How The Sky Trust Would Work
The Sky Trust would be a not-for-profit federally chartered institution
that would manage America's share of the atmosphere's limited carbon
absorption capacity. It would have three mutually compatible responsibilities:
to reduce the total amount of carbon dioxide Americans emit
by reducing the amount of burnable carbon that enters the U.S. economy;
to charge fossil fuel companies for the right to put carbon
into our sky (the "polluter pays" principle);
with the revenue thus raised, to pay yearly dividends to
all Americans (to offset higher fuel prices).
During the first year, there would be a cap on the price of carbon
emissions of $25 a ton (about 6¢ per gallon of gas). For the
next four years the price cap would gradually rise. The purpose
of the price cap is to avoid a sudden shock to the U.S. economy.
In effect, the Sky Trust would recycle the higher prices we'll
pay for fossil fuels once carbon emissions are limited. Without
a Sky Trust, those higher prices would go straight into the pockets
of fossil fuel companies. With a Sky Trust, every American woman,
man and child would receive dividends that could exceed $1,000 per
person per year (after price caps are removed).
As consumers, Americans would pay more for burning fossil fuels,
but as sky owners, they'd get money back. Those who burn a lot of
carbon would lose money. Those who burn less carbon would come out
1. The Sky Trust Working
Because it pays dividends on a per capita basis, and includes children
and stay-at-home parents as beneficiaries, the Sky Trust is a pro-family
Moreover, in the version proposed by the Corporation for Enterprise
Development, parents could put their children's dividends into tax-free
Individual Development Accounts. These savings would be invested
by the parents and could be expected to grow over time. Eventually
the money could be withdrawn my the grown children for higher education,
vocational training, first home purchase or starting a small business.
In effect, every American baby could be a trust fund baby.
Establishment of a U.S. Sky Trust would be an historic
event, comparable to the Homestead Act of 1862, the Federal Reserve
Act of 1913, and the Social Security Act of 1935.
Like the Homestead Act, a Sky Trust would create a new class of
property ownersin effect, every citizen would have an equity
stake in the sky. At the same time, the Sky Trust would establish
an independent board of trustees to manage the carbon flow through
our economy, much as the Fed manages the money flow. And, like the
Social Security system, the Sky Trust would define a new formula
for moving money within our economy. In this case the formula is:
from all according to their use of a commons, to all according to
their equal ownership.