Financing energybeyond Peak Credit
-
Upload
chrisjcook -
Category
Economy & Finance
-
view
1.492 -
download
0
description
Transcript of Financing energybeyond Peak Credit
![Page 1: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/1.jpg)
Beyond Peak Credit
A New Approach to Energy Investment
Chris Cook
Claverton
25/26 October 2008
![Page 2: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/2.jpg)
We live in Interesting Times…..
![Page 3: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/3.jpg)
….some say, “the end of the financial system as we know it”
![Page 4: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/4.jpg)
Most people have now heard of Peak Oil....
![Page 5: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/5.jpg)
….but last year we reached the point of Peak Credit....
![Page 6: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/6.jpg)
A Green New Deal has been proposed...
![Page 7: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/7.jpg)
.....to achieve the massive investment in energy infrastructure we need....
![Page 8: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/8.jpg)
...but this proposal is still based upon an unsustainable financial system….
![Page 9: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/9.jpg)
…where Money is Debt....
![Page 10: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/10.jpg)
Where did it all go wrong?
![Page 11: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/11.jpg)
A Bank is a Credit Intermediary – or “Middleman”
BankBorrower Depositor
£ £
![Page 12: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/12.jpg)
But it does not lend pre-existing money….
![Page 13: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/13.jpg)
….it creates new money as interest–bearing credit….
![Page 14: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/14.jpg)
….which is then deposited back into the system
![Page 15: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/15.jpg)
Now, if you think about it, a bank’s true economic function….
![Page 16: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/16.jpg)
…is to guarantee that the borrowers’ credit is good…
![Page 17: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/17.jpg)
Interest is charged for the use of the guarantee
Bank
Interest
Borrowers
![Page 18: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/18.jpg)
..from which Interest is paid to Depositors..
Bank
Interest
Borrowers
Depositors
Interest
![Page 19: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/19.jpg)
..Default and Operating costs deducted...
Bank
Interest
Borrowers
Depositors
InterestCosts
![Page 20: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/20.jpg)
..and a profit to Investors normally results
Bank
Interest
Borrowers
Depositors
InterestCosts
InvestorsInvestors
![Page 21: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/21.jpg)
So Banks create a Pyramid of Credit, on a base of Equity
Bank Credit
BankEquity
![Page 22: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/22.jpg)
Demand for Credit has been so high…
![Page 23: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/23.jpg)
….that Banks began to “outsource” their guarantee to rid themselves of risk.
![Page 24: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/24.jpg)
…and thus allow Equity to support more credit creation
![Page 25: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/25.jpg)
Banks outsourced risk totally – through “securitising” debt and sale to investors….
![Page 26: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/26.jpg)
…temporarily – with “Credit Derivatives” (a time-limited guarantee)….
![Page 27: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/27.jpg)
…and partially – using credit insurance from insurers such as AIG
![Page 28: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/28.jpg)
The Result is a bigger Credit Pyramid than Banks alone could sustain…
Investor Equity
Credit
BankEquity
![Page 29: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/29.jpg)
…and an opaque “shadow banking system” of Investors holding “sliced and diced” risk…
Investor Equity
Credit
BankEquity
![Page 30: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/30.jpg)
This extended Pyramid of Credit funded the “Mother of all Bubbles” in US property prices….
![Page 31: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/31.jpg)
…and servicing this credit finally exceeded the financial capacity of the US population.
![Page 32: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/32.jpg)
…the point of Peak Credit ....
![Page 33: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/33.jpg)
In August 2007, the Bubble started to deflate and attention turned at last to defaults …
![Page 34: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/34.jpg)
..but by now no-one knew where the Risk lay…
Investor Equity
Credit
BankEquity
![Page 35: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/35.jpg)
Banks started to think, “if this is what our balance sheet looks like…..”
![Page 36: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/36.jpg)
“…what does everyone else’s look like…..?”
![Page 37: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/37.jpg)
...and Banks stopped lending to each other ...
![Page 38: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/38.jpg)
The problem is not shortage of money - liquidity – Central Banks can handle that….
![Page 39: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/39.jpg)
…..it is shortage of Equity - a Solvency problem – which Central Banks cannot handle…..
![Page 40: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/40.jpg)
Bank Equity is being eaten away by defaults….
![Page 41: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/41.jpg)
…and Investors will not recapitalise the shadow banking system...
![Page 42: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/42.jpg)
The Result?
Equity
Credit
![Page 43: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/43.jpg)
So, Credit is becoming both scarce and expensive….
![Page 44: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/44.jpg)
…Central Banks are irrelevant….
![Page 45: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/45.jpg)
…and further defaults will destroy yet more Bank Equity…..
![Page 46: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/46.jpg)
….and drain money out of the system in a “deflationary spiral”....
![Page 47: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/47.jpg)
….leading inevitably to a Depression....
![Page 48: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/48.jpg)
So much for the Credit Crunch problem
![Page 49: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/49.jpg)
Clearly the solution cannot lie in creating more credit
![Page 50: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/50.jpg)
So we will take a new approach to “Equity” investment instead.
![Page 51: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/51.jpg)
Conventional Equity consists of shares in a Limited Company or “Corporation”….
![Page 52: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/52.jpg)
Ownership by a Corporation is what makes the “Private Sector” Private
![Page 53: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/53.jpg)
While the Corporation may be conventional, it is not the only enterprise model there is
![Page 54: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/54.jpg)
While all eyes have been on Credit innovation…
![Page 55: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/55.jpg)
…”Asset-based” finance has been developing “under the radar”….
![Page 56: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/56.jpg)
Canadian “Income Trusts” use a Trust law framework to “unitise” gross Corporate
revenues….
![Page 57: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/57.jpg)
Income Trust
Income Trust
CorporationCorporation
GrossRevenues
UnitInvestors
UnitInvestors
%
%
Units
Costs
Dividends?
![Page 58: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/58.jpg)
Units are sold to risk averse investors such as pension funds…
![Page 59: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/59.jpg)
…who consider investment less risky if they access corporate revenues…
![Page 60: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/60.jpg)
….before the management does….
![Page 61: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/61.jpg)
We are also seeing new asset classes such as Exchange Traded Funds (“ETF’s”)….
![Page 62: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/62.jpg)
…Real Estate Investment Trusts (“REIT’s”)…
![Page 63: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/63.jpg)
…Hedge Funds constituted as Limited Partnerships…
![Page 64: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/64.jpg)
…and of course….”Sukuks”
![Page 65: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/65.jpg)
In 2001 the UK introduced the Limited Liability Partnership (“LLP”) – not in fact, a “Partnership”
![Page 66: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/66.jpg)
…but simply an infinitely flexible corporate form – an “Open” Corporate ......
![Page 67: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/67.jpg)
…enabling a Capital Partnership....
![Page 68: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/68.jpg)
Productive assets are held by a “Custodian”....
AssetsAssets CustodianCustodianOwnership
![Page 69: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/69.jpg)
…Investors put in Financial Capital in money, or “money’s worth”…
AssetsAssets
Investors
CustodianOwnership
Financial Capital
![Page 70: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/70.jpg)
…Managers put in Human Capital of time, expertise and experience....
AssetsAssets
Investors ManagersManagers
CustodianOwnership
HumanCapital
Financial Capital
![Page 71: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/71.jpg)
…and Users pay for the use of this Capital…
AssetsAssets
Investors
UsersUsers
Payment
ManagersManagers
% %
Custodian
Use
![Page 72: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/72.jpg)
…the result is a “Capital Partnership”
AssetsAssets
Investors
UsersUsers
ManagersManagers
Custodian
![Page 73: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/73.jpg)
A “Capital Partnership” enables new forms of Equity…
![Page 74: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/74.jpg)
(a) Equity Share Units - proportional (%age) ”n’ths” such as billionths.....
![Page 75: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/75.jpg)
…..which may be bought and sold, but never redeemed, because there must always be 100%
![Page 76: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/76.jpg)
(b) Redeemable Units – eg Kilo Watt Hours; rights to occupy 1 hectare of land for a year….
![Page 77: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/77.jpg)
Such Units have a value in exchange, but carry no rights to production or income over time…
![Page 78: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/78.jpg)
They hold their value because they are asset-based on value provided by the issuer …
![Page 79: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/79.jpg)
….rather than being deficit-based upon a claim over value issued by a Bank
![Page 80: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/80.jpg)
Let’s have a look at how an Energy Partnership might work.....
![Page 81: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/81.jpg)
Imagine that a community wishes to build a wind turbine...
![Page 82: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/82.jpg)
Energy Pool
Turbine
Investors
Community
Managers
CustodianCustodian
Energy Energy
Energy
![Page 83: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/83.jpg)
Managers are entitled to a %age of production
![Page 84: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/84.jpg)
Investors provide development Capital by purchasing redeemable Units
![Page 85: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/85.jpg)
Contractors may invest equipment & materials but must invest their agreed profit margin
![Page 86: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/86.jpg)
Contractors’ costs are covered by selling Units from the “Production Pool” to investors...
![Page 87: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/87.jpg)
If electricity price rises, Investors gain and community foregoes part of the profit…
![Page 88: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/88.jpg)
..if prices fall, community has locked in the price and Investors lose....
![Page 89: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/89.jpg)
Imagine that a community wishes to retrofit combined heat and power....
![Page 90: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/90.jpg)
Heat Pool
CHP
Investors
Community
Managers
CustodianCustodian
Units
Units
£
££
![Page 91: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/91.jpg)
A Pool or Fund is created and invested in CHP and a heat network....
![Page 92: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/92.jpg)
....properties are subject to a “Hot Water Rate” which is paid into the Heat Pool....
![Page 93: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/93.jpg)
....at a suitable market price...
![Page 94: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/94.jpg)
Finance is raised by Unitising future energy production or heat savings…
![Page 95: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/95.jpg)
…replacing conventional secured debt with a new form of redeemable Equity...
![Page 96: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/96.jpg)
…and the Pyramid of Risk is very different….
Management Equity
Investor Units
Community Equity
![Page 97: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/97.jpg)
A Carbon Pool….
Carbon PoolCarbon Pool
Investors
Energy Users
Managers
Custodian
Units % of Units
Units£ Levy
£
![Page 98: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/98.jpg)
….is created by a carbon levy and the fund is unitised at an initial market price....
![Page 99: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/99.jpg)
….interest free investment is then made in Energy Pools (renewable Mega Watts)...
![Page 100: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/100.jpg)
….and in Heat Pools (NegaWatts – the cheapest energy of all) - eg retrofitting CHP...
![Page 101: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/101.jpg)
….where interest-free investment is repaid by purchasing Units from the Pool...
![Page 102: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/102.jpg)
….funded by energy savings made....
![Page 103: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/103.jpg)
Units in the Carbon Pool are distributed fairly to energy consumers generally...
![Page 104: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/104.jpg)
….who may redeem them against energy used...
![Page 105: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/105.jpg)
….or to repay investment (interest-free energy loans...) in energy efficiency...
![Page 106: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/106.jpg)
….or simply sell them at the market price...
![Page 107: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/107.jpg)
The outcome is that those with above average carbon use ...
![Page 108: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/108.jpg)
….make a net transfer to those with below average carbon use ...
![Page 109: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/109.jpg)
A Carbon Pool enables a Carbon currency based upon the intrinsic value of energy…
![Page 110: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/110.jpg)
..rather than a market in value-less Units of CO2 emissions, imposed by governments …
![Page 111: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/111.jpg)
….and designed by the same people who brought us the Credit Crunch….
![Page 112: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/112.jpg)
A trader’s metaphor illustrates the fundamental uselessness of a deficit-based carbon currency…
![Page 113: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/113.jpg)
“If you want to keep a cow healthy, you don’t regulate what comes out of it……
![Page 114: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/114.jpg)
“……you regulate what goes in….”
![Page 115: Financing energybeyond Peak Credit](https://reader033.fdocuments.us/reader033/viewer/2022051818/5497216db4795976648b4575/html5/thumbnails/115.jpg)
Thank You,