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Big Picture Solutions

There are some big problems in the world. Many of us are working on them. But are our solutions at a scale commensurate with the problem(s)? For example, will monitoring water quality in the Russian River help solve the issues regarding global water supply in the 21st Century? Well, not alone, but if others monitor their watersheds, then local action can result in global solutions. In some cases, local action is necessary but insufficient. Our working definition of Big Picture Solutions is "Big enough to be sufficient."

Not everyone agrees what the biggest problems are. This web page will take the widest angle at global problems. From this perspective, we are talking about: Global climate change; 3rd world debt, development, income disparities and inequalities; peak oil and the resulting financial meltdown; population demographics and the resulting resource use.

This web page is important because we need to know if we are putting our time in where it is most effective to make the biggest impact. We need to look at the big picture in order to set the context for the smaller scale in which we work. Many people feel it is better to work at a smaller scale because it is more manageable, and you can make a tangible impact there. But it is also good to look bigger sometimes, to think globally, act locally. Well designed big picture solutions can solve many problems at once.

On this page you will find descriptions and links to the following Big Picture Solutions.

1) Individual Emissions Entitlements: Author and economist Richard Douthwaite of the Dublin-based Foundation for the Economics of Sustainability has developed several big picture solutions incorporating systemic economic thinking, and linking cap-and-trade climate solutions to international economic instability and inequality.

Individual Emissions Entitlements are a way for the economy to provide income to people while reducing carbon emissions. If California adopts a cap and trade system for carbon emissions in order to address the problem of climate change, it should issue Individual Emissions Entitlements. Here's how it works:

  • An agency designated to manage California's carbon emissions trading system would distribute an equal number of Individual Emissions Entitlements to every adult resident in California, providing each with a basic source of income that would fluctuate with the demand for carbon fuel.
  • The recipients would sell (or "cash in") their coupons at their banks or financial institutions, which would sell them on to fuel producers within California, such as energy companies, utilities, and fuel importers.
  • The producers, utilities, and importers would surrender entitlements back to the agency, which would send inspectors to check that the number handed over matched the carbon content of the fuel the producers and importers had sold.
  • Over time, the agency in charge would decrease the number of entitlements issued each year according to the agreed cap on emissions. Also, individuals could decide to "retire" their emissions rather than cash them. This would increase the value of the remaining entitlements. This "scarcity rent" increase in value would go to citizens, rather than result in windfall profits for oil companies.

This approach, devised by the think-tank Feasta, is simple and easy to adopt, but achieves the purpose of limiting emissions, predictably, to a safe level on the basis of equity. It uses normal market procedures and involves the authority agency only in issuing coupons to citizens and collecting them from energy producers and importers. The total number of coupons issued would reduce annually from the amount emitted at present. As the price of carbon fuel rises, people would be reimbursed on a per capita basis. People who emit less would come out ahead. People who emit more would pay more than they received. Businesses could plan ahead knowing the steps by which they should move towards a low carbon-energy economy. Energy intensive goods and services would become more expensive. Those goods and services that have low energy content and use renewable sources of energy would become cheaper.

The 3C's of Individual Emissions Entitlements: the Commons and Contraction and Convergence:

The Commons: The atmosphere is a Commons. When emissions leave an exhaust pipe or chimney they mingle with air and become part of the atmosphere. Emissions are therefore synonymous with atmosphere. No one can claim to own the atmosphere - no individual, no company, no government, no country - the atmosphere a 'commons' that either belongs to everyone equally or to no one. The way property rights are allocated in a commons can determine whether you will have a "tragedy of the commons" or a thriving commons. Historically, capitalism arose when the commons were enclosed by elites in England. Rules governing the commons in the 21st century must be based on social justice and ecological sustainability.

Contraction and Convergence: The Global Commons Institute, based in the UK, introduced the 'Contraction and Convergence' framework in 1992. C&C proposes to set a goal of per capita equity in carbon emissions, and introduces a convergence period during which allocations progressively move to equality. The 1st World contracts, and the 3rd World converges toward the goal of per capita equity in carbon emissions. This recognizes that climate change is a global problem, and to truly solve it, the entire world will need to be involved. Here is a great poster put out by the Global Commons Institute which illustrates Contraction and Convergence (large pdf file, needs acrobat reader 5.0 or else you'll get a black spot in the middle). GCI believes that emissions entitlements should go to governments through the UN Framework on Climate Change (UNFCCC). FEASTA believes that emissions entitlements should go to citizens directly, and therefore FEASTA does not use the term Contraction and Convergence, although the basic concept (of 1st world contraction and 3rd world convergence) is the same.

California can take the first step by making a state wide system which can later be expanded nationally.

Opportunities to Comment: Recently there have been exciting opportunities to put these concepts into the public record, as public agencies are beginning to take steps towards a cap and trade system in the US.

CCWI submitted comments to the California Climate Action Team in February 2006. CCWI comments on the California Climate Action Team Report (including Statewide Cap and Trade) The Climate Action Team consists of resource agency heads convened by the Governor. Their mission is to devise a strategy to implement the Governor's GHG emission reduction targets (a reduction to 2000 levels by 2010, to 1990 levels by 2020, and to 80% below 1990 levels by 2050). This last target is commendable and is referred to as the "Scientific imperative to avoid catastrophic climate change." For more information on the Climate Action Team, click here.

Also, CCWI submitted comments to the U.S. Senate Energy and Natural Resources Committee for the April 4, 2006 hearing on a potential Cap and Trade system for greenhouse gas emissions. CCWI's comments can be found here, then click on Question 1, page 44.

Future directions for this project: If you are a foundation or individual with means, please contact CCWI to discuss how to help promote Individual Emissions Entitlements at the state and national level. If you are affiliated with an environmental organization, please contact CCWI to discuss ways you can help promote Individual Emissions Entitlements in your community or at your organization.

For more information, contact

Mike Sandler, Program Coordinator
Community Clean Water Institute
info@ccwi.org

More about Individual Emissions Entitlements: Greenhouse gas emissions (GHGs) would be limited through a cap-and-trade system. Emissions are considered a human right, and are allocated to individuals, who cash them in at banks, which then turn to brokers which sell them on the open market to large scale polluters (emitters). The amount of permits (entitlements) is governed by a system called contraction-and-convergence. Contraction and convergence is a way to achieve per capita equity in CO2 emissions, arriving at a given level of overall CO2 measured in parts per million. The First World contracts (reduces CO2 emissions) and the Third World converges (increases to eventual equity with the First World). Setting a goal of making this happen by 2100, you can backcast the carbon constraints of the 21st century economy, which gives us a roadmap for where we need to go. Some scientists believe a good goal is 450 ppm CO2 equivalent by 2100. Others think that current emission rates make that goal impossible, and 550 ppm is a more realistic goal.

How does this differ with Domestic Tradable Quotas (DTQs)? DTQs are a British idea to track carbon usage per person and in each transaction. They are a "downstream" solution, meaning all transactions are regulated at the individual level. Regulating oil companies is an "upstream" solution. Individual Emissions Entitlements starts downstream, but quickly moves upstream (like salmon).

How would it be administered? Individual Emissions Entitlements could be administered by Kyoto signatories at the national level. In the US, entitlements would be handled either at the State level, though the Regional Greenhouse Gas Initiative (RGGI), or through the State of California.

Eventually, state and international climate cap-and-trade programs can interrelate the way the New York Stock Exchange relates to the European Stock Exchange. At that point, perhaps in the next 10 years or so, carbon constraints on economic growth, alongside peak oil and escalating oil prices, will dictate a reshaping of the international economy.

Future issues: Climate change and rising oil prices are closely related to the global economy, which runs on money. Money is issued as debt from banks. The US Federal Reserve is the US Central Bank which controls the interest rate, which is the "cost" of borrowing money. If energy prices rise rapidly, the Federal Reserve may raise interest rates in order to preserve the purchasing power of the dollar in relation to energy. However, in a situation where the price of oil is constantly increasing, the Federal Reserve will be fighting a losing battle. Interest rates may continue to rise, choking business which can no longer borrow money because it is too expensive. This could cause a global recession. Isn't it ironic that the central bank, whose job is to manage growth of the economy would be most responsible for causing a global recession? Well, it's not the first time. But Douthwaite has some ideas about monetary policy as part of a big picture solution.

Issues such as the inequality of US seignorage gains, the exponentially compounding interest rate, decreasing value of the dollar, and petrodollar imbalances may require major changes in monetary policy. One idea for this is a new currency which provides incentives toward a steady state/carbon neutral/restorative economy. Not everything is "stagnant" in a steady state economy. For our purposes, CO2 is the only indicator which remains neutral or decreasing. GDP and other measures (especially hopefully quality of life indicators) could still increase. In Douthwaite's book The Ecology of Money, he proposes a new international currency which is allocated globally and backed by CO2 emissions permits. The currency is tied to energy use, and also allocated internationally to individuals on a per capita basis according to Contraction and Convergence. Since Africa would have more currency permits than ability to use the energy they allow a country to consume, and the US would have fewer permits than their consumers demand, the US would buy currency permits from Africa, which would fund debt relief and clean energy development through technology transfer. Rather than a "petro-dollar" economy, it would be a "development-dollar" economy. The new energy backed currency's value would grow as CO2 emissions permits become valuable during the economic contraction of the carbon intensive economy. And the "scarcity rent" would go to the poorest people, accelerating sustainable low-carbon development, and incentivizing the transition to low-carbon lifestyles in the 1st World.

Another exciting idea from Richard Douthwaite is a Fossil Fuel Buyers Cartel (Club) which would provide consumers a counterweight to OPEC as oil production plummets and the economy contracts. The Club would allow oil importing countries to band together to negotiate a fixed price for oil and gas from oil exporting countries. Coal use would be tied to these agreements so that as oil and gas prices rise, coal does not become the sole substitute (for carbon and climate reasons). The quantity of fossil fuel the Club's membership would buy would be dictated by their carbon caps and their fuel use efficiency. This would allow for future planning, and avoid price spikes and uncertainty which is bad for business.

Solves: Climate change, 3rd world debt relief, transition to renewables

2) The Sky Trust: Author Peter Barnes' cap-and-trade system with payout per capita. The Sky Trust creates a framework for a shared ownership of the commons. Companies would pay for the right to emit CO2, and the owners (all citizens who share the sky) would get a check in the mail. Some of the money would be set aside for a Transition Fund to assist fossil industries evolution into renewable energy. The system would be managed by a Sky Trust, whose mandate is to protect the commons, and is a template for other Commons-focused institutions to counterbalance the market-focused institutions we already have. This system is compatible with Individual Emissions Entitlements described above.
Solves: Climate change

3) Gelbspan's World Energy Modernization Plan: Author Ross Gelbspan's plan to shift energy subsidies from the fossil fuel industries into renewable energy; creating a $300 billion fund to bring renewable energy to developing countries; and implementing a global fossil fuel efficiency standard, which would rise by 5 percent a year.

4) Apollo Alliance: Invest billions in renewable energy infrastructure. Makes important connections between environmentalists and labor (together we stand, divided we fall).
Solves: Climate change, fossil fuel issues, good green jobs

5) Local action moves the world: When enough local jurisdictions take action, then it's almost the same effect as a big picture solution. ICLEI's Cities for Climate Protection Program is one example of this. Greening your fleet, energy efficiency, eating less meat, smart growth, and the list goes on. Actions taken at the local level can have global impact, so it's important that you do them. But the institutional effects happen at a larger systemic level. After you have implemented a few best practices yourself, look at the institutions you are associated with: your job, your school, your kids' schools, your church or synagogue, the clubs or associations you belong to, your city government. Can they reduce their ecological footprint? Can they adopt policies which will over time reduce their GHGs, while you sit on the beach drinking a margarita?

Also of note:

Community Choice Aggregation: Bay Area clean energy advocate Paul Fenn's approach to local energy control gives City Councils decision-making power over resource planning and rate-setting. Community Choice gives cities the ability to choose renewable energy, energy efficiency, conservation, and distributed generation vendors, integrators, service companies and developers. The Local Government Commission is studying the feasibility of this policy for California cities.

Solar bonds: San Francisco voters overwhelmingly approved a landmark $100 million bond initiative that pays for solar panels, energy efficiency and wind turbines for public facilities. The measure pays for itself entirely from energy savings at no cost to taxpayers. With this model, San Francisco pioneered a path for funding the nation's transition to renewable energy.

 

Background: Policy Categories

Policy can be divided into four categories. The first, voluntary or good citizen, represents an approach that many agencies have incorporated over many decades. The Bay Area Air Quality Management District's Spare the Air Program is an example of promoting voluntary practices and cooperative relationships. The second, compliance, refers to the command-and-control approach of traditional regulatory agencies. The third, market transformation, denotes a permanent change in the operation of the market, or at least one that lasts beyond the life of market interventions. It has been defined as "a reduction in market barriers resulting from market intervention, as evidenced by a set of market effects, that lasts after the intervention has been withdrawn, reduced or changed." The fourth, changing the rules, refers to new institutions that create new property rights and their own incentives. An example is the Sky Trust, invented by Peter Barnes, and described in his book "Who Owns the Sky?"

Policy Category Examples:
1) Voluntary or good citizen: Spare the Air, Climate Registry
2) Compliance or regulatory: AB1493- California's GHG law for automobiles
3) Market transformation: Renewable Portfolio Standard
4) Changing the rules: Kyoto Protocol, Sky Trust

Currently, climate change policy such as Cities for Climate Protection and the California Climate Registry, resides mainly within the voluntary category. AB1493 is one of the first instances for California and the U.S. that climate change policy is in the compliance category.

The State of California's Renewable Portfolio Standard (RPS) mandate of 20 percent renewable energy generation by the year 2017 is an example of "market transformation." The goal of market transformation is to have government intervention set the rules of trade, but then, after price signals have altered, to let private sector actors lead. The RPS is not traditional regulation, but a set of rules that guide the private sector in creating a new market.

The difference between RPS and the Kyoto-type approaches is subtle. The Kyoto Protocol has many market-based mechanisms, where carbon credits would be allocated and traded across national borders. A major difference, though, is that carbon credits do not yet exist, and must be created in order for a market to develop. In the case of the RPS, there is an existing energy generation market in which rules are altered. The Kyoto Protocol, on the other hand, would go in the "Changing the Rules" category. Carbon credit allocation and carbon trading regimes also fall into this category.

This webpage on Big Picture Solutions is meant to help clarify where different policies are in this framework, and to begin to address areas which are lacking. In particular, the Big Picture will focus on the fourth category: Changing the Rules.

 

A Big Picture Analysis

by Mike Sandler (The views expressed here are those of the author, not necessarily this organization)

Chapter 1: The issues- scale is important

Watershed scale issues: Watershed-level. Can be approached by monitoring, implementing watershed restoration solutions, and best practices. Local leadership can make a tangible difference. Zoning issues, NIMBYism, and locally rooted solutions. Citizen action groups can use direct action to plant trees, host local events, get into local media.

Regional scale issues: State wide, or multi-state on the East Coast. Local groups begin to focus on lobbying institutions which have the funding and reach to affect people at this larger scale. Local groups have more difficulty using direct action (it is harder to plant trees across whole states than it is to plant them in a local park). The bureaucracies of regional institutions are more entrenched, and require more resources to steer them towards environmental or social public interest. The default in political systems is towards vested interests and economic expansion. Only in places where citizen involvement and social awareness are high can this be avoided.

National scale issues: The major player here is the Federal Government, and the national interests which lobby to influence it. The Federal Government spends most of its resources on the military, and has enormous resources from its social security and benefits accounts.

Global scale issues: Climate change, the monetary system, the gap between economics and environment, political corruption/ campaign finance/ greed, general consumer values, global inequity, loss of biodiversity.

The United Nations is a very idealistic, but hamstrung organization. It is dependent on the United States and wealthy countries for funding, but the General Assembly is composed of mostly 3rd World Countries. It lacks the ability to directly tax people. The Bretton Woods organizations (The IMF, World Bank, and WTO) make global rules, but are not accountable to people directly. They are mostly faceless bureaucracies which make arbitrary rules, not necessarily in the interest of the people they ostensibly serve. The IMF, in particular, is an ideologically driven organization. Its ideology is the "free market," and it would be happy to see Enron-style capitalism run amok globally. Global NGOs like the Red Cross, Oxfam and Unicef are important when catastrophes like the tsunami hit, but do not set global policies. Since the end of the Cold War, the US military industrial complex has been searching for an enemy. On 9/11 they found one, predicted by Professor Benjamin Barber in his book "Jihad versus McWorld." Since then, the name of the game is militarization in the service of privatization.

The Market is global. Corporations can invest globally with fewer and fewer obstacles. A single market for everything on earth is scary. A carrot is comparable to a forest is comparable to an endangered species is comparable to a Barbie Doll. There is only one way to value something and that is in dollars. We must create different ways to value things which we value differently. We feel this way, we just can't express it (with our single currency). We are like babies, learning to differentiate two things. We know they are different, we are trying to figure out how to express it.

Chapter 2: About Currency

People think they know what money is, but they really don't. The institutions which govern us behave in a certain way. If we do not understand them, then we cannot influence them, and we will have a difficult time protecting watersheds, the climate, and the social and environmental commons.

The Federal Government has the special power to issue currency, in other words to create wealth through the special charter of the Federal Reserve system. The Federal Reserve is a cartel of banks which are allowed to create U.S. dollars when people take out a loan. The money is loaned into existence, exists as bank debt and ceases to exist when it is paid back to the bank. In other words, that dollar in your wallet is on loan from the Fed. Someone had to take out a loan for it to exist. When that loan is collected, that dollar goes back to its maker, the bank.

There is an important distinction between the power to issue currency (which only the Federal government/ Federal Reserve has), and the power to issue bonds (which states and corporations have).

When currency is issued, it circulates in the economy, creating wealth. When bonds are issued, bond holders trade the paper on the markets. More importantly, the bonds must be repaid with interest. Hence California's debt, and credit ratings given it by credit agencies and Wall Street lenders, prevents it from running deficits, causing austerity measures and budget cutting. The Federal Government, on the other hand, can continue to run deficits because they are able to print money and lend it out, because currency is a medium of exchange and unit of account (savings).

Because debt accumulates in compound interest, it is exponential. People cannot increase their productivity exponentially, so they fall behind, and default. Default and bankruptsy are not laws of nature, they are a product of a system with compounding interest. Natural systems grow until maturity, but in maturity, their growth rate decreases and they arrive at an optimum capacity. How can we make this occur in our economy?

Chapter 3: CO2- The Ultimate Sustainability Indicator

I have studied indicators of sustainability for the past 8 years. As they say at all the back-slapping sustainability conference I go to, "what get's measured gets managed." Then the corporations give each other awards for their voluntary efforts at reducing a few hundred tons of waste here, and savings a few thousand dollars there. Am I cynical? A little. I'm still idealistic. I jsut see that they aren't really looking at their CO2. If they were focused on CO2, they would be achieving real progress. It doesn't cover every base (you can't quantify the level of education or health care in your society based on CO2 emissions or reductions), but it does pretty good on natural resource use. Even the Ecological Footprint, which is a pretty good indicator, is not as good as CO2. This is partly because the E.footprint is really a metaphor. We aren't really using 4 earths here in Sonoma County, even though that would be our extrapolated print. However, we really are putting out the emissions calculated by the Climate Campaign. It's real, and it's chaning our climate. Here is a list of some of CO2's benefits as a sustainability indicator:

- CO2 is a by product of almost every use of fossil fuels.
- You can't just put a filter on the end and continue with business as usual
- It targets the embedded fuel used, not the action the fuel is used for, so is more specific in finding the actual cause of impact
- It provides a "life cycle analysis" of production in a unit which is better than kwh
- Other greenhouse gases such as methane can be converted into eCO2 by using a heat coefficient
- Negative impacts of land use decisions can be quantified into increased CO2 which results
- There are specific, science-based consequences of increased CO2 use (unlike many other environmental indicators) (There is a looming evil, a stick)
- CO2 is a good way to relate local impacts to global consequences (and then to encourage people to think globally, act locally)
- Forests take up CO2, deforestation releases CO2
- Here are some issues which can be approached through an analysis of CO2:
o Energy policy (renewables)
o Energy efficiency
o Automobile issues (fuel efficiency)
o Peak oil/ gasoline prices
o National/Middle East security/ petroleum dependence
o Land Use/ Smart Growth
o Forest protection/ open space
o Cows (meat based diet)
o Water/Energy overlap

Chapter 4: The Connection between currency and CO2

Contraction and Convergence. Using a term called Contraction & Convergence (the 1st world contracts and the 3rd world converges towards per capita CO2 emissions equity), you can define a timeline, such as 2100, and a % reduction, hopefully close to what the scientists say we need in order to avoid catastrophic climate changes, and then backtrack to today. Then you have a game plan for the number of CO2 emissions and, if you want a society that values equity, the allocation of carbon credits in your economy. Then you let the markets hash out the details. This would be a different type of economy than we have now, and sustainability would be a core part of it, not something you try to scotch tape on after you've destroyed everything.

Author Richard Douthwaite has described an Energy Backed Currency Unit in his book The Ecology of Money. Most economists believe that the economy can grow forever. The money system is designed around this belief. The money system grows exponentially, and is driven by debt backing and the interest rate. As long as money is backed by debt and has a positive interest rate, the economy MUST grow. Advocates for the Commons believe that the economy does not just grow into empty space. It grows by absorbing, and mostly destroying the Commons. The Commons is composed of the air, water, atmosphere, public infrastructure, land, and shared inheritance of the Earth. At a certain point, the growth of the economy may threaten life on Earth (our species, or all species). This could happen through greenhouse gas emissions which could trigger a sudden climate shift (the thermohaline ocean cycle, or Greenland's glacier melting, or many other possibilities). Or economic growth could become impossible because of limited oil supplies (peak oil while China's demand soars). Or maybe we just want to preserve the Commons, and limit the growth of the economy, because the economy is not producing things that serve the public interest, and we want to direct economic growth into qualitative growth rather than quantitative (WalMart-style sweatshop based) growth.

To do this, we will need a new currency. A currency which will need to have certain characteristics:

o No interest rate
o A different backing, other than debt
o A relation to the natural world, such that feedback loops are generated depending on the positive or negative impacts the economy has on the natural world. This would create a self-stabilizing system.
o A valuation of the Commons (this could come through institutions outside of the currency system, but the currency should not undermine the Commons by valuing common assets, for example, at zero)

Is such a currency possible? I believe a currency which is based on CO2 emissions and entered the economy according to sustainable development and ecologically-oriented policy objectives (such as Contraction and Convergence) would have many of those characteristics.

Will such a currency magically appear in the next few years? Probably not. It is up to economists, policy makers, and advocacy groups to educate the public and elected officials about Big Picture Solutions. It will be up to progressive local jurisdictions to take incremental steps toward equity based economic solutions to ecological problems. It will be up to us.

 

This page is still under construction.

Direct any questions to info@ccwi.org.

 

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