Environmental 'green fees' touted as triple benefit to nation's economy

WASHINGTON — WASHINGTON -- By levying special taxes, called "green fees," on fossil fuels, household wastes, and even urban traffic congestion, the United States could reap from $100 billion to $150 billion annually, alter the nation's tax structure and stimulate growth, says a report by an environmental think tank in Washington.

"Green fees can be used to pay for the reduction of other taxes or to pay for the reduction of the federal deficit," said James Gustave Speth, president of the World Resources Institute, which released the report.


"In this way, we can shift some of the tax burden in America from the things we want to encourage, like working, saving, and investing, onto the things we want to discourage, like pollution, inefficiency, and congestion," Mr. Speth said yesterday.

The study, led by WRI Vice President Robert Repetto and Roger C. Dower, director of its Climate, Energy, and Pollution program, focused on the effect of such fees on fossil fuels, household waste and traffic congestion. Among its conclusions:


* A nationwide program of curbside recycling and a pay-by-the-bag system for household waste disposal could generate annual revenues of $6.3 billion and a net savings of $432 million after payment of recycling costs.

* A fuel tax based on carbon content could bring in $35 billion yearly and provide the United States its least expensive method of reducing carbon dioxide emissions. Strong scientific evidence suggests that increasing worldwide production of carbon dioxide may cause long-term global warming that could devastate the planet.

* Rush-hour congestion tolls could not only ease traffic jams but produce revenues of $98 billion a year.

Mr. Dower said that participants in the study found, as expected, that green fees provide an economical way to achieve environmental protection goals. But they were surprised to learn that the fees also had enormous potential for shifting the country's tax structure.

"At present our taxes fall mostly on just those activities that make the economy productive: work, savings, investment, and risk-taking," the report said. "A better system would place more of the tax burden on activities that make the economy unproductive and that should be discouraged: resource waste, pollution, and congestion, for example."

WRI said that 43 states and several foreign countries already have adopted some kind of environmental fee.

Seattle, Wash., and Utica, N.Y., have pay-by-the-bag fees for household waste disposal and have found they reduce the amount of material sent to landfills. Singapore has introduced -- and Oslo, Cambridge, and London are contemplating -- a tax on motorists who drive into polluted areas during peak periods of traffic congestion.

Mr. Dower estimated that if green fees were fully employed in the United States, they could account for 10 percent of the revenue raised by all levels of government.


The three areas on which the study focused represent problems of mounting environmental and economic concern.

Existing landfills are reaching capacity and environmental regulations on new ones are becoming increasingly stringent. By imposing a $1.50-a-bag fee and implementing curbside recycling arrangements, the study estimated that communities could reduce landfill needs by 30 percent.

With traffic volume far outstripping new roads and bridges, nearly $50 billion will have to be spent on highway construction by 1999 unless measures are adopted to ease congestion, the report said.

"Congestion tolls," the report said, "could avoid these costs, while generating billions of dollars . . . for upkeep of our existing transportation infrastructure and improved public transportation options."

The carbon tax, perhaps the most controversial of all green fees, could promote economic growth and development as well as reduce carbon dioxide pollution, if coupled with lower taxes on income and investment, the WRI said.