Extractive rent comes from nature as a source of raw materials. The difference between the selling price of crude oil and the cost of pumping it from the ground is an example. Protective rent comes from nature as a sink for our wastes. In the northeastern states of the U.S., for example, the Regional Greenhouse Gas Initiative requires power plants to buy carbon permits at quarterly auctions. In this way, power companies pay rent to park CO2 emissions in the atmosphere. Similarly, green taxes on pollution now account for more than 5% of government revenue in a number of European countries. When polluters pay to use nature’s sinks, they use them less than when they’re free. Extractive and protective rents both originate in nature, but one promotes resource depletion, the other conservation. The resulting tension between these two types of rent from nature is becoming more visible in a warming world. A daunting obstacle to climate policy arises from the vested interests of fossil fuel corporations in continuing to reap extractive rent. The current value of the world’s oil, coal and natural gas reserves is estimated at $27 trillion. Much of this will have to be written off if we phase out fossil fuels. “You can have a healthy fossil-fuel balance sheet, or a relatively healthy planet,” Bill McKibben observes. “You can’t have both.” Creating protective rent by capping or taxing carbon emissions will shrink extractive rent. Fossil fuel corporations have shown themselves willing to fight hard to defend extractive rent. But the question of who will receive climate protective rent– and who will fight for it – remains up in the air.
Posted on: Fri, 21 Mar 2014 09:23:33 +0000
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