Starfish Principles At Work
BANK LOCALLY
A true Starfish movement that began less than 12 months ago has gone viral. The bank-locally movement is made up of a decentralized group of activists and concerned citizens. Arianna Huffington catalyzed the movement through her website HuffingtonPost.com.
In 2009 Huffington met with a few friends before Christmas, and their dinner discussion about the big-bank bail outs and what individuals could do to limit the power of the "Too Big to Fail" banks led to the formation of the “Move Your Money” project.
With the support of the widely-read Huffington Post, a persuasive video and the simplicity of the concept, the idea is compelling: that by moving money from the big banks into local community banks and credit unions individuals could create a saner and more stable financial system.
According to MoveYourMoney.info, more than 150 media outlets have covered the movement. These include everything from major news sources like CNN and ABC World News, The Christian Science Monitor, Forbes, Consumer Reports, The Washington Post, AARP The Magazine, The Los Angeles Times, The New York Times, and The Economist, to small-town newspapers.
Major politicians and celebrities are promoting the concept, including Illinois Democratic Congresswoman Jan Schakowsky, comedian Bill Maher, documentary filmmaker Michael Moore and actor Alan Cumming. In his entertaining and convincing video, Maher says:
"Real change is not going to come from Congress, it's not going to come from the White House and it's certainly not going to come from the lobbyists Wall Street hires to make sure their special interests keep beating out the public interest. We've got to do it ourselves, and moving your money is a great way to start."
Large national organizations are also joining the movement. These include the political group Democracy For America, New York Communities for Change, The Responsible Endowments Coalition (which is working to move large college endowment funds to local banks, along with student personal accounts) and several local groups in Portland, Oregon.
According to the Move Your Money website, within the first three months of 2010 an estimated 2 million people switched to local banks, and the trend continues to grow. Furthermore, a JD Power and Associates survey revealed that almost two-thirds of Americans would consider leaving their bank.
One of the advantages of divesting from the largest Wall Street banks is that smaller financial institutions are usually more conservative with their money management and are more closely connected to the people and businesses in their community. This makes it more likely that the loans they issue will get paid back.
It's not just high-profile catalysts like Huffington that are driving the bank local movement. Santa Cruz, California surfer Kyle Thiermann is an example of a concerned citizen who took action to affect change.
After learning about the effects of fractional reserve lending, Thiermann recruited support from eco-conscious sponsors, the Save the Waves Coalition, Gaia University and a grant from the Carter Foundation to travel to Chile with photographer Ryan Craig.
In Constitución, Chile, Thiermann and Craig documented how the natural setting where Thiermann rode the waves was slated to be destroyed by a coal-powered plant funded by Bank of America.
Not only would the great surfing waves of this beach town become polluted, but the people who lived there and depended on fishing would lose their livelihood. Thiermann's short video demonstrates how if you keep your money in the big banks, you are unknowingly supporting such projects all over the world.
This young catalyst started Claim Your Change to show people the consequences of their banking choices, and how they can make an impact for a better world, both on the local and international level, financially and environmentally.
Thiermann's websites, Claim Your Change and KyleThiermann.com offer several resources, including more videos and information on how to get involved, and how to find a local bank. Thiermann's site claims that he has documented over $110 million of lending power that have been moved as a result of his Claim Your Change project.
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Maria Sipka's Column
Ideas Worth Spreading: The Exclusive and Inclusive Ecosystem of TED(x)
TED started in 1984 as a one-off event in Monterey, California where a few hundred selected “very cool elite people” engaged around “Ideas Worth Spreading.” "TED" stands for Technology, Entertainment, Design — three broad subject areas that are, collectively, shaping our future.
Over the next 26 years, some of the world's leading thinkers and doers where invited to share what they were most passionate about. People like Bill Clinton, Nobel laureate Murray Gell-Mann, Wikipedia co-founder Jimmy Wales, and Google co-founders Sergey Brin and Larry Page would speak about science, arts, politics, global issues, architecture, music and more.
Fast track to 2002. In comes Chris Anderson—the catalyst who would open TED up to the world. Chris spent the next three years asking people how they would make TED a better experience. He listened intently and initiated a series of major changes.
The first turning point happened in 2006, when TEDTalks became available online, free for the world to share. By January 2009 they had been viewed 50 million times. In July 2010, with over 700 talks available free online, the viewing figure stood at more than 290 million, attracting a growing global audience.
The second turning point happened in March 2009, when TED added an “x” to its event—a very bold and courageous move that initially sparked fear in the “elite” as potentially diluting or threatening the pure experience of TED as they knew it.
These local, self-organized events are branded TEDx, where x = an independently organized TED event. At a TEDx event, TEDTalks video and live speakers combine to spark deep discussion and connection in a small group. The TED Conference provides general guidance for the TEDx program, but individual TEDx events are self-organized.
And to top it off, in May 2009, TED launched the Open Translation Project in an effort to bring TEDTalks beyond the English-speaking world. Kicking off with 300 translations in 40 languages in just over a year, thanks to the power of crowdsourcing and the passion of TED translators, the numbers have skyrocketed to 10,000 translations in 77 languages.
Catalysts around the globe, who take on the role of organizing these local events hold the key to the continuing success of TED and TEDx globally:
"As we try to build this TEDx community, we are making this as much of a community effort as we can" – Don Levy, TEDx Conejo
"We decided that we would handpick our community based on clear criteria that ensure quality and diversity" – Patrick Newell, TEDx Tokyo
"We ended up having more than 100,000 people who tuned to our live stream from 45 countries around the world, and it generated close to 12 million social media impressions on and around the event."– Ron Gutman, TEDx Silico
At the core of every decentralized organization exists a set of powerful yet simple guidelines, formed by the members. In researching this article, I found a great presentation on slideshare.net revealing 8 ways to create a successful TEDx:
1. Don't do it on your own
2. Try harder on the location
3. It starts with the guest list
4. Help your speakers
5. Focus on local aspects
6. Don't be afraid to ask
7. Use the Power of New Media
8. Have a little fun
What is awe-inspiring about TED is that the community is building a clearinghouse of knowledge and inspiration from the world's most inspired thinkers. In contrast to centralized organization such as BBC, Disney, Fox and MGM – all which have been around for decades at market caps of billions of dollars – the entire TED community shapes the future and prosperity of TED, at a fraction of the cost with a much smarter distribution channel: the people.
At a cost of $4,000, TED was the hottest ticket in the world. You had to either be famous, thoughtful, brilliant, sexy, successful, or connected and rich to get in. As people started to talk about the event more, the rest of the world wanted a taste of TED.
Maria Sipka is the CEO and founder of Linqia – an online marketplace helping companies identify, connect and engage with masses of highly targeted consumers participating in online communities and groups. Follow Maria on twitter or contact her on LinkedIN.
Rod is a TEDizen and has attended seven times. On one occasion, he presented the starfish and spider concept at the TED University.
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Follow-up to AIDS Competence Article
In the last issue of "The Beckstrom Starfish Report" Gaston Smith shared his story about working with AIDS Competence. He has recently reported tremendous growth with this project, and would like to ask newsletter readers for ideas and advice on how his organization can use complementary currencies to remunerate people beyond the basic “Starfish wage”--somewhat like air miles, but in a way that can be used for specific development-oriented purposes only, in order to discourage Spider characteristics.
If you have any suggestions for Gaston, you can contact him at gaston@aidscompetence.org. He would greatly appreciate hearing from you.
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Eco Corner - Rod has been on the Environmental Defense Fund Board since 1994
How Pollution Markets made the air cleaner and reduced acid rain
Rod has been on the Environmental Defense Fund Board of Trustees since 1994. He interviewed Dan Dudek, Chief Economist of the Environmental Defense Fund, who was one of the co-authors of the Kyoto Protocol, and a world leading expert on environmental markets and how to shape them, design them, put them into policies and make them work. As far as we know, this is the first time Dan has granted such an interview, so we are very pleased to share this installment in this edition of "The Beckstrom Starfish Report."
Rod: Let's talk about the mechanism of how pollution markets work with cap and trade solutions. What gets capped, exactly, and what gets traded?
Dan: When most people think about pollution, they think about pollution as something bad; that we ought to pass a law on, or we ought to regulate. We ought to just tell people to stop doing it! And in fact, that’s what most governments around the world do. They pass laws, they say “thou shalt not” and of course, they expect business people to just meekly follow along and obey the law.
Rod: Right. Over twenty years ago, many front covers of Time and Newsweek were talking about acid rain as the end of the forests. What happened? The forests are still here.
Dan: The big thing that happened is that scientists finally, after more than twenty years of research and debate, were able to join with economists to convince the environmentalists to convince the government that yes, indeed, it was possible to solve the acid rain problem and do it using a market that could do it faster and cheaper than traditional methods.
The first President Bush, having made the claim that he wanted to be the environment president, was looking around to see what he could do to make good on that claim. He invited Environmental Defense to make suggestions, and we said, solve the acid rain problem. This is the number one thing on people’s minds. This is the hottest, single environmental issue in the country
Rod: So he called you in for a meeting?
Dan: Absolutely.
Rod: Were you there?
Dan: Yes, this was during the transition team, before he was even inaugurated.
Rod: So who else was at that meeting?
Dan: It was actually Fred, me and Joe Goffman. This was a follow-up of a project we had undertaken, something called Project 88, which was a set of recommendations to whoever might become the new president about initiatives he should take, and one of them that we had listed, along with global warming, of course, was acid rain.
Fortunately, we got a taker on that one; and I say fortunately, because acid rain has been the example that people have looked at in the European Union. We mentioned the Kyoto Protocol, before, Rod. Now this has been the example around the world for how to set up this kind of environmental market. The government sets the limit. Basically what happens is, think of this as a checking account. The government sets this overall limit, but then, sets up a checking account for each one of the pollution sources in the country.
Rod: Let me see if I understand. So sulfur dioxide emissions were increasing, from burning coal, and also from gasoline and other things, right? Emissions were increasing a lot, and the levels of both sulfur dioxide and sulfuric oxide were getting too high in rain.
Dan: Right.
Rod: So these emissions were killing the forests and scientists said they had to be cut by 50%.
Dan: Right.
Rod: So the government decided to reduce the amount of sulfur dioxide produced by industry to half of the current rate; and then allocated that to each company in a pro rata fashion.
Dan: Right.
Rod: And then industrial polluters either had to achieve those reductions themselves, or get them elsewhere. How else could they reach their targets?
Dan: They could buy them on the marketplace, and that’s why I used the checkbook analogy. The interesting thing about this program was that compliance was simply measured as having a positive balance in your checkbook. In other words, all you needed to do was to have enough allowances to cover your emissions.
Rod: So what happens if you’re in the red?
Dan: This is the interesting thing, and this is also an innovation in the program. For the first time, we had really serious financial consequences for non-compliance. The penalty began with $2,000 a ton.
The first market price in the early years of the program in 1995 was about $60 a ton. So let’s see now, if I’m thinking about whether I’m going to obey the law, or pay the fine, and the fine is two thousand and I can buy them legally for sixty, what am I going to do? Total no brainer, and the fine has increased each year with the rate of inflation. So it’s now north of $3,000 a ton. Market prices are in $600 a ton range or so now, so we still have a huge incentive for people to comply.
Compliance rates have been nearly perfect. There have been a few examples of some problems at individual plants, largely concerning disputes over regulations and what was required of those plants, nothing really relating to the acid rain program itself. The EPA has called this the single most successful environmental program in the history of the United States, as measured by total number of reductions, how much it has cost, or by how little it has cost actually, and by how few people it has taken to run the program, because it’s mostly self-operated.
Rod: When was the Clean Air Act passed?
Dan: The Amendments were passed in 1990.
Rod: So the 1990 amendments prescribed 50% cuts by 1996?
Dan: There were actually two steps. The first round of cuts was required by 1995. That was roughly a 25% cut. The second set of cuts kicked in in the year 2000—another 25%. Those were being held at that level. People were actually given a 30-year allocation so that you could trade back and forth through time. We find people trading streams of these in ten, fifteen, twenty year ranges.
Rod: Yes, but didn’t the government just lower the levels against them again?
Dan: Yes, they did. There’s a new set of regulations called the Clean Air Interstate Rule, which will knock these down from a level of roughly 8.9 million tons from cobalt power generators down to about 2 million tons.
Rod: Wow.
Dan: So the program’s not only proved very successful, we’ve also had lots of innovation and development of technology. The science for assessing damages associated with these pollutants has intensified. We still need to make additional cuts to protect the environment and human health.
Rod: It’s an amazing story. So you and Fred and Joe had a brainstorming session with the president, and the president asked you to come up with something. So you then went to work on drafting this policy document?
Dan: Yes. Before I joined Environmental Defense, I had been a professor teaching the theory of environmental economics at the University of Amherst in Massachusetts, and this is an idea that had been kicking around in the economic literature for some time. Why don’t we set up a market? Why don’t we do this? But no one had actually ever done that before, or figured out how to do it mechanically, or found, quite frankly, a government that was interested in doing that.
So here we had this fabulous opportunity, in terms of laboratory, and our challenge, given to us by the White House, was that we basically had six months to write out a program. Because it was in June of '89 that the president wanted to announce his recommendations amending the Clean Air Act to the nation. So within that period, we had to work with industry, the Environmental Protection Agency, and other environmentalists, and figure out the details and the mechanics of the whole thing.
Rod: My recollection is that in those earlier days there were actually quite a few environmental groups that were concerned about environmental markets and giving corporations the right to pollute at any level. Was that part of the history?
Dan: It was more than part of the history; it was part of the bruising day-to-day battle of making this happen. I think many people, not just environmentalists, still think that the search for profit, this drive to reduce cost, this competition that we find in our market-driven society, is really the cause of pollution. It makes people fail to think about their responsibilities in terms of managing emissions or their responsibilities to future generations or their neighbors, depending on the type of pollutants, and their impacts.
We took that conventional wisdom and stood it on its head and said, “No, we think the problem here is that it’s a market failure. It’s the failure of markets to price these abominable effects to bring them into the business calculus -- that’s the problem.” If we can get the right kind of government action, businesses would think in these terms. They’d make self-interested decisions. They would control emissions and we’ve have the kind of outcome we’ve seen with acid rain.
Rod: Right. So in Economics 102 or 103, we were talking about internalizing the externalities.
Dan: Absolutely. Yes.
Rod: Back to your teaching days, right?
Dan: Indeed.
In future editions of "The Beckstrom Starfish Report" we'll share Dan’s story of how the Kyoto Protocol was set up, and why Dan holds hope that we can turn global warming around.
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Share Your Starfish Story
From a Group of Spiders to a Pack of Starfish
Croatian scholar and researcher Mak Dukan is inspired by “The Starfish and the Spider,” as he made clear in a recently published article by a German green political foundation. The Croation Energy Strategy (CES) is building a spider-like, centralized energy system where generation takes place at just a few locations, leaving the nation vulnerable to reliance on a few plants and energy disruptions. Instead, Dukan said, the energy strategy should be based on a decentralized, starfish approach. He thinks the Croation government should encourage homes and businesses to generate renewable energy. The following interview with Mak expands on the ideas he presented in his article "From a Group of Spiders, to a Pack of Starfish" about how decentralized energy production is a better solution than the current misguided Croatian energy strategy.
BSR: Your article mentions that households are the largest individual energy consumers in Croatia, and suggests that the government could provide greater financial and legal motivations for homeowners to install solar energy systems. Do you think the government should subsidize, at least in part, these installations?
Dukan: Solar energy and especially solar thermal devices, used mainly for water heating, are largely underutilized in Croatian households. Currently, the government is subsidizing these installations through feed in tariffs. However, this is only on paper since there are no solar energy investments taking place. Thus, the paid subsidies for solar energy are in fact minimal.
If the government is providing subsidies for these installations, the question is why aren't the Croatian people investing in solar energy? I believe the answer is in the huge bureaucratic hurdle one has to go through in order to install a solar energy device. This includes collecting numerous permits and delaying your investment for a long time period.
Also there would be more installations if the government popularized investments in solar energy, primarily through giving them a larger emphasis in strategic policy documents like the CES. Hence, I believe the government should above all create a more favorable investment climate by simplifying the bureaucratic process involved and revise the CES.
Imagine a farmer selling his waste maize to a biogas plant, which in turn sells the biogas to local users who generate electricity and heat through Combined Heat & Power (CHP) devices and sell the surplus to the community. This increase in economic activity would mean an increase in GDP per capita, as a measure of wealth. This includes higher earnings for the government since at every additional economic transaction it would collect taxes. Apart from this, profits would be generated on a regional level creating room for new projects organized by local communities. This would be a pure win-win situation.
BSR: Do you have any ideas on how to start a grassroots starfish movement throughout local communities in Croatia, dedicated to focusing on and utilizing decentralized renewable energy sources?
Dukan: It's been primarily governments that have catalyzed most movements towards decentralized energy production, usually as a response to a preceding energy crisis. For example, the Danish and German governments, after the sudden rise in oil prices in the 70's, initiated a move towards decentralized energy through committed policymaking. These countries realized that producing energy domestically and lowering reliance on imported fossil fuels brings energy independence, which is in my view one of the main elements of being a free nation.
I connect having your own energy to being free because with reliance on imported fossil fuels one can be restricted to a candle and wood fire if OPEC or Russia decides to stop exporting fossil fuels or raise prices to an unaffordable level.
Denmark and Germany have been developing decentralized energy systems for 30 years and still have not finished their transformation, although they have strong policy goals. For instance, Germany recorded that in 2009 renewable sources produced 16% of total electricity consumption.
Although having sound policy does not mean an instant transformation towards decentralized energy, one has to bear in mind that when Germany and Denmark started their energy transformation, renewable energy was much more expensive and the technology was not developed. Now, renewables are among the fastest growing industries in the world, which is resulting in economies of scale and technology development.
If the Croatian government initiated a move towards renewable energy, we could be much quicker in achieving what Germany has been doing for three decades. Primarily, this should start by outlining sound policy, providing subsidies and tax breaks for clean energy, cutting the bureaucracy and educating people about advantages of clean energy.
Apart from the top-down approach, what is needed are individual projects started at the grassroots level which would demonstrate that decentralized energy is economically feasible and socially acceptable. This could include taking advantage of tons of waste with a huge energy potential, capturing waste heat from energy intensive industrial processes or producing electricity and heat from CHP, using solar energy that is abundant at the sunny Croatian coasts or generating wind energy.
Most important, it is proven that these projects are economically feasible and end up generating revenues for the owner. If stakeholders at regional levels realized they could make money by producing clean energy, it would create an incentive for them to invest, which could convince the government to steer the energy policy into that direction as well. The Croatian move from a group of spiders to a pack of starfish must come from both the top and the bottom.
Read Mak's article published by The Heinrich Boll Stiftung.
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