Resource Profit in a Warming World
|April 8, 2014||Posted by Staff under Good Press|
This 2014 excerpt of TripleCrisis – global perspectives on finance, development, and environment – Mar 18, is by James K. Boyce.
Rent isn’t just the monthly check that tenants write to landlords. Economists use the term “rent seeking” to mean “using political and economic power to get a larger share of the national pie, rather than to grow the national pie.”
Two other types of rent originate in nature rather than in human investment. Extractive rent comes from nature as a source of raw materials. The difference between the selling price of crude oil and the cost of pumping it from the ground is an example.
Protective rent comes from nature as a sink for our wastes. In the northeastern states of the U.S., for example, the Regional Greenhouse Gas Initiative requires power plants to buy carbon permits at quarterly auctions. In this way, power companies pay rent to park CO2 emissions in the atmosphere. Similarly, green taxes on pollution now account for more than 5% of government revenue in a number of European countries. When polluters pay rent to use nature’s sinks, they use them less than when they’re free.
The current value of the world’s oil, coal, and natural gas reserves is estimated at $27 trillion. Much of this will have to be written off if we phase out fossil fuels. Fossil fuel corporations have shown themselves willing to fight hard to defend extractive rent.
Who should get protective rent? One possibility is to return it to the people via equal per capita dividends. Another option is to let the government keep the money, as in the case of Europe’s green taxes.
Dividends are based on the principle that the gifts of nature belong to everyone equally. Cap-and-giveaway is based on the premise that the same corporations that profit from extracting nature’s wealth ought to be paid to leave it in the ground.
The only way we’ll see a switch from extractive rents for corporations to protective rents for the public will be if ordinary people join together to make this happen. To change the rent we get from nature, we must change who gets it.
Ed. Notes: Of course people should pay for polluting, which would encourage them to find clean alternative fuels. But it’d also be a good idea to quit paying corporate welfare to polluters. And to de-tax wages and investments to facilitate tech-progress to clean fuels and engines.
Another crucial part of the puzzle is to charge people for merely occupying land; doing that would encourage owners to use land efficiently. In cities, they’d develop vacant lots, parking lots, abandoned buildings, and under-sized buildings — they’d infill. Compact metro regions have buildings side by side and shorter trip distances so they both consume fewer resources and emit fewer pollutants.
Cutting demand for fuel weakens the grip of oil companies while charging landowners is something localities can do; without waiting for federal action, cities and counties can shift their property tax off buildings, onto locations, and that would trigger the cascade of benefits for both people and planet. As does Aspen CO and Singapore, they could even generate a surplus and pay residents a dividend — way cool.