In yesterday’s trading the British pound fell three fifths of a cent against the Yankee dollar to 1.75 and dropped a fifth of a penny against the euro to 1.43. The media paraded the usual suspects to explain this...expectations of a narrowing of interest rates relative to the eurozone, unexpected evidence (as if any more was needed) of the continuing collapse of Britain’s manufacturing sector and so on...and then started edging into apocalyptic mode.

More interesting than the wobbling of the pound was this reaction of the media. The herd were clearly spooked and began to write in terms of the pound tumbling, 2-year lows and the resurgent industrial sector in the eurozone. The gloss is starting to flake off Brown’s New Britain as reality breaks through. The sooner JAK deposits the 75 000 Swedish kronor promised for my account this month the better. If the arithmetic works a third of it will be speculated on the collapse of the British pound against the Swedish krona before the herd twigs and destroys my profit.

In The Ecology of Money Richard Douthwaite argues that ‘an international currency should be based on the global resource whose use it is highly desirable to minimize’. Actually he doesn’t argue this but merely states it. So this is a premise. Bear that in mind. Douthwaite then picks up the old Limits to Growth argument from 30 years ago. Economic growth needs piped energy, piped energy and economic growth produce pollution and pollution brings economic growth to a shuddering halt. The structure of Jay Forrester’s System Dynamics model for his World Dynamics modelling ensured that collapses were suitably dramatic…good visual effects. With me so far?

This is where Global Warming enters the argument. But first a cautionary note. Please remember that nearly everything in today’s weblog is either an assumption based on pretty dodgy science or a computer projection based on pretty dodgy parameters and incomplete theories. Global Warming is not caused by all piped energy but by bad piped energy...let’s call it BPE. Gross National Product is an arithmetical sum of goods and bads...and hence pretty meaningless...so goodness knows how the economists will cope with these BPEs. But that is their worry and not ours.

Enter the Global Commons Institute and their Contraction & Convergence agenda. We The World can stop Global Warming dead in its tracks, they claim, by reducing global carbon dioxide emissions. Think ration books in the Hitler War and coupons for Carbon Dioxide Emissions. Hey presto! You’ve got yourself a scarce resource. And a scarce resource is just what is needed for an international currency. Hold on to your hats. We are nearing the currency link.

In New York seven years ago a book was published entitled Kingpins of Carbon: How Fossil Fuel Producers Contribute to Global Warming. It included the interesting fact that 80% of the fossil carbon that ends up as man-made carbon dioxide in the earth’s atmosphere comes from only 122 producers of carbon-based fuels. So the idea is that someone somewhere guesstimates how much Carbon Dioxide can be emptied into the atmosphere each year and expresses these annual emissions as Ration Book Coupons. This is what then happens to these coupons.

The Competent Receivers of these Carbon Emission Coupons sell them to the Gang of 122 who receive them in addition to cash from big users such as the electricity companies and the oil and coal merchants. This forces the wicked polluters to pay an arm and a leg for all the foul fumes they spew out into the atmosphere. This leads to shareholder profits plummeting and so they pull their money out and invest in profitable new carbon-free technologies like the 600-year old Windmill Business and the 60-year old Nuclear Fission Steam Kettle Industry.

So far so good. But you got there before me. Who? Whom? Who hands out these coupons to whom? The current ideas doing the rounds talk about half of them going to ordinary people as Domestic Tradable Quotas (DTQs) so we can pay our energy bills with them instead of paying in cash. Someone has already designed the credit cards. The other half get auctioned off like the 3G licences for mobile phone companies. Economists from the University of Chicago have proved that auctions are an efficient way to allocate scarce resources. So that’s alright then.

You were there before me again. Who decides? And what happens to the money? The Global Commons Institute has worked out how to put the International Monetary Fund in charge. The IMF would assign Special Emission Rights (SERs) to national governments every month, issue the energy backed currency units (ebcus) and fix their value relative to the SERs. Then The Great and The Good would spend the money on noble causes like renewable energy development and energy conservation. If your mind is wandering in the direction of Lottery and Arts funding and sees Her Majesty’s Treasury at every turn you may feel a little sceptical about the whole scheme.

But why not think instead of Parish Councils with real teeth run by Pillars of Local Communities. Or a devolved version of the National Trust with hundreds or thousands of Local Community Trusts holding Brussels Milk and Fish Quotas, buying up local farmland when it comes on the market and administering the local libraries and community halls left to local people in the estates of local benefactors? Governments need us. We really don’t need them at all.