The Community Energy Cooperative Trim-tab:
Something small we could do as a community that could pull us towards sustainability.
By Justin Good
Delivered to the Earth Charter Annual Meeting
East Haddam, May 13, 2007
Introduction
This paper is offered in gratitude to the generous spirit of openness shown by my new friends at the Earth Charter in East Haddam who reached out to us in Chester with the hope of some future collaborative working together. I wish to reciprocate this reaching out by sharing with you an idea, what I find to be a very innovative, radical, practical, viral, very realizable, and in fact very beautiful idea. Explaining why this idea is so beautiful, so ripe for implementation will require that I explain how it solves a number of deep structural problems with our economic systems, and this will allow me to talk about that I think are the key dimensions of sustainable, or ecological, economics, and the key flaws with the status quo. And that will allow me to knit together a number of themes in environmental philosophy. We need not assume that this idea is the solution to our economic woes in order to take it seriously. But discussing a possible solution to a problem is oftentimes a good way to understand what the problem in fact is, and vice versa. My hope for our meeting today is just to lay the seed for a catalytic agreement amongst us all here: that is, an agreement that can serve as a basis for further, deeper agreements, and ultimately collective action.
The idea I wish to share with you is what we’ll call a community energy cooperative trim-tab. Now I need to confess right now that I am not an expert on cooperatives, I’ve never created one or been anything other than a member of a grocery store food cooperative. This idea is not my own, but is something that has been tried before in various forms, and is currently undergoing a resurgence of attention, especially in Europe. And as I’ll go into in the conclusion to my talk, there are some brilliant people, in particular, Lynn Benander’s
Co-op Power right here in New England, that have worked out the legal architecture for this concept and are using it to build a biodiesel refining plant in Massachusetts right now. What I want to share is how my own adventures in trying to understand the economics of sustainability have repeatedly returned me to this idea, to the need for this kind of cooperative venture. And each time I rediscover the idea, it seems more radical, more necessary, more realistic, more like a genuine trim-tab.
And what is a ‘trim-tab’? A trim-tab is a miniature rudder on the edge of the main steering rudder on large ships or the wing flaps on airplanes. Due to profound water pressure on the rudder of a large ship, enormous force is required to exert enough pressure on the rudder in order to redirect the vessel. What a trim-tab does is to create a tiny vacuum, which literally sucks the rudder in the desired direction. Created with minimum effort, the small vacuum self-regenerates itself to build up larger vacuums which easily shift the hulking volume of ship into a new trajectory. Hence, a trim-tab is an example of something which is tiny that can have enormous changes in the direction and behavi or of complex systems. The idea of a trim-tab is also a central design principle in the sustainability research of Buckminster Fuller who once wrote:
Something hit me very hard once, thinking about what one little man could do. Think of the Queen Mary—the whole ship goes by and then comes the rudder. And there’s a tiny thing on the edge of the rudder called a trim-tab. It’s a miniature rudder. Just moving that little trim-tab builds a low pressure that pulls the rudder around. Takes almost no effort at all. So I said that the little individual can be a trim-tab. Society thinks it’s going right by you, that it’s left you altogether. But if you’re doing dynamic things mentally, the fact is that you can just put your foot out like that and the whole big ship of state is going to go. So I said, “Call me Trimtab.”
In a universe in which everything is in continuous, complex, changing motion following multiple patterns of least resistance, what we need therefore are trim-tab sized inventions to alter the “least resistant directions” of various macro-processes, in order to cause “man’s ecological patterning to evolve in preferred patterns.” So if you are thinking about the problem of fundamental change in society, the trim-tab concept is a very satisfying notion because it helps to counteract the numbing effect of ideology and propaganda, which is to make you believe that how things are now is inevitable and inexorable, and therefore that change is impossible. The trim-tab concept fits together with my own approach to sustainability activism, which is that we don’t need to push the town towards sustainability, we just need to take away the obstructions that are stopping the town from moving in that direction itself. Natural systems have their own goals, desires, intentions and values that are more profound than our human ideas about how the world should world.
So why is a community energy cooperative a possible trim-tab? What I’m going to do here is to go through five key issues in sustainable economics. You could say that these issues correspond to four basic economic concepts which are being challenged, and ultimately reconstructed, by what I think of as an ecological revolution in thought. These are the interrelated concepts of energy, development, ownership, investment and wealth. Our conventional ways of understanding and practicing each of these ideas are, I would say, the underlying drivers of our current global economic and environmental crisis. So each of these concepts, if reconstructed to be made consistent with the facts of ecology, offers an evolutionary solution to our seemingly unsolvable dilemma. Here as elsewhere, the greater the crisis, the greater the opportunity for change. This is why, as my understanding of political and economic corruption has deepened, I’ve become increasingly optimistic about the possibility of real change.
Digression on Peak Oil
SolarClarity's efforts in Chester began with the issue of Peak Oil and the drafting of a Peak Oil resolution. It is still an amazing fact to me, that I could spend seven years in graduate school studying political philosophy and never think seriously about energy. While I’ve always been interested in nature philosophy, I did not start to think systematically about energy until after 9/11. Trying to understand why the US was carpet bombing Afganistan after the “attacks” led me very quickly to the study of the history and structure of the military-petroleum complex, and then to the Peak Oil concept. The politics and wars of the twentieth century look a whole lot different when you consider them against the backdrop of oil. So for example, not just the first and second Gulf wars but going all the way back to World War I, which began as an invasion of Iraq: the first British division deployed in 1914 was sent to Basra to stop the Germans from building Berlin to Baghdad rail service. The Peak Oil concept is the one that raises havoc with conventional economics, however. As I’m sure some of you know, Peak Oil is a geological event theorized by the most famous petroleum of the last century, Dr. M. King Hubbert, and hence Peak Oil is also referred to as ‘Hubbert’s Peak.’ As it turns out, the extraction rate of natural resources like oil or water follows a bell-shaped curve, beginning quickly and cheaply, reaching a platau, and then declining quickly, becoming more difficult and expensive to extract. In the 1950s, Hubbert correctly predicted that domestic oil production in the United States – then the petroleum king of the universe – would peak in 1971. More recently, a group of the world’s leading petroleum geologists, ASPO or the Association for the Study of Peak Oil, have been attempting to predict global Peak Oil. At their last conference which was in Boston in November, there was a deepening consensus that world Peak Oil will take place between 2005 and 2013. Peak Oil doesn’t mean the end of oil, per se, but the end of cheap oil, and it occurs when approximately 50% of the oil in the world has been extracted.
Is it serious? While global warming is finally starting to become a politically acceptable topic for mainstream corporate media, Peak Oil is still off the charts. But the government is surely worried. Last year, the Senate Intelligence Committee was briefed by several former CIA directors about the dangers that Peak Oil poses for domestic and international security. In their discussion, they referred to a now famous report, the Hirsch Report, created by request for the US Department of Energy in 2005, to study the effects of oil depletion on the US economy. The Hirsch Report, officially titled “Peaking of World Oil Production: Impacts, Mitigation, and Risk Management,” argues that, in order to avoid a economic contraction on the scale of a massive recession or even an full-scale economic depression, will require the development of an entirely new energy infrastructure, and that we need approximately twenty-years, investing a $1 trillion per year, to avoid unprecedented economic dislocation.
As far as I can tell, most mainstream economists either don’t accept the Peak Oil concept, or don’t think that it’s a serious problem. First of all, according to conventional economic wisdom, scarcity is relative to demand, and oil reserves are relative to the price someone is willing to pay for a barrel, so that there’s more oil available at $70/barrel than at $30. Secondly, economists tend to have faith in the market to allocate scarce resources in the most efficient manner, believing that if oil gets too expensive, then something else will be found to replace it. This is true, of course, in the long run, but as John Maynard Keynes said, in the long run, we’re all dead. We already have reason to believe that the market is not going to automatically save us.
Within ten years after peak, we will need the energy equivalent of another Saudi Arabia, approximately 10 million barrels of oil per year, to meet our projected demands, and there is no combination of renewables that will be able to make up more than a small percentage of that amount. There is no other source of energy that is as cheap as oil still is, which is why oil is the most heavily traded commodity in the world, why oil finds its way into every nook and cranny of our economy, and why the US military, even after it leaves Iraq, will continue to maintain between 3 and 14 permanent military bases there. That is, the US government’s de facto solution to Peak Oil is the so-called “war on terror.”
Depending on how soon Hubbert’s Peak arrives, the major problems will be felt in agriculture, transportation, and energy costs generally. Our modern industrial agricultural system has been described as a way of using soil to turn oil into food, using ten calories of hydrocarbon fuel to create one calorie of food energy, not including cooking. Peak Oil will make the food production much more labor-intensive than it has been, and breakdowns in the industrial food system could lead to nation-wide food shortages. This is precisely what happened in Cuba when the collapse of the Soviet Union created an artificial Peak Oil there, leading to what Cuban’s now call the “special period.” Already, due to rising costs for diesel fuel to run tractors and hydrocarbon-based fertilizers and pesticides, Midwestern farmers are going bankrupt at a faster rate than during the Great Depression seven decades ago. Moreover, Peak Oil is primarily is liquid fuel’s crisis, which will drastically affect the transportation system, driving up the cost to ship everything. On the post-peak side of things, it will no longer make economic sense to buy grapes from Chile, or fresh fish from Indonesia. It will no longer make sense to have a mass transit system composed of 300 million internal combustion engines running on gasoline, and it will no longer make sense to trust the ability of our regional power providers to supply the electrical grids with as much cheap electricity as our flat screen TVs and microwaves can consume. One of the next major disasters we can expect in the US is a regional grid failure in the Northeast from a natural gas crunch.
Thinking through the ramifications of Peak Oil led me to rethink all my assumptions about economics, politics ultimately metaphysics.
1. Energy and Economics
"The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking."
(from the Hirsch Report on Peak Oil, US Dept. of Energy 2005)
Problem
Peak Oil, Global Warming and other ecological calamities. Specifically, a looming energy crisis that neither governments nor markets, are adequately responsive to deal with. Due to QWERTY problems with energy infrastructures, price indicators will come too late to avert economic dislocation, while the US Federal government may be too corrupt to be helpful. And even if you are willing to pursue green energy as an individual consumer, you probably can’t afford it.
Structural drivers
Markets do not distinguish between renewable and non-renewable resources, and they are blind to the future. Classical economics is not based on principles that reflect ecological realities.
What is needed
Specifically, an investment mechanism to fund renewable energy projects at a community level. More generally, an approach to economic development which does not require a continuous and exponential growth in the consumption of energy, together with markets which are future-oriented, and which measure in more objective and nuanced ways, the preservation and enhancement of different kinds of wealth.
2. Conventional and Sustainable Development
"From the point of view of Buddhist economics, production from local resources for local needs is the most rational way of economic life, while dependence on imports from afar and consequent need to produce for export to unknown and distant peoples is highly uneconomic and justifiable only in exceptional cases and on a small scale."
(from E. F. Schumacher, Small is Beautiful: Economics as if People Mattered)
Problem
Current patterns of development are energy-intensive and based on non-renewable fossil-fuels, highly-entropic and environmentally-destructive, promote consumption as a driver of economic growth, create increasing economic inequality, and do not necessarily make life easier. Continuous growth is the logic of a cancer cell. Increasing global economic interdependency is making small local and regional economies more vulnerable to increasing instability.
Structural flaws
Economic growth is an end in itself. Growth in productivity is rooted into the basic idea of our economy and political system. It is seen as a natural assumption, that economic growth should minimize labor and maximize consumption, but this process has led to the liquidation of natural resources, the problem of unemployment (30%+ globally) via the mechanization of labor, and an unsustainable energy regime: “The market … represents only the surface of society and its significance relates to the momentary situation as it exists there and then. There is no probing into the depths of things, into the natural and social facts that lie behind them, In a sense, the market is the institutionalization of individualism and non-responsibility.” (Small is Beautiful, p. 44.)
What is needed
Specifically, we need community-based projects to move local economies in the direction of import-replacement and self-reliance. Instead of trying to bring in more income, towns should try to fix the leaks, so that money spends more time in the system before leaving. We need economies which mimic the low-entropy stability of healthy ecosystems. More generally, we need an economics which aims not simply at growing consumption, but growing happiness. The Rocky Mountain Institute has worked out a comprehensive economic renewal plan for communities based on precisely this low-entropy model. And we need better measures of wealth. According to the sustainability indicator theorist Maureen Hart, “We are what we measure, we only notice what we measure. (The ‘popsicle index’.) And we need an economic system which maximizes happiness through simple living. Schumacher again: “[Modern economics] tries to maximize human satisfactions by the optimal pattern of consumption, while [Buddhist economics] tries to maximize consumption by the optimal pattern of productive effort.” (From Small is Beautiful, p. 58 (just like the Mohegans and Pequots!)
3. Ownership
"[The commons] refers to all the gifts we inherit or create together. This notion of the commons designates a set of assets that have two characteristics: they’re all gifts, and they’re all shared. A gift is something we receive, as opposed to something we earn. A shared gift is one we receive as members of a community, as opposed to individually. Examples of such gifts include: air, water, ecosystems, languages, music, holidays, money, law, mathematics, parks, the Internet, and much more."
(from Peter Barnes, Capitalism 3.0: A Guide to Reclaiming the Commons)
Problems
The most valuable of all assets in the world are those which are owned in common by all the beings who exist on planet earth. The commons are not just public pasture lands, but all shared gifts. This trillion dollar abundance upon which life and happiness depend, is not valued or even seen by the market place. It immense store of natural, social and built capital is being liquidated through accounting failures within capitalism and due to corporate-driven privatization (‘piratization’)
Structural drivers
John Locke argued that property rights are an essential extension of our natural freedom to own our body and are necessary for actualizing human freedom. Within the natural jurisprudence of the European invaders of Turtle Island, this notion connected ownership with the willingness to put the land to work, to ‘domesticate’ the land, to ‘add value’ to the land. With the development of corporations and legal corporate personhood, the process of capital consolidation increased and led, by the beginning of the 20th century, to an oligopolistic domination of the world by a few thousand billionaires.
What is needed
We need community-owned renewable energy resources to ensure those resources stay focused on bringing our region affordable clean energy for years to come. We need a structure which will allow natural resources like forests, solar and wind energy and clean water to be owned and held in trust for the benefit for all living and future beings to whom these gifts belong. More generally, we need to develop a set of public, community-based institutions to represent the commons sector of the economy. Ultimately, we need a post-humanistic, non-anthropocentric jurisprudence that represents not simply the interests of human beings, but the interests of the entire community of life. We need not the privatization of resources, but what Peter Barnes calls the ‘propertization’ of the commons.
4. Investment
"In a tapeworm economy a small group of insiders centralize political and economic power at the expense of people, living things and the environment, in a manner that destroys real wealth. A tapeworm economy is one in which it is considered acceptable to make money from our popsicle index going down. In investment terms, it is an economy with a negative return on investment. It is parasitic in nature.The way an actual tapeworm operates is to inject its host with a chemical that makes the host crave what is good for the tapeworm and bad for the host. So the Tapeworm Economy is adept at using media and education and numerous financial incentives to get us acting against our own strategic interests and instead supporting and depending on the Tapeworm.The symptoms of the Tapeworm are many - narcotics trafficking that targets our children, runaway exploitive and predatory corporate practices such as the patenting of life, terminator seed and the destruction of our topsoil and food supply, fraudulent inducement of debt to homeowners, students and consumers, suppression of knowledge and renewable energy technology, criminal mismanagement of government credit and resources, black budget operations and the manipulation of currency, financial and precious metal prices and markets. These practices introduce organized crime throughout all aspects of our lives... these transactions drain our families and neighborhoods on a daily basis – much like a tapeworm drains its host."
(from Catherine Austin Fitts, The Real Deal on the Tapeworm Economy)
Problems
The cheapest capital does not go to the most socially beneficial economic activity, but to the economic activities which offer the highest return on investment, and why many have no access to capital at any cost. This is why Joe Courtney, our new democrat in the 2nd congressional district, feels compelled to ask for more nuclear submarines, rather than enterprises which could lead to the production of real value.
Structural drivers
Structural flaws in the US Constitution which did not prohibit the privatization of the money system, leading to the creation of the debt-based fiat currency system under the control of the Federal Reserve, meaning that there is no public control over the system which measures the creation of wealth. And there are few ways for individuals to invest their money in their communities, so they end up being forced to finance the very forces which are undermining the long-term health of their neighborhoods.
What is needed
Specifically, a way for ordinary citizens, investors, local governments and other organizations to invest their financial resources not in Wall Street but in their own communities. More generally, we need to decentralize control over money and access to capital, in order to ensure that the economic system truly aims at improving for all of its brothers and sisters, not just the 5% of the people who own 95% of the financial assets on the planet.
The Community Energy Cooperative Trim-tab solution
"The members of Co-op Power believed that it wasn’t enough to build renewable energy resources. They believed it was important for communities across the Northeastern US to retain majority ownership of those resources, so they could be stewarded in the communities’ best interest for generations to come. When we initially worked with venture capitalists to explore ways to partner with them to build renewable energy resources, it was clear that maximizing profit was their prime goal. We believed and continue to believe that financial stability, worker benefits, consumer benefits, community benefits, and environmental stewardship are also essential priorities. It became clear that for us to achieve these goals and create a sustainable financial base, we needed to own our renewable energy resources as a community, through our governmental entities, through our non-profits and religious organizations, and through our cooperatives. If we own them, we don’t have to ask the owners to do the right thing, we can just do it."
(from
Coop-Power)
A community energy cooperative is a community-owned and managed renewable energy corporation which serves three very important functions: 1) to serve as an investment circle, allowing citizens as well as private investors to invest in renewable energy projects at the community level, 2) actually constructs onsite renewable energy resources at the municipal level in order to reduce carbon emissions while making the area less dependent on imported hydrocarbon fuels and boosting the sustainability and resilience of the local economy, 3) and separating equity from return on investment so that the energy resources which are developed are held by the community as a whole.
How does a community energy cooperative serve to mitigate all of the seemingly hopeless problems discussed above?
ENERGY: It serves to close the funding gap for renewable energy projects, thus helping to move our towns towards sustainability at a faster rate than either the market or our town governments are able to do.
DEVELOPMENT: It offers a model for the kind of economic development which aims not at growth in consumption, but of wealth in a more traditional, more ecological sense: non-harmful self-sufficiency at the local and regional level. By localizing the production of electricity (food and energy being the two most essential goods required for survival), one main prong of sustainability is developed.
OWNERSHIP: By being communally owned, the energy coop ensures that private investors do take for themselves a return on investment on a resource that was not gifted to them alone.
INVESTMENT: By being communally-managed, the coop serves to offer an alternative to the way money works in a financial system dominated by organized crime and the entropic decay of a dying empire.
Does that sound like a trim-tab to you?
19-1 Bates Road
