Environmental taxation in the digital world

Technological innovation has changed economies from the Industrial Revolution to the new Digital Revolution. Each phase of change generates benefits to society, but also new threats to the environment. Since the midtwentieth century, environmental protection policies have tried to keep pace, innovating to address ever-evolving challenges. Now the emerging digital economy is bringing swift and significant technological advances. Our daily lives are increasingly digital: wireless email, smart phones, online shopping, Uber, Airbnb, telecommuting, streaming, cloud storage, wearable technology and much more. This digital world is the product of a combination of digital data, analytics that use data and connectivity that allows for the exchange of data on digital platforms, often through the Internet.1 It has created information highways in the air, revolutionized commerce and transportation, and placed new pressures on the urban landscape. As one article has noted, “Society’s current relationship with the Internet is best described as a blind date.”2 From an environmental perspective, the digital world can reap significant improvements, such as the ability to more effectively integrate renewable energy into the electricity grid and control household energy consumption. But it may also have negative effects, including electronic waste, new demands for energy and accelerated consumerism.3 The time is right to anticipate how governments might avoid or minimize adverse impacts of the digital economy, before patterns of behavior have solidified. This chapter explores the potential for environmental pricing to address the digital world’s negative environmental externalities. To provide a concrete context, it delves into selected pockets of digital life: the infrastructure that supports the digital world, in particular spectrum and electricity; online retail that digital technology makes possible, with a focus on packaging and drone delivery; major tech headquarters and new forms