solar tariffs property rights commons

US Orders Tariffs on Chinese Solar Panels
productivity growth

Facing Taxes, Can We Prosper and Work Less?

When entrenched energy corporations say jump, politicians ask how high. Citizens need to explore fundamental alternatives. We trim, blend, and append three 2012 articles from: (1) Los Angeles Times, May 18, on tariffs by D. Lee; (2) The Atlantic, May 22, on commons by J.H. Adler; and (3) New York Times, May 27, on output by T. Jackson (author, Prosperity Without Growth: Economics for a Finite Planet).

by Don Lee, by Jonathan H. Adler, and by Tim Jackson

The Obama administration ordered tariffs of 31% and higher on solar panels imported from China, escalating a simmering trade dispute with China over a case that has sharply divided American interests in the growing clean-energy industry.

The Commerce Department claimed that Chinese solar panel manufacturers "dumped" their goods -- that is, sold them at below fair-market value.

In just a few years, China has grabbed about half the U.S. market for solar panels. U.S. imports of Chinese solar cells -- the primary component in solar panels -- were valued at about $3.1 billion last year, up from $640 million in 2009, according to the Commerce Department.

U.S. solar panel manufacturers called the ruling a victory for American jobs.

But U.S. firms that develop solar projects and install them decried the anti-dumping duties, saying that they risked a trade war with China and threatened to slow or halt the momentum of solar installations in the U.S.

U.S. imports of cheaper Chinese solar panels had provided the catalyst for an overall dramatic price reduction in the last two years that has made solar installations more affordable for homes and businesses.

The cost of outfitting a typical home today with solar panels runs about $20,000 -- half of what it did two to three years ago. Customers also benefit from a 30% tax credit until 2016. That doesn't give the solar industry much time to become cost competitive with electric power, he said.

To read more

JJS: Politicians care about fairness when the competition comes from abroad but not in general. To reduce costs for domestic producers, government could take other steps that don’t make consumers pay more. It could stop taxing employees in solar (or workers in general) and stop taxing profits in solar (or earned income in general). It could stop subsidizing major competitors like coal, and even tax fossil fuels for their pollution. These alternatives and others show tariffs to be a knee-jerk reaction that mainly stifle progress.

The facts that government subsidizes grey ways and fails to tax landholders for the socially-generated value of land are probably the two biggest economic reasons why people don’t treat the environment sustainably.

There have been significant environmental gains in many areas. Our air and water are cleaner today than forty years ago -- and substantially so -- and traditional regulatory strategies deserve some of the credit. But modern environmental regulation is hardly a model of efficient governmental intervention. What, then, should we do differently?

Where property rights are well-defined and secure, a tragedy of the commons is less likely; each owner has incentive to act as a steward, caring for the underlying resource and preventing its overuse, both for themselves, and for others who may value the underlying resource.

The importance of property rights for environmental conservation is not a new idea. It lay at the core of the early American conservation movement. After all …
* It was the institution of property rights that enabled the first Audubon Societies to post private reserves to protect birds from hunters who sought to collect their feathers for women's hats.
* It was the institution of property rights that enabled Rosalie Edge to turn Hawk Mountain from a hunting ground into a bird sanctuary.
* It is the institution of property rights that allows land trusts large and small, from the American Prairie Foundation to the Western Reserve Land Conservancy to protect precious places.
The need to day is to keep moving beyond property in land and adopt property institutions to a wider array of ecological resources so that property institutions can have the chance to succeed in those areas where mutual coercion, mutually agreed upon has failed.

To read more

JJS: Of course any “tragedy of the commons” is less on private land -- it’s not common land.

If we’re to compare tragedies, we’d find more and worse on private land, if for no other reason commons are so rare. My neighbor sprays her lawn, kills her pet, sickens her kid. My farming uncle has no topsoil left (or aquifer). My cousin inherited a woodlot she let get clear-cut. You can extend the list endlessly.

Hardin was unhappy with the title the Nature editors gave his article. At least say “a” tragedy of the commons rather than “the”, so to avoid misplaced emphasis.

If my old neighbor Garrett Hardin is right (he is), then let’s focus on absentee ownership, a violation of both property rights and sensible stewardship.

Finally, it matters less who owns than who collects the rent. You “own” your home but the bank makes more off it than you do. We own oil in the Gulf of Mexico but oil companies keep all the “rents” and don’t bother paying royalties. And our subsidies, or “givings”, do more damage than any commons or private property. There’s another list you can extend.

Even more ameliorative than regulations or “property rights” (ignoring property wrongs) are abolishing subsidies and, most crucial, public recovery of those socially-generated rents.

When extractors must pay rent, they rather than stockpile deeds and titles and leases, they bypass deposits of low yield, leaving more wilderness in great shape for other species besides hikers, campers, hunters, skiers, scientists, etc. Further, as a tax (or fee, etc) on land goes up, the price of land goes down, so your Nature Societies can afford to preserve much more territory.

In urban areas, “land dues” impel owners to quit speculating and wasting and underutilizing sites but instead get busy and put their parcels to good use -- fewer vacant lots and more contiguous buildings, less car traffic and more riders and pedalers, thanks to a compact city. It’s worked wherever it’s been tried.

So the answer is not either or, not statist rules or elitist property, but rather public recovery of socially-generated values of land and resources, then ideally sharing the revenue as common wealth. That’d be what? Not the “comedy of the commons” but “the good fortune of the commons”?

Has the pursuit of labor productivity reached its limit? We need to rein in growth for the damage it's inflicting on the planet: climate change, deforestation, the loss of biodiversity. To do so, we could employ fewer people in providing goods, more in services.

We could grow the fields of teaching, care-giving, and of craft. It is the time and attention paid by the carpenter, the seamstress, and the tailor that makes their detail possible. It is the time spent practicing, rehearsing and performing that gives music, for instance, its enduring appeal.

People often achieve a greater sense of well-being and fulfillment, both as producers and consumers of such activities, than they ever do in the time-poor, materialistic supermarket economy in which most of our lives are spent. And these activities can make the economy more environmentally sustainable.

A transition to a low-productivity economy demands lower taxes on labor and higher taxes on resource consumption and pollution, for example.

Avoiding the scourge of unemployment may have less to do with chasing after growth and more to do with building an economy of care, craft, and culture.

To read more

JJS: It doesn’t have to taxes, it could be auctioning off permits. And the revenue raised need not be spent by politicians, they could fund a dividend to citizens. If the citizenry got a rent-share, that’d set up a feedback loop that’d balance economy and ecosystem automatically. As the people’s dividend went up, they’d work less; as it went down, they’d work more. Finally, perfect harmony!


Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .

Also see:

As China, the US, etc confront corruption …

Palm oil giants target African land

Evidence the US is becoming a two-class society?

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