead be unnecessary and unjust. Rawlsians should therefore look favourably on this possibility of achieving greater reductions in inequality in ways benecial to the least advantaged, which are unobtainable through income taxes because of the impact that such taxes have on incentives. Rawls overlooked this possibility because he was unaware that expenditure taxes could also be progressive. Thus, while he commends expenditure taxes in other respects,23 he advocated income taxes for their progressivity. He explains that even if expenditure taxes are part of an ideal scheme for a well-ordered society ... it does not follow that, given the injustice of existing institutions, even steeply progressive income taxes are not justied
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when all things are considered (Rawls, 1999, p. 246). Under non-ideal conditions, Rawls suggests that progressive income taxes may reduce inequalities that have been unjustly generated (e.g. when income is not fairly earned), or that can themselves generate injustices (e.g. by undermining equal basic liberties or fair equality of opportunity). Income taxes must thus be adopted because two wrongs can make a right, in the sense that the best available arrangement may contain a balance of imperfections, an adjustment of compensating injustices (Rawls, 1999, p. 247). Given that expenditure and environmental taxes may also be valuable tools to minimise net injustice, and achieve reductions in inequality benecial to the least advantaged,the best available arrangement should also include them. The models involving a rebate, for example, instead of hurting the poor, can employ existing inequalities to their benet (Rawls, 1999, pp. 28493, pp. 128f., p. 140, pp. 302f., p. 362).

Environmental Taxes as Deterrence Taxes

Robert Frank employs the second type of argument when he advocates expenditure taxes as a brake on what he terms the consumption arms race (Bankman and Weisbach, 2006, pp. 1447ff.; Frank, 2000), a collective action problem with various deleterious consequences for society. Participants in the race spend all they earn, and what they have not yet earned, and remain frustrated because they lack the assets not only of their neighbours but their non-neighbours: a survey of the United States showed that 35 per cent of the sample aspired to reach the top 6 per cent of the income distribution, another 49 per cent aspired to emulate the wealthiest 12 per cent, and only 15 per cent reported that they would be satised with being middle class (Fournier and Guiry, 1993). Another US survey showed that the level of income needed to full ones aspirations had doubled between 1986 and 1994, and that by the end of the 1990s it was more than twice the median household income (Schor, 1999a, p. 5; 1999b). Given such aspirations, as some ascend the economic ladder (and the top 1 per cent of earners captured 70 per cent of all earning growth in the United States in the last two decades of the century [Frank, 1999] and over half of the overall economic growth from 19932008 [Saez, 2008, p. 2]), they quickly buy faster vehicles and second homes near the best schools. Others, afraid of being unable to compete, stretch their means beyond prudent limits. This leads to a collectively self-defeating trend towards higher risk bearing, lack of savings and investments, and neglect of public goods. Frank notes that each year we postpone repairs on structurally unsound bridges and shut down cost-effective drug-treatment programs, even as our spending on luxury goods continues to grow four times as quickly as spending overall (Frank, 1999, p. 11). Bankruptcy rates have been doubling every few years in the US, and in the UK personal debt more than doubled in less than a decade, exceeding UK gross domestic product in two consecutive years.24 This trend does not appear to match our considered judgements. As Frank notes,scores of careful studies show that we would be happier and healthier if we spent less on luxury goods, saved more, and provided more support for basic public services (Frank, 1999, p. 11). Debt can cause great anxiety, put a strain on family life and in extreme cases even lead to suicide. The consumption arms race is thus not only a recipe for environmental crises, but also for unmanageable debts, stress and sheer unhappiness.
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11

Global Poverty and Destruction

Unlike domestic reductions in inequality, domestic reductions in pollution reduce pollution globally, and global environmental improvements will benet the global poor. However, while progressive environmental taxes reduce the risk of harm to the least advantaged locally, they may still be detrimental to poor people elsewhere. For example, air-mile taxes may reduce developing countries income from tourism and exports. If this is detrimental to those countries, we end up with a similar conict to that with which we started: environmental problems harm the poor but some environmental solutions may harm them even more. One may still defend the scheme by referring to the current and future global poor who will be killed by climate change rather than to the current global poor who may bear nancial loses from reductions in exports and tourism. Complex empirical calculations may be required to estimate the relative severity of each problem, as in poor countries reductions in exports may also increase deaths. Developing countries, aid agencies and independent experts, however, rate climate change as far more devastating, and have supported scal means to reduce developed countries emissions in Copenhagen as well as Rio and Kyoto. Moreover, the global poor will have a very strong complaint if they are submerged under the sea, devastated by storms, oods and droughts or killed by new diseases, because of climate change. They would not have an equally strong complaint if they bore losses in the export or tourist sectors as a result of Western efforts not to change the global climate. There is an uncontroversial right not to be ooded but not an equally uncontroversial right that others visit us or buy our products at pre-tax prices. The impact of environmental taxation on poorer countries may also be softened by, for example, reducing taxes on ights to poor countries relative to other environmental taxes, supporting exemptions for fair-trade products, campaigning against the elimination of other trade barriers, or employing some of the revenue to subsidise more energy-efcient technologies in developing countries. Finally, as in the domestic case, we may reverse rather than soften the impact of environmental taxation on the least advantaged. Some of the schemes described earlier could be implemented across the world, for example by combining a global environmental tax with a global tax rebate or by granting each country some tax-free per capita consumption units yearly, and allowing the sale of unused permits either to a central agency (as in the rst environmental card scheme) or on the global market (as in the second). When contemplating the possibility of a global progressive environmental tax, it is important to notice that, while we do not currently have gures on the environmental consumption of particular individuals, we do have gures for past and present national levels of per capita consumption and pollution, ecological footprints included. So at the global level we already have the data we require to levy environmental taxes progressively on each country. For example, we know which countries have well-above-average levels of per capita carbon emissions, and which ones are well below, and so it would be possible to impose higher global carbon taxes, or import duties, on the rst group than on the second. The fact that the United States and other high-polluting states have continued to drag their feet at Copenhagen does not provide a reason against such a proposal. On the contrary,
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it is important to show how the demands poor states placed on the wealthy were very modest relative to what justice requires. Even relatively conservative theories of global justice (e.g. Rawls, 2000) condemn killing or harming innocent people in peaceful countries, whether through napalm, toxic waste, resource pillage, ocean depletion or climate change. Moreover, while recognising that implementing progressive environmental taxes globally provides fresh feasibility problems, it is important to remember that from a normative perspective, the case for progressivity is even stronger in the global context for at least two reasons. First, global inequalities in both income and consumption are far greater than local inequalities; thus, the arguments rehearsed earlier regarding both fairness and effectiveness apply even more strongly to the global case. If taxes are regressive, they may have little effect on us, and be very burdensome to those in developing countries, with a hundredth of our income and a fraction of our efciency in energy per unit of output (Casal, 2011a; 2011b). Second, in the global scenario, there is a much clearer division between the authors and the victims of climate change (Stern, 2007, pp. 65161, esp. pp. 138ff.).25 Rich countries have become even richer in a process that has involved very serious harm and even worse threats to poor countries. Against such a background, the issue seems to be not whether those consuming well above their fair share should be paying any environmental taxes but rather quite how steeply progressive those taxes should be.

Conclusion
Environmental taxes can be defended on sound deontological or consequentialist grounds and their implementation is very urgent, particularly because of climate change. A common objection to their introduction rests on the assumption that they will disproportionately burden poorer individuals who tend to contribute to environmental problems far less than wealthier individuals. It may also be objected that since economic inequality and environmental destruction are linked in various ways, it would be preferable to adopt environmental measures that diminish, or at least do not exacerbate, economic inequality, which in some countries has recently reached an all-time high (Saez, 2008). Various types of green scal reform, however, not only avoid disproportionally burdening those who pollute least but can also reduce economic inequalities that income taxes leave behind, and slow down a collectively self-defeating consumption arms race. Global progressive environmental taxes are also possible, and even easier to justify. (Accepted: 16 February 2011) About the Author
Paula Casal has been an ICREA Professor at the Universitat Pompeu Fabra in Barcelona since 2008. She was previously a Reader in Moral and Political Philosophy at Reading University, and a Lecturer at Keele University (19962004). She has also been a Fellow in Ethics at Harvard University (19992000), a Keele Junior Research Fellow (also at Harvard 20001), a Hoover Fellow at Universit Catholique de Louvain (20012) and a Leverhulme Research Fellow at Oxford (20023). She specialises in distributive justice but is also interested in gender, climate change, multiculturalism and the overlap between ethics and primatology. The journals her work has appeared in include Ethics, Journal of Political Philosophy and Journal of Moral Philosophy. She is an Associate Editor of Politics, Philosophy and Economics,Vice-President of The Great Ape ProjectSpain, and a board member of Academics Stand Against Poverty. Paula Casal, ICREA Research Professor, Departament de Dret, Universitat Pompeu Fabra,Tras Fargas 25, Barcelona 08005, Spain; email: paula.casal@upf.edu
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Notes
I thank Jerry Cohen, Martin Janssen, Bert Hamminga, David Miller, Michael Otsuka, Jorge Riechmann and Andrew Williams for comments on the 1989 version of this article. For comments on the 1996 version I presented at Keeles ESRC Sustainability Seminar, I thank Brian Barry, Wilfred Beckerman, Andrew Dobson and Stephen Tindale. For more recent comments I thank Simon Caney, Robert Goodin, Axel Gosseries, Brent Howard, Marc Fleurbaey, Mathias Hungerbhler, Humberto Llavador, George Monbiot, Thomas Pogge, Henry Shue, Jeroen van den Bergh, Philippe Van Parijs and audiences at the Chair Hoover at Louvaine-la-Neuve (2001), the Equality Studies Centre at Dublin (2002), the Commodifying Carbon Conference at Oxford (2007), the Australian National Universitys Research School of Social Sciences (2007) and Oslo Universitys Center for the Study of Mind in Nature (2008). 1 Response to Joan Herrera, televised debate on the State of the Nation, TV2, 12 May 2009. 2 The US performs embarrassingly compared to Europe or Cuba in practically all dimensions examined by the authors (including child mortality, homicide, mental illness, teenage pregnancies, obesity and drug abuse). 3 Explaining why we allow ourselves to drift towards environmental disaster, Andreou (2007) compares us to a person who fails to get up when the alarm clock rings. I agree that procrastination is part of the problem, but to avoid excessively general and apolitical explanations we need to understand how large inequalities obstruct potential solutions and recall that the problems main victims and the procrastinating decision makers do not coincide. 4 Cuba was practically the only country classied as sustainable at the 1992 Rio Summit and by the WWF (2006). 5 They are below 1 per cent of GDP in the United States and Mexico, and below 2 per cent in OECD countries. Denmark leads with 4 per cent. See http://www.imf.org/external/pubs/ft/issues/issues25/index.htm [Accessed 1 May 2011]. http://ec.europa.eu/taxation_customs/taxation/gen_info/info_docs/tax_inventory/index_en.htm lists them as accounting for below 0.1 per cent of GDP. 6 Including Hugo Grotius, Samuel Pufendorf, John Locke, William Ogilvie, Thomas Spence, Thomas Paine, Hippolyte de Colins, Francois Huet, Patrick E. Dove, Herbert Spencer, Henry George, Leon Walras and possibly even John S. Mill ( Vallentyne and Steiner, 2001). 7 Even individual health is collectively benecial (Pogge, 2008, pp. 230ff.). 8 Of course, more efcient ways of using resources may be invented but this does not alter the fact that if some consume more natural resources there will be fewer natural resources left. 9 For example, Beitz (1975) notes that the distribution of natural resources is particularly arbitrary because the oil or diamonds in our subsoil are far less connected with our choices, efforts and identities than our talents. 10 As even Robert Nozick famously admits (Nozick, 1974, 180), it may be objectionable for an individual to appropriate all the water even if it is permissible for him or her to exclude others from less vital items. 11 Having reviewed various surveys and deliberative workshops, the UK Green Fiscal Commission concludes that fairness emerged as a key principle underpinning acceptability of tax reform (UK Green Fiscal Commission, 2009, p. 46). 12 Indeed, most US and EU citizens (87 per cent of Germans, 85 per cent of Britons, 84 per cent of Italians ...) support progressive taxation (Heineman and Hennighausen, 2010; Hite and Roberts, 1991; 2008; Lansley and Gowan, 1994). 13 Most leisure ying is performed by the richest fth of the UK population, who also have the biggest, newest, fastest cars and drive the longest distances (UKGFC, 2009, p. 31, p. 38). 14 Irving and Herbert Fishers Constructive Income Taxation appeared in 1942, and Nicholas Kaldors proposal for households, An Expenditure Tax, in 1955 (Fisher and Fisher, 1942; Kaldor, 1955), but there were no serious practical plans before J. W. Andrews (1974), the US Treasury (1977), the Institute for Fiscal Studies (1978) and Michael J. Graetz (1979). See Seidman, 1999, p. 145. 15 See Barack Obamas reaction to the proposal, available from: http://linderfairtax.house.gov/index.cfm?FuseAction=Letters. View&ContentRecord_id=313. [Accessed 1 May 2011]. 16 See http://news.bbc.co.uk/2/hi/europe/2205419.stm. [Accessed 1 May 2011]. 17 This is the method chosen by Seidman (1999), Fellows (1994) and, with an annual deduction for the rst $20,000, by Frank and Cook (1995). 18 For example, the Dutch carbon and energy tax on households and small businesses applies only for use between 800 and 170,000 cubic metres of gas and 800 and 50,000 kWh of electricity, in recognition of the impossibility of reducing consumption to zero. 19 See, e.g., http://www.ukerc.ac.uk/Downloads/PDF/L/Low_carbon_world_intro.pdf and http://papers.ssrn.com/sol3/papers. cfm?abstract_id=947485. [Accessed 1 May 2011]. 20 Black markets may develop but if penalties are high, taking risks for small items would be irrational, and hiding cars and houses is not easy. Most people do not disguise their income as someone elses to pay lower taxes and may be even more reluctant to declare their homes or vehicles as somebody elses. Besides steep nes, they may end up with invalid licences or insurance claims or sales that fall through. In any case, the point here is to defend progressive consumption taxes, not particular ways of implementing them. Thus, if a system presented practical problems, we would just have to achieve progressivity in some other way. 21 For illustration, imagine that Rockefeller wants to buy a fth yacht. Given his high consumption history, under the former scheme he would have to pay an extremely high over-consumption tax. For a sufciently high compensation, his low-consuming cleaner, however, may agree to the use of her low-tax consumption permit for this purchase. From that moment onwards, she will have to pay a higher tax rate for whatever else she consumes, but there will be a price she will be willing to accept for this drawback. If a market develops, all consumption permits will have the same price. 22 David Miliband (2006) proposed a scheme of personalised tradable carbon allowances when he was Secretary of State for the Environment. See Toynbee, 2006; House of Commons Environmental Audit Committee, 2008. 23 Thus, Rawls (1999, p. 246) writes:a proportional expenditure tax may be part of the best tax scheme. For one thing, it is preferable to an income tax (of any kind) at the level of common sense precepts of justice, since it imposes a levy according to how much a person takes out of the common store of goods and not according to how much he contributes (assuming here that income is fairly earned) ... And if proportional taxes should also prove more efcient, say because they interfere less with incentives, this may
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make the case for them decisive if a feasible scheme could be worked out. See also Rawls (2001, p. 161): income taxation may be avoided and a proportional expenditure tax adopted instead ... people would be taxed according to how much they [consume] ... and not according to how much they contribute (an idea that goes back to Hobbes). 24 UK personal debt grew by 1 million every eleven minutes in 2008, and household savings dropped below zero for the rst time in four decades, while China and India were saving at 25 per cent and 37 per cent, respectively ( Jackson, 2009, pp. 22ff.). See also The Independent, editorial, 24 August 2007 and 22 August 2008. 25 According to 2004 data, China made only a 9.33 per cent contribution to global emissions from 1950 to 2002 and only 87 per cent of the world average contribution. Moreover, a third of its emissions derive from production of goods for Western consumers, displaced to China to reduce Western costs and emissions. See NDRPRC, 2007, esp. p. 2, p. 6, p. 58; Kahn and Landler, 2007.

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