Milne, Janet E. --- "Environmental Taxation in the United States: Retrospective and Prospective" [2011] ELECD 728; in Cullen, Richard; VanderWolk, Jefferson; Xu, Yan (eds), "Green Taxation in East Asia" (Edward Elgar Publishing, 2011)

Book Title: Green Taxation in East Asia

Editor(s): Cullen, Richard; VanderWolk, Jefferson; Xu, Yan

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781849803007

Section: Chapter 5

Section Title: Environmental Taxation in the United States: Retrospective and Prospective

Author(s): Milne, Janet E.

Number of pages: 28

Extract:

5. Environmental taxation in the
United States: retrospective and
prospective
Janet E. Milne*

The fight against pollution . . . is not a search for villains. For the most part, the
damage done to our environment has not been the work of evil men, nor has it been
the inevitable by-product either of advancing technology or of growing population.
It results not so much from choices made, as from choices neglected; not from
malign intention, but from failure to take into account the full consequences of
our actions. Quite inadvertently, by ignoring environmental costs we have given
an economic advantage to the careless polluter over his more conscientious rival.

President Richard M. Nixon, 19701



1. INTRODUCTION

In 1920, A. C. Pigou quietly launched the effort to use tax systems to address
environmental problems with his statement that it is "possible for the State,
if it so chooses, to remove the divergence in any field [between trade and
social net product] by `extraordinary encouragements' or `extraordinary
restraints' upon investments in that field,"2 citing taxes as an example.3
Although not confined to environmental problems, his concept has become
synonymous with the principle of internalizing environmental externalities.
Taxes that increase the cost of environmentally damaging activities can
serve as "extraordinary restraints" that bring the external environmental


* The author expresses her appreciation to Richard Cullen for organizing the
conference that generated this chapter. A modified version of this chapter was
published in Lewis & Clark Law Review, Volume 15, Issue 2, 2011.
1 President Richard ...