Cap & Dividend

Under a global Cap & Dividend scheme emissions from burning fossil fuels are limited by limiting the amount of fossil fuels that can be brought onto the market anywhere in the world – an ‘upstream cap’, the cap being set and then lowered each year based on climate science, and being implemented by requiring fossil fuel corporations to have a permit issued by the Trust for each unit of coal, oil or gas introduced anywhere in the world, the permits being denominated in carbon units.

Reducing fossil fuel availability by an upstream global cap system is by far the easiest way to ensure that total global carbon emissions are reduced because far fewer corporations are involved in introducing fossil fuels into the economy than in using them. An upstream cap thus involves issuing permits to far fewer licensees than a scheme controlling various classes of user, like power stations, further downstream.

An upstream cap is also the most certain way to make sure that the required reductions in emissions are achieved because it impacts directly on total global supply and hence automatically on total global emissions. Unlike a carbon tax, it does not depend on market forces to achieve the reduction in emissions called for by climate science.

The scheme has several benefits:

  • The scheme acts as a global safeguard to ensure that, whatever may or may not be agreed between nation-state governments at Paris next year, the necessary reductions in total global carbon emissions required to avoid disastrous runaway climate change are achieved.
  • There is no interference with the powers and responsibilities of nation-states.
  • Interference with the global economy is kept to a minimum.
  • The scheme contributes to the reduction of poverty and inequality.
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