This post serves as documentation of an email exchange I initiated about setting up crypto-currencies based on (renewable, benign) energy created. It is very dense with information but it’s a great resource for sharing. Invitation open to participate in the conversation and/or extend/work on these ideas.
I formatted my initial proposal in bold, and decided to put the responses as-is from the email thread – if they responded inline, they are inline, if not they are the bottom.
This maybe does not help much for reading, but there’s quite some dense information which could be valuable to someone.
Participants in the conversation:
Shann Turnbull, Green Money Working Group
Leander Bindewald, New Economic Foundation (Josh Ryan-Collins had been initially invited for the conversation; Josh appointed Leander to respond)
Chris Cook, Senior Research Fellow at the Institute for Security and Resilience Studies at University College London
Graham Barnes, Feasta
Barnes:I agree with Leander in terms of technical design – exchange currencies just need trust – but there is an attraction in relating the currency unit to something tangible.
A store of value currency could operate as a hedge against future energy price rises but
there are practical issues surrounding its redemption within any single renewable energy
project. i.e. is the generation capacity there at the time the instrument is redeemed? Easier
to achieve if there is a collective redemption ‘pool’ (Chris’s thoughts I think) to smooth out the
supply and demand. But if this were in place it facilitates capital investment which (he
believes and intuitively seems should be right) is more cost effective than interest-based euro
Rogers and others, but the unmet need does not have to be for goods and services today.
And its not the only guiding principle for a currency.
has to have connections to the grid – a bidirectional power purchase agreement. As smart
micro grids are established they decrease the reliance on the PPA but its needed whatever.
Kws carry different values at different times, so the exchange is not a simple process.
fixing problems of value asymmetry and/or clearing with traditional community currencies (time banks etc.).
value-sets. This is grounded in the work we did with DRA over here when Spice were
involved and explained to us the negative effects of setting a cash value against ‘hours-in’ in
Bindewald: Just as a point to consider: Michael Hudson stormed out of a session at the Teslaconference in Split last year, screaming “This is Enron all over again!”So, how do you make sure your currency differentiates or even discriminates between the energy producers?
Bindewald:This really relates to the questions that seem more relevant to successful currencies, then any (technical) design-feature: What is the user story, how do you get people to accept it, what is the benefit to them? This is always closer to social engineering then to currency issuance.
Bindewald:You are raising such questions in the two paragraphs below, but you will have to answer them before anybody could engage in the implementation.
Response by Shann Turnbull
Hello Graham et. al
I agree that the core problem is to establish an independent unit of value as stated in my “view to share” sent yesterday as pasted in below to “Simon Lelieveldt the chair of our COP in The Hague<
I nowdays do not favour a currency redeemable into energy except for financing renewable energy projects but a currency whose value is defined by the retail value of benign sustainable energy created by those who create wealth by producing, consuming and investing as set out in the paper Josh presented for me on March 6 at the ECOBATE conference. Refer to: ‘Might sustainable energy money have a future?’ posted at http://ssrn.com/abstract=
I will be presenting this paper on June 11 at Aix-En-Provence, INFINITI conference on International Finance,[http://
Begin forwarded message:
Dear Simon, et. alMay I respond to your request for information in regards to your topics as follows:A (Bio note)Shann is a founding member of the Sustainable Money Working Group introduced at http://www.gtne.org/?q=
node/337 with details posted at www.gmwg.org. His presentation is motivated by the objectives of its members to establish an emergency source of funding in the event of another financial crisis and establish a sustainable source of low cost funding. After obtaining an MBA from Harvard Shann became a serial entrepreneur founding a number of enterprises with three becoming publicly traded on the stock exchange in Australia. As a partner in a private equity group that acquired a dozen public companies in seven years he participated in their re-organisation as their chair, CEO, executive director or advisor. His PhD research established the science of corporate governance and risk management. Since writing Democratising the Wealth of Nations in 1975 Shann has been a prolific author on reforming the theories and practices of capitalism based on adopting ecological property rights to land, buildings, firms and money.B (View point to share)Governments and their regulators urgently need to facilitate if not initiate the introduction an objective stable unit of value to anchor and so sustain the 5,000 community currencies operating around the world when the current financial system next fails. The disruptive potential for cell phone money to replace current forms of money and banking needs to be used to reform the financial system from the ground up so that it is no longer back-to-front, upside-down, inside-out as explained here. Our discussion needs to empower members of parliaments around the world to create laws that allow new types of cell phone money to be trialled that can by-pass the official banking and payment systems to insulate host economies from any financial crisis. Regulation must prohibit cell phone money being created or controlled by any non-mutual organisation that is not democratically and transparently controlled by the users of the money. Only negative interest rate money would be permitted to eliminate money being used as a store of value that creates inequities, inefficiencies and inflation. Any units of value used by the currency that was not defined by a sustainable service of nature of the host bio-region would be subject to regulatory approval. Sustainable Energy Dollars (SEDs) or $Z would meet these conditions as explained here. My discussion paper is posted here.LINKS to be embedded:PhD research at: http://ssrn.com/abstract= 858244Democratising the Wealth of Nations, at: http://ssrn.com/abstract= 1146062back-to-front, upside-down, inside-out as explained here: http://www. ethicalmarkets.com/2013/01/14/ can-democratic-money-with- environmental-values-reduce- market-failures/
Chris Cooks response:Shann
I agree and this is precisely what I was saying in Tehran this week.
The Iranians – like us – must move from a ‘least dollar cost’ economy to a ‘least energy cost’ economy, and the Danes demonstrate empirically how this looks in practice since they have essentially mandated least energy cost as an overall policy requirement since the Oil Shock of 1973.
Naturally, it can’t be done with conventional legal and financial structures, but it can straightforwardly be done with updated versions of structures and instruments which pre-date the bank credit financing and conventional ‘equity’ funding.
My response to allThank you all very much for all the very valuable responses. Greatly appreciated.
Another response by Shann Turnbull