There are some folks in the environmental community who view taxes as a method for dealing with pollution problems as fundamentally immoral. Not only do they view pollution as a moral wrong (instead of as a cost) they also believe that putting taxes in places is akin to giving firms “licenses to pollute.”

Why?

Taxes permit firms to make a simple choice. Clean-up the pollution and produce at a higher cost, or continue to pollute but pay the tax to “society” as compensation. Opponents wish to see pollution banned. Of course, this is nonsense for many reasons we have explored on this site (search through the “Environment” category). As you guys probably know, eliminating all pollution is undesirable because pollution is a byproduct of things we like. To ban pollution from a macaroni plant, it would be the same as saying that we will have very little, or no, macaroni. But we like macaroni. Similarly it is very costly to clean up additional units of pollution. Imagine, for example, how easy it is to clean the first few sprinkles off of your floor after the kids dropped the bowl. Then compare it to how costly it is to get behind the fridge to get that last remaining “pollution” sprinkle.

If people take this view seriously, that pollution is an unnecessary cost to produce goods, and that we should eliminate it, then it ought to follow that these folks should support the firing of all workers. Workers are costly. In fact, they are unnecessarily costly, in very much the same way that pollution is unnecessarily costly. So how many environmentalists do you see out there calling labor a moral wrong? After all, isn’t labor very close to slave labor? That truly is awful – so labor would seem to be closer to something morally wrong than SO2 emissions would be. This is no less ironic given the push in the environmental community to create “green jobs.” So, in their view, eliminating by diktat one moral wrong (pollution) will be great because it will enable us to dramatically expand the scope of yet another moral wrong.