Video: Is Cap and Dividend the Right Solution for Climate Change?

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Peter Barnes, senior fellow at the Tomales Bay Institute, has been the tireless champion of the "cap and dividend" approach to national climate legislation, an idea he first proposed ten years ago in a book called Who Owns the Sky?  Now, his idea is finally gaining traction in the nation’s capital as the new administration fast-tracks climate action as a policy priority.

The cap and dividend idea is arguably the most elegant, simple and equitable variation of the "cap and trade" mechanisms currently under consideration. In the current economic crisis, it also now seems to be the most politically plausible. Here’s why.

Cap and dividend makes every American an equal owner of the sky. Under this plan, when the government caps emissions and sells permits to polluters to release carbon dioxide, it collects the funds on behalf of American citizens. Each month, the government sends everybody a dividend check from the proceeds and thereby protects families from rising energy prices.

We caught up with Peter Barnes who spoke to us in detail on camera about this idea. He was joined by Michael Noble of Fresh Energy, who sees cap and dividend as the best idea for squeezing carbon out of the economy without squeezing family finances. As Barnes asks, what politician is not going to want deliver a monthly check to each and every constituent back home? Not only that, as you will see, cap and dividend promises to deliver what President Obama promised on the campaign trail.

A bit of background is important to keep in mind. Barnes’ formulation of cap and dividend is part of a larger body of thought, spelled out in another book he wrote called Capitalism 3.0: A Guide to Reclaiming the Commons. In it, he analyzes how capitalism has overtaken democracy and suggests with great persuasion that the path to correcting the imbalance is by protecting and strengthening a sector we usualy ignore — the commons. The atmosphere is the commons under consideration in Barnes’s cap and dividend proposal, a subset of a vision he has developed for a new operating system to better drive capitalism. His formula: Corporations + Commons = Capitalism 3.0.

Barnes writes with the clarity of a former journalist and from the bedrock of success he has enjoyed as a businessman. He also brings a keen and prescient eye to history and political opportunity:

Once or twice per century, there are brief openings during which non-corporate forces reign. No one can say when the next such opening will occur, but it is safe to say that it will.

The book was published in 2006, and it appears that the moment he spoke of has arrived.

We must be ready when it comes to build a strong, self-perpetuating commons sector, not easily dismantled when the political wheel turns again.

Barnes explains that property rights, once granted to citizens, are hard to take away, and he demonstrates his point this way:

…..Social Security is an intergenerational compact, engraved into our economic operating system. It was imagined, designed, and installed early in the twentieth century in response to what was then a looming crisis: the impoverishment of millions too old to work. The basic contract was, and remains, simple: active workers collectively support retired workers, and in return are supported in old age by the next generation of workers. For seventy years, this contract has been administered without scandal or waste by a trust fund that has never missed a payment. Thanks to this operating system upgrade, extreme old-age poverty, once rampant, is largely a thing of the past.

What we need now is a comparable system upgrade, this time to fix capitalism’s disregard for nature, future generations, and the non-elderly poor.

Please read his book
, and also please watch him explain cap and dividend in this latest installment of our new video series. This one is called: Is Cap and Dividend the Right Solution for Climate Change? We’ve also posted it on YouTube under the title Who Owns the Sky?

See Also

Video: The Economic Wisdom of a Green Recovery

Video: Everest’s Melting Glaciers

Understanding a Cap on Emissions