The objectives of the Sustainable Money Working Group (SMWG) are to:

  1. (1) Sustain small and intermediate sized businesses (SMEs) by providing alternative sources of liquidity in the event that a financial crisis deters banks from providing finance;
  2. (2) Establish a basis to develop a crisis and inflation resisting financial system that can also protect and nurture the environment to sustain humanity on the planet.

The first objective can be achieved by introducing a cost carrying type of money that was used very successful during the Great Depression. It was called “Stamp scrip” as each week a stamp worth 2% of its face value had to be affixed to the notes to keep them valid. Revenues from the sale of stamps over a year amounted to 104%. This is more than enough to allow the money to be given away to a SME or individual as the issuer recovers 4% more than the value provided. A local business association or government body typically issued stamp scrip.

Cell phone technology now makes it practical to re-introduce cost carrying money. Cell phones are widely used in developing countries to store and transfer money independently of the banking system. Subscriber Identity Modules (SIM) of cell phones can store and send stored value to other cell phones. Cell phone can act as swipe cards or transmit values to other phones in various units of value. This makes it practical for the issuers of money to collect a fee for its use. Cell phones represent a disruptive banking technology.

The second objective can be achieved by using local renewable energy to establish the value of money. All economic values, prices and market forces would then be determined by the local endowment of renewable energy.

Electrical energy is measured in kilo-Watt-hours (kWr). Money values pegged to renewable kWh would produce sustainable $kWh. Sustainable Energy Dollars (SEDs=$Z) could become a global unit of account with a local unit of value. As the productivity of technology for converting renewable energy into electricity improves the value of $Z would be enhanced to reverse inflation. Central banks or their governments would no longer be required to protect the value of money.

Beside resisting inflation, $Z would also be crisis resisting as it would be created on a decentralized basis according local renewable energy endowments. Decentralization creates resiliency. These factors should provide an incentive for traders and investors to write contracts in $RE rather than in current forms of unanchored fiat money. Centralized fiat money is subject to government manipulation and subject to unpredictable financial shocks and unknown external influences.

Individuals and businesses commonly create credit. However, its creditability might not be sufficient to be accepted as a median of exchange. The decentralized creation of credit by individuals and investors who create value would require credit insurance to allow local credits to take on a monetary role. If we accept that those who wish to use money need to pay the cost of getting it established then the cost of credit insurance would be attached to the money. This would make $RE a form of cost carrying money.

Cost carrying money removes the ability of money to be: (a) a store of value; (b) create inequality from moneymaking money; (c) increasing in value without any relationship to the real economy or well-being of society; (d) create financial asset bubbles, and/or (d) lead to the “financialization” of the economy (Palley 2007).

There are five other reasons for using sustainable kWhs as a monetary unit of value as:

  • (1) It increases the viability of renewable energy to reduce the need and/or extent of carbon taxing or trading (Turnbull 2010c);
  • (2) It connects the value of money to the quality of life and/or standard of living as these closely correlate with energy consumption;
  • (3) It is democratic as the value of local money can be independently determined any where on the planet as renewable energy is available in some form everywhere
  • (4) It creates a market mechanism for distributing humanity on the planet to those regions that are most richly endowed with renewable energy
  • (5)It creates a feedback mechanism for nature to inhibit excessive ecological impact of humanity.