Webster’s Dictionary defines “legacy” as “something transmitted by or received from an ancestor or predecessor or from the past.” When we think of the personal or family legacy that we leave for our children and our children’s children—such as property, a sum of money, or family heirlooms—we often see individuals endeavoring to protect that “legacy” so that it is in good condition when it is passed down from generation to generation. This is often done through a trust.
A trust is a legal arrangement in which legal ownership of an asset is transferred to a person or entity, known as the “trustee,” who is then responsible for managing the assets in the trust for the future benefit of another person or group, known as the “beneficiaries.” The trustees must manage the property held in trust for the benefit of the beneficiaries in accordance with the terms set up by the settlor (the one who created the trust for the property to be protected). For instance, the settlor can designate what can be done with the property, how it can be handled and used by the beneficiaries, and how long the property is to be held in trust. Because trusts are flexible and allow the settlor to specifically designate the terms of the trust to their liking, they have been referred to as “the best method as far as the protection of family assets is concerned.”
While trusts are most often used for private purposes, the concept can and arguably should be utilized to protect the environmental and natural resource legacy that present generations will pass on to future generations. These trusts are legislatively formed and protect assets that belong to the public, so they are known as “public trusts,” rather than private.
One of the most cited examples of the use of a “public trust” is the Alaska Permanent Fund (APF). The APF is a constitutionally established fund, managed by a semi-independent corporation in Alaska, created in 1976. A portion of all mineral (oil and gas) proceeds received by the state is deposited into the fund for the purpose, among others, of “conserving a portion of the state’s revenue from mineral resources to benefit all generations of Alaskans.” The fund is managed by a board of trustees according to legislative guidelines so that current and future generations can reap the benefits of the state’s oil wealth. Each Alaskan citizen receives an annual dividend that comes out of the fund. In 2007, each citizen received a $1,654 dividend check simply for living in the state.
While the APF does place the state’s natural resources in a trust for the benefit of future generations, it is really about making the money last for future generations rather than the natural resource itself. In order to really protect the environment and natural resources so that they can be passed onto future generations as a well-kept legacy, the environment or natural resource itself—rather than just the money that comes in from depletion—needs to be placed in a trust. A group of senators in Vermont are trying to do just that.
Senate Bill 0044, introduced by Senator Hinda Miller in January 2007, would create the Vermont Common Assets Trust. The trust would be used to “protect certain common assets (such as air and water) for the benefit of present and future generations.” In short, the common assets of the state would be placed in a trust that would be managed by a board of trustees, fees would be assessed for the use of those common assets, and any proceeds generated from such usage would be placed into the Vermont Common Assets Trust Fund. Just like Alaska, every citizen of Vermont would receive an annual dividend out of the fund.
By placing the common assets in trust, rather than just the profit generated from their use, the board of trustees can manage the assets so that they can be used by current citizens in a way that will allow them to be satisfactorily passed down to future generations—in a condition that allows them to live in beautiful Vermont just as we have lived in beautiful Vermont.
For example, the air or atmosphere could be placed in the Common Assets Trust to protect against the harms of greenhouse gas emissions that contribute to global warming. While Vermont has already signed onto the Regional Greenhouse Gas Initiative (RGGI),which plans to place a cap-and-trade system on carbon dioxide emissions from fossil-fuel burning power plants in the region, that initiative only covers two percent of the carbon dioxide emissions in the state. The Trust could catch the other 98% of CO2 emissions in the state (as well as other greenhouse gases that contribute to global warming) by establishing clear limits on greenhouse gas emissions from all sources, charging emitters for their use of the atmosphere, and distributing the proceeds as dividends to Vermonters on a pro rata basis (as well as using the funds for other beneficial purposes). Like the RGGI, the Trust could set up a cap-and-trade system that would apply across the board, protecting Vermont’s common asset (the sky) so that it can be passed on to future generations.
Not only would trust help protect the atmosphere through direct regulation and management, it would also create incentives for Vermonters to make better use of these common assets. It would provide an economic incentive to emit less, because the more you emit the more you pay (eventually surpassing the amount you received back in dividend-form). Also, the trust would spur economic development in the state for energy conservation and alternative energy initiatives.
The amazing thing about this bill is that it represents a drastic departure from the approach that government has historically taken regarding common assets. Instead of business as usual, Vermont is trying to protect the natural legacy that will be left for future generations by placing the environment itself in a trust—just like many private citizens do when they want to protect property that will be passed down to their descendants in the future.
Despite this positive step, the bill does not seem to be picking up much momentum in the legislature. Since January 2007, when Senate Bill 0044 was introduced, it has not moved from the Senate Committee on Economic Development, Housing & General Affairs. The bill currently has seven co-sponsors.
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