Chris Cook’s contribution below can be seen as a response to the Irish appeal we published yesterday, and which favourably looks on establishing an Atmosphere Trust, as proposed by Peter Barnes.
Chris takes issue with the organizational format of a trust:
“While “Custodians” or “Stewards” of productive assets in common ownership are a key part of the global architecture that I envisage, these should not IMHO operate within a Trust law framework but rather a simple consensual partnership based legal framework with global application.
Trust law – unlike partnership protocols – is not noted for simplicity, and is beloved by lawyers – typically paid by the hour rather than the outcome – for that reason. Moreover, the very idea of an entrepreneurial “Trust” is an oxymoron. The creativity and innovation so necessary for climate solutions would be stifled within a “Trust” framework. Finally, the interests of the management and staff of Trusts diverge from those of the “Trustees” – a similar problem to the “Principal/Agency problem” that bedevils all Companies, whether “For Profit” or quasi- Trust “Not for Profit”.
In other words, unlike John Jopling and Peter Barnes, I do not believe the answer lies in global Organisations – like the Red Cross – because such Organisations do not “scale” and invariably become monolithic, hierarchical and “Corporate”, in some cases losing sight of their “mission” or purpose altogether.
We only need to look at the Red Cross Swiss organisation itself for proof of this, although to be fair, it has never lost sight of its mission – unlike (perhaps) the Olympic movement.
The global architecture that I envisage is a networked “partnership of partnerships” or “cooperative of cooperatives”: a partnership based framework agreement within which all the “stakeholders” would “self organise” and new financial instruments and mechanisms would be created to enable – among other things – the “unitisation” of energy and land rental value.
In this context you should note that the idea of a new Organisation as an intermediary which creates tradable permits, quota’s or anything else, runs counter to the disintermediating logic of the Internet.
The necessary global framework for climate solutions is capable of being created organically simply by the linking together of “Local” into Area, of Area into Regional, of Regional into National and National into Global protocols.
So by all means let us found local “Custodian” entities, and agree a protocol within which these would link together with others to a “common purpose” of saving the planet and rseult in what would essentially be the “International Clearing Union” envisaged by Keynes at Bretton Woods upon which “money’s worth” of energy and land rental value – in particular – would be exchanged with credit supported by a mutual guarantee. ”
So how would such entities look like in practical terms?
Chris Cook is collaborating with the Nordic Enterprise Trust in Scotland and has proposed concrete alternatives, such as Community Land Partnerships, or the Energy and Heat Pooling mechanisms.
Here is a more detailed description.
Source: Scottish Parliament. Economy, Energy & Tourism Committee. Energy and Heat Pooling. Submission to Energy Inquiry. By the Nordic Enterprise Trust, August 2008
“What type of future is needed in Scotland in terms of the production, distribution and more efficient use of energy, given the issues of price, security of supply and sustainable development?
The requirement is for energy decentralisation, with energy generated and consumed locally wherever possible. Use of existing National Grid infrastructure should be scaled down and replaced by international connections allowing system and load balancing eg between Scotland and Norway’s complementary renewable resources and the rest of Europe.
How can this future be delivered in Scotland and how will we meet all the various targets and obligations?
Through the use of “Energy Pooling” many sources of energy generation, particularly based on wind and tidal streams, become “self funding” simply by selling production forward to Investors.
The use of “Heat Pooling” allows a significant proportion of the vast amount of heat currently wasted as a by product of energy generation to be collected and delivered to consumers in a simple but elegant way. Similarly, energy savings may be financed by widespread implementation of solar water heating, ground source heating, and where appropriate biomass schemes, all funded from the future energy savings to which they give rise.
What decisions need to be taken, by when and by whom to deliver on Scotland’s energy future?
Both national and local Government should develop policy in respect of the “Pool” concept under the guidance of elected representatives with community participation aimed at identifying optimal outcomes.
Generally
The potential policy outcomes of Pools are compelling, and include:
• Financing at a fraction of the cost of conventional finance, and requiring no Treasury permission.
• A new asset class ideal for long term investment
• A “sustainable” development model, where it is more profitable to develop and operate to high standards of quality
• A policy which requires no legislation to implement
Pooling is an inherently “mutual” and collaborative approach entirely consistent with Scotland’s traditions, culture and values.”
“A Pool is a development and funding mechanism using a UK Limited Liability Partnership as a framework with the following stakeholders:
• Custodian – holds assets in perpetuity on behalf of the Community • Customer – the community of individuals and/or enterprises which use energy produced or benefit from energy savings • Investor – the consortium of individuals and enterprises who invest money and/or money’s worth (eg the value of the site) in a Pool • Developer/Operator – provides development expertise and manages a Pool once the development is complete.
When the development is complete, the Customer either:
• buys renewable energy produced (“MegaWatts”) from a Pool; or
• repays loans out of energy savings (“NegaWatts”) to a Pool.
In an Energy Pool approach, the developer need commit no Capital, and would receive, in exchange for work and services provided, a combination of cash to cover costs, and – in respect of an agreed profit element – a proportional share of the output from the development once complete.”