Our ability to live within the carrying capacity of our ecosystem will determine the long-term success of our species. Living in cities and surrounded by all the material comforts, we often forget that we are not separate from nature, but a part of it. To thrive, we don’t only have to reduce our material footprint–we need to find a way to live in harmony with our natural habitat.

A United Nations (UN) study estimated that no industry would be profitable if their environmental costs were included. This means that our entire economic system is dependent on extracting natural resources at a growing rate. The value of the natural resources consumed by the global economy is estimated to be worth $125 trillion annually. Since the 1970s our population has doubled while our rate of consumption has quadrupled. As a planet we now consume 100 billion tonnes of material a year.

As we aspire to articulate a social contract that can bring our way of life into harmony with our ecosystem, we have to answer a critical question about how we should allocate our precious natural resources. To succeed we need to find a way to generate more well-being with a much smaller ecological footprint. This problem is fundamentally about supply and demand. To solve it, we need to find a better way to connect the two sides. The solution I propose is primarily market driven.

When we view the marketplace we have designed thus far, we know what the demand side looks like. Citizens and cells have listed their needs in the form of prioritized subscriptions. It is essential that the needs are set in order of priority and that every subscription has a defined price above which the customer is not willing to go through with the purchase.

We also know something essential about supply. From the standpoint of natural resources, there will be a lot less of it than before. To achieve balance in our ecosystem, we need to rein in our rampant use and allocate resources much more wisely.

To better understand supply, the first order of business is to determine the carrying capacity of the planet by surveying the renewable and non-renewable natural resources in each bioregion. This is best done with the help of pre-existing data from governments, universities and non-governmental organizations (NGOs). How many plants and forests are needed to capture the carbon emissions we produce? How is the growing population going to be fed now and in the future? What kinds of curbs do we have to set for emissions to avert the negative effects of climate change?

The results of these calculations will provide us with the total quantity of a given resource that can be harvested annually. The inventory is then broken down further by every bioregion. Countries and continents negotiate how they will conserve and consume their allotted share of the natural resources. The basis for the negotiations should be the health of the local ecosystems, the local population that relies on them and the assessed sustainability compared with the global average generated by the inventory.

These negotiations will not be easy, but the end result will yield vital information. Every continent, nation and county will know how much of a given resource can be used in a specific area while still achieving sustainability. Every region would also know how much more renewable resources they should produce in the future and how to transition away from using non-renewable resources. Without this assessment, we are liable to rob future generations of these resources.

If we now create a market where this limited supply meets the unchanged demand in our marketplace, what would happen? The limited supply would predictably raise the prices of almost all natural resources and these price hikes would be immediately carried over to the goods and services that use them. But what happens next is amazing.

The markets will, almost miraculously, allocate the scarce natural resources where they are most needed. As the higher prices would exceed the maximum prices set by most demand-side subscriptions, their offers would go unfilled. This demand would be diverted to cheaper and more sustainable solutions. Thanks to the prioritized nature of the subscriptions, natural resources would be directed to the most important uses. Only those who have an essential need for something would be willing to pay the much higher cost those resources now carry. Both of these phenomena are exactly what we are looking for.

Now, let’s look at the supply side a little more carefully. Normally the dramatic increase in prices would create many more willing sellers. When the price of oil is high, for example, exploration for new oil goes up. New supplies entering the market bring the prices back down. That’s how markets work. But this is the opposite of what we want. We need to reduce supply, not increase it.

When the supply is limited, as in this case, the sellers experience a windfall. There is no additional supply that can bring down the price. Through no virtue of their own, the sellers would be enriched by unearned income. There would also be more willing sellers than the quotas allow. Which brings us to the question: How do we decide who gets to sell natural resources and who gets to collect the unearned income?

These questions point to a need to create a secondary marketplace that sells licenses to natural resources. These licenses have their own supply and demand logic. To make sense of it, we should consult Henry George, the expert on unearned income. His famous Land Value Tax proposal aimed to return unearned income to benefit the public. In his proposal, taxes are directed specifically on things with a fixed supply like land and natural monopolies such as railways. The income generated by these taxes aims to free us from all other taxes, which is why George’s proposal was also called the single tax proposal.

To capture the unearned income created by the limits set on supply, the best way to issue the licenses is to auction them off to the highest bidder in regional auctions. Every locality would auction their annual share of the allowed natural extraction in narrowly defined licenses. They would, for example, allow you to cut down a defined number of cubic meters of a particular tree type in a pre-approved forest, or fish a certain amount of fish using a specific method in a pre-approved area. Other licenses would allow you to emit a certain amount of carbon dioxide or use a certain amount of fresh water for industrial use.

The price of the license will be extracted from the high prices of the natural resources and the goods and services that are produced from them. The consumer prices will be unaffected as the price of the license captures most of the unearned income that would have otherwise gone to the seller. The sellers of the natural resource will also make a small profit so long as they didn’t overbid for the licenses.

The license will be attached to the digital identity of the products and it will follow the products from beginning to end. When the price of the licenses is included in the price of the goods, the consumer gets direct feedback on the price and value of the finite resources they are using. The externalities of material extraction are internalized into all prices. This is as it should be. This is a systemic feedback loop at its best.

When consumers pay for the license as part of their purchase, they effectively compensate their own community members for consuming this resource. This is as it is supposed to be. Since we want to limit the use of natural resources, all taxes should be collected from the use of natural resources.

The proceeds from the license sales should be collected by the local communities and administered by the local forums. These funds augment the funds created by the public UBI and follow the priorities they have set.

The income generated by the licenses create millions of green jobs. For the first time the preservation of our ecosystem becomes a genuine and sustainable business. Saving the planet will finally receive the funding it needs, while all other public funds can be directed towards other important causes. The goal is that the sale of the licenses can fully fund all the work needed to return our ecosystem to a sustainable path.

But when we cut supply, we also have to address another persistent problem that contributes to ecological destruction. Today people all over the world are forced to make desperate decisions on how they can feed their families. Because of debt, poverty or sheer hunger, people are forced to sell their land, cut down their forests and even hunt animals into extinction, just to eke out a living. Luckily, we have already solved a big part of this problem earlier: the UBI provides everybody with a basic living. This liberates people from having to make bad choices like exploiting endangered natural resources.