Cap and Share

Cap and Share is a regulatory and economic framework for controlling the use of fossil fuels in relation to climate stabilisation. Originally developed by Feasta (the Foundation for the Economics of Sustainability), the foundation believed that climate change is a global problem and that there is a need to cap and reduce greenhouse gas emissions globally, the philosophy of Cap and Share maintains that the earth’s atmosphere is a fundamental common resource. Consequently, it is argued, each individual should get an equal share of the benefits from the limited amount of fossil fuels that will have to be burned and their emissions released into the atmosphere in the period until the atmospheric concentration of greenhouse gases has been stabilised at a safe level. Given the vast discrepancies in fossil fuel use between the wealthy and poor on a global level, Cap and Share would have a highly progressive economic effect, reducing inequality and helping to support climate justice and the energy transition in the Global South. This framework for phasing out fossil fuel production was originally devised by Feasta in 2005 and 2006. Cap and Share calls for fossil fuel production to be capped at its current level and then diminished year by year at a rate fast enough to prevent catastrophic climate change. Cap and Share has two main variants. In the variant which Feasta is currently promoting, fossil fuel companies would be obliged to buy a limited number of permits for their production (or imports, in a non-global system) each year, and the funds generated by the permit sales would then be shared out to the population on a per-capita basis. The sale of the permits could be done by auction. A floor price might be necessary to ensure that adequate funds would always be raised to ensure the functionality of the system. These cash transfers, if distributed per-capita, would be economically progressive because the wealthy - who tend to use more fossil fuels, proportionately - would be obliged to pay compensation to everyone else for this, while those who use fewer fossil fuels - who tend to be lower-income - would gain financially.