When there is more than the optimal amount of pollution and a big old nasty budget deficit, pollution taxes are a nice policy option. The double-the-pleasure, double-the-fun usefulness of this policy is known as the double dividend. The World Resources Institute has undertaken a "green fees" project to identify where pollution taxes can be successfully implemented:
The Green Fees initiative is identifying and analyzing a portfolio of tax reforms that would be both fiscally prudent and environmentally sound. WRI is educating policymakers and opinion leaders in order to build support for these measures.
It's worth a look if you are interesting in this sort of thing.
Here is the abstract from Greening the Tax Code:
In recent years several Republican and Democratic governors have imposed new pollution taxes, often winning bipartisan acclaim. A growing number of commentators have supported such measures at the federal level.
Analysis indicates that taxes on air and water pollution could generate substantial revenue for the U.S. Treasury while improving environmental quality, stimulating technological innovation and enhancing energy security. Reducing tax expenditures with adverse impacts on natural resources could do the same. As lawmakers explore ways to reduce federal budget deficits and reform the tax code, they should consider measures that shift more of the tax burden onto activities—such as pollution—that make the economy unproductive or reduce quality of life.
This policy brief examines fiscal instruments that both raise revenue and help improve environmental quality. The paper analyzes several different types of pollution taxes, considers current tax expenditures with adverse environmental impacts, discusses ways of integrating these instruments into tax reform packages and suggests directions for further research.
