The world is facing an ecological crisis. Our economic system fails to properly account for the natural resources on which human prosperity depends. But attempts to remedy the problem, for example through environmental taxation, fail to address an elephant lurking in the room: the monetary system. Energy-related money offers a means to improve the qualities of the monetary system, while also stimulating the low-carbon energy transition we urgently need.
From the Executive Summary:
Modern interest-bearing bank-debt money creates the illusion of exponentially growing wealth and an unceasing demand for economic growth and/or inflation. In return, it has delivered instability and misallocation of investment, and encouraged myopic policy-making. To make the economy work for the planet, and therefore for the long-term interests of humanity, we need to change how money works. We need a feedback loop between nature and the economy. This report examines the potential of energy-related monetary instruments – currencies and accounting frameworks – to provide such feedback. Since energy is as fundamental to the economy as it is to the natural sciences, it is an attractive option upon which to base such feedback.
This report is a first attempt to systemically review the rich and burgeoning field of energy money proposals and projects. We present a new taxonomy of energy money to guide the reader through this work. It charts the functions of money, the important characteristics of energy, and the relationships between the two.