Book contents
- Capitalism and the Environment
- Capitalism and the Environment
- Copyright page
- Contents
- Figures
- Tables
- Preface
- Acknowledgments
- 1 Introduction
- 2 How Capitalism Saves the Environment
- 3 Capital Investments Create Their Own Political Economy
- 4 Bloated Capital
- 5 The Case for Environmental Taxation
- 6 What Should Be Taxed?
- 7 Generating Environmental Knowledge
- 8 Looking Before Leaping
- 9 Conclusion
- Index
4 - Bloated Capital
How Capitalism Went Awry
Published online by Cambridge University Press: 16 December 2021
- Capitalism and the Environment
- Capitalism and the Environment
- Copyright page
- Contents
- Figures
- Tables
- Preface
- Acknowledgments
- 1 Introduction
- 2 How Capitalism Saves the Environment
- 3 Capital Investments Create Their Own Political Economy
- 4 Bloated Capital
- 5 The Case for Environmental Taxation
- 6 What Should Be Taxed?
- 7 Generating Environmental Knowledge
- 8 Looking Before Leaping
- 9 Conclusion
- Index
Summary
While it would be impractical to try and regulate capital investment, it is still surprising that there is so little to deter risky investments. It is still easy to invest in capital equipment that produces harmful effects or products. The reasoning would seem to be the notion that capital investments are purely private decisions. We leave it to the private investor to consider the private benefits. As to the potential for public harm, a dual system of ex post and ex ante disincentives are supposed to send a signal to prospective investors. Ex post, liability could be costly, and could serve as a deterrent for engaging in potentially harmful behavior, by investing in harmful capital. Ex ante, a regulatory state is supposed to intercept the most dangerous industrial practices, and should disincentivize the capital investments that enable them. These dual disincentives have been insufficient in stemming the investment in harmful capital.
- Type
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- Information
- Capitalism and the EnvironmentA Proposal to Save the Planet, pp. 82 - 107Publisher: Cambridge University PressPrint publication year: 2021