Market Based Environmentalism

China one of the most polluted countries in the world is about to embark on a new path
that addresses at least some of the complaints raised by environmentalists.
The Chinese Ministry of Finance has revealed a whole slew of initiatives that are to go into effect on April1, 2006. The method chosen by the Chinese in this case is the straight forward simple strategy that personal behaviour is essentially influenced by market incentives. As a result China will attempt to mitigate environmental damage and protect the environment by increasing taxes in some cases and imposing new ones in others.

In order to dissuade use of wood products a 5% tax will be imposed on the use of disposable chopsticks and wood floor panels. This must mean that disposable plastic chopsticks are more environmentally friendly. I did not know that.

Another measure will impose a tax on golf balls and golfing equipment. The Yangtze river will sure become less polluted as a result of making a round of golf more expensive.
And we must not forget that yachts and luxury watches are also to be subjected to higher taxes. I am sure that as a result of these measures Chinese demand for energy will be reduced substantially. It takes a lot of energy to keep a Swiss time piece going.

But then there are a few more sensible measures. One such measure will increase the tax on petrol and another one will impose a 20a5 tax on larger high polluting engines. But even in this case we have to ask whether the owner of a $100,000 car is going to change his/her behaviour because the operating cost of the vehicle have jumped by say $1000.00 a year.