Externality fees to address areas where humans have exceeded the ecological ceiling


Dear Doughnut Economics friends,

I’m writing a book about building the sustainable future we need by creating more green jobs. I’m calling them meaningful jobs, actually, to update the term. To build a sustainable future of advanced energy communities, smart mobility, a circular economy, reduced food waste, and restored natural systems, we need funding.

A good place to look for this funding is where negative externalities are happening. Every time an entity pushes a cost onto someone else or the environment that the other did not ask to bear, a negative externality has been created. Let’s have a government agency levy a fee on that externality that does 3 things. 1) fixes the problem caused 2) creates funding to do that thing in a more sustainable way 3) discourages the entity that imposed a cost elsewhere to stop doing that thing.

We already have externality fees: bottle bill deposits, plastic bag fees, and cap and trade fees. We need to expand these. Any thoughts on the term externality fee and what would help speed up the process of setting up this funding mechanism? I’m particularly interested in applying the idea to the parts of Kate Raworth’s Doughnut Economics graphic where humanity has exceeded the ecological ceiling: climate change, nitrogen and phosphorus loading, land conversion, and biodiversity loss.

Yours in sustainable community,