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4          A parallel resource currency is needed

 

4.1          The gardener has no use for our money

 

If the gardener would accept our money for the resources, she would have to spend it again. But what should she buy?  And if she would buy something from us, sooner or later the money would be available for us to buy products and resources again. Every money circulation causes additional resource consumption.

 

The gardener could use the money to strengthen ecosystems. But in parallel she would transfer the money back to us and then it circulates again. There might be a slowdown in resource consumption but no limitation. In the end we would have bought all resources with our money.

 

In addition, we can manipulate our money at will. This is not possible with REU. The REU currency is a currency linked to resources.

 

 

4.2          All resources must be considered

 

Each saving of resources can have unwanted side effects, since other resources are used.

If, for example, CO2 emissions are to be reduced by these measures:

  • Biofuel as a substitute for fossil fuels causes problematic monocultures (palm oil, sugar cane, rape, etc.), which permanently reduces the original ecological value of the land. At the moment of deforestation of the primary forest perhaps even more CO2 is released.
  • Electric cars, even if they are charged with green electricity. Electric cars require raw materials, the extraction of which severely affects the ecosystems. Green electricity should also not be wasted since it could replace CO2 emitting energy sources.
  • Photovoltaic plants consume raw materials for production and land areas that are ecologically less valuable (excluding existing building roofs).
  • Railway lines consume space and cut up the landscape.
  • Wood heating systems are CO2 neutral, but they reduce the ecological value of forest areas and produce harmful smoke gases. Unlimited use is as harmful as oil usage.

It can be seen that every CO2 saving measure leads to the consumption of many other resources. Although this may be much lower relative to the previous situation, the total volume of newly used resources can still overload ecosystems. Ultimately,less environmentally harmful technologies must be used and the use of resources as a whole must be restricted as well.

 

As the Earth's ecosystem is a highly interconnected system with unpredictable interactions, all resources must be protected fundamentally, preventively and as a whole.

Only a few key resources (ecological devaluation of areas, processing and storage of pollutants such as CO2, pesticides, waste, etc.) need to be evaluated with REU costs in order to limit their consumption absolutely.

 

4.3          Natural resources cannot be paid for with human money

 

Natural resources have a price. Not one, though, that we can pay with our money. No living being can buy resources from nature. Nature provides resources free of charge. However, resources are not easy to obtain. All living beings must strive for resources. We humans seem to be an exception, because with our money we can buy resources from other people. The impression is created that these resources have been legally acquired. However, these resources were also taken from nature without payment. There is no currency that would be accepted by nature.

The price other people charge for a resource only evaluates human aspects:

  • ownership structure
  • the amount of work required to extract or process the resource
  • inventiveness in how to use or convert resources
  • who discovered the resources
  • the temporary provision of a resource

The monetary prize also does not in the least evaluate the value of the resources used by the ecosystem. The cost of resources will not lead to a change in consumption until the cost becomes very high because the resource is depleted. But then this is much too late.

If a resource can be obtained at source with little effort, the cash price at resale will be low. However, the cost of money does not reflect the true ecological value. In addition, resources are very heavily exploited to make a profit despite the low price of money. In extreme cases, fundamentally important ecological resources are wasted or destroyed in this way. If, for example, drinking water costs little, it is treated wastefully. However, the water taken is essential for the functioning of ecosystems and polluted water can destroy them.

Example forest:                                             

From the gardener's point of view, a forest owner is only a forest manager accepted by us humans: ideally, he is responsible and takes care of the forest. He decides how many trees can be felled, how the forest is used and protected. When he sells wood, the price only reflects his costs and human ownership, but not the value to the ecosystem. In particular, felled trees will not be able to produce further resources. If the forest is overexploited, the ecological value decreases and resource production is reduced without anyone paying a price to nature.

With the REU currency, resources become valuable, must be paid for and taken into account in purchase decisions.

 

4.4          Limited resources and unlimited money supply

 

The classic money supply must change, because this is the only way to achieve various economic goals, e.g. inflation, deflation, economic growth. It must also be in the right proportion to the volume of goods [9] and it's influenced by the state.

The growing quantity of goods and money depends on many factors, but not sufficiently on the limited natural resources. Even if we were to buy natural resources from any authority for our growing money, the value of the resources could not be the monetary value we defined ourselves.

The REU currency should represent the available resources corresponding to gold at the gold standard. In contrast to the gold standard, which only worked as long as people believed in it, natural resources and thus the REU currency have a true, uninterpretable value that cannot be arbitrarily changed.

 

4.5          REU changes our way of looking at things and our behavior

 

In chapter 9.1 it is estimated that with a monthly REU budget of 1000 REU per month a flight Stuttgart to Barcelona and back would cost 1788 REU. The consequences only become clear when resource costs become directly visible in relation to the budget. An increase in the price of money by the cost of resources corresponds to inflation, which is offset by wage increases.
If I had to pay the 1788 REU out of my budget, I would drastically reduce my energy consumption or I would have to earn REU elsewhere.

 

4.6          Economy and ecology must pursue the same goal

 

If only classical costs are optimized, there is very often a conflict between ecology and economy, because it is primarily a matter of reducing classical costs. For example, the idea of an automatic start-stop system in a car is very old, but has not become established for a long time because it causes additional costs. Only through (much too late) legal framework conditions did it become attractive in order to reduce CO2 emissions.

If fuel costs had an additional REU price, the limited REU budget would make efficient but high-priced products more attractive. For example there was the Lupo 3L TDI already in 1999 with about 3 liters consumption on 100km. Its production and further development was stopped at that time for economic reasons. With a limited REU budget it would have been much more attractive.

 

4.7           Environmental costs must be easily identifiable

 

The consumer pursues many optimization goals when making purchasing decisions. At the moment he optimizes the classical product costs, the quality and perhaps also the longevity. Many consumers also consider environmental aspects, but this is done on a voluntary basis. The reduction of resource consumption is only a very subordinate optimization goal as long as there are (seemingly) infinite resources.

 

But it should actually be the other way round: products that are cheap to manufacture due to a high consumption of resources or less ecological production methods would have to be expensive. Products with less use of resources or less harmful production are more expensive to manufacture but should be cheaper.

 

There are often attempts to make environmentally harmful products more expensive so that their cost advantage is reduced, e.g. through taxes. But taxes also ultimately circulate between people and cause further consumption of resources see 4.5. In addition, it is not certain whether taxes can permanently limit resource consumption, see 3.7.

 

Mixing classical and ecological costs in a single price does not trigger purchasing decisions for sustainable products if a less ecological product would not become significantly more expensive. For example, the eco-tax on fuels is hardly recognizable in the total price and many people are not even aware of it.

 

On the other hand, a separate price makes ecological costs visible in the simplest way and resolves the conflict: environmentally harmful products have a low classical and a high REU price, less harmful products have a high classical and a low REU price.

 

By limiting the REU budget and classic money, everyone has to consider whether they want to optimize REU, classic costs or both. Ultimately, all producers will have to take up consumers' new purchasing criteria and develop products with lower REU costs.

 

4.8          Waste of resources due to ignorance or intent

 

There will always be people who consume excessive resources through ignorance - or worse through intent. Due to the parallel REU price displayed, resource costs can no longer be ignored and everyone must adapt their behavior. In the same way, one cannot permanently consume more products than he can pay with the money available. This is analogous to classical debts, which at some point slow down excessive consumption.

 

4.9          There's no REU debt to the gardener.

 

There must be no REU debts to the gardener, because they mean an inadmissible consumption of resources that is no longer sustainable, see14.3. If there were REU debts to the gardener, ecosystems would be exploited and destroyed immediately. However, the REU currency must always be in balance with the currently available resource surpluses.

 

4.10      Inflation, deflation

 

The REUs given away ideally corresponds to the currently available resource budget. We cannot increase the REU budget arbitrarily. The resources are like an absolute and real gold standard. If ecosystems deteriorate or improve, correspondingly less or more REUs are paid or resource prices increased.

 

In the introductory phase, there will be controlled inflation of REU prices as resource prices are increased and further resources are gradually taken into account.

 

However, if all resources are valued stable at the sources and their prices remain constant, REU costs for products will decrease because they are manufactured or used more resource efficiently. This would then be a deflation of REU prices.

 

It can be assumed that people will continue to exhaust their budget and thus use all available resources. Of course this should be prevented so that unused resource surpluses strengthen and stabilize the ecosystem again. The gardener will therefore continuously reduce the people's resource budget.

 

Resource prices should remain as constant as possible in the stationary state (all resources are valued), so that meaningful indices can be determined, see 4.14.

 

4.11      Prosperity must not cause a disproportionately  consumption of resources

 

In [10] it can be seen that energy consumption increases with rising income. It is plausible that rising incomes are accompanied by an overall increase in resource consumption, because products can be purchased and resources consumed in proportion to the money available.

 

Even if the available capital is not used for consumption purposes, it is invested to generate interest. These investments in turn cause the consumption of resources. Only money that is physically stored does not cause further resource consumption.

 

In principle there is nothing against prosperity. But depending on financial possibilities, people can use resources exclusively and in excess, which should actually be available to all people.

 

With the parallel currency and the same budget for each person, resource consumption would be limited overall and per person. Nevertheless, wealthy people can still benefit from their prosperity:

  • You can choose sustainable, more expensive products with lower REU costs.
  • They can use their capital to strengthen ecosystems. In the future, there will be many new investment opportunities that were previously unattractive. Part of the ecologically effective resource gains could be paid out in REUs.
  • In a transitional period, wealthy people can buy REU from less wealthy ones.

Prosperity means more responsibility for living in a sustainable way. In addition, a change in behavior towards more sustainability has a much greater effect on affluent people.

 

There are many wealthy people who are committed to the environment and who have recognized that prosperity only makes sense if ecosystems function.

 

4.12      Imported resources are balanced correctly

 

Many countries keep their own statistics which can be used, for example, to monitor the development of their CO2 emissions. However, these statistics must take into account the resources of both imported and exported goods.

 

This accounting method is not currently used or is only used as a rough estimate. As all export/import goods have a REU price, the resource consumption is allocated very precisely to the actual user of the product.

 

4.13      REU costs as optimization target

 

The REU price is formed according to market economy laws and, as with normal money, a cost distribution can be determined. If for each product it is possible to say exactly how high the classical expenditure of money for personnel, raw materials, energy, infrastructure, etc. is.

 

An analysis of the REU costs provides the reasons for a high REU price. This analysis is important to improve products: Only those who can recognize the resources which production or preliminary product variants are causeing can optimize product manufacturing to low REU costs.

 

The consumer cannot decide which concrete resources are tied up in the product. He only sees the total ecological costs. Nevertheless, the consumer will optimize his behavior and reduce the consumption of resources. This works like classic money, where the consumer is not interested in a complete breakdown of all production costs, but makes his decisions with the total price.

 

4.14      REU is a highly aggregated index for environmental cost analysis

 

A study carried out on behalf of the German Bundesumweltamt [11]page 17, describes the properties of a highly aggregated index:

"Such an index should satisfy at least the following requirements:

  • intuitively understandable (ideally in a known unit)
  • suitable for benchmarking between states or regions
  • suitable for time series analysis
  • Aggregation methodically sound and comprehensible
  • Handling uncertainties and missing data transparent and methodically comprehensible

Above all, the index should provide a new perspective. This also means that it should not follow the already existing indices, e.g. GDP, one-to-one. So he should avoid redundancy."

 

Many of these requirements are met by the REU currency:

 

REU is another currency and as such just as intuitive as other currencies. Nobody has to memorize countless Life Cycle Assessments and environmental comparisons in order to recognize ecological products. A simple REU cost comparison is sufficient.

 

Benchmarking is possible, as with GDP, but in terms of resources. Consumed REUs  can be assigned to regions,states or groups. In addition, benchmarking for cost optimization takes place at every stage of the value chain, right up to the end product for the consumer.

 

The development of REU balance sheets over time is an indicator of whether an economy is becoming more sustainable.

 

Aggregation takes place during product manufacture and is just as sound and comprehensible as pricing with conventional money.

 

Missing and uncertain data should of course be avoided, but are tolerable to a certain extent, see 7.5.6

Using the index function, the REU provides producers and consumers with concrete and permanent instructions for action:

  1. Choose the cheapest REU price.
  2. Do not consume more REU than is available.
  3. Optimize production processes, materials, intermediate products.
  4. Consider the total environmental costs over the life cycle.

An important requirement not mentioned above is the dynamics of the index. For example, the German Environmental Index (DUX), which has been discontinued, was criticized that changes in the index became visible too slowly [11] Page 16.

 

The REU price would be a very dynamic index as REU prices with low latency are permanently determined by all market participants.

 

Of course, the formation of REU prices also causes additional expenses. But this effort is not made by a central institution at long intervals, but in parallel by each individual market participant.

 

At the same time the index is a currency and not just non-binding information. It represents a concrete, payable value and triggers market economy processes.

 

The REU balance sheet of a nation, company group or product group, for example, indexes its resource consumption. A wide variety of indices can be easily determined from the REU costs, just as it has been possible up to now with traditional money.

 

Provided that no further resources are considered and the REU costs at the sources remain almost constant, meaningful indices result.

 

Similar to the inflation index, for example, the REU costs for a sample shopping basket could be calculated monthly. However, it is to be hoped that this REU index is not an inflation index but a deflation index, i.e. that less and less REU will have to be spent on products because they become more sustainable.

However, this does not mean that more can be consumed if REU prices fall, because the REU budget is reduced until there is sufficient sustainability.

Every person could compare his REU expenses with other people and thus optimize his behavior.

In addition to gross national product, REUs could also be accounted for nationally. The lower the REU balance, the more sustainable an economy is. The quotient of gross national product and REU budget would be a measure of the resource efficiency of an economy.

 

4.15      Resource protection is egoism

 

Everyone must have an own interest in preserving the environment. It is the basis for his health, prosperity and peace.

 

4.15.1      Protect prosperity

 

Any prosperity is worthless if the environment becomes unstable. The biggest problems are global and an escalation threatens any prosperity directly or indirectly:

 

Sea-level rise can lead to coastal cities being abandoned and very high values written off. In the same way, climate changes can lead to settlement areas becoming uninhabitable, e.g. because the water supply becomes too expensive or agriculture is no longer possible.

 

Even those whose property is not directly affected will have to write off a large part of their property due to the strain on the economy or a likely global economic crisis.

 

In addition, resettlement generates very high costs (infrastructure, buildings, industrial facilities), which must also be financed by taxes. It is conceivable that land will be expropriated for new settlement space. Sea-level rise is also not a local problem, such as the Fukushima reactor accident, but will occur simultaneously and in many coasts and regions, so that massive impacts on the world economy are to be expected.

 

In addition to the material consequences, the political consequences are even more serious: governments could fall and countries could sink into anarchy when it comes to bare survival. As can already be seen today, population migrations are triggered that can destabilize other countries as well. Wealthy countries that act long-term and with foresight should have a very strong interest in effectively protecting the global environment. Resource problems will also fall back on them.

 

Especially those who possess much risk losing very great material values and should have a high interest in ensuring that ecosystems do not deteriorate. If they use some of their wealth to live sustainably, it is better than any classic insurance that will quickly reach its limits in the event of a global crisis.

 

4.15.2      Avoid ostracism

 

Those who show their consumption or wasting of resources that other people lack run the risk of their behavior being socially outlawed. Instead of recognition there is the threat of ridicule, criticism and head shaking. And when it is getting tough, there are even more radical reactions to be expected.. In the future, luxury will only make sense if resources are not wasted.

 

4.16      Justice

 

An obvious argument against the REU currency is something like this: "Rich people can buy REUs and do not have to limit their resource consumption, whereas poorer people have a hard time getting by with their traditional money and also have no room for maneuver when it comes to resource costs. That aggravates the injustice." This may be correct in cases of hardship, but can be prevented by a number of measures:

  1. Resource costs increase only slowly and everyone has time to change their resource consumption, see 4.4.4.
  2. Society must ensure that poorer people also have access to resource-saving products, see 6.4
  3. The earth has enough resources for every human being, if they are used sensibly. If we live sustainably, everyone has a sufficiently large REU budget at their disposal.

But before such details are clarified, the question of justice in today's world arises. The world is completely unjust. Those who waste as many resources as possible do so at the expense of fellow human beings who have less power and influence or who are not yet born. This injustice is much more serious than the above individual cases.

Article 3 of the Charter of Human Rights [12] "Everyone has the right to life, liberty and security of person." Access to vital resources is a prerequisite for this. Resources must not be wasted, destroyed or exclusively used by a small group. As we make decisions today that have long-term implications for the future, Article 3 should definitely be broadened to include future generations.

 

Through the per capita REU budget, all people have the same right to use natural resources. Excessive use of resources will be limited, thus helping to comply with Article 3.

 

If people are unable to use their budget due to living conditions, it can be sold to people who consume more resources than they are entitled to. This is not fair, but it is better than the current situation, in which they have to bear the consequences of environmental destruction disproportionately. The aim is to ensure that resources are used sustainably in the long term so that the REU budget and thus the natural surpluses are sufficient.


Very wealthy people may not have to change their lifestyle. They have so much capital that they could buy any REU with classic money. This would open the gap between resource-saving and resource-wasting people. Perhaps this is limited to a transitional phase and only to irresponsible people whose behavior will at some point be socially outlawed.

 

Industrialized countries have a time and technological advantage over less developed countries: they were the first to exploit resources on a large scale worldwide and they have the biggest responsibility.  For example, their economic growth would not have been so rapid without oil and coal. Even today, many developing countries sell their raw materials to industrialized countries without being involved in the value chain or generate economic growth by exploiting oil and coal reserves. The population benefits only to a small extent from these resources.

 

Industrial countries should, in their own interest, make sustainable technologies available worldwide at low cost. Resource problems will also fall back on them (population migration, security, etc.).

 

Withe the help of REU the excessive consumption of resources in industrialized countries will lead to classic money flowing into developing countries. This money should largely be used to develop their economies sustainably. They may even have a small advantage over industrialized countries, because industrialized countries have to restructure their economies and developing countries can rely directly on the best technologies.

 

Of course corruption and mismanagement will continue in less develop countries. But this is also the case when development aid is provided in the form of classic money.

 

4.17      Sense of Justice

 

From the point of view of people suffering from environmental problems, such as climate change, poisoning, land expropriation, poor drinking water and food, it must be perceived as extremely unfair that there are other people who cause these problems to a particular degree and who additionally make profits from them. And in order to widen this injustice gap even further, the main polluters can temporarily protect themselves from the consequences of environmental destruction through their prosperity.

 

If disadvantaged people were to defend themselves with good reason, no one would be helped.

If everyone pays for their resource use with the same REU budget or has to earn additional REUs, there will still be people with excessive resource use, but they would be forced to compensate. This balance could be perceived as fair and make social upheavals less likely. In addition, limiting the overall budget for all people would contribute to improving the environmental situation.

 

For example, I wouldn't mind SUVs if I knew that the resources for these vehicles and their operation are covered by the owner's REU budget. Luxury could be freed from this environmental flaw and so the REU currency would also benefit the SUV owner.

 

4.18      No Eco Dictatorship or planned Economy

 

The REU currency is anything but an ecological dictatorship. It is a pure market economy in which resources have a price with immediate effect. In contrast, our present economic system is an unlimited dictatorship in relation to the exploitation of all resources.

 

The REU currency is also not a planned economy: no one specifies what and how much is to be produced or what is required. The only requirement is how much the individual resources should cost, so that the ecosystems are not overloaded. However, this is comparable to a trader or entrepreneur who sets prices in such a way that he does not go bankrupt.

Copyright © 2019 | Martin Huck | E-Mail: info@resource-equivalent-unit.de

 
 
 
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