Testimony at the New York Regional Greenhouse Gas
Initiative Rules Hearing

H. William Batt

[Reprinted from GroundSwell, November-December 2007]

(The following testimony by Dr. William Batt of the Central Research Group, Inc. was given at the Department of Environmental Conservation (DEC) and New York State Energy Research and Development Authority (NYSERDA) on December 10, 2007.)

Nobel Prize Winning Economist Joseph Stiglitz, now at Columbia University, had a column in the recent December 7 issue of The Guardian, expressing his concern – a better word would be alarm – about the way current solutions for Carbon Emissions are being introduced. In his piece, he stated, and I quote: "the problem of global warming is so vast that every instrument must be employed.

"Better incentives must be part of the solution. But there is a raging controversy over whether the Kyoto protocol's cap-and-trade system or taxes work better. The problem with the Kyoto system is assigning caps that will be acceptable to developed and developing countries. Giving emission allowances is like giving away money -- potentially hundreds of billions of dollars. "

Given the choice, he favors taxes, but using both measures would be even better. The current session of Congress has two bills, reflective of the competing approaches to climate change solutions. HR 2069, the Stark/McDermott "Save Our Climate Act of 2007" would enact a carbon tax. S. 280 introduced by Senators Lieberman and McCain, called the "Climate Stewardship and Innovation Act of 2007", establishes a program for market-driven reduction in greenhouse gas emissions through the use of tradable allowances. Lieberman/McCain would sell the pollution rights outright.

It appears that our NYS DEC seems to favor the latter, and the morality underlying this design is, as Dr. Stiglitz points out, very questionable. Why should we turn over the ownership of the air, or any part of it, to private industry! Our most environmentally minded state agency is lining up behind the most conservative approach to the problem, and this is not defensible.

Not very long ago, we witnessed the publication of a plethora of articles and books decrying the sale of titles to water in many areas to private corporations. Some places saw such strong reactions to these changes that governments were overthrown -- Bolivia's President Evo Morales came to power due to this event more than any other. Privatization of the natural world has been an ongoing process now at least three centuries old – but it’s a practice increasingly recognized for its unsound, and even immoral, basis.

The theft of what is called "the commons," the birthright of all humanity, continues encroaching upon many new realms in this past century alone. The US government first granted pieces of the electromagnetic spectrum to various radio stations in the late 1920s, even while reassuring everyone that "the public owns the airwaves." As pieces of that spectrum are allocated today, now at least for a sale price, it is viewed as "property," in much the same way as is my car, my computer or my refrigerator. We've seen the same thing happen to the time slots at airports, something the airlines regard as corporate assets, even when they don't use them efficiently. There are many other realms of nature that have either been seized by, or else simply granted to, private entities with little regard for the public. Where will it end?

Now we're about to turn over parts of the air itself to the utilities so that they can use it as their dump, a betrayal of the public that in every respect equals prior betrayals. To be sure, the air may be capable of absorbing a certain moderate level of pollution, as a sink, just as do rivers and oceans sometimes can in their way. But the proper way to allocate the use of such a privilege is not by sale but by auction rental. Rental on a regular and frequent basis would assure that a price was always reflective of the true market, something that a one-time only lump sum sale can never accomplish.

Professor Stiglitz, as noted earlier, believes that "every instrument must be employed." In another piece by the Worldwatch Institute, Brookings and several other notables, he expressed his support for a carbon tax of $15 per metric ton of Carbon Dioxide, which would offset the federal payroll tax on the first $3,660 of earnings per worker. This design parallels in several respects the Alaska Permanent Fund program, in which royalties from oil are placed in a trust and paid yearly to every citizen of that state. It also closely follows the proposal of Peter Barnes who suggested, in his book, Who Owns the Sky, that every individual citizen could receive a dividend from the Sky Share program, the amount depending on how tightly the threshold of emissions was set.

The RGGI program as it is now written, would give control over a large part of the air to private interests on a once-and-for-all basis. Let me ask: Do we really want to turn over to utility companies one more piece of the common birthright of all mankind. There was supposed to be a quid pro quo when such a grant was made to the broadcast stations in 1928: they then pledged that the public would be served by “must carry” requirements and other public services. What happened? It is better with respect to the disposition of pollution rights that the air space be periodically rented by auction on a regular basis. That way rules and laws can be secured that will better guarantee that the public interest is served and that a proper price will be paid for what is, after all, the commons that we all share.

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