Funding the ecological refurbishment of the cities housing
Posted: Wed Nov 19, 2008 11:36 amTrying to reduce the fossil fuel inputs needed as far as possible, to make the existing housing stock habitable with minimal (or no) gas, is going to be expensive.
Owner occupiers who can afford to re-mortgage their houses have the option of doing a massive insulation job, adding passive solar water heating, ground or air sourced heat pumps, rain water collection systems etc. In the very short term this seems to be the only immediate action that can be taken.
But this is not an option for people who can't afford it or who live in private or social rented housing.
There clearly needs to be a massive campaign to get housing associations and the Council to refurbish their housing stock, this is also something that can be started now, we should start by collecting statistics and information about the state of the housing stock to use in putting forward our case.
In the medium to long term perhaps a far more radical approach is needed, if this example is true it's quite inspiring:
And the example in that article (one typo corrected):
Can we imagine a Sheffield Pound that could be used to buy locally produced renewable electricity, building services and food?
Owner occupiers who can afford to re-mortgage their houses have the option of doing a massive insulation job, adding passive solar water heating, ground or air sourced heat pumps, rain water collection systems etc. In the very short term this seems to be the only immediate action that can be taken.
But this is not an option for people who can't afford it or who live in private or social rented housing.
There clearly needs to be a massive campaign to get housing associations and the Council to refurbish their housing stock, this is also something that can be started now, we should start by collecting statistics and information about the state of the housing stock to use in putting forward our case.
In the medium to long term perhaps a far more radical approach is needed, if this example is true it's quite inspiring:
Bart klein Ikink wrote:A stunning example
In the past, money systems without interest on a small scale existed in various forms, with varying success. They still exist today. The success of natural money will depend heavily on the rules of the system. The most stunning success story is the Wörgl currency.
On July 5th 1932, in the middle of the Great Depression, the Austrian town of Wörgl made economic history by introducing a remarkable complimentary currency. Wörgl was in trouble, and was prepared to try anything. Of its population of 4,500, a total of 1,500 people were without a job, and 200 families were penniless. The mayor, Michael Unterguggenberger, had a long list of projects he wanted to accomplish, but there was hardly any money with which to carry them out. These included repaving the roads, streetlights, extending water distribution across the whole town, and planting trees along the streets.
Rather than spending the 40,000 Austrian schillings in the town’s coffers to start these projects off, he deposited them in a local savings bank as a guarantee to back the issue of a type of complimentary currency known as 'stamp scrip'. This requires a monthly stamp to be stuck on all the circulating notes for them to remain valid, and in Wörgl, the stamp amounted 1% of the each note’s value. The money raised was used to run a soup kitchen that fed 220 families.
Because nobody wanted to pay what was effectively a hoarding fee, everyone receiving the notes would spend them as fast as possible. The 40,000 schilling deposit allowed anyone to exchange scrip for 98 per cent of its value in schillings. This offer was rarely taken up though.
Of all the business in town, only the railway station and the post office refused to accept the local money. When people ran out of spending ideas, they would pay their taxes early using scrip, resulting in a huge increase in town revenues. Over the 13-month period the project ran, the council not only carried out all the intended works projects, but also built new houses, a reservoir, a ski jump, and a bridge. The people also used scrip to replant forests, in anticipation of the future cash flow they would receive from the trees.
The key to its success was the fast circulation of scrip within the local economy, 14 times higher than the schilling. This in turn increased trade, creating extra employment. At the time of the project, Wörgl was the only Austrian town to achieve full employment.
Six neighbouring villages copied the system successfully. The French Prime Minister, Eduoard Dalladier, made a special visit to see the 'miracle of Wörgl'. In January 1933, the project was replicated in the neighbouring city of Kirchbuhl, and in June 1933, Unterguggenburger addressed a meeting with representatives from 170 different towns and villages. Two hundred Austrian townships were interested in adopting the idea.
At this point, the central bank panicked, and decided to assert its monopoly rights by banning complimentary currencies. The people unsuccessfully sued the bank, and later lost in the Austrian Supreme Court. It then became a criminal offence to issue 'emergency currency'.
Unterguggenberger was opposed to both communism and fascism, championing instead what he referred to as 'economic freedom'. Therefore, it was deeply ironic that the Wörgl experiment was first branded 'craziness' by the monetary authorities, then a communist idea, and some years later as a fascist one.
The town went back to 30% unemployment. In 1934, social unrest exploded across Austria. In 1938, when Hitler annexed Austria, he was welcomed by many people as their economic and political saviour.
The 1920's had already seen a scrip currency called the 'wara' in the German town of Schwanenkirchen. This saved the town's economy and kept a coal mine operating. It started circulating more widely, and became part of a movement called 'Freiwirtschaft' (Free Economy), based on the ideas of the economist Silvio Gesell.
Central to Gesell's ideas was the use of a hoarding fee of the kind used in Wörgl (technically known as 'demurrage'). The soundness of such an idea was affirmed by John Maynard Keynes in his 1936 work 'General Theory of Employment, Interest and Money'.
The success of the Wörgl currency inspired the well known American economist Irving Fischer to write an article which was published nationwide. Many towns copied the idea. The Americans however used a far higher tax rate (2% a week instead of 1% a month) which undermined the confidence in the stamp scrip currencies. President Roosevelt abandoned the idea completely in the New Deal. It is therefore very important to do this the right way, otherwise it will become a failure.
Perhaps the most groundbreaking feature of demurrage is that it is intrinsically anti-inflationary. Whereas conventional currencies are progressively devalued by interest, anti-inflationary money steadily increases in value. As each monthly stamp is added, the value of the note effectively increases by the stamp amount. This is technically equivalent to a negative interest rate.
The present short-term focus of investments, and the consequent lack of long-term vision are exacerbated by interest-driven currency devaluation that, from a profit perspective, reduces the appeal of longer-timescale projects. The use of a demurrage currency gives an edge to those working for sustainability, because a rate of return is achieved simply by lending out money. When money is repaid (remember these are non-interest currencies), it will have increased in value owing to the money saved by having avoided paying the monthly demurrage fees. This has the potential to enable investment in highly beneficial but economically marginal activities such as earth repair.
A recommended book that covers scrip currencies and more fully explains this 'negative interest' principle is Bernard Lietaer's 'The Future of Money'. In case the ending of the Wörgl story was disempowering, it must be said that the number of complimentary currencies around the world is undergoing an exponential growth. As of 2000, there were more than 2,500 in operation.
http://www.naturalmoney.org/
And the example in that article (one typo corrected):
Bart klein Ikink wrote:For example: you want to build a house and you have the choice between a house of € 100,000 with a yearly energy cost of € 5,000 or a house of € 200,000 with a yearly energy of € 2,000. When the interest rate is 10 percent, the cost for a cheap house with high energy consumption is as follows: € 10,000 interest plus € 5,000 energy is € 15,000 per year. The expensive house with low energy costs: € 20,000 interest plus € 2,000 energy is € 22,000 per year. If you do not have to pay interest, the expensive house with low energy cost will be cheaper.
Can we imagine a Sheffield Pound that could be used to buy locally produced renewable electricity, building services and food?