image1 image2 image3

PRODUCT.|PHILOSOPHY.|LIFE.

Get new posts in your email

The forest tax / dividend

Brazil's rainforests in the Amazon have been in the news recently. While there is rampant deforestation occurring in the Amazon, world leaders are calling on the Brazilian government to strengthen their environmental protection laws and put a stop to this deforestation. The arguments for this range from the Amazonian forests being a critical carbon sink in the fight against climate change to how Brazil's environmental laws can make or break the world's fight to rein in global warming.

But Brazil has little incentive to play ball, except for an altruistic sentiment of "if we don't do the right thing here, we could kill the entire planet in another two hundred years". And the counter-argument to that is, "If we do, then our economic growth will be hurt and we'll continue to live in the current levels of poverty and standard of living, or worse.

From a purely economic perspective, Brazil's economic interests aren't aligned with the long-term global climate interests. And this should be easy enough to remedy.

Those who live in apartment complexes pay a certain amount every month or every quarter towards collective maintenance costs. These funds go towards maintaining and developing the common areas like gardens, gyms, swimming pools, etc. At a slightly larger level, municipal taxes do the same for a wider area in terms of providing garbage disposal, water connectivity, etc. Similarly, there are state level and national level taxes that provide services at the level of the state or the nation - like highways, rail infrastructure, etc.

However, we don't seem to be approaching environmental laws in a similar way. Brazil has more to gain financially by cutting down the Amazonian forests than it does in protecting them.

Rather than appeal to them on moral and altruistic grounds about playing their part in saving the future of the planet, we should simply make it financially more beneficial for them to do so. This means, paying them money in return for preventing deforestation and keeping the Amazonian forests intact.

When the countries asking them to forego short-term financial gains forego their own short-term financial gains and hand over that money to Brazil as a price for keeping their forests alive, everyone's economic interests will be aligned with the long-term goals and we will put an immediate full stop on deforestation.

This approach can work for any country that has forests that we want to save. We could call this the forest tax for the countries that have to pay it and the forest dividend for the countries that receive it.

It is unfair to expect a few countries to take on the burden of saving the planet alone. It is about time everyone paid their price.

Share this:

CONVERSATION