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Demand your share


Published: Monday 15 October 2001


CONVENTIONAL or 'neo-classical' economists choose not to question a series of outdated assumptions that form the basis of their beliefs. For instance, they believe that there are no limits to the gifts of nature, and therefore, nature poses no limits on the size of the human economy. This assumption was understandable at the start of the industrial revolution, when the bounties of nature - such as the atmosphere's ability to absorb pollutants - seemed limitless. But even today, when it is apparent that many of these services have definite limitations, no costs are imposed on their use. This blunder will have serious repercussions for future generations.

Another assumption is that the growth of markets benefits everybody, thus distribution of benefits is not an issue. It is assumed that as long as the free market is allowed to take its course, everybody will benefit. This does not explain how, despite years of promoting this economic model, disparities are growing not just between nations but also within nations. Fortunately, a small but growing number of ecological economists and thinkers have started to question these assumptions, and see the natural economy as a boundary within which the human economy must function. Peter Barnes is one such thinker. In Who Owns the Sky?, he not only advocates that polluters pay, but goes a step further to outline a plan to ensure that rights to, and benefits from, nature are evenly distributed.

Barnes uses a system followed in Alaska as the basis for his proposal. When oil was discovered in Alaska, the governor, Jay Hammond, proposed that since the natural resources of the state belonged to its people, they should benefit. An Alaska Permanent Fund was created, under which 25 per cent of the state's oil revenue goes into a fund. This is invested in a portfolio of stocks and bonds. Annual earnings from this portfolio are divided in half. Fifty per cent go to schools, highways and other infrastructure. The rest is paid out in dividends to Alaskan citizens.

What Alaska did with oil, Barnes proposes the US should do with the sky. He calls for the creation of a 'US Sky Trust', because just as the oil was worth billions, the services provided by the atmosphere are worth trillions. To begin with, such a trust would require the creation of tradable carbon emission permits, each permit representing the right to store one tonne of carbon in America's share of the global atmosphere. Barnes links the Sky Trust to US commitments to the United Nations Framework Convention on Climate Change, which called for stabilisation of greenhouse gas emissions at 1990 levels, and not the Kyoto Protocol, which calls on the US to reduce 1990 emission levels by 7 per cent by 2008-2012. So the Sky Trust would initially issue permits for 1.3 billion tonnes of carbon, the amount the US emitted in 1990. The number of permits issued would be reduced over time. These permits would be 'attached' to carbon as it leaves the coalmine, oil or gas well, and bought by companies that bring fossil fuels into the US economy. At the end of each year, these companies would have to have enough permits to cover all the emitable carbon they brought into the economy during the preceding year, or be penalised.

All revenue from carbon emission permit sales is then put into a pool. From this pool, administrative costs are subtracted, as are contributions to a 'transition fund' created to assist families and communities whose livelihoods are adversely affected by the shift from carbon-based fuels. The remaining amount is divided by the total number of US citizens registered to become Sky Trust shareholders.

According to Barnes, the Sky Trust would serve three purposes - protect the atmosphere for future generations, assure that those who use the atmosphere for waste storage pay a market price for doing so, and divide revenue from the atmosphere equally among all US citizens. Compelling reasons. Disappointingly, Barnes restricts his plan to the US. He chooses not to apply his model for a Sky Trust on the global scale, where he would have to address wider issues such as the past and current high per capita emissions of US citizens. This would give rise to a rather sticky question - having already used up so much atmospheric space will the US have any permits left to distribute among its citizens? A question that Barnes acknowledges, but chooses to leave unanswered, proceeding to describe his model on the assumption that the US "will have some chunk of the global atmosphere".

Nevertheless, Barnes' proposal provides valuable lessons for the whole world on how to share the costs and benefits of limiting greenhouse gas emissions. More significantly, his proposals are applicable to other global environmental negotiations, many of which boil down to how human beings can democratically share the increasingly limited ecological space available to them.

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