Tradeable Ration Coupons to Address Climate Change and Alleviate Poverty

On Sunday at 4pm I was lucky enough to hear a wonderful talk on sustainability and economic growth by economist Gareth Morgan on Radio New Zealand, followed by an interview with Kim Hill.

Gareth listed some horrifying facts about how badly New Zealand was doing in reducing its carbon emissions. He referred more than once to the importance of having tradeable rights for emissions. That reminded me of something I have been reading from an excellent little 1999 book called The Ecology of Money by the late Richard Douthwaite. Chapter 4, which is on the web, outlines his proposal for an international currency, the EBCU (environmentally backed currency unit) designed to reduce carbon emissions.

He says “We want to link our monetary unit to something that discourages fossil fuel use even when there is pressure for an expansion of the amount of money in circulation.”

He says set the global limits and share them out among the nations of the world on the basis of their population in a certain base year. Ration out the rights to all human beings on earth. “Some nations would find themselves consuming less than their allocation, and others more, so it is proposed that the under consumers should have the right to sell their surplus to more energy intensive lands.”

Like Gareth Morgan, Richard says make the rights tradeable, but in a suitably designed international currency. (if we use the existing currencies the poor countries will still be cheated by the rich ones and will end up no better off. He explains that most countries keep their US dollars and Euros for reserves so that wouldn't end up with the right effect) Then after they have all been traded in for emissions and cancelled, issue less the next year in the same way.

And the ration coupons are something called Special Emission Rights SER assigned by the IMF. It all gets a bit confusing and I struggle to understand it.

If you read Douthwaite’s chapter 4 it is clear that he has based it on the Contraction and Convergence model of the Global Commons Institute (GCI). He also talks about the work of an independent economist David Fleming. Fleming envisaged that perhaps 45% of each country's allocation would be shared out equally among its population in the form of 'domestic tradable quotas' (DTQs). These would have to be surrendered in addition to cash whenever people purchased electricity or fuel.  And if you want to find more a search will lead you to a paper by Molly Scott Cato and Tony Cooper of the GCI. This gives some figures.

In my efforts to understand it better, I emailed Molly but she hadn’t done any more work on it since she wrote it. It seems David Fleming died in 2010 and Richard died last year. So I am trying to track down Tony Cooper of the Global Commons Institute. Maybe someone else can help me understand it better?

So I was thinking about this in relation to our country’s carbon emissions. We could issue ration coupons to all New Zealanders, enough to allow for the current carbon emissions. Then we should allow people to sell their rights, but not in New Zealand dollars. They can be bought and sold only in our proposed domestic-only currency, the Zeal.

The effect would be that there would be a transfer of wealth from the high carbon emitters to the low carbon emitters.

We had ration coupons during the Second World War. I remember my mother taking her ration book to the shop to buy sugar, meat and clothing. You needed them as well as money. You couldn't trade them then. And of course petrol was rationed.

Maori Party must be naive to negotiate for a committee on poverty

Set up a committee on poverty and say that is a way to stop it? Daft as. Hone is right. Koretake! Useless!

The way to stop poverty is to legislate and tax so that it stops the profiting from the passive ownership of land, resources or money. This is the New Economics Party policy and gets to the root of poverty issues. Tax what you use not what you earn, tax what you take not what you make.

Today I found that after the Global Financial Crisis in UK, there was a conference on Economic Justice and a Council of Economic Justice was set up. To the conference were invited many organisations which advocated monetary reform and many who advocated Land Taxation Tax and other resource taxes. This Council will have a great deal in common with our party. Meanwhile the Libdems have a group called ALTER which advocates land value taxes and the Scottish Greens now has a policy on this at local level. We are in touch with Earthsharing Canada and it is very gratifying to know that Frank De Jong is starting to read on the topic of monetary reform.

So oh dear Pita and Tariana. You are more naive than I thought. All you will do is watch the gap between rich and poor widen and widen, but you will at least know that statistics. To have a committee chaired by the very person who introduced a rise in the regressive GST tax regime shows how utterly ineffective it is going to be.

Monetary reform and land value taxes have been around for centuries, but in my lifetime they have never been implemented except for a brief period when we had unimproved value as a basis for  most of our local body rates.