We combine research with advocacy in order to make the intergenerational equity foundational across all aspects of civilization. We are focused on oil, gas & minerals because it is an area where the financial value of minerals is clear. Further, the consequences of not implementing intergenerational equity has also led to a number of bad consequences for mineral owners, broadly called the “resource curse”, and this is a specific application that has significant consequences in of itself.
The five principles for managing our shared inheritance of mineral wealth are:
1. The state is a trustee of natural resources for the people and especially future generations (Public Trust Doctrine).
2. As we have inherited the minerals, we are simply custodians and must pass them on to future generations (Inter-generational Equity Principle).
Consider the example of inherited family gold. If the family decide to keep the gold as it is, they ensure the gold remains to be passed onto future generations. However they must safeguard it against theft, which is both a headache and a cost, while the gold produces no income. Alternatively, if they decide to sell the gold and invest the proceeds in say land for example, they and their future generations can benefit from the income of the land as long as it is well maintained. The crucial point is that if the gold were to be lost or the investments mismanaged, the loss of capital would be permanent for all future generations.
3. If we mine and sell our mineral resources, we must ensure zero loss, ie. capture of the full economic rent (sale price minus cost of extraction, cost including reasonable profit for miner). Any loss is a loss to all of us and our future generations.
4. Like Norway, all the proceeds from our minerals must be saved in a Future Generations Fund, with the state as trustee for the people and especially future generations.
5. We own the minerals, we own the fund, we own the income if the fund. Distribute the real income (after inflation) from the Future Generations Fund only a commons dividend or a Citizen’s Dividend, equally to all as a right of ownership.