Old Age, Gender and Physical Activity "Strength is Health”: George Barker Windship Health Through Sport How to Train the Body for Health and Poise Medicine, Science and Sport The Bicycle and Tricycle as Aids to Health and Recreation Passive Smoking What is Strength? Health Insurance Decisions What Makes Man a Sprinter? What to Fish for in February? Sport and its Economic and Social Importance Use of Weights for Health Does Ageing Drive Health Expenditures Medicare: Policy Issues Indoor Training for Outdoor Sport Starting and Starters Insured versus Not Insured Babylonian Astrology The Wrath of Heaven The Displaced Zodiac and the Beginnings of Astronomy The Duty of the Son of Heaven: Orientation Time Was Once Relative	A Case for Bilateral Taxation In our spaceship world of interdependency, the problem of environmental disruption is an important problem difficult to overemphasize. The recent big crack in the polar ice in Antarctica, the recurrent big forest fire in Indonesia that affected much of Southeast Asia, the serious sand storms from Northern China that reached as far as Taiwan, and many other events serve to remind us of the severity of the problem. If not properly tackled, the very survival of the world may be at stake. It is thus a problem that deserves the utmost emphasis. Economists analyze the problem of environmental disruption as a form of external effects. The most cited paper is that of Coase's (1960) on 'The problem of social cost'. Coase's analysis has become so influential that an author (He 2000) of Economic Highlights (an influential Chinese weekly on economic issues) criticized a proposal for imposing pollution and congestion taxes on cars and petrol for ignoring Coase's analysis. He writes, "Obviously, . . . [the author] is wrong. His mistake is exactly the Pigovian tradition criticized by Coase. He considers only the damage on one side, that of external costs of the usage of private cars. . . . But he forgets to calculate another account: the restriction of the usage of private cars results in how much losses on individual utilities, the car and other related industries in China?" This pervasive influence of Coase prompted me to reconsider his criticism of the Pigovian tradition. This reconsideration reaches the following conclusion. While Coase is correct in emphasizing the reciprocal nature of an externality problem (to avoid the harm to B would inflict harm on A), he ignores an important asymmetry. At the initial private equilibrium before accounting for the external effect (either by agreement, taxation or some other methods), the incremental harm on B (the sufferers of the external cost, say, pollution) is  supra-marginal (i.e. significantly larger than infinitesimally small) while the harm on A (the polluters) of marginally reducing the damage-causing activity is infinitesimal. This is so since A has originally optimized with respect to the level of that activity under her control but B has no control on it. This ignored asymmetry is discussed in the next section and in a mathematical model in the appendix. Section 3 discusses the usefulness of a bilateral tax on an external cost not only in making the sufferer take account of the costs imposed on the causer in having to reduce the relevant activity, but also in ensuring that the sufferer has no incentive to exaggerate or understate the true damage. Despite the reciprocal nature of an externality emphasized by Coase, Section 4 argues in favour of amenity rights (or the principle of polluter pays) on the following grounds: 1. the Coase theorem is invalid in the presence of conscience effects; 2. effects on future decisions; and 3. the under-provision of environmental quality due to its global public-good and long-term nature and the relative unimportance, at least in rich countries, of additional material production in comparison to environmental quality. This relative unimportance is in turn due to the diminishing marginal utility of income and the even lower marginal welfare of income. The divergence between utility (representing individual preference) and welfare (true individual well-being or happiness) is in turn due to excessive materialism caused by our accumulation instinct and the omnipresent advertising. This paper does not deny the possibility that the government is not ideal and may be rather inefficient in trying to implement the appropriate tax system, a point emphasized by Demsetz (1996), among others.