This document discusses local environmental taxation incentives and subsidies. It proposes a "natural grid" policy approach used in Denmark to decouple economic growth from energy use. This was achieved through investment in renewables, efficiency and decentralization. It also proposes a "financial resilience - open capital" model called "prepay" where individuals prepay taxes and receive credits to pay taxes in the future, providing a return. This approach is applied to an "energy prepay" model where individuals and communities prepay for energy investments through a cooperative structure.

1. Local Environmental Taxation
Incentives and/or Subsidies?
Eco Cities Conference - OF4
Chris Cook
Nantes 27th September 2013

2. “21st
Century problems cannot be solved
with 20th
Century solutions”

3. Introduction - Resilience
Resilience - the enduring power of a body or bodies for
transformation, renewal and recovery through the flux of
interactions and flow of events
Resource Resilience – Natural Grid
Financial Resilience – Open Capital

4. Resource Resilience – Natural Grid
Since 1980 Denmark's GDP rose 78%
Energy use has been stable
Carbon fuel use has declined
How did Denmark achieve this?

5. Resource Resilience - Natural Grid
Least Energy Cost principle
- not 'least Danish Krone cost' (or least $, € or £ cost)
- minimum carbon fuel input for a given output of
electricity, heat or power
- investment in renewables, heat, transport, energy
efficiency

6. Emerging Outcomes of Natural Grid policy
- decentralisation
- skills base of knowledge and knowhow: eg Vestas is
the biggest global wind turbine manufacturer......in a
country of 6m people
- trend to energy security and energy independence
- not forgetting........reduction in carbon use

7. Financial Resilience – Open Capital
Prepay – credit returnable in payment for value
Protocols – Contrats de Société/social agreements

8. Prepay
Tax

9. Tax Prepay
Tax Prepay – credit returnable in payment of taxes
Tax Return – 'stock' part of tally stick returned to Treasury
Rate of Return - rate over time at which stock is returnable
for cancellation
eg Prepay £8 for £10 tax - £2 profit 25% pa rate of return
- not fixed - depends on existence & quantity of flow

10. Capital Partnership
Custodian
(Community)
Custodian
(Community)
InvestorInvestor
UserUser
Prepay
%
ManagerManager
Value

11. Capital Partnership
An agreement or Protocol: not an Organisation
A consensually negotiated framework agreement for
self organisation to an agreed common purpose
Does not own anything; employ anyone; borrow
anything; or contract with anyone
A Co-operative of Co-operatives or Partnership of
Partnerships

12. Energy Partnership
Custodian
(Community)
Custodian
(Community)
InvestorInvestor
ConsumerConsumer
Prepay %
%
ManagerManager
Payment

13. Energy Prepay – the Value Proposition
Community
- sells energy forward and locks in price
- interest-free loan until prepay unit returned vs supply
Consumer
- prepays for energy and locks in price

14. Energy Prepay – the Value Proposition
Investor
- direct 'inflation hedge' investment in energy
- Consumers buy credits from Investors at best price
below physical energy price & return against supply
Manager
- shares in gross revenues or production
- interests aligned with Investor
- no 'Principal/Agency' problem

15. Energy Partnership - Outcomes
Contrat de Société - relationship-based not transaction-
based; costs transformed to revenue/production shares
Neutrality – removes ego and politics
Collaborative - stakeholder interests aligned
Sustainable - shared interest in minimising cost over time

16. Nantes Green Deal – How it Works
Investor pays €1k for Units in Nantes Energy Pool
- 20 x 1 Mwh prepay Units @ €50 each; or perhaps
- 2000 x 10 Kwh prepay Units @ 50c each
Nantes Energy Pool invests at community level through
energy loans eg community CHP/co-generation
Loan repaid via energy bills through buying prepay
energy units at market price in €

17. Nantes Green Deal
Custodian
Nantes Energy Pool
Custodian
Nantes Energy PoolInvestors
Consumers
Manager
€ Energy
Loan
Buy units @
market price
€
Prepay
Prepay
Units
€
€

18. Nantes Green Deal - Outcomes
Cost-effective - interest-free return in energy to investor
out-competes conventional € debt funding
Incentives – consumers must save energy to save €
Subsidies – energy dividend of energy prepay units
replaces € subsidies
Natural Grid - energy independence & resilience

19. 21st
Century problems cannot be solved with 20th
century solutions.........

20. …....21st
century solutions pre-date modern finance