Ecological Sustainability as the New Gold For Ecological Transformation
The challenge in building an ecological civilization from industrial business and pillage-as-usual is not technical or legal, but financial. To save ourselves from ecological catastrophe, our economic and financial system must value and embrace sustainability and devalue pollution, depletion and ecological damage.
Ecological sustainability must be monetized as the new gold, and store of value and capital to help finance the trillions of dollars of productive investment necessary for ecological transformation and the support of social and ecological justice. Oil, coal, natural gas must become stranded assets, written down and left in the ground and awarded a new non-pollution credit to be monetized by future renewable investment. A trillion dollars of stranded fossil fuel assets can become a trillion of dollars of investment in wind and solar hardware installations.
A new Bank of the Commons will support and invest in sustainability to provide broad and enduring ecological and social benefits to be monetized as capital by the Bank of the Commons.
The monetized value of sustainability becomes a capital asset for the Bank of the Commons and used both to invest in further ecological improvement and as social property distributed annually to all as social dividend for sustainable conduct.
The Challenge at Hand
How to move quickly from ‘green’ plans and pledges to sustainable reality?
How do we build an economy where economic growth means ecological improvement, not ecological degradation, where the price system sends clear signals for sustainability, where sustainable goods and services become cheaper, gain market share, and increase profits? How do we assure that an ecological price system is complemented and supported by intrinsic social rewards for the general pursuit of sustainability expressed through the strengthening of freedom and community, protection of the commons, and by social and ecological justice?
Bank of the Commons
The Bank of the Commons will both invest in ecological sustainability and monetize sustainable ecological value through pollution reduction and the growth of ecosystem services credited to all members of the community.
The benefits of replacing coal, oil, and natural gas must also be monetized and broadly shared by valuing the reduction of pollution, depletion, and ecological damage, and by the new ecosystem services provided by the regeneration of the ecosphere and the real natural capital accounts of living wealth.
Bank of the Commons investments will result in a dual multiplier effect upon the economy. First, by the shared benefits from economic growth, and second, by booking and distributing value of real wealth resulting from the collective social effort and success in reducing pollution, restoring habitat, and advancing social and ecological justice.
These benefits of the ecological turn are part of sustainable community wealth and shared by all. At the same time, the balance sheets of polluting, depleting, ecologically destructive entities are charged and debited for such self-destructive conduct where the polluter, not the community, is directly charged.
For example, borrow $10 million from the Bank of the Commons to build a wind farm producing 12 million kilowatt hours of energy a year to be sold in an ecological market for $3 million dollars a year. At the same time, the value of the carbon dioxide saved and pollution reduced, and ecosystem services restored are monetized on the balance sheet of the Bank of the Commons at a calculated $4 million a year to be both distributed as a citizen’s dividend and reinvested in further sustainable efforts by the Bank of the Commons.
Similar to a regulatory asset like Renewable Energy Credits (RECs), that is created by solar and wind electricity, the pollution reduction and ecosystems services created by sustainable investment is added to the books of the Bank of the Commons. It is booked as ecological capital on the right side of the balance sheet and as a valuable cash asset on the left side of the balance sheet. Ecological accountants can handle the combination of reinvestment and citizen distribution much as in done by the Alaska Permanent fund with oil revenues and is used to create investment income and a citizen’s annual distribution.
In 2017, around 5.14 billion metric tons of carbon dioxide were produced by U.S. energy consumption alone (34.8 billion metric tons globally). If the value of an avoided metric ton of carbon dioxide is booked at $100 a ton, the balance sheet capitalization of the Bank of the Commons would increase by $100 million dollars per million metric tons of carbon displaced, for a potential total value for a renewable energy future of $514 billion dollars.1 Globally this amounts to Green capitalization of $3.48 trillion dollars. This is a recurring credit.
Environmental sustainability, not gold, should be the universally recognized store of real value, the manifestation in financial terms of economic growth as ecological improvement.
1 https/www.statistica.com/sta Energy and Environmental Services. U.S. carbon dioxide emissions 1975-2017.
Roy Morrison builds solar farms. His next book forthcoming is Ecological Economic Growth.