A Clear Blue-Sky Idea

Think of the energy that has been wasted in recent years calling for a gas tax. New York Times columnist Tom Friedman alone seems to advocate it every week or so. So does every other “responsible” energy plan. Only one problem: Not Gonna Happen. Look at the public furor over current gas prices that has Congress running for cover. The idea of adding a dollar-a-gallon tax at the pump is deader than Phil Leotardo in the final episode of “The Sopranos.”

But there is a way to slash emission of greenhouse gases that’s politically practical. There’s a way to both tell those Mideast countries to go drown in their damn oil—and to begin to save the planet from catastrophic climate change. There’s even a way to go green and go to the mall and buy a little something with your extra cash, as long as you take the bus or drive a hybrid there instead of a Hummer.

It’s called a “sky trust” (or a “clean air trust” or “carbon revenue recycling”) and it’s roughly analogous to the Alaska Permanent Fund, which since 1976 has sent every Alaska resident a dividend check each year with a share of the state's oil revenues. The notion of a huge public trust begins with two simple ideas that have the potential to cut the Gordian knot on energy policy.

The first is that the atmosphere belongs to everyone. If you want to dump in it with your car or business, you have to pay the owners for the privilege, just as you would pay for the right to dump waste on someone’s private property. The owner is us. This idea of the sky as a public “commons” is already well established in proposals for a “cap-and-trade” system of pollution permits and credits like those used in Europe for carbon and in the United States to dramatically reduce the problem of acid rain.

The second idea is the one you probably haven’t heard about until now. The reason a gas tax or any other carbon tax is political poison is that people don’t trust the government to spent their money wisely. (Sen. Chris Dodd, for instance, has proposed that the proceeds from a carbon tax be dedicated to fund alternative energy sources. Nice idea, and give him credit for guts not shown by the other presidential candidates. But it won’t fly.) So instead of “taxes,” think “charges” or “assessments.” And instead of “government spending” or “tax breaks,” think “dividend checks” every month, perhaps through debit cards. For you. For everyone. Think free money.

Sure, the government would like to get its hands on the hundreds of billions in annual revenues that would come from making people pay a surcharge to reduce greenhouse gases to Kyoto-mandated levels. But this is as impractical economically as it is politically, even if it came in the form of tax credits. “U.S. consumers will ultimately pay for carbon scarcity through higher prices, which will depress their purchasing power significantly,” writes Peter Barnes, author of “Capitalism 3.0” and an important booster of the sky trust idea. “Dividends are a way to replenish consumer purchasing power and keep the economy from tanking.”