When resource depletion causes oil and natural gas prices to soar, who will get the benefit? The oil producers, of course, and, as a result of the recent 300% increase, they are already reporting massive profits.
"That's what happens in a market economy" says economist and Post Carbon Institute board director Richard Douthwaite. "The trouble is, the poorest people in the poorest parts of the world will get squeezed very badly as the price goes up and up. Already many can't afford kerosene for lighting, bottled gas for cooking or the increased bus fares. There have been riots in some countries."
So Douthwaite's organisation, Feasta, is proposing an emissions rationing system to share out increasingly scarce oil and gas and to limit the output of coal. "We are starting with the EU and hope that, from 2008, each resident of the 25 countries will get his or her individual emissions entitlement every six months. Then, from 2012, we want the system to be extended to the rest of the world."
When people receive their emissions entitlement (EE) they will take it to a post office or bank and sell it for whatever the market price is at the time, just as if it was foreign currency. Fossil fuel producers will then have to buy enough permits from the intermediaries to cover the emissions from their output. International inspectors will see this is the case.
"This is an alternative to the Oil Depletion Protocol" Douthwaite says. "Its advantage is that that it takes in natural gas and coal as well. Different EEs would be issued for each fuel so that it will be possible to reduce the production of oil at the rate required by the protocol, while the rate at which the demand for gas and coal is cut back will be in line with the rate at which total emissions need to fall to halt climate change."
Douthwaite points out that, the lower the weight of carbon dioxide allocated to each person through their EE, the higher the price they would get. "So, rather than the profits of scarcity going to the giant energy companies, they will be shared amongst all of us and those who use least fossil fuel will come out best" he says.
Details of the Feasta plan can be found at http://www.feasta.org/documents/energy/November2005.pdf.