Commons Trusts

What is a Commons Trust?

A commons trust is a legal entity responsible for protecting a shared asset that is inherited from past generations, or is presently being created, on behalf of current and future generations. Because it is common property — held in trust and not owned by anyone — the commons are insulated from any claims by private individuals, business, government or other trusts.

How were commons managed in the past?

Throughout history, community rules for many kinds of commons have been set up to prevent resource overuse while ensuring fair access. For the most part, these rules were customary and gained acceptance through practice. Hence, the supervision of most traditional common goods — land, forests, and cultural artifacts, for example — did not involve the establishment of official trusts. This is largely because the users and managers of these resources were not sufficiently organized to protect their commons from the encroachment of business and government.

So is the commons trust a new concept?

No. Commons trusts have existed on a small scale for centuries. Many feudal cultures had common spaces for grazing, foraging, hunting, planting or gathering wood, which were often located on the margins of civilization. In response to the heavily concentrated power and wealth of such societies, commons trusts were attempts to create equity for the people who relied on these commons for their work and sustenance. Trusts called Waqf were developed in the Muslim world as early as the 7th century. The English also began creating trusts during the 12th century. Over the years, commons trusts have been a steady presence in both Muslim and Western cultures, although they have rarely become part of mainstream economic and social policy.

How does a commons trust function?

Throughout history, community rules for many kinds of commons have been set up to prevent resource overuse while ensuring fair access. Yet the supervision of most traditional common goods — land, forests, and cultural artifacts, for example — has seldom involved the establishment of formal trusts. This is largely because their users and managers were not sufficiently organized to use these commons as collateral to protect them from the encroachment of business and government. Modern approaches to natural resource management, along with the development of new kinds of commons — such as digital information and social innovation — have given rise to a new understanding and methodology in the management and valuation of common goods. In the next generation of commons trusts, each trust will be responsible for

• deciding on a non-monetized metric to evaluate the sustainability, quality of life and well-being of a commons and its community of users and producers
• applying this metric to the preservation of the resource by creating a cap on its usage
• monitoring resource creation, usage and restoration according to this cap to determine whether or not the trust may rent a portion of the resource for extraction or production by the private sector or the state

Are there differences in the way a commons trust manages depletable and replenishable commons?

Yes. A depletable commons needs a trust to protect it for posterity, manage its use, and to replenish it. Yet a replenishable commons may not need a trust. That is the ideal situation, since the absence of a resource regime maximizes creative freedom by the producers and fair access to the users of a replenishable resource. Replenishable commons should be kept open to the extent possible. Sometimes, however, the production of a replenishable commons may need to be insulated from — or asserted against — the claims of the private and public sectors.

How should a renewable commons be managed?

While the state should not tax a renewable resource, rental fees assessed by a trust for a renewable commons may be necessary to protect it from ownership or exploitation by business or government. As long as the market puts a scarcity value on a renewable resource (such as agriculture, solar energy, information, internet, intellectual property, sports, the arts), or a state continues to regulate a renewable resource (such as indigenous cultures, labor, public education, holidays, airwaves, streets, parks, ecosystems, beaches, money), a commons trust is needed to

• ensure that the particular resource is measured and valued according to a non-commerical metric
• promote fair access to existing replenishable commons
• enhance and protect the development of new replenishable commons
• generate rental fees to finance the administration of the trust’s activities

What is unique about Commons Trusts?

• Commons trusts are the only fiduciary institutions in society that are accountable for the long-term preservation, sustenance or creation of depletable commons. That’s because neither of our existing property regimes — private nor public — have a mandate to guarantee long-term protection, creation and use of these critical resources and thus ensure the common capital of the planet.

• Commons trusts are also the only social institutions capable of protecting and incentivizing the creation of replenishable commons. Commons trusts are able to stimulate and protect the co-production of a replenishable resource because they use measures other than scarcity-based pricing to value these common goods.

• The creation of commons trusts allows the private and public sectors to continue to focus on profit, investment and budgetary appropriations, while the commons becomes a primary means of generating social innovation and stabilizing the principal of commons reserves to maintain the diversity and sustainability of the overall economy.

Who manages a Commons Trust?

The stakeholders of a commons appoint trustees to manage a trust on behalf of designated beneficiaries.

What is the role of these trustees?

• The primary obligation of trustees is to maintain the value created through the commons within the commons to the extent possible, so that the community can hold in reserve the larger portion of its depletable capital (natural, genetic, and material) for the benefit of people and species yet unborn, while generating replenishable capital (solar, social, cultural and intellectual) for current generations.

• A second responsibility of commons trustees is to decide what proportion of their common resources may be monetized by renting them to the private sector (or to state-owned businesses or utilities) for extraction and production. A percentage of this fee on depletable resources is then taxed and redistributed by the state to citizens as dividends — or used for other purposes such as maintenance and replacement of the common goods which are being rented, or mitigation of the negative effects of renting these goods. Commons trusts thus guarantee that those who are unprotected have rights to basic sustenance from their own resources and that the depleted resources are repaired and restored.

• A third duty of trustees is to ensure accountability and transparency in decision-making, particularly in the creation of a resource usage cap, usage permits, the amount of rent assessed for usage, and the taxes paid to the state for common beneficiaries and for resource restoration.

Who are the beneficiaries of a Commons Trust?

The beneficiaries are the population directly affected by the extraction, production or use of a common resource. Designation of these beneficiaries depends upon the size or extent of the commons community, which may be local, regional or global in scope.

How does a Commons Trust actually work?

Instead of regarding a commons as a source of profit, commons trusts determine their preservation value (the actual worth of passing on what we have inherited to future generations and allowing this stock to be replenished and restored) through the full participatory choice of community members on whether or not to spend this commons capital. Commons trusts thus create a new time signature based on the preservation of common resources and the resilience of the system that manages and produces them — not on the assets of the commons that may have financial value in the marketplace.

Are there other ways of setting up trusts?

Yes. Many kinds of trusts — involving different legal modalities and degrees of emphasis — have been developed around the world among commons groups, the private sector and the state. However, hybrid arrangements (such as private trusts, public utilities, public-private partnerships and public trusts) reduce the possibility that a commons trust can truly preserve common goods for the long-term, generate equitable benefits, and thus create the restorative and distributive balance needed by the people of a commons. Hybrid trusts tend to perpetuate imbalances in wealth and power because they rely upon and replicate, rather than supersede, the rules and institutions of the present socio-economic system.

Why should Commons Trusts become part of mainstream social and economic policy?
Through the creation of commons trusts across the world, a new dynamic equilibrium can be achieved. The financial incentives of businesses and government would continue to operate as before: the private sector profits through the extraction and production of resources rented to them by the commons sector, and the state gives equal weight to the interests of the private and commons sectors. The difference is that the long-term wealth guaranteed by commons trusts would not be generated through the potential financial revenue of the commons assets they are managing. At every level of decision-making and value creation — local, regional or global — this social and ecological restructuring would create a far more representative balance of power and wealth between the commons, business and government than currently exists.

What are some examples of Commons Trusts?

• Global Atmosphere Trust
• The Pacific Forest Trust
• Rio Atlantic Forest Trust
• The Old Growth Forest Project
• Allegheny Land Trust
• Vermont Land Trust
• North Carolina Coastal Land Trust
• Edwards Aquifer Authority
• Colorado Water Trust
• Indigenous Knowledge Commons
• Music Performance Trust Fund
• Creative Commons