Dear Professor Stiglitz,
It was a pleasure attending your talk tonight here at Murdoch University in Perth, Western Australia. I have long been a fan since reading Globalisation and Its Discontents where you awakened me to the frightening impact of self-serving economic ideologies being perpetuated by the global financial sector. Your talk tonight extended these insights through a sober post mortem of the global financial crisis, but all the while maintained your hallmark sensitivity to the real and pressing economic demands of our time such as poverty relief and climate change.
In your introduction I was surprised to learn that in addition to being awarded the Nobel Prize in Economics that, as a lead author for the International Panel on Climate Change (IPCC), you are also a joint recipient of the Nobel Peace Prize. As it turns out, for our blog I have been writing a series of open letters to Nobel Peace Prize laureates regarding efforts by our NGO to establish an community issued Emissions Reduction Currency which uses the universal greenhouse gas accounting standards and framework drafted by the IPCC to create localised economic and social capital based on practical actions to prevent global warming. I am doing this to frame our vision in a universal context. Possessing an illustrious background in both economics and climate change you were an obvious choice to become a recipient of one of these letters.
What is an Emissions Reduction Currency? In essence it is a tool in the form of a local currency whereby a community can reward itself directly for day to day actions its members undertake, individually or collectively, to prevent global warming. Local currencies are a formalisation of barter which are variously used to increase social cohesion, to reduce the cost of working capital and to promote small businesses, and historically, particularly during the Great Depression, to temporarily increase liquidity for exchanges and transactions during times when credit is hard to come by. There are currently several thousand local currencies in circulation worldwide, with Australia for some reason having the largest number documented despite our relatively small population. The limitation of local currencies is that they depend on social capital and trust that exists in a community and this prevents them from operating at a large scale, particularly in modern times where people are highly mobile and social institutions are in decline.
In 1969 Buckminster Fuller, in his classic Operating Manual for Spaceship Earth, proposed the creation of a world currency based on kilowatt hours of alternative energy produced. His thinking was that such a currency would promote sustainable energy resources and technology in a democratically accessible fashion, and would also ground economic transactions within an environmentally sustainable context. More recently, governments such as the EU have been attempting to create a similar currency based on the commodification of greenhouse gas emission through emissions trading systems. In part to facilitate this, the IPCC and other global institutions have created a universal accounting structure for documenting reductions in greenhouse gas emissions.
Our group, the Maia Maia Emissions Reduction Currency Scheme, and other small scale initiatives worldwide have been attempting to bring these two ideas together to create local currencies that are based on alternative energy usage and greenhouse gas reductions and sequestration. In our scheme, local organisations such as schools, churches, local government or civil society groups who are engaged in efforts to prevent global warming can issue a local currency based on the quantification of greenhouse gases reduced. The hope is that this currency will serve to make these reductions tangible, will further promote those efforts and ultimately will create an economic return from them. As this currency is used as a coupon in trade for goods and services (in combination with ordinary fiat currency) it communicates an ethos of environmental awareness which will hopefully influence purchasing decisions by consumers.
Conceptually, emission reduction currencies will not be limited by the social capital available in the issuing group as the basis of the currency connects goodwill fostered locally with the goodwill generated globally through our collective actions to protect humanities common future and the ecosystems in which we are embedded. In effect we are trying to invent a global local currency that can be freely convertible everywhere.
I am curious what an eminent economist such as yourself might think about our little experiment. Could this be a viable tool for easing the global economic malaise through generating new resources for local economies that have been abandoned by the banks and global economic institutions. Do you think this is a realistic idea? Can ordinary people create their own economic values for greenhouse gas reductions without waiting for a world-wide political consensus. Can this approach avoid market speculation that has plagued government sponsored emissions trading systems? What do you think? Are we crazy or can this idea actually make a positive contribution?
As a final bit of trivia, the term Emissions Reduction Currency was coined for us by a Professor at Murdoch University. I've used this term to categorise similar schemes being developed internationally and to publish my research in that most scholarly of publications, Wikipedia. Myself being a businessman and not an academic this was the best I could do on short notice. I've included a hyperlink to this information at the bottom of this letter in the off chance that you might know anyone in the Establishment that might be interested.
In any case, I hope this letter has been of interest to you. Thank you for your amazing efforts at keeping faith with reality in a field such as economic policy where feet so rarely touch the ground.
Co-founder The Maia Maia Emissions Reduction Currency System