The Natural Wealth of Nations: Harnessing the Market for the Environment

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The Natural Wealth of Nations: Harnessing the Market for the Environment

By David Malin Roodman
W. W. Norton, 1998
224 pp. $13.00

Roodman offers a positive program for mobilizing market forces to help the environment while reducing growth-inhibiting taxes on capital and labor. Critics often place environmental preservation in moral opposition to economic growth and anti-poverty measures, pitting environmentalists against development advocates. Roodman persuasively argues that this choice is a false one and proposes a pragmatic reconciliation. Governments should tax environmental damage, from the overharvesting of fishing areas to harmful emissions, rather than prohibit it outright. In turn, the resulting revenues should be used to fund tax cuts in well-deserving areas, such as investment and labor, that promote growth. In other words, we should tax environmentally harmful activities to reduce taxes on economically desirable ones. In highly readable prose, the author documents the subsidies in the United States and elsewhere that encourage environmental waste as well as the fewer instances of his alternative approach. This book should be required reading for legislators around the world.

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