Carbon Share is a method of returning the value created by a mandatory greenhouse gas emissions cap to residents.
The goal of Carbon Share is to compensate consumers for increased costs of fuel and electricity by allocating shares of the greenhouse gas emissions cap to residents on a per capita basis. Residents sell the shares to upstream regulated fossil fuel companies, which are required to obtain shares equal to their emissions.
The principle behind Carbon Share is that the sky is a commons that belongs to all of us, and if the supply of this commons (capacity to absorb carbon dioxide emissions) becomes limited (due to climate change), then the value that accrues should be returned to everyone, equally.
The goal of this website is to facilitate Carbon Share's transition from a concept to a reality.
The basic model for how Carbon Share works is:
1) The jurisdiction sets a mandatory cap in GHG emissions.
2) The jursidiction allocates shares representing the cap to residents or households (For example, individuals may receive a share representing 14 tons CO2 in the mail or electronically on a debit card.)
3) Individuals sell the share to upstream regulated companies (fuel importers and companies producing coal, oil or gas doing business within the jurisdiction) at the price per ton for that day. The transaction may be facilitated by banks, brokerages, or websites such as eBay.
4) Fossil fuel importers and producers surrender the shares (as permits) to the government agency in charge of enforcing the emissions cap. Enforcement officers check that the number held by the company matches the carbon content of the fuel the producers and importers have sold during that year. Then, the next year, the agency decreases the number of shares issued according to the agreed carbon cap. The agency re-distributes shares to residents and the process repeats.
Note: Carbon Share may be modified in many ways. The Share can be distributed monthly, quarterly, or annually. It can be in the form of a paper "Share," an electronic format such as a debit card, or wired electronically to a brokerage account etc. The debit card could also carry proceeds from a government auction of permits (a cash dividend). The dividend could be "earmarked" by local governments to only be used for specific purchases such as Energy Star appliances, CFLs, etc. No matter the specific form of the Share, as the cap tightens, the value of the shares (or dividend) increases. This provides a cushion against price spikes to citizens, and directs “windfall profits” to consumers, not polluters. The per capita equity basis for allocating entitlements can later apply to regional, nationwide, or global programs.
Carbon Share is one form of consumer compensation and can co-exist with other forms. The Share is denominated in tons CO2, but if the government sells the tons first, then it sends consumers a cash Dividend, which may arrive in the form of a check, or electronically on a debit card. Consumers may be given the choice of Dividend or Share on their tax form: How would you like your climate allocation? You could choose: cash dividend, rebate, or share.
Fliers about Carbon Share: 1) Carbon market design, 2) How to spend the revenues, 3) What is Carbon Share, 4) Cap and Dividend, 5) How would you like your climate entitlement
Mike Sandler explains Cap & Dividend on the "Climate Challenge" show on Montgomery County Community TV. (half hour show)
Continue to How It Works.
Find out how Carbon Share can be implemented locally, nationally, or internationally.
Find out what you can do to help.