Bank of the Commons:
Ecological Sustainability as the New Gold For Ecological Transformation
by
Roy Morrison
The practical challenge in building an ecological civilization from industrial business and pillage, as usual, is not technical nor legal, but financial. We must recognize that to save ourselves from ecological catastrophe our economic and financial system must value and embrace sustainability and devalue pollution, depletion and ecological damage.
At bottom, ecological sustainability must be monetized as the new gold and store of value and capital to help finance the trillions of dollars of productive investment necessary for ecological transformation and the support of social and ecological justice. At the same time, oil, coal, natural gas must become stranded assets, written down and left in the ground and awarded a new non-pollution credit to be monetized by future renewable investment. A trillion dollars of fossil fuel assets can become a trillion dollars of investment in wind and solar hardware installations.
Sustainability must be treated legally and financially not as a cost but as a precious value, a hard asset, the new gold whose value is created by economic growth that means ecological improvement. The replacement of fossil fuels and nuclear energy with 100% renewable energy and storage will yield not just market profits but enormous and ongoing ecological benefits and ecosystem services to be monetized as capital for a new Bank of the Commons to support and invest in sustainability to provide broad and enduring ecological and social benefits.
The monetized dollar value of sustainability becomes a capital asset for the Bank of the Commons and used both to invest in further ecological improvement and as social property distributed annually to all as a social dividend for sustainable conduct. This is organizationally similar to the Alaska permanent fund that uses oil revenues and invests those revenues to distribute yearly social dividends to all Alaskans. But, in the case of the Bank of the Commons, this is real wealth, not revenues raised from self-destruction, but from the pursuit of enduring prosperity.
The Challenge at Hand
The question is how to move quickly from Green plans and pledges to sustainable reality?
Across the nation, States are competing in adopting plans, programs, and regulations to move quickly toward 100 percent renewable energy. Nationally, a Green New Deal advances the notion of a crash program for climate change relief. Gov. Jay Inslee of Washington is running for president on an agenda focusing on responding to climate change and building a green economy expanding upon his aggressive work in Washington. Beto O'Rourke announces a 5 trillion dollar plan to invest in the clean energy transition to meet the existential climate crisis with goal to reduce greenhouse gas (GHG) emissions 50% by 2030 and to zero by 2050. In Congress, fossil fuel supporters Republican Alaska Senator Lisa Murkowski and West Virginia Senator Joe Manchin announced that it's time to take climate change seriously.
What does this all mean? Is it just feel good talk as the ice melts, the forest burns, drought, floods and superstorms worsen and proliferate? Can we create a path toward sustainability?
How do we build an economy where economic growth means ecological improvement, not ecological degradation, where the price system sends clear signals for sustainability, where sustainable goods and services become cheaper, gain market share, and increase profits? How do we assure that an ecological price system is complemented and supported by intrinsic social rewards for the common pursuit of sustainability expressed through the strengthening of freedom and community, protection of the commons, and by social and ecological justice?
We will address these central challenges.
Rise of an Ecological Civilization
An ecological civilization arises not just from price signals and pursuit of monetary gain. The price system sending clear signals for sustainability is also an expression of intrinsic social and political values that supports the ecological understanding of value, that reshapes and reconsider cost accounting through an ecological lens that assigns value in the pursuit and practice of both ecological sustainability and social and ecological justice.
The ecological price system ultimately rests upon social and political values, and, in application, means sending a combination of clear price signals for sustainable conduct to investors, businesses, consumers, regulators through mechanisms such as an ecological value added tax that increases tax on unsustainable goods and services to privilege sustainable investment over unsustainable investment, to redefine fiduciary responsibility on all levels to mean making economic growth mean ecological improvement within the context of freedom and community, ecological and social justice and the health of the commons.
The manifestation of this path and determination for sustainability and justice will be the organization and spread of the Bank of the Commons that will be both an instrument to invest in ecological sustainability and monetize sustainable ecological value through pollution reduction and the growth of ecosystem services credited to all members of the community.
Making economic growth mean ecological improvement does not just create economic gain through markets, it also creates wealth through ecological improvement, in the way conventional banks create money and wealth through loans. An ecological citizen's dividend must also be the consequence of ecological improvement. The benefit of replacing coal, oil, and natural gas is not simply income from the sale of renewable energy.It must also be monetized and broadly shared by valuing the reduction of pollution, depletion, and ecological damage and by the new ecosystem services provided by the regeneration of the ecosphere and the real natural capital accounts of living wealth.
The Bank of the Commons will result in a dual multiplier effect upon the economy. First, by the conventional and shared benefits from economic growth, and second by booking and distributing value of real wealth resulting from the collective social effort and success in reducing pollution, restoring habitat, and advancing social and ecological justice. This is the expression of real and sustainable capital upon which the creation and distribution of a basic income grant or negative income tax arises. The important difference between the creation of money by the Bank of the Commons and conventional economics notions such as modern monetary theory (MMT), is that wealth created by the Bank of the Commons will in part be based on the real and enduring value of ecosystem services and pollution reduction through the pursuit of sustainability.
These benefits of the ecological turn need be socialized and booked, but to be done so that the benefits do not simply become a credit to the balance sheet of entities pursuing ecological ends, but are part of sustainable community wealth and shared by all. At the same time, the balance sheet of polluting, depleting, ecologically destructive entities are charged and debited for such self-destructive conduct where the polluter, not the community, is directly charged. The Bank of the Commons provides a broad community benefit and motivation for ecological transformation resting upon and providing both intrinsic and extrinsic rewards.
For example, if I borrow $10million dollars from the bank of the commons to build a wind farm that produces 12 million kilowatt hours of energy a year to be sold in an ecological market for $3 million dollars a year my company earns a profit, subject to an EVAT and a wealth tax, as does the Bank of the Commons. At the same time, the value of the carbon dioxide saved and pollution effects reduced and ecosystem services restored is monetized on the balance sheet of the Bank of the commons at a calculated $4 million a year to be both distributed as a citizen's dividend and reinvested in further sustainable efforts by the Bank of the Commons.
Similar to a regulatory asset like Renewable Energy Credit (REC), that is created by solar and wind electricity, the pollution reduction and ecosystems services created by sustainable investment is added to the books of the Bank of the Commons. It is booked as ecological capital on the right side of the balance sheet and as a valuable cash asset on the left side of the balance sheet. Ecological accountants can handle the combination of reinvestment and citizen distribution much as in done by the Alaska permanent fund with oil revenues and is used to create investment income and a citizen's annual distribution.
In the case of the Bank of the Commons, the pollution reduction and ecosystem services are valued apart from the revenue generated directly from sustainable investment and monetized by creating a regulatory asset based on real and fundamental ecological reality and consequences for the commons and used for common social benefit. This is a key manifestation of an ecological market system and of a system of sustainable prosperity, of freedom and community and justice.
In2017, around 5.14 billion metric tons of carbon dioxide were produced by US energy consumption alone (34.8 billion metric tons globally).iIf the value of an avoided metric ton of carbon dioxide is booked at$100 a ton, the balance sheet capitalization of the Bank of the Commons would increase by $100 million dollars per million metric tons of carbon displaced, for a potential total value for a renewable energy future of $514 billion dollars. Globally this amounts to Green capitalization of $3.48 trillion dollars.
This is a recurring credit, not a one-time thing. It is not a reward simply to encourage the building of renewable energy facilities, rather it is recognition of the ongoing value of the operation of these facilities based on their annual output and carbon displacement that captures the real ecological and social value of sustainability and is the basis for shared wealth and healing the global commons.
Environmental sustainability, not gold, should be the universally recognized store of real value, the manifestation in financial terms of economic growth as ecological improvement.
ihttps/www.statistica.com/sta Energy and Environmental Services. U.S. carbon dioxide emissions 1975-2017