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Reforming the banking system for good



Most people are well aware of the crisis that continues to engulf the banking and financial systems, but how many know about what caused it?

To many, the financial crisis that first reared its head in 2007 came as a shock. Suddenly, and apparently out of nowhere, the global monetary system was in recession. But those who knew about economics saw it coming.

In 2006, I stumbled across a book called The Grip of Death, by Michael Rowbotham”, says Ben Dyson, the founder of Positive Money, a not-for-profit organisation that, according to its website, is set out to “raise awareness of the deep flaws in our current monetary system”.

I thought that the way the banking system was structured would probably mean that it would collapse sooner or later.

Then in 2007, it happened and I just watched the whole thing playing out, thinking that this is all due to the fact that banks are able to create money.”

The notion of creating money might sound a bit far-fetched. Far from it. It’s an entirely realistic activity, and one that happens in every bank around the world. And it’s this activity that paved the way for the financial crisis over the past five years, as an “artificial boom” was created in the eight years leading up to 2007, during which the money supply doubled.

For those that thought money trees only appeared in hallucinations, think again.

The stuff that most of us think of as money – the cash that you use in shops – only makes up 3% of all the money that exists”, explains Dyson.

The vast majority of it – the other 97% – is electronic money, which is what you see in your account when you check your balance at an ATM.

A lot of people think that this electronic money must be a representation of some pile of cash that’s sat in the bank, but the reality is that it’s actually just an accounting entry, so it’s literally just a number in a computer system.”

And it’s as simple as that. The banks are able to create these numbers by making loans, but this comes at quite a cost. The more the banks lend, the more profit they get, and the more money that begins to swish around in the economy.

The creation of new money allows the banks to decide where most of it enters the economy, too, with the majority looking at the short-term, and investing in such unsustainable industries as oil, commodity speculation and trading in the financial markets.

Renewable energy, cleantech, water and sustainable agriculture – the areas that really need investment – are therefore overlooked.

Positive Money is out to highlight the ways the banking system can become “stable, sustainable and fair”.

It was set up in 2010 by Dyson, who after completing two years of a development economics course at the University of London’s School of Oriental and African Studies, Dyson became disillusioned with the course.

I realised that it wasn’t really related to the real world”, he explains.

It was mostly theories that had never really been tested in reality, and so I got a bit frustrated with that.

I started writing about these issues in 2009 because none of the journalists were doing in the response to the crisis, and then eventually we got a bit of funding to try and turn it into a proper organisation.

Since then, we’ve just been building it up, making more contacts and bringing it to wider attention.”

Whilst Positive Money’s message might have been conveniently shrugged off by most in the banking system, Dyson says that there are a lot of people in The City interested in its work.

So what is he suggesting should happen to reform the sector?

In simple terms, we need to take that power to create money away from the banks, and bring it back to the state”, he says.

You wouldn’t necessarily want to give that power to politicians because they’d probably abuse it in the same way that the banks have done.

“You’d need to give it to some democratic, accountable, transparent body, where we can actually see how much money is being created and where that money is going, and how it’s getting used.

You would need the government to pass a law to do that and to make a few small changes for banks as to the way they operate.”

Under this new, more sustainable banking model, Dyson says that upon walking into a bank to deposit some money, a customer would be faced with two choices: to allow or prohibit the bank from taking risks with their money.

As it is, banks are provided with a “safety net” from government, which means that if they lose money or go bust, taxpayers’ funds will be used to reimburse customers.

We’d like to see the removal of that safety net for the banks”, states Dyson.

The bank should say to people that if they want their money to be invested in high-risk areas – commodity speculation, foreign exchange and so on – there’s a risk that they might lose a significant part of their investment.

If they want to invest in lower-risk, safer areas however, then their potential risk is much, much lower, and the banks can guarantee that customers won’t lose more than a small percentage of their investment, even if things go really bad.”

In this system, banks would need to find people that are willing to take risks. Instead, money would be invested what Dyson calls the “real economy” and in “real business”.

Only then would Positive Money’s vision of a “stable, sustainable and fair” economy be realised.

Further reading:

The Guide to Sustainable Investment

What is a bank?

RBS under fire for fossil fuel lending

Sustainable banks outperforming mainstream counterparts


How Going Green Can Save A Company Money



going green can save company money
Shutterstock Licensed Photot - By GOLFX

What is going green?

Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.

The first step in going green

There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.

Making needed changes within the company

After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.

Reducing the common paper waste

paper waste

Shutterstock Licensed Photo – By Yury Zap

Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.

Make money by spreading the word

Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.

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5 Easy Things You Can Do to Make Your Home More Sustainable




sustainable homes
Shutterstock Licensed Photot - By Diyana Dimitrova

Increasing your home’s energy efficiency is one of the smartest moves you can make as a homeowner. It will lower your bills, increase the resale value of your property, and help minimize our planet’s fast-approaching climate crisis. While major home retrofits can seem daunting, there are plenty of quick and cost-effective ways to start reducing your carbon footprint today. Here are five easy projects to make your home more sustainable.

1. Weather stripping

If you’re looking to make your home more energy efficient, an energy audit is a highly recommended first step. This will reveal where your home is lacking in regards to sustainability suggests the best plan of attack.

Some form of weather stripping is nearly always advised because it is so easy and inexpensive yet can yield such transformative results. The audit will provide information about air leaks which you can couple with your own knowledge of your home’s ventilation needs to develop a strategic plan.

Make sure you choose the appropriate type of weather stripping for each location in your home. Areas that receive a lot of wear and tear, like popular doorways, are best served by slightly more expensive vinyl or metal options. Immobile cracks or infrequently opened windows can be treated with inexpensive foams or caulking. Depending on the age and quality of your home, the resulting energy savings can be as much as 20 percent.

2. Programmable thermostats

Programmable thermostats

Shutterstock Licensed Photo – By Olivier Le Moal

Programmable thermostats have tremendous potential to save money and minimize unnecessary energy usage. About 45 percent of a home’s energy is earmarked for heating and cooling needs with a large fraction of that wasted on unoccupied spaces. Programmable thermostats can automatically lower the heat overnight or shut off the air conditioning when you go to work.

Every degree Fahrenheit you lower the thermostat equates to 1 percent less energy use, which amounts to considerable savings over the course of a year. When used correctly, programmable thermostats reduce heating and cooling bills by 10 to 30 percent. Of course, the same result can be achieved by manually adjusting your thermostats to coincide with your activities, just make sure you remember to do it!

3. Low-flow water hardware

With the current focus on carbon emissions and climate change, we typically equate environmental stability to lower energy use, but fresh water shortage is an equal threat. Installing low-flow hardware for toilets and showers, particularly in drought prone areas, is an inexpensive and easy way to cut water consumption by 50 percent and save as much as $145 per year.

Older toilets use up to 6 gallons of water per flush, the equivalent of an astounding 20.1 gallons per person each day. This makes them the biggest consumer of indoor water. New low-flow toilets are standardized at 1.6 gallons per flush and can save more than 20,000 gallons a year in a 4-member household.

Similarly, low-flow shower heads can decrease water consumption by 40 percent or more while also lowering water heating bills and reducing CO2 emissions. Unlike early versions, new low-flow models are equipped with excellent pressure technology so your shower will be no less satisfying.

4. Energy efficient light bulbs

An average household dedicates about 5 percent of its energy use to lighting, but this value is dropping thanks to new lighting technology. Incandescent bulbs are quickly becoming a thing of the past. These inefficient light sources give off 90 percent of their energy as heat which is not only impractical from a lighting standpoint, but also raises energy bills even further during hot weather.

New LED and compact fluorescent options are far more efficient and longer lasting. Though the upfront costs are higher, the long term environmental and financial benefits are well worth it. Energy efficient light bulbs use as much as 80 percent less energy than traditional incandescent and last 3 to 25 times longer producing savings of about $6 per year per bulb.

5. Installing solar panels

Adding solar panels may not be the easiest, or least expensive, sustainability upgrade for your home, but it will certainly have the greatest impact on both your energy bills and your environmental footprint. Installing solar panels can run about $15,000 – $20,000 upfront, though a number of government incentives are bringing these numbers down. Alternatively, panels can also be leased for a much lower initial investment.

Once operational, a solar system saves about $600 per year over the course of its 25 to 30-year lifespan, and this figure will grow as energy prices rise. Solar installations require little to no maintenance and increase the value of your home.

From an environmental standpoint, the average five-kilowatt residential system can reduce household CO2 emissions by 15,000 pounds every year. Using your solar system to power an electric vehicle is the ultimate sustainable solution serving to reduce total CO2 emissions by as much as 70%!

These days, being environmentally responsible is the hallmark of a good global citizen and it need not require major sacrifices in regards to your lifestyle or your wallet. In fact, increasing your home’s sustainability is apt to make your residence more livable and save you money in the long run. The five projects listed here are just a few of the easy ways to reduce both your environmental footprint and your energy bills. So, give one or more of them a try; with a small budget and a little know-how, there is no reason you can’t start today.

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