NEW ENERGY COULD SAVE OLD FINANCE

In Re-Designing Money Systems to Reduce Greenhouse Gas Emissions and Accelerate the Growing Green Economy, the keynote address for the launch meeting of the United Nations Environment Program Green Economy Initiative in Geneva, Switzerland, December 1, economist and ethical investing advocate Hazel Henderson – who has been at the cutting edge of environmental and economic innovation for over 4 decades – described the opportunity she sees to create a new "green" world financial order out of the current turmoil.

Henderson: “The financial crisis of 2008 presents the best opportunity in over a century to simultaneously reform money systems and create additional mediums of exchange and financing mechanisms to accelerate the shift from the fossil-fuel/nuclear-Industrial Era to the greener information-rich Solar Age. Today's convergence of global warming, financial crisis and the growing green economy signify a new stage in human awareness and understanding of our place in Nature and are fueling the needed paradigm shift…”

Henderson, who worked on the Congress's Technology Assessment Advisory Council during the Ford and Carter administrations and first wrote about a “coming solar age” more than 30 years ago, says “…controlling incumbent financial and political, academic interests have dominated all discussions and drowned out alternative paradigms and proposals for reform and innovation…”

What is bad about this is that “…other valuable assets from human skills and knowledge to ecological productivity and assets are ‘off the balance sheets’ in most corporations, financial firms, and central banks..." But, Henderson believes, this is finally changing.

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Henderson did not merely critique the present system. She offered a brilliant, outside-the-box solution to facilitate the development of New Energy.

Henderson: “[Taken from work by Dr. Shann Turnbull, it begins with] a unit of value based on kilowatt hours of renewably-generated electricity. This is similar to the energy-based currency proposed in the 1930s by the Technocrat movement…The essence of Turnbull's proposal would have governments issue interest-free loans directly to construct the new smart grid and renewable energy facilities in "KWH dollars," to be repaid from the revenues of their electricity sales. Turnbull shows that if usual interest rates of 8% are removed, then wind-generated electricity is cheaper than coal, even without accounting for coal’s external costs. Germany’s Renewable Energy Act spearheaded by Herman Scheer, Ernst U. von Weizsacker and others employs similar tools…”

Understanding how radical her proposal was, Henderson suggested a means of gettting support for it.

Henderson: “The need today is for all the constituencies supporting green economies to join forces with the weak ministries, Environment, Education, Health and Welfare, to put political pressure on the strong ministries, Finance, Central Banks, Commerce, Business and Trade and force them to adopt the new ecological/information/money paradigm. This will require the help of mass media whose mainstream editors will also need re-education beyond the obsolete economics/money box…”

If her idea for starting a war within the halls of governments between bureacrats charged with overseeing the welfare of people and those charged with overseeing the welfare of money seems ambititous, it is only because Hazel Henderson knows the strength of the forces she wants to bring down, “…the power of these strong ministries guarding the dying money/finance/fossil fuel order.”

History is rife with such powerful “ministries.” Among them: The Southern planters of the 19th century, the Russian Czar at the start of the 20th century, the bankers of Weimar and the pre-OPEC “7 Sisters” of oil come to mind. Most of them are gone now. The processes by which such “ministries” fall are sometimes violent, sometimes political and sometimes economic. The only thing consistent is that they fall.

The force of history and the urgency of the moment are on Henderson’s side.

The question remaining: Can New Energy rise or will Old Finance and Old Energy once again push it down as if to delay the onset of tomorrow?



Re-Designing Money Systems to Reduce Greenhouse Gas Emissions and Accelerate the Growing Green Economy
Hazel Hnederson, December 1, 2008 (United Nations Environment Program/Green Economy Initiative Conference Keynote Address)

WHO
Hazel Henderson, econmist, environmentalist and entrepreneur, is president of Ethical Markets Media, LLC, author of Ethical Markets: Growing the Green Economy and many other books and co-creator of the Calvert Henderson Quality of Life Indicators with the Calvert Group; Leaders of the new financial paradigm (UNEP-FI, the UN Principles of Responsible Investing, the movement for socially-responsible investing, the Club of Rome, the Rocky Mountain Institute , the Carbon Disclosure Project , the New Economics Foundation , Focus on the Global South and other non-profit civic groups)

WHAT
Henderson’s basic theme is that the most effective way to achieve the urgently needed reform of the financial system would be a turn to what she calls the sustainability sector of the economy: “…companies geared to the ecological and social sustainability of human societies and providing a healthier planet for our children…”

Henderson has been studying the "sustainability sector" for 3 decades. (click to enlarge)

WHEN
- Henderson’s current focus is on the financial crisis of 2008.
- Henderson published The Politics of the Solar Age in 1981.
- Henderson co-founded Citizens for Clean Air in New York City in 1964 and The Center For Growth Alternatives in 1972

WHERE
- Henderson’s attention is on global financial markets. She has dubbed the misguidedness of the system a “global casino.”
- Henderson believes the decline of the U.S. relative to the BRIC countries (Brazil, Russia, India, China), the EU countries and other G-20 countries opens up opportunities to redirect investments into New Energy and other aspects of the “Sustainability sector.”
- Henderson pointed out that "Main Street" is where real people create real products and services while on Wall Street and in other financial sectors only things that do harm to the real economy are created.

WHY
- The urgency of Henderson’s call for a new direction in global finance is fueled by her insight that traditional financial players are missing the opportunity, as exemplified by the Nov. 15-16, 2008 "Bretton Woods II" conference, where “…demands for reform of financial systems were reduced to [necessary but not sufficient] demands for fairer representation of developing countries and more transparency at the IMF, World Bank and WTO…”
- Henderson has long argued that traditional Gross National Product (GDP) and Gross Domestic Product (GDP) calculations mislead financial players by failing to consider externalities that would move them in new, more productive directions.
- Henderson’s driving insight is that money is not real and the energies that sustain it must be directed at activities that will benefit human activity and well being, not activities that benefit the imaginary machinations of investor assets (CDOs, CDSs, MBSs, CMOs, etc.)
- Henderson also called for a variety of reforms, such as a 1% tax on international financial transactions and a reduction of investment in military infrastructure, to fund her innovative proposals.
- Henderson will soon launch a Mission Markets/Ethical Markets/Social Markets trading platform to list green companies in an honest, secure market where they can find the bridge loans and new, patient, socially-responsible investors.

Henderson keynoted the launch of the United Nations Environment Program's newest initiative. (click to enlarge)

QUOTES
- Henderson: “Ecologically-literate, socially-responsible companies, venture investors and business schools…must now join forces with civic society, labor unions, politicians and bureaucrats – to reform money circuits and expand pure-information based trading systems, e.g., e-Bay, Craigslist, Freecycle, Time Banking , LETS systems, cell phones, radio and new electronic, socially responsible trading systems for growing the green economy…to be a new "green Bloomberg" to accelerate the rollout of the green economy worldwide.”
- Henderson: The old financial sector is waking up to the green economy as confidence in Wall Street and now even in the monetary authorities, collapses. Why are the companies in wind, solar, geothermal and alternative energy being hammered – losing as much as 50% of their value along with other DOW and S&P, Wilshire indexes, along with other companies. For three reasons: 1) These small renewable energy companies, too small for institutional investors’ portfolios, are often traded over-the-counter and prey to algorithmic short-selling, often naked shorting which can destroy their capital structure… 2) The second reason renewable companies have been hard hit is that obsolete asset allocation models are all still based on the industrial categories of the fossil-fueled sectors…This obscures the emerging green economy from traders' screens, so that they do not see this emerging "sustainability sector." 3) These small companies are in their rapid growth phase and need dependable sources of working capital and credit, so they are more vulnerable to credit squeezes and market uncertainty…”