Letters to the Editor, November 7, 2013
In his letter, ("Don't trash the small guy for big business" October 27), Thomas Chow questions the fairness of the government's proposals to subsidise the replacement of old diesel commercial vehicles, while imposing charges for household waste.
His concerns touch on key aspects of the choice between incentives and penalties in environmental policy.
Why subsidise owners of these vehicles to phase them out? A key consideration is that many of the owners are small operators. The vehicle, though old, represents a major investment and is expensive to replace. It was bought at a time of lower awareness of the public health costs of pollution. Today we all know better.
In any event, it is not possible to deprive owners of a major capital asset without a reasonable arrangement, so we have proposed the subsidy.
Why charge for household (and business) waste? Unlike vehicles that have long working lives and represent capital investments, waste is generated daily, and parts of it are subject to consumer discretion, as demonstrated by response to the plastic bag levy.
Yes, some consumer goods come over-packaged. But with the proper incentive, buyers will begin to look for goods with less packaging. Over time, suppliers will have a financial motive to minimise packaging too, through consumer preference, as well as new government policy.