Carbon Pool

Description

Proposed by Chris Cook:

"My "Carbon Pool" proposal is as follows.

A "Carbon Levy" is collected on carbon fuel transactions at a suitable rate, in say £ sterling.

(a) Renewables

The resulting "Carbon Pool" £ fund is then invested directly in viable renewable energy projects through a "Community Energy Partnership", with professional assistance in terms of project appraisal.

So £1m invested at 50p for each Unit redeemable for 10 Kilo Watt Hours buys 2m Units, and pays for a 1 Mw turbine.

If the turbine produces 200,000 Units per year (a miserly 23% load factor) then that's 4m Units. Deduct 10% for maintenance, and you still have 1.6m Units of "free" energy.

The community is receiving what is essentially a loan denominated in energy, which it repays by selling electricity to/through the Pool at the market price.

(b) Efficiency

The Pool makes "energy loans" - ie sterling is paid to do the work, but the liability is in 10 KwH energy Units.

The energy loan made to the property, not the owner, and is repaid through billing by (say) the electricity supplier, at the market price.

Say a loan of £5,000 per house to 100 houses raises £500,000 funds to install a local mini CHP. The liability is not in sterling but in 1m Units at an initial value of 50p.

The householders then pay to the utility at the market price:

(a) their energy bill - reduced by their savings through now having hot water/heating at greatly reduced cost;

(b) energy loan repayments at x Units per year (or sooner, if they like).

So the Carbon Pool is receiving energy (which it uses to redeem Units) from its investments in renewables, and sterling from its investments in energy savings.

(c) Energy Dividend

Community members will receive an "Energy Dividend" as an equal share of the Units flowing through the Pool.

They may:

(a) use these against energy consumed;

(b) use them to repay an "energy loan";

(c) exchange them in the local shop or anywhere else that might accept them.

The outcome is that those who have above average carbon use make a net transfer to those with below average use, and the transition away from carbon fuels is financed painlessly over time. How painlessly depends upon how great the levy is.

"Deficit-based" carbon credits or emissions trading both attempt to monetise by fiat something with no intrinsic value (sound familiar?) . The Carbon Pool/Carbon Levy monetises the energy value of carbon instead - which has intrinsic value." (via email, March 2009)