Climate protection policy: new taxes or voluntary undertakings?

Abstract

Limits to Growth, the report published by the Club of Rome in 1972, triggered the global debate on the limits to energy consumption for the first time. Cybernetic models were used to determine the time at which raw materials would be exhausted as a result of human consumption and at which the Earth would be turned into an uninhabitable biosphere, partly as a result of pollutant emissions. The calls for equality of distribution regarding the use and consumption of the Earth's resources from one generation to the next resulted in a plethora of models ranging from rigid dirigism aimed at conserving natural resources to a ‘wait and see’ approach based on the belief that the price mechanism as the indicator of shortages would sort things out anyway. The proposal to use taxation instruments to create such equality in the distribution of the world's resources originated from the idea that the market prices of natural resources fail to reflect the finite economic nature of such reserves and that, as a result, resources are being consumed at an ‘excessive’ rate. Prices kept artificially high by tax surcharges would motivate consumers to reduce their level of consumption. The tax revenue could then be earmarked for investment in energy saving projects.