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The Seventh Pillar of a Bioregional Economy: Currency Diversity to Restore the Chesapeake Bay

The fifth in a series on the Pillars of A New Bioregional Economy to restore ecosystem health of the Rappahannock River and the Chesapeake Bay…

In August of this year, we ran a commentary titled A New Currency for An Ecological Age and noted that valuation of the ecosystem services we believe are needed to restore keystone environmental assets such as the Chesapeake Bay may somehow need a boost beyond what our national currency can provide, and asked this question:

What if, however, we were to find another currency, a bioregional currency, not to replace the one we have, but to simply add to it, to help reduce environmental externalities?

We then noted that the man in the image may have part of the answer. More on him and his ideas in a moment.

It is my understanding that in the 1930s, Dr. Joseph Juran recognized a universal principle he called “the vital few and trivial many” – the idea that 20% of something always is responsible for 80% of the results. Professionally, Juran focused on Quality Management, and unlike an earlier Italian colleague, Vilfredo Pareto, who focused on wealth, Juran was more interested in reduction of defects. Considering Pareto’s earlier work, Juran noted that 20% of defects were responsible for 80% of problems. Juran’s and Pareto’s work eventually came to be known as The Pareto Principle—the management theory that says that to be successful, one must focus on the 20% of things that really matter.

As a former environmental planner, I am going to go out on a limb here and state my belief that if human civilization were to focus on one thing to restore ecosystems here in the U.S., and probably worldwide, it would be to increase effective forest cover (this just means land cover that mimics a forested landscape, which could theoretically include agricultural uses practiced in an ecologially-friendly manner). I am further going to estimate that at least here in the U.S. many of our aquatic ecosystems began to decline about the time effective forest cover began dipping below 80%. Around here, in the Rappahannock River watershed, I understand that forest cover, as a rough approximation, is around 60% of the watershed. Interestingly, according to NOAA’s Chesapeake Bay Program Office, the forested land cover in the entire multi-state drainage area is 58%. Putting all this together, if our land cover goal to provide a resilient or healthy Chesapeake Bay ecosystem is around 80%, and the Bay watershed as a whole is 20% below that, it is this 20%, therefore, that is causing 80% of the problems we are now experiencing with the Bay.

So, the good news is that at this very moment, we have 75% of the land cover in the Bay drainage basin we need for full ecosystem function. The bad news is that according to land cover records, the last time we had 80% forest cover was around 1800, and we are continuing to lose approximately 100 acres per day, in spite of the many billions of dollars we have spent on Bay clean-up in the last couple of decades. And if all that isn’t enough bad news, to address the 20%—we’d have to spend 80% of our collective effort—just on trees, at a time of staggering shortfalls in local, state, and federal government budgets. Now, at this point, I don’t know what “80% of our collective effort” means but I suspect that at the very least it means an unprecedented effort larger than command and control government can possibly achieve. To put it another way, for this one, we’re going to need government and commerce together in the boat paddling in the same direction.

Somehow, to really chip away at this 20% forested land cover deficit, through some type of economic mechanism, we will have to find new dollars through new demand for Bay-friendly products and services that will result in annual payments to landowners to plant trees. This is the point where Pillar 7 enters the picture—Bioregional Currency Diversity.

I propose that we need this because Bay-friendly products and services sold through a bioregional marketplace will tend to cost more than those that are now sold that are Bay-harmful. In addition, there are other markets, such as ecosystem services, for which we need to create additional demand, which simply means new dollars to be able to flow to landowners as annual payments. To maintain a region’s competitiveness while moving toward restoration will require the subsidization of these additional and more expensive products and services. Perhaps additional currencies operating within a bioregion, augmenting, not replacing, our national currency and presently available credit mechanisms, could turn a bioregional marketplace from a niche initiative (appealing only to a minority of green consumers or “cultural creatives“) into a mainstream program that regular folks use because it isn’t any more expensive (or less expensive) and does so much good on a local and regional basis for nature and people.

So, to make all this work, there needs to be robust commercial demand created or redirected for products and services that restore ecosystem health. The types of currency diversity that might be considered include the following:

1. Time Dollars

The guy in the image above is Edgar Cahn. He is the founder of TimeBanks USA, a nonprofit that promotes “Time Dollars”, local currency for community building, and a Distinguished Professor at the University of the District of Columbia School of Law. He is the author of “No More Throw-Away People” and “Priceless Money.” A time bank works like this – for every hour you spend doing something for someone in your community, you earn one Time Dollar. Then you have a Time Dollar to spend on having someone do something for you. It’s that simple. A guy in New York City recently started a time bank.

Then there is IthacaHours. They’ve been around for years. Their system operates like any on-line classifieds, and includes an amazing diversity of services, including car repair, accounting, carpentry, gardening, music therapy, health care, etc. How does this relate to a bioregional marketplace designed to restore keystone environmental assets?

A system like this provides a way for people to provide services in support of their values that are not monetized (or not monetized well) in the national economy. If a region really valued their River and Bay, they could use this system to “pay” adults and teens through “time currency” to perform all kinds of conservation related services that otherwise are unaffordable (and particularly in this economy), thus creating new demand for restoration.

2. Regional Currency

A second option to help create new demand could include a new regional river basin currency. The Berkshires region of New England has a successful program called BerkShares, a local currency to facilitate consumers supporting local merchants. Since 2006, over 2 million BerkShares have gone into circulation, with the support of banks in the area.

How could this help restore environmental assets? Say a bioregion created a “watershed dollar”. The exchange value of that dollar could be slightly more than the value of the U.S. dollar. This differential value could come from at least two sources—the retailers, that agreed to provide a discount on Bay-friendly products and services, in return for greater volume of sales, and the bank, that got more deposits, and positive marketing for supporting ecosystem restoration.

A related “Open Currency”system, noted by Thomas Greco, and created by Michael Linton, called Community Way, provides another option. He describes the basic plan in these videos: Part 1 and Part 2

As we contemplate the challenges and opportunities involved in implementing these kinds of programs, it is perhaps a good idea to strive for practicality and simplicity and avoid ideologies. For instance, it is clear that there is a growing interest in “buy local” campaigns, and concerns about the plight of local business, and indeed this is a valid concern. However, local products are now sold by chain stores, and local retailers sell overseas products. As a former retailer, and staff to the Thomas Jefferson Sustainability Council a decade ago, my view was and continues to be that diversity, in nature, and in the human economy, is a good thing.

- Michael Collins


One Response to “The Seventh Pillar of a Bioregional Economy: Currency Diversity to Restore the Chesapeake Bay”

  1. Wilford M. S. Says:

    Currency makes us think of control and exploitation. It assumes a level of control to police the currency. We always think of just one currency being allowed. I have printed my own currency based on the principal of equal exchange of time. I trade my time for your time. My idea is that any who wants to can issue any kind of currency they want to. That way true community is built on real relationships.

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