07/10/2013 11:34 am ET Updated Sep 09, 2013

Taxation Without Conservation

The Virginia State Legislature has got it directly backwards in advancing the cause of environmental protection and ecologically sustainable energy use.

Government fiscal policies are supposed to encourage environmentally beneficial behavior, not penalize it. Yet Virginia lawmakers have proceeded to impose an extra levy on the owners of economy-oriented hybrid and electric cars. Why? Because these motorists were not using enough fuel to generate their "fair share" of gasoline tax revenue needed to maintain the state's roads.
Smart thinking! Punish people for being more energy efficient and producing less pollution. There is a reason Congress approved a tax credit for purchasers of these battery-powered vehicles. The idea is to attract as many converts as possible to these technological engineering breakthroughs in the name of superior fuel economy and pollution reduction. If additional revenue is required for highway upkeep, raise it through additional taxes on pollution, waste, and other environmentally detrimental activities. In doing so, you create a deterrent as well as a cash producer.

Indeed, tax incentives and disincentives are clearly a key mechanism for transitioning Americans from an environmentally unsustainable fossil fuel-dependent society to one reliant primarily on sustainable renewable energy. Without these fiscal incentives and disincentives, people often won't budge. It is human nature to resist voluntarily shifting from a well-established status quo in response to a serious threat (such as global warming) incremental in character.

Unfortunately, a majority of the Virginia legislators appear completely oblivious to the challenge that lies ahead.

If we are going to leave some semblance of an environmental legacy for future generations, a gradual tax on carbon emissions should be imposed to wean us off over reliance on fossil fuels.
But financial manipulation for the greater good should not be limited to a carbon impost. Tax breaks and government subsidies should be routinely extended to programs dedicated to recycling and reuse of materials as well as research and development of clean, renewable energy. Conversely, new taxes should be imposed to discourage involvement with environmentally detrimental goods and activities. Among the targets eminently qualifying for this treatment are cigarettes and any conduct associated with inordinate waste of natural resources.

By internalizing the environmental costs of products through a tax, the worst offenders should ultimately be priced out of the marketplace.

All this has been lost on the Virginia State Legislature, which needs to correct its misstep--and philosophy--without delay.