Missing Inaction: Internalizing Beneficial Omissions

Abstract

The omission bias has been much discussed in both the legal scholarship and the behavioral scholarship. Scholars have noted that a harm stemming from an omission is preferred over equivalent or lesser harm stemming from action. In this article I would like to highlight a neglected form of omission — a beneficial omission. I argue that an omission bias causes us to downplay social contributions stemming from omissions, even at the policy level. The environmental field is the central arena for beneficial omissions. The legal mechanism I suggest for encouraging beneficial omissions in the environmental field is the negative consumption tax. The negative consumption tax provides a refundable credit to individuals who abstain from a polluting consumption pattern, in contrast to the standard green tax which applies to polluting individuals. In this Article I argue that recognizing and increasing the salience of a contributive omission through a negative consumption tax may have three advantages. First, it may be a more effective mechanism both for internalizing externalities and for enhancing the welfare of the worst-off individuals. Second, it would transform individuals of low socio-economic backgrounds into recognized contributing citizens. Third, it is more likely to gain political currency by passing political-economy barriers.This Article provides three possible applications of the negative consumption tax in the realm of environmental policy: car ownership, air travel, and residential consumption of electricity.