1. Transition
Banking on Ourselves
Chris Cook Schumacher College
15 November 2012

2. Conventional Banking
Value
Seller Buyer
Bank
IOU IOU

3. Financing – Clearing Union
 Peer to Peer trade credit - banks as service providers not
lenders
 Bank capital requirement is only for operating costs
 Goods and services change hands by reference to $, not
necessarily in exchange for $ currency
 Credit risk shared by sellers and buyers collectively
 No 'interest' (money for the use of money)
 Default costs and operating costs shared

4. Clearing Union - Seller accepts Buyer's IOU
Value
Seller Buyer
IOU

5. IOU is guaranteed by Clearing Union of Sellers &
Buyers collectively
Value
Seller Buyer
IOU
Guarantee Guarantee
Pool

6. Seller & Buyer pay guarantee charge into Pool held
by Custodian
Value
Seller Buyer
IOU
Fee Fee
Guarantee Pool Guarantee

7. 1/ Buyer settles credit in money or 'money's worth'
eg energy stock
Value
Seller Buyer
Fee Fee
Guarantee Pool Guarantee

8. 2/System identifies a 'chain' of IOUs
A<B<C<D<E<A and 'nets' them out
IOU
Seller A Buyer B
Fee Fee
IOU IOU
Pool
Guarantee Guarantee
Buyer E
Buyer C
Buyer D
IOU IOU

9. 3/ Buyer defaults: system pays sellers and collects
from buyer if possible
Seller A Buyer
Default
Collects
Pays Default
Pool
Seller B
Pays

10. Service provider sets guarantee limits, handles
defaults & manages system
Value
Seller Buyer
IOU
Fee Fee
Guarantee Pool Guarantee
Service Fee
Service
Provider

11. Financing – Capital Partnership
 Investment to a common purpose in people businesses
 Production and/or revenue sharing between investor and user
of investment for as long as the investment is used
 No 'interest' (money for the use of money)
 Sharing of risk and reward – no default

12. Capital Partnership
Users
Payment Use
Custodian
Custodian
% %
Investors Managers

13. Capital Partnership reinvents Equity

14. Equity Shares - % age shares in flows of
revenue or production
03/04/10 14

15. Stock – returnable in payment for use
value eg rentals, Kilowatt Hours

16. Example: “The Art of Flirting” – a film
incorporated as an LLP
31/05/10 16

17. The actors received nth’s of gross revenues
31/05/10 17

18. I got 5%...and the producer the rest
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19. But we needed lights, cameras, pizza, coffee
31/05/10 19

20. Capital Partners invested £ for 20% of
the revenues....
31/05/10 20

21. ...if there are any
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22. Art of Flirting Partnership
Viewers
Viewers
£
Custodian
Custodian
% %
Financial Capital
Financial Capital Human Capital
(Investors)
(Investors) (Actors, Producer, Me)
31/05/10 22

23. Capital Partnerships are not Organisations
03/04/10 23

24. They do not own anything, do anything,
employ anyone, or contract with anyone...
03/04/10 24

25. Associative agreements require no legislation
Users
Users
Payment
Custodians
Custodians
(National)
(National)
% %
Financial Capital
Financial Capital Human Capital
(Money, IP etc)
(Money, IP etc) (Developers, Operators)
03/04/10 25

26. Transition
16/06/10 26

27. Energy subsidies in the Middle East alone
cost trillions of dollars
16/06/10 27

28. Investment in the global transition to
renewable energy needs trillions of dollars
16/06/10 28

29. How do we make the connection?
16/06/10 29

30. Energy Stock
User
User
Energy
Custodian
Custodian
Energy Energy
Investor
Investor Manager
Manager

31. Stock - returnable in payment for energy
05/04/10 31

32. Mega Watts: renewables funded by
unitising Energy Pool of production.
05/04/10 32

33. Nega Watt energy savings - the cheapest
energy - funded by an Energy Loan in Units
09/03/10 33

34. Energy Loans made to properties & repaid via
utility bills out of energy saved
09/03/10 34

35. Funded by investors who invest through
buying Units in Energy Pools
09/03/10 35

36. Energy Loan of £5,000
50 Units of 1 Megawatt Hour @ £100 per Unit
09/03/10 36

37. 5,000 Units of 10 Kilowatt Hours
@ £1.00 per Unit...and so on
09/03/10 37

38. Reduced energy bill for energy consumed
09/03/10 38

39. Energy Loan repaid through buying Units
from the Pool at the market price
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40. The UK 'Green Deal' – Compound interest
and Jevon's Paradox
09/03/10 40

41. Stock: saving energy is saving money
09/03/10 41

42. But how do we transition from a carbon
economy?
09/03/10 42

43. Transition through Gas
09/03/10 43

44. Carbon Levy - initially on gas - funds Energy
Pool investment in renewable Mega Watts
09/03/10 44

45. …and Green Deal investment in Nega Watts
09/03/10 45

46. An Energy Dividend is paid in Stock
09/03/10 46

47. The outcome is that those with above
average carbon fuel use ...

48. ….make a net transfer to those with
below average use of carbon fuel

49. “If you want to keep a cow healthy, you
don’t regulate what comes out of it……”

50. “……you regulate what goes in….”

51. Energy Pools enable Carbon currency
based upon the intrinsic value of energy…

52. ..rather than a market in value-less Units of
CO2 emissions, imposed by governments

53. No dollars change hands but transactions
are priced against the dollar

54. The $ may come to be fixed against a unit of
energy – an Energy Standard

55. This brings us to Energy Economics

56. Thank You
03/04/10 56