As published in The Washington Post , January 1, 2008; A11
UPS delivered my hedge trimmer a few weeks ago. Actually, it is not just a hedge trimmer but has interchangeable heads so that it can trim grass, mow down brush and cut small tree limbs. The whole thing was a steal: $359. As I powered it up, I felt mild pangs of guilt -- the two-cycle contraption uses a mixture of oil and gas to cool the engine as well as fuel it, which makes it not just copiously smelly but also a behemoth when it comes to producing carbon dioxide.
If you think that is bad, so do I -- especially since I could have bought a slightly more expensive four-cycle model that does not require mixing the oil and gas. And I know better. But my knowledge did not translate into action. I knew I was doing wrong. I even agonized about doing wrong. But it did not stop me.
My weakness, what Aristotle called "akrasia," is something Ulysses knew a lot about when he instructed his crew to tie him to the mast when they passed the Sirens. Me, I need to be tied up going to Home Depot. We're not talking just about garden tools. I have also suffered from akrasia when it comes to my car. My car gets 40 miles per gallon but is not a Prius -- it is a dirty, used diesel. I couldn't resist the initial low price and the promise of ongoing savings.
On and on it goes. I spend most of my waking hours worrying about how to reduce my output of carbon dioxide and other greenhouse gases. Yet my behavior seems to march to a different drummer. I need to get the best deal. For me, not the world. When it comes to what counts as the best deal, my values don't get incorporated into the calculation. I am attuned only to price. And I don't think I am alone in this.
Fine, you say. Big deal. The solution is obvious: We adjust the price to make the "right thing" priced right for me. But here is another problem -- when it comes to pricing I am totally irrational. Offer me two washing machines, one that is more expensive now but more efficient over its lifetime, and hence cheaper in the long run, and I'll choose the one that is cheaper now. I can do the calculation in my head using a formula of the discounted value of future savings to see how much they are worth in present-day dollars. But behavioral economists would say my actual discounting is hyperbolic. In the end, all I care about is the deal today. The sad truth is that if you want me to buy the more efficient machine, you will have to give me a subsidy upfront to make it no more expensive than the inefficient one.
No problem, you might say. We don't need to waste money on subsidies; we can just create a tax to make the washing machines' prices equivalent, the same for the prices of the diesel and the Prius, and the two-cycle trimmer and the four-cycle version, and so on. Then you will step into line.
But there is another problem. I like Hummers. Not the really big Hummer I, but the more demure Hummer II. I like its boxy design and its commanding presence on the road. I secretly desire to command the road. Here I am not irrational, just retrograde when it comes to my preferences. And if my preferences are strong enough and my wallet is large enough, no tax is going to make me give up my Hummer for a Prius.
I am not alone in loving Hummers. An effective tax will have to take into account all variety of Hummer lovers, the strength of their preferences and the size of their wallets.
I say: Better not to tempt me in the first place. Take the Hummers away. Don't clutter my world with things I should not have. Don't dangle them in front of me, creating desire, only to then try to have me renounce them. Just ban the damn two-cycle hedge trimmer and let me be done with the matter.