Governing the Commons to Promote Global Justice: Climate Change Mitigation and Rent Taxation

Climate change mitigation means restricting the use of the atmosphere as a disposal space for greenhouse gas emissions, which would create a novel scarcity rent. Appropriating this rent via fiscal policies, such as taxes, together with already existing scarcity rents of land and natural resources, could be an economically efficient source of public revenues to advance human development objectives. This chapter discusses how an international climate agreement would turn the atmosphere into a common property regime and describes equity principles that determine how the resulting climate rent is distributed. It then estimates how carbon pricing in combination with appropriate revenue recycling could advance human development goals. It also considers equity aspects of distributing land and natural resource rents as well as the potential of these rents to promote global justice. Finally, it assesses the political feasibility of combining rent taxation with targeted investment, drawing conclusions for the potential implementation of such an approach.