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Fiscal Approaches to Driving the Circular Economy

I had the honour of addressing the Baltic Sea Action group on the opportunities to drive the circular economy using fiscal instruments.

The main thread of my presentation was the work done with the Swedish Sustainable Economy Foundation on the nutrients phosphorus and nitrogen from field to plate to field and the framework of the fiscal and economic realities affecting decisions at each step.

If you take a step back to see the whole chain, you realise that no-one wants to be counter-sustainable, but from each person’s viewpoint they must make economic decisions for the domain they are responsible for.

By going as far up the supply chain as possible, it is possible to add dividend-bearing surcharges to existing levies that stimulate a circular economy.

You can view and download the slides here

To view the whole presentation see the youtube clip below.

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Dividend-bearing pollutant fees in simulation at European Phosphorus Platform

BERLIN 5 MARCH 2015: As an extra attraction at the 2nd European Sustainable Phosphorus Conference (ESPC2), The Swedish Sustainable Economy Foundation (TSSEF.SE) presented a shortened version of its simulation of divided-bearing pollutant fee mechanism. The  simulation, which is played as a business game scenario, pits a government charged with reducing emissions of phosphorus against food producers and property owners who are charged with following regulations and keeping profits up.

The aim of the simulation is to bring participants up close to the myriad of factors  – from technical and legal to emotional – surrounding putting a price on pollution. The simulation is aimed at giving participants an idea of how Environmental Fiscal Reform (EFR) works. The simulation highlights the dividend-bearing pollutant mechanism created by TSSEF. Basically a surcharge is levied as high up in the supply chain as possible on potential pollutants. (Pollutants are also useful substances, just in the wrong form and the wrong place.) Essential to understanding the levy is that it is paid back to taxpayers – to ensure that consumers retain spending power. Download the poster here. Read More…

Banks can play an important role in driving prosperity. Making money on asset-flipping doesn’t do it.

Professor Werner calls on Universities to look more into the role of local banks and the role of banks in general in the economy.

 

In this speech from MOTALA in Sweden Professor Werner explains the problem of large banks only investing in buying and selling assets, instead of investing in the local community in productive projects that create jobs.

Tell politicians national economies are not like handbags.

handbagAn article newly published in the New Statesman points out something that is clear to economists: a national economy is not the same as a household economy. Politicians of all persuasions seem to be getting that badly wrong.

Politicians can cause problems by inferring that the nation must pay its debts like any well-run household because it just doesn’t work like that. Nations, unlike households, have a money-printing machine in the basement.

The article cites and incident of British Prime Minister David Cameron trying to use the “handbag” routine:

In 2011, Cameron had to hastily rewrite a speech stating that “the only way out of a debt crisis is to deal with your debts. That means households – all of us – paying off the credit card and store card bills” after economists pointed out that this would massively exacerbate a recession fuelled by lack of demand.

The idea that a nation’s books must balance is counter-intuitive. Yet when it comes to the environmental books, the need to have a healthy flow of nutrients in the economy without degrading land and depleting resources, this seems to be accepted as some kind of necessary evil.

It is as if the Prime Minister want the money system to have its books balanced whilst the environment (and poverty) is a tool to achieve that .

The opposite is the ideal: balancing the environmental and social books, and the money system is one tool to ensure that. If the money books don’t balance so what? They aren’t even meant to. You cannot say the same for nature.

The next step in complementary currency

Cover_biomassComplementary currencies like the Bristol Pound act as vouchers for national currency. You swap one Bristol Pound for a Bank of England pound at a  1:1 or 1:0,9 rate. The benefit of a currency like that is that it encourages money to stay in the local economy (jobs with it). The Bristol Pound is valid only locally.

The question is, can complementary currencies take a next step, towards keeping money locally AND stimulating the green economy – an economy where nutrients recycle instead of being brought from outside (entailing a large expenditure of fossil fuel) and an economy where wind, biomass and sun provide the energy.

A recent updated version of a report from Stephen Hinton Consulting demonstrates one way that might be achieved.

The vouchers are not swapped for national currency but for sorted biomass, and for promises to sequester carbon in the soil.

Learn more about this proposal in the white paper.

A complementary currency to drive a cityR5 (.pdf)

OPINION: The overwhelming case for tax on carbon and climate dividend

 

surcharge rutaLet us start by agreeing that the fossil carbon economy presents some tricky issues: much of what we see around us, and the standard of living we enjoy, comes to us thanks to an economy driven by energy and chemicals extracted from fossil fuels. The best jobs are thanks to them and our pensions are invested in them; these largest companies in the world rely on fossil energy or are suppliers to those industries. That is hard to just give up, especially when no alternatives as agreeable are in sight. Read More…

Economists: Make sure to look in the right direction

As a Brit living in a country that drives on the other side, I still have a moment of hesitation crossing the road; looking both ways, both sides. I was about to cross the road yesterday to go to a conference on banking, and as I stopped the thought crossed my mind that maybe economists in the mainstream are so used to one way of doing things that they are not looking in the right direction either. I couldn’t shake the feeling something has been missing. Why have the warnings about climate change not changed anything? How are things different now that the IPCC has put its foot down and stated clearly that we need to exit fossil fuel burning and transition to clean, renewable energy? Maybe low inflation is not the answer, but HIGH inflation? Read More…

THE MONOPOLY CODE: Secret alternative rules of Monopoly show how everyone can live in prosperity

The original board

I am utterly astonished. We have heard of the DaVinci code, but there is a MONOPOLY code. The secret rules of the game from the early 1900s show how, by changing the rules, everyone can live in prosperity. Read More…

Lokalvaluta dagen

(Seminarium och Workshop)
LOKAL VALUTA SOM MOTOR I LANDSBYGDS- OCH LOKALEKONOMISK UTVECKLING

itk
Kan en lokal, volontär valuta vara ett sätt att organisera och stimulera landsbygdsutvecklingsprojekt? Tidigare har ISSS utfört pilotstudier och utveckling av modeller för introduktion av lokalvaluta. Dessa studier visade bl.a. stora möjligheter för användning av volontärvalutan ITK. ITK, som står för Ideell Tid Kuponger, introducerades inom projekt som syftar till att stärka den lokala ekonomin och öka den lokala beredskapen inför t.ex. extrem väder, elavbrott, ekonomiska svårigheter mm. Denna workshop ger dig som är involverad i landsbygdsutveckling, beredskap, lokalekonomi, miljöutveckling osv. nya insikter och metoder för att organisera, uppmuntra och finansiera projekt. Read More…

Case Study: using complementary currency to drive volunteering and collaboration

Journalist BirGitta Tornerhielm shows off her vouchers for ITK

Journalist BirGitta Tornerhielm shows off her environmental currency

PLACE: County of Uppland, Sweden

SITUATION:  Despite best efforts, rural areas – even some close to large cities – are experiencing a decline in population, investment  and or services. As unemployment is rising, and the production of services is moving away from the area, the ability of the area to handle challenges such as economic downturn, food shortages, freak climate, power failure etc. is decreasing.

When disaster strikes, the authorities and corporations cannot alone be relied upon, it is up to citizens to meet these challenges.

SECONDARY SITUATION: The above applies too, to the task forming the sustainable society. The challenges are similar but the time-frames differ. Firm public engagement, and collaboration between authorities and businesses is needed to meet the nation’s ambitious environmental goals.

FRAMING QUESTION: Are there  tools available that can be used to encourage citizens to take part in developing the sustainable society, tools and approaches that can encourage them to contribute their time and skills to developing a local resilient capability? Is so, how can these tools be implemented? How can corporations and authorities be involved? Read More…