The great transition - building a high wellbeing, low carbon economy

nef (the new economics foundation)

The Great Transitionto a High Well-Being, Socially Just

and Low Carbon Economy

Hard Times Ahead Conference, 30th May 2012

Tony Greenhamnew economics foundation


4 ‘U’s of economics

› Unsustainable› Unfair

› Unstable› Unhappy


Unsustainable

Source: Rockstrom (2009) ‘A safe operating space for humanity’

Nine ecological boundaries


Unfair

The Gini coefficient, 1979 to 2008–09 (UK)

Source: “Poverty and Inequality in the UK” Institute for Fiscal Studies


Unhappy

Life Satisfaction in Selected OECD nations

Available at www.happyplanetindex.org


Unstable

Reproduced from the New York Times

It’s all connected - Sovereign debt and bank exposure


Goal of a good economy

Achieve high well-being and social justice within fair ecological limits


New Conceptual Framework


Six Pillars of the Great Transition

1 – Reform Finance and Money2 – Create Good Jobs3 – Measure What Matters4 – Define Ecological Limits5 – Redefine Role of the State6 – Reduce Inequality


Taming the Vampire Squid….


‘Running out of Money’

Stories from the American Great Depression

• Wasted milk, idle labour and hungry childrenKEY CONCEPTS – debt deflation, spare capacity

• The parable of the $100 billKEY CONCEPTS – relationships of credit; socially constructed; “money is not metal”


The Miracle of Worgl

• 1932: small town in Austria• 1500 local unemployed• 40,000 shillings public funds• Issued own currency• Re-paved streets, new water

system , new bridge, new houses and a ski jump!

• 200 towns ready to copy• 1933: outlawed by the central

bankSee www.lietaer.com/2010/03/the-worgl-experiment/


Local banking – the reinvestment gap

Deprived Areas All Other Areas7%

93%

Reinvestment gapRatio of lending to savings

30%

70%

Reinvestment gapRatio of lending to savings

NEF (2006) The Power of Information: opportunities for disclosureNEF (2006) Full disclosure: why bank transparency matters.

A UK snapshot from Barclays Bank….


Keeping money local

“Money is round, and it rolls away”Confucius


Plugging the Leaks


Monetary vs core economy

“No society has the money to buy, at market prices, what it takes to raise children, make a neighbourhood safe, care for the elderly, make democracy work or address systemic injustices…the only way the world is going to address the social problems that are dumped on it is by enlisting the very people who are now classified as ‘clients’ and ‘consumers’ and converting them into co-workers, partners and rebuilders of the core economy.”

Edgar Cahn

In 2005 average time spent on housework and care for children and adults in Britain worth £253.7 billion – 21% of GDP

Source: nef - 21 Hours


Stories of Co-Production


Complementary currencies

Social exchange• designed primarily to motivate people’s behaviour• credits can be issued and simply deleted when spentChallenge: persuading people to appreciate credits which might be regarded as basically valueless

Economic exchange• designed primarily to circulate• have a continuing existence once they are issuedChallenge: persuading people to trust the credits; backing, balanced books; continued circulation

Based on “More Than Money” by David Boyle


Social currencies

Examples Outcomes

Local Time-based exchanges, e.g. Member-to-Member, Skill Swap, Rushey Green, Spice, Care Banks

co-production, building confidence, skills and social networks, supporting people for personal change or recovery, building community.

National or international

Reward points, e.g. Nectar, Nu-spaapas, Blue Dot, Wigan and Windsor, Time Dollar Youth Court

Nudging behaviour, reducing emissions, building loyalty, recognising effort


Economic currencies

Examples Outcomes

Local Local currencies, e.g. LETS, Brixton pound, Ithaca hours, Stamp Scrip, Community Way, local barter.

rebuilding local economies andemployment, using local resources more effectively, valuing local waste, tackling poverty

National or international

Backed currencies, e.g. kWh money, Carbon points, Liberty Dollar, Terra, WIR, LLP money, goCarShare, C3.

re-valuing local renewables, revaluing agricultural produce, providing reliable currency,paying people


Evidence: economic impact

UK: 80-90% of money spent in multiples leaks out of the economy (nef 2002)

US: 10% redirection of spending from chains to local businesses• San Francisco: $192 million in additional economic activity

and 1,300 new jobs (2007)• West Michigan: $140 million in new economic activity for the

region, including 1,600 new jobs and $53 million in additional payroll (2008)

Source: nef (the new economics foundation): The Money Trail, http://www.pluggingtheleaks.org/downloads/the_money_trail.pdf, p115; Civic

Economics www.civiceconomics.com/SF and www.civiceconomics.com/localworks

http://www.pluggingtheleaks.org/downloads/the_money_trail.pdf

http://www.civiceconomics.com/SF

http://www.civiceconomics.com/localworks


Complementary currencies - benefits

• Local economic multiplier• Building community cohesion• Productive v speculative• Stimulate local production• Shorten supply chains• Increased resilience• Complementary not competing


Community Currenciesin Action


“A map of the world that does not include Utopia is not even worth glancing at”

Oscar Wilde, Irish dramatist, novelist and playwright

Tony [email protected]

@nefbusiness

mailto:[email protected]

The great transition - building a high wellbeing, low carbon economy

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