The earth’s resources are our common inheritance. Coal-rich mountainsides and ancient forests. The air that we breathe and the ocean floor. The wisdom, ideas and stories of generations before us.

But over time, our access to these shared resources has been cut off: what once were common goods are now enclosed and exploited, concentrated in the hands of the few. And the rents generated from this ownership are producing massive excess wealth for a minority – far beyond what is necessary to keep business running – while many people all over the world struggle with economic insecurity.

Earth4All proposes a Universal Basic Dividend (UBD) as a model for redistributing that wealth. In a nutshell, through a UBD those who exploit common resources pay a fee into a Citizen’s Fund, and that fund is paid out to citizens as a dividend.

This model might be dismissed as a utopian fantasy, but for one thing: for over thirty years it’s been tried, tested, and proven as means for fairly sharing a state’s wealth – proposed by the Republican governor of the state of Alaska. Could the Alaska Permanent Fund provide a model for a Universal Basic Dividend?

Stewarding wealth for future generations

In March 1968, oil was discovered on state land in the far north of Alaska. In the years that followed, the vast initial windfall from exploration licences was rapidly spent. The Alaska Permanent Fund was set up in 1976 to ensure that the state’s newfound wealth would be better stewarded to benefit both current and future generations. The concept was simple: a minimum of 25% of annual mineral royalties would be set aside, invested, and paid out to citizens as a dividend.

How the Alaska Permanent Fund works

The fund operates as a sovereign wealth fund, with a portion of oil and mining revenues deposited into it each year. These funds are then invested in a diversified portfolio, generating returns that contribute to the fund’s growth. In the autumn of every year since the first payout in 1980, every citizen – adult and child – receives their dividend payment as co-benificiaries of the common good that is Alaska’s mineral wealth.

The Permanent Fund has grown to over $64 billion in size, and annual payouts typically range from $1,000 to $2,000 per person every year. For 2021, the dividend was $1,114, meaning that a family of four would receive $4,456. The largest dividend ever paid was during Republican Sarah Palin’s governorship in 2008, when every Alaskan enjoyed a windfall of $3,269.

Impact

The Alaska Permanent Fund is popular across the political spectrum in the state. Public support is, perhaps unsurprisingly, widespread, with 81% of Alaskans saying that the fund’s payouts improve their quality of life.  Crucially, the fund recognises the equal right of every resident of Alaska to a portion of the state’s natural wealth. It’s seen as a matter of justice, and particularly intergenerational justice: safeguarding the wealth of today for future generations. 

But beyond the fundamental moral right to a share in our common inheritance, the impacts of the Alaskan Permanent Fund also offer a strong justification for the policy. The fund is likely to have had a hand in Alaska’s status as one of the most income-equal state in the USA.  Studies carried out into the impacts of the Fund have shown it has aided poverty reduction, particularly among vulnerable populations and indigenous Alaskans. And despite common fears that forms of universal income would remove incentives to work, a 2018 study showed that this has not been the case in Alaska, nor in other unconditional cash transfer trials in other parts of the world. We also know that more equal societies have better outcomes across the board, and set at the right level a dividend could play an important role in reducing inequality. 

Expanding the model

In Earth for All: A Survival Guide for Humanity the authors argue that a Universal Basic Dividend (UBD) is a crucial policy instrument to reduce inequality, empower citizens, and guarantee economic security during and beyond the coming period of disruptive transformation.

UBD works with what is known as a fee and dividend model, as we have seen in Alaska: companies that pollute the commons, extract natural resources, or earn rents on financial assets, pay fees from their excess profits into a Citizen’s Fund. This fund would then distribute equal payments (either directly, or after investment in transition projects) to all a country’s citizens in the form of a dividend – the right of every citizen as a co-owner of the earth’s common resources.

The Alaska model provides a good starting point for the UBD concept, but there is no reason to stop at oil and mining royalties. Fees for the exploitation of common goods as diverse as forests, financial infrastructure, oceans and intellectual property could be incorporated into such a model, as well fees for diminishing and polluting the commons. Set highly enough, these fees could serve to drive down pollution (a criticism sometimes levelled at the Fund is that has not disincentivised resource extraction in the state, but this was never the fund’s intention, and fees could be set at higher rates according to their purpose). The fund that collects the fees could also be invested in projects that support the transition away from using and exploiting these common resources.

The fund is just one example of the kind of safety net that will be needed to ease the disruption caused by upcoming economic shocks, and to create a fairer society long-term.

A matter of justice

UBD alone can’t fix inequality and create a more resilient society. It must be implemented as part of a larger plan to build societies that are more resilient, including redistribution of wealth, progressive taxation, and the empowerment of workers. Read more about the five extraordinary turnarounds proposed by Earth4All here.  

Sharing the profits from our common inheritance is a matter of justice. But beyond that, it’s also a practical, popular, and politically acceptable means to improve lives and provide security as we adapt to a rapidly changing world. The Alaska Permanent Fund shows us that this is no pipe dream – it’s a proven starting point and inspiration for bold policies that can put us on a path for an Earth for All.  

Find more resources and publications about UBD on our landing page.