Tomorrow, the state committee charged with advising the California Air Resources Board on design for a "market-based compliance program" to implement California's Global Warming Solutions Act will hear comments from author and socially-responsible-tech-entrepreneur Peter Barnes. In his 2001 book, Who Owns the Sky?, Barnes staked out a bold position in the debate on how to allocate atmospheric property rights by advocating that dividends be paid out of a carbon cap-and-trade system to a public trust, similar to oil dividends paid out of the Alaska Permanent Fund. His answer to the question of initial entitlement is that the atmosphere's carbon storage capacity should be a common asset controlled through a "Sky Trust"â€“as opposed to a state-owned asset or an asset to be given away to corporate users.
The gist of Barnes' planned remarks, posted on EcosystemMarketplace.com:
The economic value of the atmosphere is a form of common wealthâ€“no corporation created it, and it belongs to everyone. This common wealth can and should be used for the benefit of all.
There are several ways this can be done. The first and most obvious way is for the state to auction carbon emission permits, rather than give them free to historic polluters....
A second way the economic value of the atmosphere can be used for the common good is to distribute 'carbon shares' to the citizens of California, as has been proposed by the Climate Protection Campaign of Sonoma County. Each 'carbon share' would be equal to the total number of permits issued divided by the number of eligible California citizens. Citizens would sell their shares to banks or brokerage firms, who in turn would sell them to emitters. In this way, a carbon market would develop without a state auction, and all Californians would equally share the windfall that arises from carbon capping. The committee should carefully consider this elegant option.
Recognition of the painfully inelegant allocation of carbon emission entitlements in the European carbon trading model thus far is important, but there is also a huge cringe factor for me in Barnes' usual assertion that the economic value of the atmosphere is a "gift from our common creator." Where's the discussion of all the private assets (well-managed forests and agricultural land, etc.) that are producing uncompensated positive externalities in the form of carbon sinks even as we speak?