WInd power

[Dave Birch] I wonder if this means something. In the last couple of months I've been invited to a couple of meetings where the topic of alternative currencies and wind power (and other renewables) has come up. I'm starting to think there might be something in this. One of the problems that windpersons have to deal with is that they need lots of money to build windmills, but because the electricity produced costs more than electricity produced by, say, coal then no power company will invest unless bribed. We might decide that the wind is better for us overall, but we need a mechanism to align social costs with private costs.

How can the future of money have anything to do with this? Well, there is a neo-Bono, neo-Hayek compass that might point us in an interesting direction and there was a discussion about it at a New Economic Foundation seminar that I was invited to.

Remember noted lateral thinker Edward de Bono's pamphlet on "The IBM Dollar" written for the Centre for the Study of Financial Innovation all those years ago? The essence of his argument was that switching money around is more efficient than dealing in equities and bonds so that a company wanting to raise money for a new idea should, instead of selling stock or taking out loans, simply print its own currency that is redeemable against future services. This currency would initially trade at a huge discount, but over time (assuming the company was successful) it would rise.

So, here's the idea. A community interest company (CIC) forms to sell the future output of not-yet-built windmills. It prints a currency — Edgar Kampers was calling these "KiVas", pronounced key-vahs, at the NEF seminar and I think that sounds rather good — with a start date five years on but no end date. These are the sold to the general public. Utility companies agree that they will take them in payment starting in one year. Thus, people buy and accumulate the kivas as a cheap hedge for their electricity bills (in the UK, the government's plan to ensure that there is not enough power to go round by 2015 is well on its way) and the CIC obtains "hard" currency to buy windmills (although some of those suppliers might also accept discounted kivas if they are heavy electricity users). The kivas become a currency traded on the foreign exchange markets just like any other currency.

Why would anyone bother to hold kivas? Well, here's where the neo-Bono argument crossed with the neo-Hayekian argument. The kivas ought to be a stable currency, because we will always want to use energy. I might choose to hold part of my pension portfolio in kivas rather than dollars, because when I retire (a vanishingly unlikely contingency, but there you go) I will still want to have light in my house for the same number of hours everyday but I have no idea what a euro will be worth: thus I obtain stability by stashing away light (in the form of kivas) rather than dollars.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]

cash and cashlessness, costs and interchange, notes and coins, retail