Stranded Asset Compensation
A common approach to compensate for the loss of an asset is the asset swap. This proposal suggests a swap of the investment dollars coal miners have sunk into coal mines and not recovered plus the funds required to close the coal mines and reclaim the land. The swap is to give coal mines investment dollars if they invest the money in community-owned renewable energy using inflation-indexed community loans. The export coal-miners can invest in clean green hydrogen from solar power and water to sell on export markets. The local coal-mines and power stations can invest in renewable electricity, and the distribution and storage of local energy.
The funds to pay the coal-miners can be stimulus money created at low-interest rates to move the economy out of the current recession.
To make the proposal electorally acceptable, the compensation funds are invested using community loans to local cooperatives. The Reserve Bank and Treasury determine the investment returns given to the stimulus money investments.
Advantages of Local Community Cooperatives
Local Community Cooperatives owning community energy assets:
- Solve the equity problem of government incentives. Like many incentive schemes, feed-in tariffs favour those in society who can pay for part of the assets to the indirect detriment of those who cannot. Non-distributing cooperatives solve this problem as all members of the cooperative share in the profits from the investments.
- Have the advantage of reducing ownership costs of investments as community members take responsibility for part of the asset base. The community covers the cost of asset ownership instead of individual households having to cover the ownership costs.
- Provide a trusted system to increase coordination benefits such as demand management.
- Provide economies of scale to reduce the cost of installations, billing, maintenance, insurance, and other services.
- Provide scalable, low-cost services to administer and operate energy investments.
- Keep local investment funds in local hands and strengthen local community social capital.
Local community cooperatives enable the construction of a Regulated Commons. The approach can apply to any asset whose output is used by many consumers.
