Roboeconomic Money

Right now money is carboncredit, it buys us fossil fuels and this is the reason it has value. Try in your mind to imagine if you pay for something, like an airline ticket or Ikea furniture and the money can’t buy fossil fuels. That doesn’t work. In the Roboeconomy money can not be carboncredit, there will be no carbon/fossil fuels in use. Still the economy will happen, people will be producing, but now all with renewables. The credit creation process (how money starts to exist) has to reflect that.

Economists have been wondering about how much money should exist and how it should be created for a century now, but in the fossil economy it is really simple : If you create more money than is needed to buy the fossil fuels to produce stuff you cause inflation. If you increase the amount by extending credit, production will ramp up, eventually more production capacity will be added, but if the cost of fossil fuels remains about the same, prices can be stabile. If you try to buy something with very little automation or fossil fuel input its a totally different story. Say you spend 1000 euro on man made wood carved panels, and you get 20, then if you want to spend 2000 on the same you may not get 40, because there needs to be an artisan capable of carving the panels. Renewables are a bit like that.

If you want to create credit to spend in the economy, and it only uses renewable energy (RE), the production is limited to the RE capacity. If one wind turbine produces 5 MW on a windy night, and you have credit that buys 5MW, nobody else can buy those megawatts anymore. With fossil fuels lying in storage this kind of inflexibility does not exist. You can fix this with storage in batteries, but for the forseeable future all RE will be spoken for. This has another important consequence : If you suddenly drop 1 billion credits in the economy, probably NOTHING changes on the production side.

Credit/Money creation in a RE powered economy needs to be a carefull process. Today banks and gas companies try to push Hydrogen as a new clean fuel, mainly because they don’t want anything to change to their business. Banks want credit to be thought of independently of resources because if you start doing that you start to worry. You need to exactly do that in a RE powered economy. It is not complicated though, you create a unit of energylike a kWh, and a kWh credit. The issue is where to allow that credit to be allocated.

Say you buy sneakers in Holland, made in China. That won’t be likely in the Roboeconomy but ok. So your kWh credits need to be usable in China, where there are machines stamping plastic, maybe there is methane plant where the gas is turned into plastic. That plant may be for a large part running on local renewables, so quite cheaply. The plant owner may own RE sources. Your credit should then go towards what? Probaly towards public service RE sources used by the truck that moves the sneakers to the port. There needs to be a RE producer that accepts the credit and this needs to be of use to the producer or the whole idea of paying makes no sense.

With fossil fuels in the economy there is a product that has to be everywhere all the other products are too. Every truck contains diesel, every ship and plane contain fossil fuels, its a constant compagnion and it needs to be delivered and made available through a complex logistics chain. With RE you don’t need that, but you will find RE sources along the former fossil distribution network more readily because that’s where most of the people are who need them. The question is : Why would anyone of these accept your kWh credit ?

It seems there need to be a global ownere of RE sources, or at least some alliance, so that credit created in one place can be used in another, but that raises other questions, for instance how much credit can we create if it gets used elsewhere. We are interested in your thoughts.