> a progressive consumption tax would for sure strongly incentivize the wealthiest to reduce the part of their consumption activities that pollute the most, <
Unless I misunderstood the proposal, it would be indifferent to how polluting a "consumption activity" is, and so would not incentivize the wealthiest to reduce high-pollution activities any more than low-pollution ones.
Perhaps you just meant that high-pollution activities would be more affected because the incentive to reduce would hit wealthy people harder and their activities are on average more polluting?
In a sense consumption tax like VAT is progressive in that richer people that consume more already pay higher taxes overall for their consumption. Why wouldn't one just suggest to increase VAT more or add tax to other forms of consumption without a VAT? (It's not progressive enough?)
Isn't it the point to discriminate certain markets for consumption ? Not a fan of Maslow pyramid, but we have to acknowledge some lexicographic preferences among goods, and some are prioritary for a decent life (as opposed to positional goods?). Having non-linear pricing for electricity, water, perhaps oil, since we intend to limit resource consumption, is surgery precision behavioral incentives. The problem I have is relative to distinguish usage for intermediary consumption and final consumption : how to deal with firms?
Of course also as you said, such concept can't rely on "Markovian" (no memory) markets, and asks for very invasive institutions (like electricity counters).
One advantage for electricity markets is that demand is (almost) vertical, defined by exogenous needs (light, warming) rather than immediate price. So changing price is okay. Not contradictory, it is just that linear pricing makes people indifferent on first order, quadratic or exponential would make the signal sufficiently strong (among the other benefits you mention). Studies show it smoothens consumption curve (in time and heterogeneous households).
> a progressive consumption tax would for sure strongly incentivize the wealthiest to reduce the part of their consumption activities that pollute the most, <
Unless I misunderstood the proposal, it would be indifferent to how polluting a "consumption activity" is, and so would not incentivize the wealthiest to reduce high-pollution activities any more than low-pollution ones.
Perhaps you just meant that high-pollution activities would be more affected because the incentive to reduce would hit wealthy people harder and their activities are on average more polluting?
In a sense consumption tax like VAT is progressive in that richer people that consume more already pay higher taxes overall for their consumption. Why wouldn't one just suggest to increase VAT more or add tax to other forms of consumption without a VAT? (It's not progressive enough?)
Isn't it the point to discriminate certain markets for consumption ? Not a fan of Maslow pyramid, but we have to acknowledge some lexicographic preferences among goods, and some are prioritary for a decent life (as opposed to positional goods?). Having non-linear pricing for electricity, water, perhaps oil, since we intend to limit resource consumption, is surgery precision behavioral incentives. The problem I have is relative to distinguish usage for intermediary consumption and final consumption : how to deal with firms?
Of course also as you said, such concept can't rely on "Markovian" (no memory) markets, and asks for very invasive institutions (like electricity counters).
One advantage for electricity markets is that demand is (almost) vertical, defined by exogenous needs (light, warming) rather than immediate price. So changing price is okay. Not contradictory, it is just that linear pricing makes people indifferent on first order, quadratic or exponential would make the signal sufficiently strong (among the other benefits you mention). Studies show it smoothens consumption curve (in time and heterogeneous households).