Green Money: Why It’s Needed, How to Get It? - How Might an Efficient, Equitable and Resilient Finance Sector Be Established?
16 Pages Posted: 26 Nov 2012
Date Written: July 21, 2012
Abstract
Money becomes green when its value is defined by electricity generated by a cooperative from local benign renewable energy sources. Green money introduces a global unit of account with its value determined by the capacity of each bioregion to sustain humanity on the planet. This introduces profound changes in the way market prices, values, and costs are established to allocate global resources. Producers, traders, investors and/or consumers who enter into purchase contracts denominated in units of renewable retail electricity guaranteed by creditable third parties create green money. Part of the insurance cost is attached to the contract to create a usage or demurrage fee for green money. This avoids green money being used as a store of value with compounding interest charges that require economic growth to justify creating additional money to pay interest. Green money allows the financial system to deliver prosperity without growth while also reducing income inequality from the owners of money earning interest. A more reliable, fairer, ethical and efficient financial system is created. Green money reduces the bias to invest in carbon burning energy sources to ameliorate and/or eliminate the need for carbon taxes or trading. Green money resists inflation as its anchored to the retail value of an unlimited service of nature and avoids contagion from alien markets as it is democratically controlled in each bioregion.
Keywords: Demurrage money, Financial system, Local currencies, Renewable energy, Resource allocation
JEL Classification: E42, 250, G20
Suggested Citation: Suggested Citation