kWh as a medium of exchange

One of Buckminster Fuller's ideas was to use kilowatt-hours (kWh) of electricity as a medium of exchange. One advantage of kWh is that electricity is already measured. There are meters on buildings where electricity is used. The electricity that is generated should equal the amount that is used because, unless there is some kind of storage, electricity has to be used at the same moment that it is generated.

If it is true that more than 200 kWh of electricity are used to mine, or create, a single Bitcoin (1,375 kWh per hour of processing/6 Bitcoins per hour is about 229 kWh per Bitcoin), then it would appear that Bitcoins are impractical as a medium of exchange. What is the value of anything?

The Citizens' Climate Lobby has a proposal for a carbon fee and dividend. The amount of the fee is based on the cost of carbon dioxide emissions. The quantity of the carbon dioxide emissions is based on the amounts of coal, oil, and natural gas that are extracted from the crust of the planet, "at the point where they first enter the economy ... The fee on that date shall be $15 per ton of CO2 equivalent emissions ... potential in each type of fuel or greenhouse gas." The fee would be paid at that point by the companies that mine the coal, pump the oil, and drill for the natural gas. So, that cost would be built into the price of every good and service that is fueled by those fossil deposits.

The cost of emitting more greenhouse gases needs to include non-monetary measures such as: the loss of life and property during increasingly extreme weather events, rising sea levels, air pollution and lung disease, loss of crops and fertility of the soil, people displaced from their homes, extinction of species, and so on.  

The cost of emitting more greenhouse gases is complex and difficult to quantify.  Something that is difficult is a challenge, and a challenge can be enjoyable. 

The challenge of quantifying the full environmental and social costs for all forms of generating electricity is only part of the puzzle.  To make it more meaningful, we could use kWh as a medium of exchange. 

Global production of electricity is approaching 25,000 TWh per year.  Divided by 7.5 billion people, this amounts to about 3,333.3 kWh per person on planet Earth.  We could initiate the conversion to kWh as a medium of exchange by depositing into the account of each person in the world an amount of 3,333.3 kWh. Currency that people have in bank accounts could be converted at an exchange rate of one kWh for each $0.10 USD.  

What could we buy with the kWh in our accounts?  As a medium of exchange, anything. A loaf of bread might be priced at 20 kWh from someone's account.  

The price might be two kWh to purchase one kWh of electricity if it was generated by burning coal because of the cost of its carbon emissions.  Someone in a remote village who paid 500 kWh from their account for a 50 watt solar panel, enough perhaps to power a couple of LED lights and to charge the battery of an Internet phone, might generate 200 watt hours per day, which would be 73 kWh per year, and as much as 1,460 kWh over a 20 year lifetime of the panel; not bad for a 500 kWh investment.  

So, each kWh would have two values; the intrinsic value of the work it can perform in powering lights, computers, tools, vehicles, and so on, plus its value as a medium of exchange.  The task of accounting for kWh that are exchanged would be no more difficult than the task of accounting for currency and Bitcoins.  It could probably be done with free, open source accounting software.

What would be unpleasant would be exchanging kWh for derivatives.  Derivatives are so abstract as a form of investment that it might be best not to even try to convert them.  

The following is not abstract.  Two six watt LED lights (each equivalent to 60 watt incandescent) with fixtures that have clamps so the lights can be clamped to many different surfaces for a price of 100 kWh apiece.  Two 30 watt hour battteries that have connectors so they can be used to power other items in addition to the lights for a price of 100 kWh apiece.  One Internet phone that is equipped with a co-processor designed for running machine learning software, and works with around 5 watts of electrical current, and has a battery that is capable of providing at least 5 hours of use per day for a price of 1,000 kWh.  A free-standing 100 watt hour battery for a price of 300 kWh.  An open source, wireless Internet router with a software defined radio that can operate at frequencies from 1 MHz to 60 GHz for a price of 500 kWh.  

The price of all of that would total 2,700 kWh, including the 50 watt solar panel.  For those who are still thinking in monetary terms, that would be about $270 USD per household.  With virtually every person alive today thus enfranchised as a citizen of planet Earth, the World Congress as a gathering of all citizens could begin.  

John Kintree
November 21, 2017