Will EPA Pass a Cow Gas Tax?

December 4, 2008

A story from MSNBC about the EPA possibly implementing a per unit Pigouvian tax on cows to offset the greenhouse gas emissions that cows are responsible for.

The farmer featured in the story complained about how such a tax would hurt him financially. While that may be true, it should be irrelevant. If there is truly an externality here and it can be effectively measured and properly implemented, then there should be a tax on cows in the amount that is equivalent to the negative harm done per cow. That’s all that matters. It all hinges on the extent to which cows cause global warming and the extent to which global warming harms society. I’m not in a position to answer that question, but just because it may harm a farmer doesn’t mean it’s bad policy.

Side note: The video quoted how much in additional tax the farmer in the story, Charles Hanehan, would pay under this proposed tax. And he made a ridiculous comparison to the bailouts that certain companies are getting right now, which is irrelevant. But since he brought up handouts to certain companies, I did a little digging on EWG’s Farm Subsidy Database and found that Hanehan Family Dairy received $561,695 in subsidies from 1996-2006. You can’t make this stuff up.

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