The Ebcu

Climate change is the most serious problem facing humanity and yet policy-makers seem powerless to act. The competitive global market means that no country is prepared to lose competitive edge by charging its companies for the right to pollute the environment. The corporations have also exerted their considerable political influence first to argue that climate change was not the result of carbon dioxide emissions, and then to fight tooth and nail against policy designed to address this issue.

The Global Commons Institute has come up with a creative idea to tackle this problem and to tie in the issue of global poverty. He suggested that a group of countries, perhaps initially the European Union and its former colonies, agree to limit their CO₂ emissions to their fair share of the amount the planet could deal with without overheating (the so-called carrying capacity).

So far, so good. The poorer nations can exchange their share of the environment for cash from the richer nations who pollute more than their fair share. But for various complex reasons to do with the power exercised by countries which have control of the major trading currencies (the reserve currencies: dollar, euro, yen and pound), if we use the existing currencies the poor countries will still be cheated by the rich ones and will end up no better off.

In 1999 Richard Douthwaite came up with a cunning plan to solve this problem by inventing a new currency, called the EBCU or environment-backed currency unit (it is described briefly in his book The Ecology of Money). The new currency will be the only way to buy goods from other countries and is the also the only acceptable currency for buying the right to produce carbon dioxide. It will be shared equally on a per head basis to all the people of the world. This will ensure that pollution rights will be fairly shared and the richer countries will have to compensate the poorer ones, evening up the unjust distribution of resources we have today. It will also set an absolute limit on the output of carbon dioxide, finally getting a real handle on climate change.

I have written a short paper (ebcu.pdf: 117KB) with Tony Cooper of the Global Commons Institute. It gives more detail about the system, including some figures I have worked out for the sorts of exchanges between countries that will be involved once the EBCU is up and running. You can also find more details from the FEASTA website or download a paper by FEASTA members about changing policy on climate change called Treating the Disease not the Symptoms (sleepwalk.pdf: 1.24MB).