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Does green megawatt-hour stand a chance to become Arthur Clarke's currency?

Irina Zerchaninova's picture
Expert Coordinator The Russian GREENTIE network

Irina L. Zerchaninova was head of department of the Industrial Development Institute "Informelectro" (governmental research institute, Russia) for many years. Among her tasks were futures...

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  • Oct 23, 2015 12:00 pm GMT
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Famous British author, inventor and futurist Sir Arthur C. Clarkes predicted for 2016 the replacement of money by a megawatt-hour universe currency. He was not the first who thought in a similar way. These were Henry Ford (energy-backed money) and Thomas Edison (monetary policy and “energy dollar”).  Modern researchers, particularly, in US and Russia also say about “energy currency” and “energy standard”. Some of them even come up with ideas of concrete options, which, perhaps, still do not become a frequent discussion practice.  In the meantime the year of 2016 is getting nearer and nearer.  What’s about the Arthur Clarke’s prediction for all that?

It is often believed that “energy currency” may be materialized, while replacing money is still a fantasy. But the situation just seems a little bit backwards. Conventional money is close to be abolished – plastic cards and electronic records do prevail. The latter can be generally bundled to anything, though if to mean the global financial system, banks, credit structures, you should notice they do not change principally, and, within this framework, money does not abolish. Energy currency and energy standard, however, look like quite difficult matters at all. “Any” megawatt-hour (or kilowatt-hour) as a currency is striving to bring back the Gold Standard, “simply” electronic energy certificates reject the existing financial and so on systems (with all the consequences), and “eco-dollar” is regarded as untenable in the near future because of insufficiency of green energy capacity.  Actually, diversity of opinions and approaches is much wider – for example, check references [1-6].

But in one way or another, they all lead to rather cumbersome schemes.

Nevertheless, freely tradable renewable energy certificates or green certificates (RECs), which are often called “green currency” beyond the renewable power sector, seem a pathway. It is hardly imaginable that predictions for the future may refer to conventional fossil fuels. And it is unlikely that Arthur Clarke would do away with the sustainable development processes if he were among us today.
It could be very interesting if a reputable institution experimentally took RECs as a means of payment, or introduced a means of payment bundled to green megawatt-hours (kilowatt-hours) with tracking system like the European Guarantees of Origin (GoOs). However, such an experiment ought to be based not only on an opportunity to confirm the Arthur Clarke’s prediction but also on some additional factors. Below are my remarks in this connection.

The trade with green attributes of renewable energy separately from physical energy is convenient for definite markets but not very correct in the context of systemic approach. Any attribute of a subject captures all other attributes of this subject to a degree. Hence, the price of RECs ought to reflect at least minimal physical energy price – or, if to consider a long-term process, its average one. And, it wouldn’t be inconvenient for RECs systems, if RECs, fulfilling their conventional functions, had prices expressed as a percentage of the green energy price. Instead, it would facilitate simplifying the creation of a world currency system. Any function can be defined as an external manifestation of attributes in the structure of relations. Dependently from the latter, the same in fact certificate in view of economic aspects can be looked upon as a commodity, security, non-tradable confirmation. Why not world currency or something related to it? But not only that, let such an investigation facilitate more flexibility of RECs as a specific instrument.

Energy end-use is not restricted really by energy consumption at the moment of energy supply payment. It may be specified next. And creating some recommendations may lead to more transparency in both energy transfers and payments.

The science in fossil fuel sector and nuclear power one is able to create unexpected lines for renewable energy technologies of the next generation. The deployment of RECs would stimulate them to it. Insufficiency of green capacities may be overcome through RECs borrowing schemes. Besides, green energy investors could be exempted from ecology-related taxes if they invest not less than a definite sum, which is not a bad idea in all.

And, the most feasible way to implement the prediction and to progress on the sustainable development is within making some international money transfers depend on the fact of existence … of what? For example, it might be the existence of renewable energy targets and RECs systems (or/and high-efficiency energy technologies) in a country, which of course is a good subject for a discussion.

 

Ref.:
[1] Currency systems based on energy consumed. 2012 http://www.roperld.com/science/CurrencySystems.htm
[2] Electricity as currency? 10 reasons it could work. 2013 http://www.activistpost.com/2013/03/electricity-as-currency-10-reasons-it.html
[3] Hybrid energy market and currency system for total energy management: Invention (US 20130332327 A1). 2014
http://www.google.com/patents/US20130332327
[5] Should currency be denominated in kilowatt hours? / Institute of Economic Affairs. 2014
http://www.iea.org.uk/blog/should-currency-be-denominated-in-kilowatt-hours
[4] Solar coin – The first energy currency: Forum. 2014 - 2015.
http://solarcoin.org/forum/
[6] The relation between energy and currency. 2015 http://energyfanatics.com/2015/05/04/relation-between-energy-currency/

 

Irina Zerchaninova's picture
Thank Irina for the Post!
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