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October 26th 2008
by Liongold
Brain-fu: 440
(3629) A Green Points System
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Viewed 747
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Good Idea 8
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This is more a sort of economic theory that can, if utilised, potentially eradicate poverty as well as help the environment.
In most cases, people get money when they sell something, but lose money buying something with equal value. But what if we got more money just by buying something?
The scenario works somewhat like this: A goes to a store, where he buys an environmentally-friendly product from B. In return for attempting to keep the environment clean, the government rewards A with what I call 'green points'. These green points are 'packets' of money. They are not like stocks, which are sold for money; they are, quite literally, currency. The government gets back the capital spent in green points through taxes.
This is fundamentally similar to the the carbon credit system used by most countries, with two major differences: that this is aimed not at industries but at consumers, and two, the value of the green point is not fixed.
Yes, its value varies. A green point may now be equal to 10 dollars; tomorrow it could be equal to 20 dollars. What governs this variation in value? The green point system follows a different concept of demand and supply than is usually obeyed by objects ( this is because you get these when you buy something, as opposed to when you sell) i.e. if demand goes up, the value of the green point goes up, and supply is determined by the government.
For example, if demand goes up, the value of the green point jumps from 10 to 20. Because this will cost them even more, the government will have the right to limit the amount of greenpoints assigned to an object. e.g. if a hybrid car has 5 green points attached to it, and the value of the green point jumps from 100 to 200, the government can change the number of greenpoints assigned to the car from 5 to 4.
What, in this case, is the demand? It is what we may compound demand, or the combined increase in demand of all the objects to which greenpoints are assigned to. If the demand for these objects rises, so does the green points value. The supply is basically the number of greenpoints assigned to an object.
How does this have the potential to solve poverty? It is simple: there may be some products whose cost is significantly less than the total value of the green points received from it. Anybody who buys that object instantly profits from it. This means that the poor can vfery rapidly become rich.
But what of inflation? Surely the prices of objects will very rapidly rise? This can be curbed if we assign a maximum limit to the green points'value i.e. it can't go above a certain value. Because it is very likely that a lot of demand will fall for that object if the price of the object goes past that limit (after all, we must assume that the increased demand is due to its green point value), the products'price will not go beyond that mark. However, curbing this problem for products not directly related to the green point system - products which aren't environmentally-friendly or unfriendly, for example, chocolate - is a little harder to solve.
This system has a three-way benefit: the government has citizens at least trying to help the environment, the company has increased demand, and the consumer makes a profit. No one loses.
How'd you like it?
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