There’s a long history of
attempting to impact human behavior via economic incentives and penalties,
although the latter tends to take precedence: We often utilize additional “vice
taxes” to commodities and activities deemed unsavory (i.e. levies on alcohol and
tobacco purchases). But awarding positive action can be just as effective. Case
in point: cap and trade. While cap and trade is getting a lot of buzz as of
late—due to the Obama administration’s decision to create a cap and trade system for carbon
dioxide—Mark
Lange of The Christian Science points out, in an opinion
piece, the viability of cap and trade that, in 1989, a cap and trade program for
sulfur dioxide (SO2) emissions resulted in a 45% reduction in acid
rain within five years.
Which brings us to water
conservation. Many water utilities employ rate structures that charge based on
water usage (and waste)—a clear example of using an economic penalty to modify
behavior. But perhaps there is a better way.…
US Representative Mike Coffman
thinks so. On April 2, Coffman introduced the “Water Accountability Tax
Efficiency Reinvestment (WATER) Act, which mimics the EPA’s Energy Star Program
that offers tax credits for the energy-efficient appliances. Under Coffman’s
WATER Act, WaterSense products would be eligible for tax credits of up to 30%
(with a $1500 cap). According to EPA estimates, the installation of WaterSense
fixtures (including low-flow faucets, showerheads, and toilets) could save a
family of four $17,000 gallons a year. The WATER Act (aka HR 1908) now awaits
review by the House Committee on Ways and Means.
In a statement to the press,
Coffman says “The Water Conservation Act will help meet this demand by helping
individuals and businesses conserve water.”
What do you think? Are incentives
the way to go when it comes to promoting conscientious water use, or should we
combine tiered rate systems with low-flow rebates?
To read Mark Lange’s opinion piece
on cap and trade go to: www.csmonitor.com/2009/0413/p09s04-coop.html