Pearce favours taxes on non-renewable resources, and gives a formula for deciding what these taxes should be. The formula implicitly accepts that we should use up all of a given resource, and then move on to use up some substitute which is less convenient to use or more expensive to extract. Therefore the only questions to be answered are: how slowly should we use up the resource, so as to delay the eventual cost of having to change over to the worse substitute, and what level of tax would get it used up at this rate?
However, this does not mean that we should use up only one five-billionth of the reserves each year, for several reasons: much greater reserves might be discovered in future; substitutes might be discovered, or new production methods or styles of life which do not need the resource at all; also, much more efficient ways of recycling the resource might be discovered, so that less is needed. But it is clear that with this approach:
(a) We should use up resources much more slowly than we do now, or than we would with Pearce's formula;
(b) We should have a much higher resource tax, one sufficient to get our consumption down to this desired level; and
(c) It would be most effective to tackle this problem on an international basis, seeking global agreement on minimum resource taxes of the appropriate level.
David Chapman, Democracy Design Forum, Coles Centre, Buxhall, Stowmarket, Suffolk IP14 3EB (tel 0449 736 223).