Motif Markets | Example sustainability issues

Sustainability Credits can be used to address any sustainability issue which meet the criteria outlined here. This also includes sustainability issues outside the environment space.

As an example, below are some possible issues in which sustainability credits may be a useful mechanism.

Dispatchable Credits

Carbon credits have been very successful at encouraging electricity generation to sources which do not emit CO2. Mainly wind and solar. Also, the costs of generating this power is far lower than that generated by CO2 emitting sources such as coal and gas power stations. However power from wind and solar is not available all the time.

This has led to the unintended consequence where the wind and solar power generators cherry pick the easy power generation revenue. The left over revenue is no longer sufficient to maintain and run the more expensive generators whose costs are higher but can provide power all the time. As a result, when the wind and sun are not available, the power network can fail.

This is a sustainability issue. Our community requires access to power on a continuous basis. What we need is “dispatchable power” which can be provided when the intermittent sources cannot supply sufficient power.

A Sustainability Credits scheme based around “Dispatchable Credits” would be an effective market mechanism that can used to address this sustainability issue. Intermittent power generators would need to buy sufficient dispatchable credits to cover the times they cannot provide power. These credits would be sold by by power generators who can supply dispatchable power and would fund them to remain viable.

The advantage of using credits is that they are technology neutral and will motivate participants in this industry to find innovative ways of addressing this power network sustainability issue.

Fish swap credits

The United Nations estimates that a third of fish populations are overfished and 60% are fished to their biological limit. One way of addressing this sustainability issue is for people to switch consumption to species with more sustainable populations.

Sustainability Credits could assist with this switch. “Fish Swap credits” would need to be bought by companies selling species that can not be sustainably fished while these credits are generated by companies selling species which are sustainably fished.

Re-employment credits

Productivity improvement is the key to improving wealth in a society. Automation is a major source of productivity improvement. However a downside of automation is the loss of jobs in a community.

Large unemployment leads to disadvantage and poverty and increase in crime. We could consider this as a sustainability issue for communities.

When job loss through automation is incremental, then the community can (at a macro level) adjust and employment rates are maintained. However some technological advances could displace a large number of jobs. For example, driverless cars and trucks technology is developing rapidly and may soon make many drivers redundant. Artificial Intelligence technologies is expected to cause even greater job losses.

How does a community handle a large loss of jobs through automations. Some suggest “Universal Basic Income” as a solution. The pros and cons of this are debatable, however what it does do, is move the problem onto the government.

If we consider this as a sustainability issue caused by the companies introducing these automation technologies, maybe it is reasonable for them to take some responsibility for this issue as well. This could be done with Sustainability Credits. The companies introducing the technology causing job losses, will need to buy “Re-employment Credits” to offset those losses. The “Re-employment Credits” are generated by organisations retraining people who have lost their jobs and finding them new jobs.