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Pitch

Local currencies support community resiliency and can be used to implement climate-friendly projects


Description

Summary

Local currencies are innovative modes of exchange (printed bills, electronic credits, or other formats) that are accepted by businesses, government, and/or other institutions in a community. They are intended to stimulate local exchange. Local currencies complement and are used alongside standard national currencies.

Local currencies promote social and economic resiliency, and thus help with climate adaptation.

Local currencies can also be used to fund and implement climate-friendly projects that rely on local entrepreneurship and/or local labor (e.g., tree-planting).


Key actor

Grassroots neighborhood organizations


What actions do you propose?

Local currencies promote community resiliency:

  • Encourage consumers to support local shops and producers, generating employment and expanding the local tax base
  • Encourage local entrepreneurs to meet local needs
  • Improve local morale, build community, build social capital
  • Insulate community from vicissitudes of global casino economy 

 

Improved local resiliency makes a community better able to cope with climate-related changes (disaster recovery, changes in what kinds of economic activity—e.g., water-intensive industries, particular crops—are viable, changing global trade and immigration patterns). 

Local currencies can also be implemented in ways that support climate action. Two examples (undoubtedly there are others--please add them!):

  • The Token Exchange System, an electronic local currency designed by the Principled Societies Project, facilitates crowd-sourced funding (e.g., interest-free loans to business, grants to civic institutions) to invest in climate-friendly projects (Boik 2013).
  • The Eco-Pesa, a printed currency, was paid to residents of a slum neighborhood of Mombasa, Kenya in 2010 by the NGO Eco-Ethics for planting trees and hauling trash. Residents used the scrip at participating local businesses, who continued to spend them locally. The $352USD in Eco-Pesas were responsible for approximately $4,176USD in local transactions within the first three months of the program. As a means of delivering aid to a depressed community, the Eco-Pesa provided health and climate benefits (including the establishment of three new tree nurseries), boosted morale (gave teenagers something to do), was transparent, and was cost-effective (Ruddick 2011).

 

Local currencies are a good way to put local resources—especially local entrepreneurship and local labor—to work to tackle socially important problems.

This project proposes to establish resources (e.g., a clearinghouse of information and best practices, a support network, a source of seed funding) to encourage the establishment and flourishing of local currencies in the developed and developing world that have climate resiliency and/or climate action as explicit goals.

QUESTION FOR THE COMMUNITY OF PRACTITIONERS: IDEAS FOR FOCUSING THE PROPOSED ACTION? WHAT ARE THE MOST CRITICAL NEEDS IN THE SHORT AND MEDIUM TERM?


Who will take these actions?

A team of practitioners dedicated to cultivating a network of successful local currency projects, organized as a nonprofit.


Where will these actions be taken?

In interested communities, metropolitan areas and regions throughout the developed and developing world.


How much will emissions be reduced or sequestered vs. business as usual levels?

The benefits of local currencies are twofold: first, they increase social and economic resiliency, useful for climate adaptation.

Second, they can fund climate mitigation actions (e.g., tree-planting). The amount of emissions reductions will depend on goals set by individual projects. A community that plants 100 trees, for example, sequesters about 2,320 pounds of carbon (http://www.epa.gov/cleanenergy/energy-resources/refs.html).

 


What are other key benefits?

Local currencies improve local economies and put people to work, build local pride and trust, generate social capital.


What are the proposal’s costs?

A year of startup funding for a small nonprofit.


Time line

Start operation in 2014. Set goals for upcoming years (help support and/or initiate a certain number of community projects per year, each with their own measurable goals; find sustainable source of ongoing funding). 


Related proposals

Carbon negative biochar economies. Proposal in the previous Climate CoLab contest.

It proposed local currencies supplied into regions to support activities related to small-scale biochar (eg horticulture, stove-making, education). The money then circulates locally to support all activities. The effect would be to combine emissions reduction, carbon storage, poverty reduction, employment creation and economic revival in all areas. The proposal was nominated for a Katerva award.

 


References

Boik, John (2013). “Local Currency Supports Resilient Cities.” (http://www.thepolisblog.org/2013/01/local-currency-resilient-cities.html)

Ruddick, William (2011) ‘Eco-Pesa: An Evaluation of a Complementary Currency Programme in Kenya’s Informal Settlements.’ International Journal of Community Currency Research 15A: 1-12. (http://ijccr.files.wordpress.com/2012/04/ijccr-2011-ruddick.pdf)

Directories of local currency projects and resources are available at:

http://neweconomicsinstitute.org/content/local-currencies/local-currency-resources

and

http://www.complementarycurrency.org/links.php.

One local (Massachusetts) example of a successful complementary currency is Berkshares (http://berkshares.org/).