19 April 2009

Reduce ACT GHG Emissions to zero by 2020

| cscoxk
Join the conversation
33

Most people do not know that we increase the amount of money in society by the banks lending money they do not have. That is, the banks – including the Reserve Bank – make loans of money even though they do not have it on deposit. As soon as they create the loan the bank deposits the money in the borrowers bank account and so the money supply increases. The reason we increase the money supply this way is that it is assumed that banks will only lend money to people or organisations who will pay it back and to pay it back it is assumed you have to make the money work for you. While this is good in theory in practice it leads inevitably to credit crises, inflation and the so called business cycle.

There is a way of increasing the money supply that creates money after we have built an asset that will pay back the money. On Wednesday I am presenting to the ACT Legislative Assembly Committee on Climate Change such a proposal. We can increase the money supply by building infrastructure that will reduce greenhouse gas concentrations while at the same time returning a handsome profit.

Find out more about this idea at http://stableproductivemoney.wordpress.com/2009/04/10/presentation-to-the-act-legislative-assembly/ and see how we can reduce the ACT net greenhouse gas emissions to zero by 2020 without requiring the community or the government to go into debt and with a decrease in the cost of energy.

The same method can be used to build any productive infrastructure that has difficulty finding funding because the benefits accrue mainly to the community not to business or governments funding the infrastructure through loans. For example it can be used to fund and build a light rail system in the ACT or to build our water infrastructure so that we have no need for water restrictions.

Once we start to increase the money supply using this approach we will halt the tendency for lenders to inadvertently encourage asset bubbles and we will reduce inflation.

If you think it is an idea worth pursuing come along to the presentation or send your support to committees@parliament.act.gov.au

If you can see flaws in the idea then comment here.

Join the conversation

33
All Comments
  • All Comments
  • Website Comments
LatestOldest

Vonbare,

Unless we can come up with solutions where the average citizen is better off with reductions in ghg emissions I do not think we will get very far. That is, the problem is really one of the “tragedy of the commons” where each person knows it is best for the group if they do something but each will not do anything while the others are “looking on”. This applies to countries as well as individuals.

I have been working on a solution to this problem for several years. Initially the idea was for people who consume a lot of a resource to pay extra but the extra money goes to those who consume little. Those who consume little have to spend their money on ways to increase the resource through investment. This works well for water and it could work for reducing ghg emissions but the problem is too great and too urgent to rely on prices alone.

The global economic crisis has given us a once in a lifetime opportunity to change the way we increase the money supply so that it can pay those who consume little or contribute less to the problem. We need massive investments to solve the problem. The presentation on Wednesday outlines one way to do it while at the same time helping fix the credit crisis. The system is one where no one loses and a country can do it without waiting for others to join in with the knowledge that others will almost certainly join in once it is demonstrated to work. No one loses because good infrastructure returns more money benefits to a society than it costs to build.

The system I am proposing will

Reduce greenhouse gas concentrations
Reduce the cost of energy
Reward those who reduce their energy consumption
Stabilise the money supply

That is, countries who adopt it will get wealthier quicker than those who don’t. That means that others will soon join in.

I can make all the assertions I like but it will not be believed until we try it out.

It would be good if Canberra was the place to prove it particularly as it will cost nothing to the government or citizens except moral support.

VYBerlinaV8_the_one_they_all_copy6:33 pm 20 Apr 09

Perhaps we could rename Australia to Brownland?

Greenland will therefore live up to its name.

shiny flu,

Considering The Great Global Warming Swindle was aired firstly on Channel 4 and secondly in 2007 means it is pretty much obsolete. The science that has been released since then proves that climate change is not a lie, and is happening at a much greater rate than ever predicted.

A brief summary of what we learnt in 2008:

1. Other greenhouse gases are also worrying
2. Arctic summer sea ice is in rapid decline
3. Warming is already having an impact
4. There will be definite climate changes no matter how much we mitigate now
5. Sceptics are still out there
6. We will have major international issues surrounding climate refugees as the 3rd world and developing countries are first ‘hit’

And what we’re still working on

1. How much warming and by when
2. Where to stabilise
3. Where the missing carbon is going
4. Whether warming worsens storms
5. How fast Greenland is melting

Questions:

a) do non-believers not believe because they are lazy and don’t want to change their lifestyles?
b) did you know that still in the 1970’s you could find scientific reports stating that cigarettes were good for you (and I wonder who funded those studies)

VYBerlinaV8_the_one_they_all_copy4:32 pm 20 Apr 09

Cscoxk – if you get this to work I’ll be impressed and take back what I said at post#7. I do think, though, that you need to be able to describes the economics a lot more clearly, within the framework of how government and banks do business. All the best.

VYBerlinaV8

Thanks for taking the effort. It has helped me understand where people have difficulty.

I am very optimistic because it is a win-win-win situation for all including the banks. If I do not succeed with the ACT politicians I will go to the banks because I think they have much to gain from a more stable money system.

VYBerlinaV8_the_one_they_all_copy3:13 pm 20 Apr 09

I’m giving up now. The big posts are nice and all but they do little to respond (sensibly) to my underlying doubts.

Good luck with it.

Hells_Bells7412:22 pm 20 Apr 09

Damn moneychangers!

harvyk1

I am not proposing how to reduce ghg concentrations I am proposing a method of financing ways of doing it. I have referred to many methods that will reduce ghg concentrations and if you read some of the references you will see considerable details. The issue is which is the most efficient way (cheapest). I suggest it is best to let the market decide.

The risk of not being able to find ways to reduce greenhouse gases is ZERO. We know how to do it. It is a question of financing it. We are not creating loans which of course are risky but I am not talking about financial risk because there are no loans. I am talking about the risk of not having a way to reduce ghg concentrations no matter how much we invest because our investments will not pay for themselves even when we exclude finance charges. I have shown that there investments that will pay for themselves many times over.

It is scalable if other countries increase their money supply this way. You may not have noticed it but that is exactly what the Chinese are doing with respect to their money supply. They are investing money on productive infrastructure not giving out money for people to spend willy nilly. They are certainly not going to the banks to loan them money the banks do not have but will create when asked.

I am proposing what the Chinese are doing but in a way that uses markets to do the allocation not government edict. Australia is doing the same as the Chinese with the infrastructure fund and I suggest that this, while better than handouts, is still inefficient as there is no market mechanism to do the allocation and I also say that there was no need to raid the future fund to pay for the infrastructure. It would be OK for the Reserve Bank to increase the money supply to pay for it. The problem is that governments are not very good at allocating funds in the most efficient way.

I have shown how to finance the investment needed. Increase the money supply by building an asset first rather than the way we do it now which is to increase the money supply then maybe build an asset. It is really that simple. It is a small adjustment to the money markets by providing a different way to increase the money supply. It is not a revolution.

I find it mildly amusing that people seem to think it is more than that and that it is crazy idea. If we had in place the method of increasing the money supply as I propose it and we then proposed the following imagine the outcry.

Increase the money supply by letting the banks lend money they do not have.
The banks now lend the government some of this money and charge the government interest on the loan.

Of course the government should pay interest on money the banks had in the first place but I draw the line at the government paying interest on money the banks are allowed to create with the blessing of the Reserve Bank.

Love all this faith in government to make sound investment decisions.

I should also point out that for your plan to have even the remotest effect it would need to be something which can be scaled world wide. For an ACT only plan, assuming everyone in the world has a standard amount of GHG usage per person (assuming 7 billions people on earth, over the 300,000 living in the ACT) it would make a 0.004% difference to the worlds GHG’s.

cscoxk said :

No I do not know in detail how ghg reductions will be achieved. But I do know they can be reduced

That line is a corker, usually before someone sprouts off on how cleaver they are that they have found a solution to problem X they know what that solution is. (Even if it is of dubious scientific method).

This is akin to saying “trust me”.

Also you’re sprouting some really interesting accounting. When in the history of any project is there no risk? It means one of two things – 1. You don’t know what your talking about, or 2 – You have failed to properly assess the risk and thus the risk will bite you in the arse because you have failed to manage it.

Whilst I’m not a project manager myself, I have had to run many projects, and I’ve had to handle risks and the fallout when the risk couldn’t be mitigated.

I’m the last person to want to stifle progress, and a zero GHG by 2020 would be good. But for you to be taken seriously you need to have a bullet proof plan and be willing to show it to people, clearly identifying the risks and rewards, completely costed inc where your going to get the money to finance your dream (and as I know from personal experience people don’t just throw money at you because you have an idea, getting finance for a business is more difficult that simply getting a car loan), and make the time frame realistic. Set a date, not just a rounded year, and explain why you have chosen that date.

VYBerlinaV8,

You are 100% right when you say that we should not dilute the money supply. Now what does that mean? I take it to mean that we do not increase the money supply greater than the things there are to buy. If we have too much money in the system then we will get inflation.

As you say banks give loans if they think they will get repaid and they normally insist that the borrower has some asset against which the loan will be repaid. For people it is a job – for businesses it is tangible assets or guaranteed cash flows. We use this mechanism to increase the money supply. There is an asset backing the new loan but no asset backing the increase in the money supply. We hope out of all the loans that banks make enough new assets will be created to back the increase in the money supply.

What has happened time and time again is that too many loans are created and not enough assets are created. In fact the Reserve Bank acknowledges this with their targetted inflation. After awhile the system gets rid of the extra money created through inflation or through stopping increasing the money supply by slowing down the economy.

ALL I am saying is that there is another way of increasing the money supply other than through giving loans of money we do not have. We do this by creating special purpose money and GIVING it people who are REQUIRED to spend it building assets. If we insist on the asset being a productive one that will return more money than is invested in building the asset then we know that removing the restrictions on the new money we have created will not cause inflation.

What we are proposing is a way to direct resources as represented by special money to the construction of new productive assets and when the assets are built we turn the special money into unrestricted money.

The Reserve Bank can get the money supply under control. They can remove the need to control the interest rates and so free up the money market to work as it should without constraint.

The existing financial system stays as it is. Governments do not have to decide exactly how to invest the money. We can even arrange the distribution of Rewards to go to those who consume less and so encourage sustainability.

It is only a change to the way we increase the money supply but it will have profound effects.

Stop banks lending money they do not have on deposit. Increase the money supply after we have created a new asset to pay the interest on the money.

Of course we would not stop the banks lending money they do not have immediately but we would reduce the amount of money the Reserve Bank lends to banks and increase the fractional reserve amount as money from Rewards moved into the economy.

The process will be a smooth one and will not cause disruptions. It will give the government lots of ways of stimulating the economy in productive ways and so it will quickly reverse the recession.

I just vomit up my cornflakes!!!

Gold!!!!

Yawn.

Is it getting cold enough to turn-up my gas central heating?

VYBerlinaV8_the_one_they_all_copy6:55 am 20 Apr 09

As you say conventional theory has it that when you give loans the greater the risk the higher the return you should expect. Rewards does not create any loans and so talking about loan risk is irrelevant because there are no loans.

Firstly, are you talking about loans or investment? They are two different things, depending on which party’s point of view you take. There is more to risk and return than loans. What about the underlying assets the money is used for?

Everyone has trouble with the concept because they simply do not believe that we can create money without creating a loan.

Of course you can create money without loans. But if you do that, you are diluting the value of existing money within the system. This fuels inflation, which effectively means that everyone else’s money buys less value. When banks give loans, it is on the basis of money being returned, either through the work of an individual, or return on an investment made with the loan funds. It is backed by something. Creating money out of nothing is backed by nothing.

Don’t get me wrong – investing is profitable and environmentally friendly energy infrastructure is a great idea, but I still think you have your economics confused.

Monomania,

The main cost of renewable energy are the finance costs of interest and repayments to repay the capital we invest to construct a renewable energy source.

I am proposing a way we can get rid of finance charges of interest and repayments. This immediately makes sources of renewable energy profitable.

I know it is hard work but please listen to http://stableproductivemoney.wordpress.com/2009/04/10/presentation-to-the-act-legislative-assembly/ or even come along on Wednesday at 2pm to heckle and ask questions.

VYBerlinaV8

As you say conventional theory has it that when you give loans the greater the risk the higher the return you should expect. Rewards does not create any loans and so talking about loan risk is irrelevant because there are no loans. The risk is that on average we will not be able to get back over the life of the asset more money than we invest. The risk of that occurring is zero if we allocate the Rewards through a market place. The average person in the ACT will receive $1500 each year in Rewards but will have to spend it on infrastructure that reduces greenhouse gas emissions. Buying renewable energy is not allowed but buying part of a windmill or solar thermal plant is. Initially, people are likely to invest in ways of saving energy such as a solar hot water heater or more insulation which will save you $1500 in energy costs within a few years. People are not stupid and they will look for the best place to invest their money. I believe there is zero chance that on average the cost will be less than the return the investments make remembering we do not have to include interest charges or repayments. If you cannot think of any place to invest your $1500 I and many others will buy it off you for a discount – my guess is that the discount will be about $500 so you will get $1000 real money for $1500 in restricted Rewards money.

Banks DO lend money they do not have on deposit. The confusion arises because most of the money they lend they HAVE on deposit and so loans of existing money gets confused with the small amount they lend that they do not have. This is one of the reasons why we increase the money supply through loans because it exists and seems to do a good job of preserving existing capital.

I am NOT saying that banks go out of business or reduce their lending. In 2008 banks increased the money supply by $170 billion. If we assume that the total lent was the GDP of one trillion then they lent $830 billion in existing money. When Rewards money gets converted to real money then it will be available to banks to lend so there is no change to what banks do or the total amount they lend. The ONLY difference is that the increase in the money supply comes through the creation of productive assets instead of a loan. Banks will still lend one trillion each year – it is just that there will be delay in the Rewards money coming into the money market.

Everyone has trouble with the concept because they simply do not believe that we can create money without creating a loan. We have been so conditioned with that thought that we accept it as fact. Loans are different from money. Loans are a promise to repay in the future. You can repay with an asset or you can repay with money but the fact you can repay a loan with money or the fact that you received money when you took out a loan does not make the two the same.

Money is a representation of “value” or a convenient way of exchanging goods or services. When we have money in the bank it is a representation of value. It is not a loan.

The way we currently increase the amount of money is through banks making loans with money they do not have. However, it doesn’t have to be that way. We can increase the money supply when we have produced a productive asset. Rewards is one way to do it.

Think increasing money supply without loans and it suddenly becomes clear. I have tried to explain it further at http://stableproductivemoney.wordpress.com/2009/03/24/a-better-way-to-increase-the-money-supply/ where I go through how you could build an electronic money system.

Also do listen to the presentation again http://stableproductivemoney.wordpress.com/2009/04/10/presentation-to-the-act-legislative-assembly/ and in particular the bit where I say

“the money we invest through Rewards will be returned to the community from the income generated from the investments.”

I am not talking about getting something for nothing but talking about getting a return on investment to pay for the investment – which is what investors do every day of the week.

It’s quite clear the global warming is just a big lie/fib/boo-boo/left-wing-fantasy. Scientific research says quite clearly that it is a natural process and even a FILM from a film production studio called The Great Global Warming Swindle says that global warming doesn’t exist. John Howard, John McCain and our faithful world Jesus/God’s BFF Dubya always dismissed it so it must not exist. It really is that simple.

Clearly a move toward zero emissions is a move towards communism/socialism/totalitarianism. Do you really want to give up freedom? Are you trying to force us out of our right to our lives the way we want to? It’s obvious you hate Australia and democracy if you want us to even think about this Global “LIE” Warming, hence distracting us from the omnipresent terrorist threat.

I’m just trying to be fair and balanced…










… (sarcasm).

cscoxk said :

Monomania,

There are plenty of technologies that take greenhouse gases and other gases out of the atmosphere. Biochar for example. There are many examples of artificial photosynthesis in the labs where carbon dioxide and water are combined to produce liquid fuels. We know that geothermal works and we know that solar thermal works and we know that solar voltaics work and we know that windmills work etc.

The trick is to invest in the ones that give us the most energy for the least cost. This is best done through a market place.

We can get zero net emissions by 2020 if we invest enough and enough for the ACT is 600million per year for ten years.

All of the technologies you mention here cannot stand in the current market place. They all require a huge amount of subsidy.

These alternative energy sources are capital, energy and carbon intensive. It would require a huge amount of all three to replace non renewable energy sources. For instance, you will find it difficult to see any up to date study that measures the embedded energy in photovoltaic panels. Proponents say 2 years payback. A 2000 study from the ANU put it 8 to 11 years. It will be less than that now but why do you think they are so expensive. The benefit of carbon removal technologies remain to be demonstrated.

VYBerlinaV8_the_one_they_all_copy8:35 pm 19 Apr 09

It is 100% risk free if there is going to be a demand for energy at more than 1 cent per kwh. I think that is as close to 100% risk free as you can get. Risk comes about when you have loans that are not going to be repaid. If you know you are going to create productive assets then it IS 100% risk free.

I disagree. There are a range of risks that apply, including success of the technology on a large scale, being able to get the energy to market, and being able to manage costs along the way (this is one of the biggest risks). All of these aspects (and more) have their own many risks attached. Just creating a productive asset DOES NOT make something risk free. In fact, gaining a return on a capital investment is all about balancing risk versus return. Zero risk, very little return.

Also, your assertion about banks making money is misleading. Banks lead multiples of what they have on deposit elsewhere, but bear in mind that value is created every day, such as when we exchange our time for money by working, or when a company performs a manufacturing process on raw materials. Where does our pay come from, for example? Banks enable this. Reserve monetary policy has a range of economic outcomes, including deciding how much money needs to be printed to support cash requirements based on growing economies. Of course, banks contribute to the issue by lending for non-value purposes (my opinion, not an economic theory). I’m pretty sure your rule of 10% deposited with the RBA is incorrect, too.

Also, I’d be careful about talking about finance costs without being specific, as this can mean different things depending on the context. Without clarification, your assertion is meaningless.

Don’t get me wrong, I like your thinking, but it will need a lot more rigour if it’s going to stand up.

Monomania,

The magic of investment is that you put money into an investment and you get back more than you put in. One of the difficulties with traditional economic thinking is that the equations they use to model economic systems are based on the equations of planetary motion! and they do not include the fact that you invest money and get more back. That is where the money comes from and that is why it can be done.

There are plenty of technologies that take greenhouse gases and other gases out of the atmosphere. Biochar for example. There are many examples of artificial photosynthesis in the labs where carbon dioxide and water are combined to produce liquid fuels. We know that geothermal works and we know that solar thermal works and we know that solar voltaics work and we know that windmills work etc.

The trick is to invest in the ones that give us the most energy for the least cost. This is best done through a market place.

We can get zero net emissions by 2020 if we invest enough and enough for the ACT is 600million per year for ten years.

VYBerlinaV8

Banks DO create money by lending money they do not have on deposit. The main criteria they have to meet is that they must have 10% of the total money lent on deposit with the reserve bank. Most people do not understand how the money supply is increased and when you tell them that money is created by banks (including the Reserve Bank) lending money they do not have it is met with disbelief – but it is true. If the money supply is not increased this way then tell me how you think it is increased?

Of course in theory increasing the money supply through loans sounds sensible and rational but it is a positive feedback system which inevitably leads to more loans and more money being created than necessary. When loans start to go bad on a massive scale then money creation essentially stops which is why we get the credit crisis and governments handing out money for people to spend.

$300Billion is an estimate based on how much investment we need to produce all our energy from electricity produced by geothermal and solar thermal power plants. I know this is not “exact” but it is an over estimate of the amount of money needed and gives the order of magnitude of the problem. It is not going to be greater than this and potentially a whole lot less.

6 cents is the current average wholesale price for energy at the factory gate of fossil fuel energy plants in Eastern Australia. 1 cent is the running costs for both solar thermal and geothermal plants – if we remove finance charges. My guess is that the price of energy will start to drop and fossil fuel plants will start to close down. Prices will not go up. I also think we should issue Rewards to the owners of fossil fuel plants to compensate them for destroying the value of their assets.

It is 100% risk free if there is going to be a demand for energy at more than 1 cent per kwh. I think that is as close to 100% risk free as you can get. Risk comes about when you have loans that are not going to be repaid. If you know you are going to create productive assets then it IS 100% risk free.

VYBerlinaV8_the_one_they_all_copy7:31 pm 19 Apr 09

I think you’re getting the concept of monetary supply confused. Banks don’t just ‘print money’, they lend based on a range of regulatory criteria. This is not same thing as the reserve bank altering monetary supply.

Also, your numbers and assurances have little supporting them. Where exactly is this $300b coming from? How do you know the final costs of energy? How do you know it will be ‘6 cents’ or ‘1 cents’. Markets will sell at the highest price the market will bear.

And to say something is 100% risk free is both naive and misleading. It just means you don’t understand the risks.

Frankly, I am wondering if I am feeding a troll.

Great stuff. Deano in particular thank you for outlining your objections and let me try to meet them.

I will go through your summary but happy to go back to the others if the answers I give still do not convince.

* You do know in detail how the ghg reductions will be achieved

No I do not know in detail how ghg reductions will be achieved. But I do know they can be reduced

I do know that if Australia invests $30 billion a year for the next 10 years then we can produce enough energy from renewable resources using existing technologies of geothermal and solar thermal energy to satisfy all our energy needs. To see some calculations go to http://www.onlineopinion.com.au/view.asp?article=7662. I have more detailed modelling but they all tell the same story. It can be done. This is likely to be an overestimate of the amount of money needed but this is good enough for our purposes. Of course there are lots of other ways of producing energy than electricity but we are not looking at the details only whether it is possible.

* You do not know what is the best investment strategy but will trust the markets to work it out

Well yes. Markets are the best way we have yet devised to allocate resources. That is what they are very good at.

* Its going to cost $300 billion over ten years and you want to ask the Reserve Bank to just print this money

The Reserve Bank last year allowed the banks to print $170 billion dollars that did not exist. That is the M3 money supply increased by $170 billion in 2008. $300 billion over 10 years is only 20% of the current increase in money supply.

* You don’t believe pouring this amount of money into the economy will be inflationary even though this money is never removed from the system.

We are already putting in five times as much money. Rewards may inflate but not the general currency. Think it through. Inflation occurs when we print more money than we have things to buy. If we do not create the money until the asset is built then it cannot be inflationary. Rewards may inflate but not the general currency because it does not “appear” until there is an asset it can purchase. The main thing about increasing the money supply is not about economics. It is about ownership. I am saying that the ownership of new money should go to the general population who are living in a way that does not disadvantage the rest of us. Not to those who already have assets.

* You are going to give the majority of the money to the people who have the least use for it

The current system gives the money to the people who have the most assets and they have the least use for it.

We are giving the money to the people who contribute the least to the problem. They do not necessarily decide how to use the money but they can if they wish. There will be plenty of people around to advise them on the best way to invest. The only criteria for them is that must continue to invest in ways of reducing ghg. This gives a positive feedback system that will encourage sustainability. You reduce your demands for energy and we will give you Rewards that you must spend reducing your demand for energy.

* You believe it will be highly profitable for the community, who are the ones buying the energy to begin with.

If you sell energy for 6 cents that costs 1 cents then that is profitable. The profits go to the community because they are the ones who earn Rewards and so own the new infrastructure. It only costs 1 cent per kwh because there are no finance and repayment charges.

* You believe the scheme is 100% risk free

Yes. Because we know we can produce renewable energy. We know there is plenty of renewable energy available if we invest. We know that we can always sell energy – there is always a market for cheap energy. The only thing stopping us doing it today is the cost of finance. Remove the cost of finance and renewable energy is cheap. This is risk free because people will invest through a market place and we know people go for the best investment.

We need to increase the money supply to keep the economy growing. At the moment we increase the money supply by banks loaning money they do not have to people who already have assets in the hope that the borrower will pay them back. We do not create money in the hope that people will produce a new asset to pay the money back – just that they will pay the money back.

I am saying we can increase the money supply after the asset is built. This is much better than a hope that the money that banks create may produce a new asset.

We are not changing the financial system. Banks will still make most of the loans as they do today. It is just that banks have to have money on deposit before they can lend it and that seems a very reasonable request.

The current system where banks are given the right to print money and then lend it to the government and others and the government pays interest on it when it borrows it is so crazy that most people do not realise that is what happens because it is so ludicrous. But that is the current system. Of course the government should pay interest on money it borrows that existed before they borrowed it but the government should not pay interest on money that did not exist until it was lent.

We need to create a system where the increase in money supply is guaranteed to produce a productive asset. That is why we distribute Rewards widely and we let the market in infrastructure assets determine where the money is invested.

VYBerlinaV8_the_one_they_all_copy5:54 pm 19 Apr 09

Nutjob.

But Deano, couldn’t we then harvest the gasses to create electricity?

1. Harvest gasses
2. Print $300 billion to build infrastructure to make use of said gasses.
3. ??!?!?!?
4. Underpants.
5. Profit!

monomania said :

The only way the ACT could become carbon neutral by 2020 is if every one of us actually threw ourselves on swords or took some other method to remove our footprint from the territory.

Nah, our rotting corpses would still continue to emit green house gasses.

Sorry Kevin, I just don’t get it. I’ve always been skeptical about the idea that Australia should lead the way, throw itself on an economic sword. Look at us world.

How do we become as you suggest carbon neutral let alone negative. What’s this magic technology that would allow this to happen. Just wishing it to be won’t make it. Don’t you think that there would be rewards enough to the developers of energy producing technology. They have been trying ever since people in the middle ages worked to invent perpetual motion machines.

The only way the ACT could become carbon neutral by 2020 is if every one of us actually threw ourselves on swords or took some other method to remove our footprint from the territory.

If you can see flaws in the idea then comment here.

OK since you asked…

This approach is 100% under our control and is guaranteed to work.

Never worked in the government then, eh?

I took the amount of energy Australians are likely to consume in 2020 and assumed that we would need to produce all this energy as electricity from non polluting sources.

Your first error in reasoning. Electricity is not a direct replacement for all current forms of energy. There are different efficiencies involved in converting electricity into other forms of energy compared to the other energy sources currently in use.

It is easier to reduce investment than increase it.

You’ve definitely never worked in government then.

We do know that markets are an excellent way of allocating resources because well designed markets allow innovation to flourish.

Um, have you been reading the papers recently?

We give individuals and businesses Rewards to be spent in the market place in inverse proportion to the amount of Energy they consume.

So you give the people causing the biggest part of the problem the least amount of resources to fix it. And what encourages people with low energy usage to spend their ‘Rewards’ – they are going to get the least return from them.

That is the money we invest through Rewards will be returned to the community from the income generated from the investments.

Ah but where does this ‘income generated from the investments’ magically come from. It comes from the community that buys the energy produced by these investments – even if it was 100% efficient and no money escaped overseas, the best you could hope for is a zero net gain.

The investments will generate the money to pay for the infrastructure.

Ah, so you’ve invented a financial time machine so money generated in the future can be spent in the present. Cool!

If we do this we will increase the money supply without causing inflation

So you’re not an economist then either. Increasing the money supply without increasing economic activity will lead to inflation. Replacing one form of energy with another does not increase economic activity.

renewable energy will be produced and will be very profitable because there are zero finance charges.

Um, profitable for whom? Weren’t the profits going to be returned to the community to pay for the investments? So we are going to make a profit from ourselves.

It also means that those who consume less get more wealth.

No, the Rewards are worth less to people who use less energy because of the restrictions on how the rewards can be spent. To someone who uses zero energy, the rewards are worthless.

So to summarise:
* You do know in detail how the ghg reductions will be achieved
* You do not know what is the best investment strategy but will trust the markets to work it out
* Its going to cost $300 billion over ten years and you want to ask the Reserve Bank to just print this money
* You don’t believe pouring this amount of money into the economy will be inflationary even though this money is never removed from the system.
* You are going to give the majority of the money to the people who have the least use for it
* You believe it will be highly profitable for the community, who are the ones buying the energy to begin with.
* You believe the scheme is 100% risk free

In fact, why don’t you just invest all of the money into developing a perpetual motion machine, it would be just as effective

Care factor zero.

I do not pretend to know in detail how the reductions will be achieved

.

That is where I stopped reading.

This local council can barely keep the roads sealed and the hospitals running. I feel the chance of a carbon neutral 2020 is as likely as a no waste 2010

Daily Digest

Want the best Canberra news delivered daily? Every day we package the most popular Riotact stories and send them straight to your inbox. Sign-up now for trusted local news that will never be behind a paywall.

By submitting your email address you are agreeing to Region Group's terms and conditions and privacy policy.