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ENERGY CITIES' PROPOSALS FOR THE ENERGY TRANSITION OF CITIES AND TOWNS

3.6 Channel spending towards local economies by means of a local currency
Rethink financing solutions

The problem at hand

Globalisation has increased the distance between consumption and production areas in a drastic and sometimes caricatural way, thereby massively increasing energy costs. This not only affects manufactured goods, but also food and everyday products, such as energy and some materials, even where a competitive local source exists. Distribution is being increasingly concentrated in the hands of large retail chains offering a wide range of products. The result is that local economies are often circumvented and are being impoverished as consumers’ spending is channelled to faraway places, including tax havens, at their own expense.
How can we limit or reverse this trend when our consumer goods have to be paid for with the same currency, whether or not they are produced locally? The ideal solution would be to enable what consumers spend to be kept within the local economy whenever a local supply is available.  But how can this be achieved?

Proposal

Create a local currency in addition to the national or European currency. This would encourage consumers to direct more of their spending towards the local economy. And local producers would receive the message that a local market based on short supply chains is again possible.
This would help reduce energy use, keep added value in the local territory, preserve food diversity and guarantee product traceability, leading the way to high-quality, sustainable and personalised trade.

Conditions for success

  • Bring together consumption groups and production & distribution stakeholders to create a first local community which will demonstrate the interest of creating a local currency for the territory.
  • Involve a local authority as a catalyst, promoter and seed financer to give the project credibility and reassure users.
  • Receive the backing of a local bank to build trust.
  • Set up a simple, practical system and aim at critical mass.
  • Support this change in habits through awareness campaigns.


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