[OPE-L] Europe's New Enclosure: The Sky

From: glevy@PRATT.EDU
Date: Mon Oct 16 2006 - 07:43:43 EDT

SCIENCE-FOR-THE-PEOPLE Archives -- October 2006 (#16)
Posted on www.onthecommons.org by Peter Barnes on Mon, 10/02/2006


The enclosure of the commons began several centuries ago in Europe, and
alas, continues there in the 21st. This time the object of enclosure isn't
land, but the carbon absorption capacity of the atmosphere.

Last week I spoke at a conference in Berlin on the state of global efforts
to combat climate change. The conference was groping for a path beyond the
Kyoto Protocol, which expires in 2012 and whose modest targets for reducing
greenhouse gas emissions won't be met. I expected a fair amount of
U.S.-bashing, but most of the Euro-criticism was directed at Europe itself.
A main focus of ire was the European Trading System, in which governments
issue tradable carbon emission permits to polluting industries.

The European governments that set up the system are doing two huge things
wrong: first, they're handing out too many permits, and second, they're
giving them free to polluters, who then raise prices and reap windfall

In Germany, the big winners have been coal-burning utilities, and the losers
have been nearly everyone else. As one German steel maker complained, ³the
utilities get windfall profits, and energy users get windfall costs.² In
Britain, the first-year windfall to polluters was estimated at £1 billion.

What's going on here, of course, is a large-scale transfer of wealth
triggered by a massive enclosure of a commons. The commons in this case is
the earth's atmosphere, a shared inheritance if there ever was one. It's
being sliced into valuable private property rights that are handed free of
charge to polluting corporations, in rough proportion to their historic
pollution. The more they polluted in the past, the more new wealth they
receive. Not just once, but year after year.

There's no defensible rationale for this giveaway; the only reason for it is
the political power of polluting corporations. As Peter Ainsworth, a
spokesman for Britain's Conservative Party put it, ³The problem will not be
sorted out until the market is made to work properly by forcing firms to bid
for their permits instead of being allowed to lobby government for them free
of charge.²

America can learn from Europe's early - and costly - mistakes. Seven
northeast states, plus California, are now designing their own carbon
trading systems. These states can do carbon trading the right way: by making
polluters pay for 100 percent of their permits. The windfall that's
necessarily created when a previously free resource is converted into a
priced commodity would then be captured by the public rather than by private
corporations. It could be used for per capita dividends (as Alaska does with
oil revenue), transition assistance to affected workers, communities and
businesses, and investments in clean energy, public transit and the like.
Billions of dollars that would otherwise go to a few corporations' pockets
would instead benefit everyone.

Let me be blunt here, as I was at the Berlin conference. It would be a
tragic irony if the 'solution' to climate change included a massive transfer
of wealth to corporations that largely created the problem. This would be
like rewarding tobacco companies with billions of dollars for all the lung
cancer they caused in the past.

There's still time to avoid this 21st century 'tragedy of the commons,' and
to use our common atmosphere for the common good. It will take political
courage and leadership - in California, New York and other venues - but it
can happen. Stay tuned for updates.

Peter Barnes, a fellow at the Tomales Bay Institute, is the author of Who
Owns The Sky?  His new book, Capitalism 3.0: A Guide to Reclaiming the
Commons, will be published on October 15.

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