One of the more regular arguments on this blog is the need to apply a Pigouvian Tax to the problem of carbon emissions in order to internalize the costs of the pollution. Earlier today, an acquaintance sent this story to me and it reminded me of the fact that while the problem of global warming is real, the required but absurd responses required for the issue of global warming. The story states that Estonian authorities have responded to methane production by levying a flatulence tax on cattle. If this policy move was not a smart application of first principles regarding externalities, then it would be entirely laughable. In taking account of the fact that in livestock keepers in nations such as New Zealand are responsible for a disproportionate amount of methane emissions every year, I am constrained to keep the laughter aside and say that economics is certainly on the march.
A cursory search on the BBC news site here shows that five years ago, an equivalent flatulence tax measure was vehemently resisted by farmers in New Zealand. nevertheless, that is not to say that it is an altogether bad idea even if it the name makes it sound ludicrous.
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