In the previous post, I threw around the phrase "Pigovian tax" much too cavalierly. Looking at the external costs that an industry imposes on society, and then choosing a per-unit tax (so many cents per pound of meat, say, or a percentage tax imposed at the retail level) so that the tax revenues equal those external costs (and hence the consumers are now paying the full freight, as it were) is not equivalent to a Pigovian tax -- indeed, I expect that, in most circumstances, that procedure bears no relationship to a Pigovian tax.
To find a Pigovian tax, you should first identify all of the social costs and benefits associated with all potential levels of output of the good in question. The benefits typically are measured by consumer willingness-to-pay, and the costs are standard production costs (wages, prices of other inputs, rent on capital, and so on) as well as external non-monetized costs such as pollution or what have you (and any other adjustments where market prices for inputs do not reflect opportunity costs). Then you calculate the output level where the net benefit (all benefits minus all costs) are maximized, which typically is where marginal benefits equal marginal social costs. That output level is "socially optimal," producing more economic pie than any other output level. Having found the socially optimal output, you look at marginal social costs at that level of output and also the marginal costs actually facing private producers at that same output level. If there is a net negative externality, private marginal costs will be less than social marginal costs. The per-unit Pigovian tax, then, is given by the difference between these two marginal costs, measured at the socially efficient output. Such a tax (or the ad valorem version) does indeed bring home the full costs to the consumer, makes them pay the full freight of the goods they consume, but generally it has nothing to do with having tax revenues equal some level of external costs that were measured from the pre-tax status quo.
OK, even this more defensible use of the phrase "Pigovian tax" paints with pretty broad strokes, but I wanted at least to make some movement in the direction of accuracy.
As for the external costs associated with meat eating in the US, I believe that they are significant, even if we look only at the environmental subset of those costs. As soon as we treat harms to the animals themselves as cognizable costs (or even if we only count one-thousandth of those harms as social costs), then the size of the Pigovian tax is enormous -- indeed, it would be prohibitive, in that industrial farm operations as now undertaken in the US could not survive if animal harms were reflected in retail meat prices.
To find a Pigovian tax, you should first identify all of the social costs and benefits associated with all potential levels of output of the good in question. The benefits typically are measured by consumer willingness-to-pay, and the costs are standard production costs (wages, prices of other inputs, rent on capital, and so on) as well as external non-monetized costs such as pollution or what have you (and any other adjustments where market prices for inputs do not reflect opportunity costs). Then you calculate the output level where the net benefit (all benefits minus all costs) are maximized, which typically is where marginal benefits equal marginal social costs. That output level is "socially optimal," producing more economic pie than any other output level. Having found the socially optimal output, you look at marginal social costs at that level of output and also the marginal costs actually facing private producers at that same output level. If there is a net negative externality, private marginal costs will be less than social marginal costs. The per-unit Pigovian tax, then, is given by the difference between these two marginal costs, measured at the socially efficient output. Such a tax (or the ad valorem version) does indeed bring home the full costs to the consumer, makes them pay the full freight of the goods they consume, but generally it has nothing to do with having tax revenues equal some level of external costs that were measured from the pre-tax status quo.
OK, even this more defensible use of the phrase "Pigovian tax" paints with pretty broad strokes, but I wanted at least to make some movement in the direction of accuracy.
As for the external costs associated with meat eating in the US, I believe that they are significant, even if we look only at the environmental subset of those costs. As soon as we treat harms to the animals themselves as cognizable costs (or even if we only count one-thousandth of those harms as social costs), then the size of the Pigovian tax is enormous -- indeed, it would be prohibitive, in that industrial farm operations as now undertaken in the US could not survive if animal harms were reflected in retail meat prices.
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