How can Fintech enable the Green Economy?
I was wondering whether Fintech could play a role in making not only the global financial system inclusive, but also the global economy green.
I did a bit of research on the topic and found a few interesting things on “Green Fintech”.
First, there is a UN paper titled Fintech and Sustainable Development, published at the end of last year. It suggests the creation of a ‘challenge’ fund providing design, technical support and funding for Green Fintech projects.
Then, there is the Stockholm Green Digital Finance initiative, launched at the G20 Green Invest symposium, earlier this year. It plans to demonstrate how Green Fintech can facilitate the transition to inclusive and sustainable societies.
But the most interesting ideas are in the realm of Energy Money. There are organisations proposing new money systems, where the money is backed by energy. Electricity, in particular. Generated with renewable energy sources such as solar and wind.
Electricity is sold by utilities in kilowatt-hour, a well defined quantity, which has real value for people everywhere. It cannot be counterfeited and can be divided in smaller units. The problem is that it cannot be stored easily (cheaply), at the moment.
Energy Money projects and implications
New Economics Foundation, a British think-tank, produced a report that reviews many energy money proposals and projects. It is not searching for the perfect energy money model. It is encouraging the testing of different models locally, nationally and internationally.
These are not exactly new ideas, Thomas Edison, the entrepreneur who developed the electric light bulb, and his friend, Henry Ford, the captain of the car industry, apparently proposed something quite similar, a long time ago.
The fact that they were not successful then, does not mean that their ideas were bad. The world was quite different then. There was no climate change threat, there was no Fintech…
Energy (backed) money could also mean the end of debt-based money. The current, rather dysfunctional money system. The one that brought immense economic progress in parts on the world, but let down too many people, and the planet.