Creating a market to sell and trade the "right" to pollute is a pragmatic way of improving our environment. Peter Barnes, author of Who Owns the Sky (Island Press, Washington, DC, 2001) goes one step further, arguing that public ownership of the atmosphere may create and redistribute wealth while reducing harmful carbon emissions.

Market-based solutions to the excess emission of pollutants into the air have become the rage in recent years and have been embraced by many on the left (the Kyoto global warming treaty contains market based pollution abatement mechanisms).Most common is the "cap and trade" system, where the total amount of harmful emissions, say, sulfur from the burning of hydrocarbons, is capped at a "tolerable" amount. The "right" to emit a predetermined amount of the pollutant is granted to the firms causing the problem. Firms can then sell and trade those rights within a market set up for that purpose, the net effect being that efficient firms which minimize pollutants realize a greater profit, while gross polluters are forced to pay dearly for the right to spew more into the atmosphere. Government's ability to reduce overall pollution levels is enhanced under a cap and trade system, because, over time, total allowable levels of emissions can be scaled back, creating even more market incentive to reduce pollutant output.

Peter Barnes, in the book cited above, proposes a radical but elegant way to regulate carbon emissions (one of the factors in global warming) while enriching citizens at the same time -- create property rights that apply to the sky and make every citizen an equal shareholder in the air above them. Taking his cue from Alaska's system of sharing oil royalties with Alaskans, Barnes argues that the sky should be owned by a public trust. Firms wishing to emit carbon would be forced to buy the right to emit from the trust (or, more properly, they would be buying the right to store carbon in the atmosphere). In effect, this would "cap" the amount of carbon we allow into the atmosphere therefore rendering the "right" to emit very costly and making it subject to market pricing. The trust would then pay dividends to every sky shareholder -- all of the citizens of the country.

Like the cap and trade systems, the government could ratchet down the total allowable amount of carbon emissions over time, simultaneously reducing pollution and increasing the dividend paid to citizen shareholders.

At first blush it doesn't seem right to assign a value to the sky, never mind property rights. Another way to look at it, though, is that we, the people who hold the environment we live in in common, are giving away a valuable resource for free. People who burn carbon store the harmful results of carbon combustion in the atmosphere. The oil industry, coal industry and power industry, to name a few, sell resources at far below their actual value when all the harmful downstream consequences are taken into consideration.

Not only would assigning a value to the sky reduce pollution, a public trust like the one Barnes proposes would have the effect of shifting money to families with lower incomes. Why? Because, in Barnes words, "poor families tend not to drive big cars, occupy big homes or fly around the world in jets", and therefore they burn less carbon. A study found that a "sky trust" would cause a net gain in income for the bottom 60% of households but would cause a net loss in income for the top 40% of households. While the main idea of a sky trust is to reduce pollution, the aims of social justice could be served as well.

For more information see: Peter Barnes, Who Owns the Sky?, Island Press, Washington, DC, 2001.

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