What's the evidence that would change the behavior of the oil companies? Like you said, it would just be passed on to the consumer as an increase in price. Which may result in a decrease in consumption, true, but in reality I feel like it would just hurt the poor.
The problem right now is that oil is artificially cheap because its costs are externalized to society at large. If you charged oil companies in line with the social cost of their product, two things would happen:
1. They would try and run cleaner than their competitors to reduce their margins.
2. Whatever costs are passed on to the customer would affect customer behavior, reducing energy usage or making low impact energy more attractive.
The “It will be passed on to consumers” argument is debatable. Price is set at what the market will bear. If oil companies today could be more profitable by raising prices they would, regardless of their tax cost.
That assumes there is no competition. I don't know the oil market well enough, but if there is competition then you can't necessarily just raise prices to the maximum the market will bear. I'd assume there is some competition because when oil dips low enough they stop drilling new sites in ND as it is just more expensive to extract here (fracking).
Might I ask what do you think would change the behavior of any corporate bad actor effectively yet also preserving the legal cornerstone of the accused being innocent until proven guilty?
Yea, just another consumption tax, all of which is always paid by the consumer. And since the price doesn't discriminate by an individual consumer's income, it becomes in practice regressive. It would be great here if the individual companies could be better held liable as opposed to an across the board tax.
Consumption taxes are paid by declining demand (due to a price point movement) but in the case of an inelastic good that ends up being forced on the consumer. So in this specific case I think a tax would be a mistake and end up being regressive in practice, but adding a large tax on automobiles might be a good alternative, with the aim of slowly decreasing the demand side and encouraging alternate transportation...
Honestly though, the US could just start funding public transit properly so that the alternative isn't so dismal.
Individual companies will set up bankruptcy remote subsidiaries for each oil platform. Instead, they should be required to purchase insurance. Yes, this will increase the cost to produce where it is most risky. But isn't that the point?
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What's the evidence that would change the behavior of the oil companies? Like you said, it would just be passed on to the consumer as an increase in price. Which may result in a decrease in consumption, true, but in reality I feel like it would just hurt the poor.
The problem right now is that oil is artificially cheap because its costs are externalized to society at large. If you charged oil companies in line with the social cost of their product, two things would happen:
1. They would try and run cleaner than their competitors to reduce their margins.
2. Whatever costs are passed on to the customer would affect customer behavior, reducing energy usage or making low impact energy more attractive.
The “It will be passed on to consumers” argument is debatable. Price is set at what the market will bear. If oil companies today could be more profitable by raising prices they would, regardless of their tax cost.
That assumes there is no competition. I don't know the oil market well enough, but if there is competition then you can't necessarily just raise prices to the maximum the market will bear. I'd assume there is some competition because when oil dips low enough they stop drilling new sites in ND as it is just more expensive to extract here (fracking).
Might I ask what do you think would change the behavior of any corporate bad actor effectively yet also preserving the legal cornerstone of the accused being innocent until proven guilty?
Require them to carry insurance instead. Companies with safer practices would pay less.
Yea, just another consumption tax, all of which is always paid by the consumer. And since the price doesn't discriminate by an individual consumer's income, it becomes in practice regressive. It would be great here if the individual companies could be better held liable as opposed to an across the board tax.
Consumption taxes are paid by declining demand (due to a price point movement) but in the case of an inelastic good that ends up being forced on the consumer. So in this specific case I think a tax would be a mistake and end up being regressive in practice, but adding a large tax on automobiles might be a good alternative, with the aim of slowly decreasing the demand side and encouraging alternate transportation...
Honestly though, the US could just start funding public transit properly so that the alternative isn't so dismal.
Individual companies will set up bankruptcy remote subsidiaries for each oil platform. Instead, they should be required to purchase insurance. Yes, this will increase the cost to produce where it is most risky. But isn't that the point?