How can the sky become scarce?
To our eyes, the sky seems a vast expanse capable of absorbing enormous quantities of gas. In fact, the sky that holds most of our air is less than 10 miles high, and it can absorb only a limited amount of heat-trapping gases without upsetting the earth's delicate weather system.

The problem we face now is that we're running out of sky. In particular, we're running out of the sky's capacity to absorb carbon dioxide, a by-product of burning fossil fuels.

How will the Sky Trust affect me?
In the future, consumers will pay more for gas, electricity and other products that generate lots of carbon emissions. That's inevitable given that we must limit emissions and charge proper prices for them.

Depending on what Congress does, the extra money we pay for emissions will go to private corporations, the U.S. Treasury, or back to citizens through a Sky Trust. All Americans will be better off with a Sky Trust than with any other system.

Isn't the Sky Trust really a tax on fossil fuels?
No. With a Sky Trust, no money goes to the government. Users of fossil fuels will pay a cost for carbon disposal--a cost that was not charged before. But this cost is due to the physical scarcity of sky, and will be set by markets, not politicians. Most importantly, it will be fully returned to citizens in the form of dividends.

Why use a trust instead of the federal government to handle the money?
To insure that all money paid for carbon emissions goes back to citizens. Without a trust, sky income could be mingled with taxes, or go to large corporations, and citizens might never see it again.

With a Sky Trust, won't citizens support more emissions in order to receive higher dividends?
No. In fact, the reverse is true. Reducing emissions, not increasing them, will cause the Sky Trust's revenue (and hence individual dividends) to rise. That's because of what economists call scarcity rent. The scarcer things like buildable land, Van Gogh paintings and pieces of the broadcast spectrum become, the higher their value rises. The same is true for the sky's ability to absorb carbon.

Won't administrative costs eat up the Sky Trust's income?
Since the Trust has only two tasks--selling permits and paying equal dividends--the administrative costs will be very low. Estimates are that the total cost of managing the Sky Trust will be less than .04% of its income.

How big will my dividends be?
The size of your dividends will depend on how much carbon we allow into the sky. The lower our emission limits, the higher the price of emissions, and hence the higher your dividends. As emission limits are lowered over time, dividends should gradually rise.

Without knowing what future emission limits will be, it's impossible to predict the size of dividends. But here are some estimates. If, once emission limits kick in, emission permits cost $100 a ton (equivalent to about 30 cents per gallon of gas), the yearly dividend will be about $400 per person. If emission permits cost $200 a ton, the yearly dividend will be about $800 per person. Of course, a family of four will receive four dividend checks.

Initially, if there is a price cap on emissions, dividends would be lower. Thus, a price cap of $25 a ton would yield dividends of about $100 per person.