Healthy Money Healthy Planet - library.uniteddiversity.coop

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such resource as fossil fuel, since we need to lessen the risk of runaway global warming.
If we link a currency to energy, that would effectively encourage more energy
production, but since we want to achieve the reverse, he suggests we must instead link
the currency to rights to emit greenhouse gases.
Douthwaite therefore proposes the adoption of an energy­backed currency unit, or
ebcu, as this new international currency. In his system, greenhouse gas emission
permits, representing the right to burn fuel, would be in limited supply.
The IMF would deal out these special emission rights (SERs) on the basis of population.
The SERs would be handed from the electricity producers, oil refineries and coal
distributors to the fossil­fuel production companies as payment in addition to cash.
Because the SERs would be bought and sold between nations, it would be unfair if the
currency used for transactions was the US dollar. A new currency would therefore be
required, which would help minimise the use of the scarce resource, namely the
emitting rights. Douthwaite says that the IMF would supply governments with the
system’s new money, ebcus, on the same per capita basis as SERs. The ebcus would be a
one­off issue, which
would fix their value in relation to a certain level of greenhouse gas emissions, and
subsequently to the use of fossil energy. If a government used ebcus to buy additional
SERs from the IMF to buy more fossil energy, the number of ebcus in circulation would
not be increased to make up for the loss. Governments could also sell their SERs to their
citizens, major energy users or other governments.
Douthwaite says that under this system countries would control their economies
by adjusting the energy supply rather than the credit supply as they do today. Those
that overused fossil fuel would find their economies shrinking, while those whose
economies were sustainable could experience economic growth. Such a system would
also have an effect on a country’s currency. The power of big investors who threaten to
take their money out of an economy because of its low currency value would be
reduced, so governments would be able to pursue investor­unfriendly policies if they
wished.
And, for the first time since President Nixon delinked the US dollar from the gold
standard back in 1971, both the international and national currency would represent
something real. Douthwaite concludes,