What impact would a consumption tax have on the environment?

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Protecting the environment is one of the most important causes americans are getting behind. However, there hasn’t been much progress made to creating a sustainable world for the next generations. One way that we could protect the environment is to impose a tax on the consumption of energy that is hurting the environment.

There are little incentives to get people to use less energy. We can't rely on the goodness of people so action must be taken to fix the problem. In the article titled, Energy Tax Could Help Environment and Economy, by the Stanford New Service, an economist at the university, Lawrence Goulder, states that, "Environmental problems often result from situations in which producers and consumers don't face prices that give them incentives to balance environmental needs with other goals." In order to meet goals people need incentives. The greatest incentive is money. If it cost more to do something that is hurting the environment, many people will stop doing it or do less of it. This is very important because, as stated by Goulder, “Corrective taxes charge people for activities that have harmful indirect effects, such as using fossil fuels that pollute the environment. In contrast, distortionary taxes charge people for activities that are largely beneficial, such as earning income by working or investing.” Not only will a tax on consumption of energy be beneficial to the environment it will also encourage more people to invest their money.