Box ITrusting Commons

Trusts exist by definition to maintain an asset for their beneficiaries, future as well as present. They have all the protections of private property on the outside, but inside they can be designed for opposite ends. It is not surprising that this legal form has emerged as a way to graft commons-type management of limited resources onto an economic system that is not always the most receptive host.

One example is the Pacific Forest Trust, which helps protect private forests in the United States from both clearcutting and development. About four fifths of U.S. forestland is privately owned, and some 6,070 square kilometers (at least 1.5 million acres) of this forest disappears each year. The Pacific Forest Trust is working to halt this trend by acquiring conservation easements, which are a kind of property right in conservation use. Mineral rights give a corporation the right to extract resources; conservation easements give the trust the right to protect the land against uses that would compromise its ecological functions.

The private owners keep the land and the right to harvest it sustainably. They donate or sell to the trust the rights to develop the land. The trust holds these rights so that no one else can use them. In this way the public gets the benefits of living, breathing forests for the long haul, while owners still can harvest timber if they choose. In effect, this harkens back to the time in U.S. history when private forests were deemed commons for purposes of sustenance. Back then sustenance meant cutting trees for firewood. Today it also means refraining from cutting trees to protect the larger ecological functions of the forest.

A similar example is the Marin Agricultural Land Trust (MALT), which buys development rights to the rolling farm and ranch lands on the western edge of Marin County, California. Ranchers get to keep and work their land and pass it on to heirs. The public gets stunning and unspoiled landscapes, plus active stewards on the land. To date, MALT has protected nearly 15,400 hectares—roughly half the ranchland in the county—on 58 family farms and ranches. Given the development pressures in west Marin and the trophy palaces that Bay Area millionaires are lusting to build, the importance of MALT to one of the nation's most stunning landscapes is hard to exaggerate.

Another example is the Oregon Water Trust, which restores water flow to crucial and endangered streams. It does this by acquiring water rights and by working with farmers and other property owners to find ways to reduce their take from the streams. As with land and forest trusts, the property owners keep their land. All they give up is a portion of their water flow. That in turn becomes a commons that the organization holds in trust for the well-being of people and habitat, present and future.

And in New York City, the Trust for Public Land now holds 70 community gardens. It helped save these from Mayor Rudolf Giuliani's efforts to sell the gardens to developers.

Source: See endnote 40.

ones used how much.) The ability to sell dump space presumably provides an "incentive" for companies to reduce their emissions continually. The problem is that the system rewards most those who polluted the most. It also ignores the equitable owners of the sky—that is, all of us.

A commons-based approach would use a similar market dynamic, but it would start from a different premise and achieve a much broader beneficial result. The premise is that the sky belongs in some sense to everyone, which is why it is a commons. Corporations should not own it; they only can rent dump space from the owners. Accordingly, under the Sky Trust, there would be annual auctions for the available dump space, within strict and diminishing limits. The proceeds would go into the trust, where it could be used for investment in clean energy, cash dividends

The Parallel Economy of the Commons to the owners, or some combination of the two. Sky Trust could help finance a long-term solution to climate change, not just reduce emissions.41

The Sky Trust would operate much like the Alaska Permanent Fund, which distributes revenues from that state's oil lands. But there would be one crucial difference. The Permanent Fund encourages drilling, because more drilling means more revenues for the owners. Sky Trust, in contrast, would encourage less pollution because it would reward the commons owners—all of us—for tough emission limits. When less dump space is available, the auction price will be higher, as a simple matter of supply and demand.42

This commons-based approach has been gaining ground due in part to the failure of a permit trading scheme in the European Union. Even the Deutsche Bank and the Conservative Party in the United Kingdom now back the auction model, as do the governors of New York and Massachusetts. The concept is basically that of parking meters. When you take a scarce resource from the commons, be it parking space on the streets or dump space in the sky, then you have to pay the ultimate owners. And you can take only as much as the natural and social systems can carry.43

The approach could be applied to seabed mining, under the Law of the Sea Treaty, and in a host of other ways. It has implications also for public revenues more broadly. Starting from a commons standpoint, rather than a conventional economic one, would bring the ecological and the moral into economic alignment. As Winston Churchill, an advocate of this approach, once put it as a young Member of Parliament: "Formerly, the only question of the tax gatherer was, 'How much have you got?' Now we also ask, 'How did you get it?'"44

Churchill was getting at the distinction between income earned by productive investment or toil and income that came from cashing in on something that nature or society already had created. The question is not what people make, he was saying, but rather what they take from the common pool. Specifically he was talking about land.

Land is not just a gift of nature as opposed to a product of human enterprise (with rare exceptions, such as landfills). The value of urban land arises from the investment of the entire society rather than of a particular owner. The difference in value between a parcel in Bridgeport, Connecticut, and one of identical size on Park Avenue in Manhattan has little to do with the efforts of individual owners and much to do with the investment that has gone on around them.

It is a social creation rather than an individual one, and therefore a form of commons. When individuals profit from increases in this location value—that is, the value of the site, as opposed to any buildings or improvements they have made on the site—they are reaping where they have not sown and are expropriating for themselves a gain that rightfully belongs to the society at large.

There is a social component in all gain, of course. But with land the case is almost pure. The consequences of permitting this expropriation from the commons are grim ecologically as well as in terms of justice. The lure of land gains feeds the speculation that drives development far into the hinterland. It encourages sprawling low-density development; when taxes on the site (or socially created) component of real estate are low, there is no need to use the land intensively to generate revenue to pay the tax.

The current property tax includes the value of both land and buildings. Typically the land portion is understated, because commercial owners like to attribute site value to the building so they can depreciate it. Shifting the

The Parallel Economy of the Commons property tax from buildings to land would encourage more-efficient use of this limited resource. (Zoning is necessary to prevent the high-rising of stable low-rise neighborhoods.) It also would reclaim for society what society had created, thus achieving equity as well as ecological sanity.

Numerous cities have tried this approach: Sydney and Canberra in Australia, Taiwan, and indirectly Singapore and Hong Kong. Almost 20 cities in the state of Pennsylvania have done so too, and the results have been promising. Officials in Harrisburg, Pennsylvania, claim that the number of vacant lots and structures downtown has dropped by 90 percent. Many localities have used the approach in a more limited way, by recouping the value of public improvements from benefited property owners. One study found that the Washington, D.C., metropolitan area could have paid for most of its Metro transit system by recapturing the site value increases along the Metro route.45

After a long hiatus, interest in site value taxation is reviving. A computer simulation for King and Clark Counties in Washington state found that taxes on parking lots and vacant building lots—that is, the most wasteful uses—would more than double, while taxes on car-oriented strip development would go up by a quarter. Neighborhood shopping districts would have decreases, as would apart ments and most single family residences.46

That would be a win both ecologically and politically—and socially as well. It is suggestive, moreover, of the larger possibilities of shifting the tax burden from what people and corporations make or buy in total to what they take from the common weal in the process. Taxing the takings from the commons would encourage people to take better care of it. It would mean less waste of land and other resources and therefore denser patterns of development that are more resource-efficient.

That in turn would increase the occasions for human interaction and community in the course of daily life. Thus the wheel comes full circle. The measures necessary to protect the commons actually would foster the kind of social arrangements that make that protection more feasible.

For decades we have been told that there are only two choices for the management of scarce resources: corporate self-seeking or the bureaucracy of the state. But there is another way. Commons management has worked for centuries and is still working today. It can be adapted to the most pressing global problems, such as climate change. A new phrase is about to enter the policy realm. To "market-based" and "command-and-con-trol" we can now add "commons-based."

CHAPTER 11

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