No Environmental Comment

Natural Resources Depletion Allowance:
The depletion allowance permits firms to take a tax deduction for their investment in a natural resource, as the resource is used up. The availability of a depletion allowance serves to make the extraction and use of virgin materials more profitable relative to the use of recycled materials. This favorable depletion allowance for these hazardous materials provides a continuing incentive to utilize them in preference to other, safer materials.
In clear speak: your tax dollars are used to encourage relatively more polluting investments; aren't you proud?


Tax deductions that subsidize undesirable activity may also detract the effort to achieve environmental goals. Two particularly poignant examples are (1) deductions for the cost of cleaning up industrial waste and (2) the deduction of punitive damages imposed for egregious environmental misconduct. Tax deductions of this nature amount to a public subsidy for the polluter and hence are arguably socially undesirable.
Doesn't the study of tax laws feel a lot more relevant and urgent all of a sudden?

Finally, the 'nice' effect of setting a cap on court awards:

The capping of awards and/or risk spreading through insurance decreases the risk averseness of the firm and, hence, expenditures for developing or adopting safer product and processes.

There you have it folks: three ways to encourage pollution. You no longer need to wonder why we've made so little progress in getting to environmentally sustainable development in the last 3 decades...

[all from a book by one of my profs. if you want the full details, ask me].