ABSTRACT
This chapter introduces emergy accounting methodology and the maximum power principle, defining the indicators according to which activities should be taxed. It describes problem and provides the definition of “new scarcity”. Developments in energy analysis, applied to self-designing systems by Howard T. Odum’s eco-energetic group at the University of Florida, seem to offer the right thermodynamic basis for new types of taxation involving the restoration of natural capital. Taxing fuels is sometimes offered as an incentive for energy conservation, but reducing fuel has a negative amplifier effect on the economy that may be greater than the increases in efficiency. In order to guarantee revenue neutrality, it has been proposed to use tax revenues to cut down other distortionary taxes, for instance Value Added Tax, so as to leave the total fiscal burden unchanged. The chapter examines tax activities according to their quality attributes, where “quality” means demand for environmental support.
