This is the English version of the following article, which was originally published in German.
Auf Deutsch lesen: Regeneratives Geld: Plädoyer für eine ökologische Geldschöpfung
Money: Fuel for the Economy
Just as electrons in an electrical circuit drive the flow of electricity, circulating money drives the economy. The method of energy generation is the key factor: it determines the environmental impact of the entire system.
Currently, the grid is primarily powered by the exploitation of resources. However, we are gradually switching to renewable sources, so that in the long term, all new energy entering the grid will come exclusively from these sources. The electricity, power lines, devices, users and mechanisms within the grid will remain the same. However, the transition to renewable resources will change the system’s overall environmental impact.
Applied to the monetary system, this means: As long as new money is created alongside ecological exploitation, the consequences are devastating. It is not money itself that is the cause, but rather the manner in which new monetary units are created. The method of money creation determines its impact on the environment. Money can only have a positive impact when its creation is consistently linked to ecological regeneration or development.
Ecological reality: A systemic blind spot
A healthy ecosystem is the foundation of all economic activity. Yet this reality has played no part in the internal perspective of economic actors until now. This blind spot is caused by the way money is created: fiat money is created without reference to ecological capacity, but rather based on abstract expectations, essentially at the expense of existing resources.
While money can function as a unit of account, a medium of exchange and a measure of value between microeconomic units, it lacks crucial information about external reality: whether the activity associated with its existence was ecologically constructive or destructive. As long as this impact on ecological carrying capacity is not encoded in the money supply, a structural blind spot arises that facilitates ecological damage on a systemic level.
The Inevitable Consequence: A flawed concept of capital
We speak of ‘capitalism’ as if capital automatically equalled wealth. In fact, we currently measure capital using a unit whose creation is linked to the depletion of resources. When money is created while nature is being extracted or overexploited, the destruction of nature is effectively redefined as wealth.
True capital is the productive potential of the ecosystem available to us. If this potential is diminished through exploitation, the real capital decreases. A system that reduces ecological capacity ultimately destroys wealth and should be correctly termed ‘anti-capitalism’. Yet we call this system ‘capitalism’, which constantly exploits and devalues the real foundations of wealth (soil fertility, water and biodiversity).
Any economic actor whose capital — as measured by this misdefined concept of the underlying monetary unit — increases is also contributing to the destruction of resources because they are absorbing units of account from the overall system that exist solely as a result of damage to the ecosystem.
A Fatal Belief
The problem can be described as a collective misconception. At an individual level, money is seen as a source of enrichment because it provides the ability to make purchases, even though, under destructive conditions, its existence objectively contributes to the deterioration of the general foundations of life. This perception is perpetuated by the existing system as long as the creation of money is not based exclusively on constructive activities.
In practice, therefore, ecological activity means overcoming economic obstacles, since ‘the system’ is designed to favour exploitation. Until we correct this flawed concept of capital at its root, the resulting mechanisms will reinforce the destructive trend. Competition, pressure for returns and expansion all undermine the ecological foundation as long as money is derived from the exploitation of nature. The result? Real degrowth.
We believe that a benefit can only exist where harm is caused elsewhere. This flawed notion extends to other areas as well, resulting in economic behaviour that favours exploitation in all sectors until the necessary foundations are so damaged that total collapse becomes inevitable.
Correction: Link money creation to ecological improvement
The root of the problem lies in the creation of money. Money is the unit by which we measure capital. When new money is created alongside the depletion of resources, the conceptual shift described above is inevitable.
If we reverse this linkage, the effects on the entire system change automatically.
- Capital growth would be equated with restoring resources rather than consuming them.
- New money is created only where regenerative, long-term, sustainable ecosystem capacity is built up.
- From that moment on, the same capitalist mechanisms (investment, returns and competition) will have a positive impact on the environment rather than a negative one.
The key point is this: We are not changing the internal mechanics of the economy, but rather its external effects — and thus the point of reference to reality. As a unit of account, money will continue to serve as a medium of exchange between businesses and as a measure of value. However, it will now also carry information indicating that every additional amount of money is linked to an actual increase in nature’s productive potential, which will be accessible to everyone.
Systemically, individual profit can no longer be generated without creating added value for the environment and society as a whole. We are moving away from the notion that ‘a plus on one side necessitates a minus on the other’ towards the naturally symbiotic principle that ‘individual profit necessitates collective profit’. This prevents the widening gap between rich and poor while preserving the personal incentive for economic activity.
Dual-Token Economics: Turning Externalities into Internal Assets
This is precisely where my dual-token model comes into play. It captures what is currently considered a pure ‘externality’ — and thus eludes business valuation — and transforms it into a functional money token. The result is the following dual concept:
- An ‘asset token’: a commodity token that represents a real claim to an accessible, renewable physical resource.
- A ‘money token’: a unit that circulates independently of the asset token and mathematically represents the accumulated ecosystem service potential. It is also functionally linked to the realisation of the asset token.
Put simply: The right to redeem the asset token for the actual commodity is linked to temporary possession of the corresponding ratio of money tokens.
Money tokens therefore remain in permanent circulation, but their quantity and existence are strictly tied to a verifiably established resource, and thus to regenerated ecological capacity. At the same time, the temporary necessity of holding money tokens to realise asset tokens confers economic value on the money tokens. The realisable raw material linked to the asset token forms the system’s reserve, ensuring its connection to reality.
Previously, externalities that were not subject to internal valuation can now be recognised as assets. This creates a permanent link between a balance sheet entry and a real, renewable resource that has a positive environmental impact.
This model is already being implemented in practice in the Terra Plena project with Biocyclic Humus Soil. The dual-token approach builds upon the existing logic of economic interests:
- It changes the way money is created, meaning that regenerative performance becomes a relevant asset for accounting purposes, expressed in the form of money tokens.
- It preserves power and control while linking them to symbiosis rather than one-sided extraction. Accumulation of wealth is only possible if it benefits everyone.
Consequently, money — in our case, a private complementary currency — continues to serve as a unit of account and a medium of exchange between microeconomic units. However, its availability is tied to natural conditions and ecological restoration efforts.
Internalisation of externalities: Competition for Sustainability
If the creation of new monetary units is dependent on regenerative or restorative activities, economic competition automatically shifts.
Companies would no longer compete over who consumes resources most cheaply, but rather over who can most effectively build up ecosystem capacity, as this activity would be rewarded with new monetary units. Money, as a unit of account and a measure of value, not only forms prices, but also proves regenerative impact. Regeneration generates additional money rather than incurring costs.
I call this principle the ‘internalisation of externalities’, because ecological capacities that were previously unquantifiable in financial statements become assets through monetary quantification. This directly influences the money supply and thus economic dynamics. The result is systemic competition for sustainability. Only those who act regeneratively can expand the scope for monetary value creation.
Result
We continue to use money as a medium of exchange between microeconomic units, ensuring that each newly created unit reflects accumulated ecosystem capacity rather than depletion. In this way, capital becomes what it is meant to be: growing potential for life and productivity that expands planetary boundaries rather than restricting them and undermining its own foundations.
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This article was originally posted on LinkedIn.