<p>I understand that taxes (Pigovian taxes) can be used to steer the economy in a certain way. For example, if you increase the taxes on things related to cigarettes, the price increase will decrease the demand. Or, if you put a carbon tax, the industry will try to produce its products in a carbon-neutral way in order to keep the prices - hence demand - on the same level, which will transform the economy in a more green one.</p>
<p>However, <strong>why don't we also pay money to industries that have <a href="https://earthscience.stackexchange.com/q/19893/13363">a negative carbon footprint?</a></strong></p>
<p>I mean, while producing your product, if you either capture some carbon or product something that can be used to capture carbon, you are directly doing a &quot;good&quot; to the society. Wouldn't this also incentivize companies not just to have a zero-carbon footprint but instead to have a negative footprint?</p>
<p>Are there any examples of such policies?</p>

CC BY-SA 4.0
2020-06-30T18:24:00.260Z
@KennyLJ but it is not the same. When you give subsidies, there is no competition, and (as far as know) the more you have negative footprint, the more you won't be paid.
Our
CC BY-SA 4.0
2020-06-30T20:38:42.297Z
There is direct competition for getting loans and grants and even in subsidized industries businesses still compete within the industry, so if your margin is better (and it's assumed you have a negative or less positive carbon footprint, being in the subsidized industry) then you make more money for having a better carbon footprint relative to the inputs.
gormadoc
CC BY-SA 4.0
2020-06-30T20:50:08.040Z
@gormadoc "if your margin is better then you make more money for having a better carbon footprint relative to the inputs": how? negative carbon footprint doesn't always lead to cheaper production cost
Our
CC BY-SA 4.0
2020-06-30T20:54:37.820Z
I'm talking specifically about those subsidized industries. If a business operates on a better margin than its competitors and you assume the businesses get largely comparable subsidies for their size (like tax breaks for the biofuel industry), then it also receives more subsidies relative to the operating cost.
gormadoc
<environmental-economics>
why don't we also pay money to industries that have a negative carbon footprint?
Our
# why don't we also pay money to industries that have a negative carbon footprint?

(Asked by: username_0 on 2020-06-30)

I understand that taxes (Pigovian taxes) can be used to steer the economy in a certain way. For example, if you increase the taxes on things related to cigarettes, the price increase will decrease the demand. Or, if you put a carbon tax, the industry will try to produce its products in a carbon-neutral way in order to keep the prices - hence demand - on the same level, which will transform the economy in a more green one.

However, **why don't we also pay money to industries that have [a negative carbon footprint?](https://earthscience.stackexchange.com/q/19893/13363)**

I mean, while producing your product, if you either capture some carbon or product something that can be used to capture carbon, you are directly doing a "good" to the society. Wouldn't this also incentivize companies not just to have a zero-carbon footprint but instead to have a negative footprint?

Are there any examples of such policies?

**Tags:** environmental-economics
> **Comments:**
> **username_0**: @KennyLJ but it is not the same. When you give subsidies, there is no competition, and (as far as know) the more you have negative footprint, the more you won't be paid.  
> **username_1**: There is direct competition for getting loans and grants and even in subsidized industries businesses still compete within the industry, so if your margin is better (and it's assumed you have a negative or less positive carbon footprint, being in the subsidized industry) then you make more money for having a better carbon footprint relative to the inputs.  
> **username_0**: @gormadoc "if your margin is better then you make more money for having a better carbon footprint relative to the inputs": how? negative carbon footprint doesn't always lead to cheaper production cost  
> **username_1**: I'm talking specifically about those subsidized industries. If a business operates on a better margin than its competitors and you assume the businesses get largely comparable subsidies for their size (like tax breaks for the biofuel industry), then it also receives more subsidies relative to the operating cost.  

---

## 0 answers

