A Social Currency?

This is an open letter to Grameen Bank and Dr. Muhammad Yunus inspired by reading his visionary book 'Creating a World Without Poverty' Having previously written a letter to another Nobel Peace Prize winner, His Holiness the Dalai Lama (see earlier post) I felt less inhibited writing this one.

Dear Dr. Yunas and the Grameen Board,

I am writing to you to share a very powerful idea our group in Australia has stumbled upon that may be of some use to the Grameen mission of helping those in poverty to liberate themselves from it.

The idea is that greenhouse gas emissions reductions and abatement have some unprecedented and amazing properties (they are measurable, have a universally recognised value, are democratically accessible, and are an indicator of good will) that make them an excellent medium to back a community run 'social currency'.

Many local currencies are in existence around the world most of which are a formalisation of a barter economy. These currencies are backed by local community social capital and historically proliferate during economic downturns when the official money supply is constricted. They tend to operate on a limited scale as the value of their currencies is dependent on relationships within tight knit communities.

The opportunity in basing a local currency on emissions reductions is that such currencies become controvertible to one another on the basis of universally shared interests and thus have a real economic value that is potentially more substantial than the national currency.

We are further proposing that the inherent value of greenhouse gas reductions can only become converted to a local currency when they are ‘donated’ to socially useful ‘projects’ and earned by project participants.

Such a social currency can be exchanged for goods and services between individuals, for discounts from social businesses, or indeed from any businesses. More details on how this might be structured are found on our website: www.maiamaia.org .

Implementing such a social currency may prove useful to Grameen Bank borrowers and stakeholders in the following ways:

1. A social currency can help to pay for underfunded and vital services for impoverished communities such as education, health care, social services, water and waste treatment, etc...

2. A social currency circulating in a community will create economic efficiencies from division of labor and services that will optimise the value of national currency in that community.

3. Social currency discounts granted by social businesses such as Grameen Danone are an easy way to introduce differential pricing structures that target benefits from the businesses to the population most needing assistance.

4. The additional financial resources and efficiencies added to a community through introduction of the social currency will make it easier for microcredit lenders to pay back their loans in national currency.

5. 'Donation' of social currency collected by social business back to local community projects creates an additional avenue for social businesses to advertise their services to their target customers in a way that also directly supports those customers.

6. Social currency tends to remain in local communities rather than being pulled out of the local economy and is not subject to international currency value fluctuations.

7. Introducing an emissions reduction social currency creates a market wherein educated children of borrowers can learn environmental accounting skills to liberate the economic value of Clean Development Mechanism projects (while simultaneously creating additional incentives for those projects). This is a huge and expanding secondary services market and skills are exportable throughout Asia and to the rest of the world.

Grameen Bank is ideally constituted to introduce an emissions reduction backed social currency.

1. It has credibility and contacts with all three groups needed for a social currency to be successful - communities, families, and businesses.

2. It has the administrative structure already in place. Local Grameen branches can provide both micro-credit and social currency management services.

3. It has a large number of branches with a history of creative problem solving within which good ideas can thrive and others that aren't practical can be quietly dropped.

4. It has an immediate and local source of emission abatement in Grameen Shakti's alternative energy provision services. Grameen Shakti also has the technical capabilities to provide emissions accounting services for other local sources of emissions abatement or reduction.

5. It has the international credibility to attract 'donations' of emissions reductions from auditable corporate sources such as from Corporate Sustainability Reporting (CSR) and regulatory reporting by Danone and its subsidiaries.

Demonstrating a powerful new approach to countering greenhouse gas emissions could be a wonderful source of pride for Bangladeshis whose country is one of the most vulnerable to climate change.

It is likely that an emissions reduction ‘social currency’ could be more successfully implemented in a poor country like Bangladesh where necessity can be the mother of invention, rather than in a more economically comfortable country such as Australia. Our hope is that in some years time we can be inspired by and learn from your efforts.

Please contact us if you would like to discuss this idea further or any other way in which we as a group can assist you in making poverty history.

All the best.