(3) Banking on Ourselves - Transition
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Transcript of (3) Banking on Ourselves - Transition
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Transition
Banking on Ourselves
Chris Cook Schumacher College
15 November 2012
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Conventional Banking
Seller
IOU
Buyer
Bank
Value
IOU
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Financing – Clearing Union Peer to Peer trade credit - banks as service
providers not lendersBank capital requirement is only for operating
costsGoods and services change hands by reference to
$, not necessarily in exchange for $ currencyCredit risk shared by sellers and buyers
collectively No 'interest' (money for the use of money)Default costs and operating costs shared
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Clearing Union - Seller accepts Buyer's IOU
Seller Buyer
IOU
Value
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IOU is guaranteed by Clearing Union of Sellers & Buyers collectively
Seller Buyer
IOU
Value
Pool
GuaranteeGuarantee
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Seller & Buyer pay guarantee charge into Pool held by Custodian
Seller Buyer
IOU
Value
Pool GuaranteeGuarantee
Fee Fee
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1/ Buyer settles credit in money or 'money's worth' eg energy stock
Seller Buyer
Value
Pool GuaranteeGuarantee
Fee Fee
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2/System identifies a 'chain' of IOUs A<B<C<D<E<A and 'nets' them out
Seller A Buyer B
PoolGuaranteeGuarantee
Fee Fee
Buyer C
Buyer D
Buyer E
IOU
IOU
IOU IOU
IOU
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3/ Buyer defaults: system pays sellers and collects from buyer if possible
Seller A BuyerDefault
Pool
Collects
Pays
Seller B
Default
Pays
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Service provider sets guarantee limits, handles defaults & manages system
Seller Buyer
IOU
Value
Pool GuaranteeGuarantee
Fee Fee
ServiceProvider
FeeService
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Financing – Capital Partnership Investment to a common purpose in people
businessesProduction and/or revenue sharing between
investor and user of investment for as long as the investment is used
No 'interest' (money for the use of money)Sharing of risk and reward – no default
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Capital Partnership
CustodianCustodian
Investors
Payment
% %
Use
Managers
Users
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Capital Partnership reinvents Equity
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Equity Shares - % age shares in flows of revenue or production
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Stock – returnable in payment for use value eg rentals, Kilowatt Hours
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Example: “The Art of Flirting” – a film incorporated as an LLP
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The actors received nth’s of gross revenues
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I got 5%...and the producer the rest
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But we needed lights, cameras, pizza, coffee
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Capital Partners invested £ for 20% of the revenues....
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...if there are any
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Art of Flirting Partnership
CustodianCustodian
Financial Capital(Investors)
Financial Capital(Investors)
ViewersViewers
Human Capital(Actors, Producer, Me)
% %
£
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Capital Partnerships are not Organisations
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They do not own anything, do anything, employ anyone, or contract with anyone...
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Associative agreements require no legislation
Custodians(National)
Custodians(National)
Financial Capital(Money, IP etc)
Financial Capital(Money, IP etc)
UsersUsers
Human Capital(Developers, Operators)
% %
Payment
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Transition
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Energy subsidies in the Middle East alone cost trillions of dollars
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Investment in the global transition to renewable energy needs trillions of dollars
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How do we make the connection?
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Energy Stock
CustodianCustodian
InvestorInvestor
UserUser
Energy Energy
Energy
ManagerManager
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Stock - returnable in payment for energy
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Mega Watts: renewables funded by unitising Energy Pool of production.
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Nega Watt energy savings - the cheapest energy - funded by an Energy Loan in Units
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Energy Loans made to properties & repaid via utility bills out of energy saved
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Funded by investors who invest through buying Units in Energy Pools
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Energy Loan of £5,00050 Units of 1 Megawatt Hour @ £100 per Unit
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5,000 Units of 10 Kilowatt Hours @ £1.00 per Unit...and so on
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Reduced energy bill for energy consumed
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Energy Loan repaid through buying Units from the Pool at the market price
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The UK 'Green Deal' – Compound interest and Jevon's Paradox
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Stock: saving energy is saving money
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But how do we transition from a carbon economy?
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Transition through Gas
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Carbon Levy - initially on gas - funds Energy Pool investment in renewable Mega Watts
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…and Green Deal investment in Nega Watts
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An Energy Dividend is paid in Stock
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The outcome is that those with above average carbon fuel use ...
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….make a net transfer to those with below average use of carbon fuel
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“If you want to keep a cow healthy, you don’t regulate what comes out of it……”
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“……you regulate what goes in….”
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Energy Pools enable Carbon currency based upon the intrinsic value of energy…
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..rather than a market in value-less Units of CO2 emissions, imposed by governments
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No dollars change hands but transactions are priced against the dollar
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The $ may come to be fixed against a unit of energy – an Energy Standard
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This brings us to Energy Economics
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Thank You
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