MONEY: STRATEGIES FOR GOVERNMENTS

Chapter Eight, from the book "Rethinking Money", by Bernard Lietaer and Jacqui Dunne, 2013

STRATEGIES FOR GOVERNMENTS

Money is the crowbar of power.

Friedrich Nietzsche,

19th-century German philosopher

Trash was a nightmare problem in Curitiba, the capital of the south- eastern state of Paraná, Brazil. There was a large slum population dwelling in shantytowns, makeshift, improvised housing constructed from corrugated steel, cinder blocks, and what ever else was available. “Back in 1989, the primary problem we faced was garbage in the favelas. We needed to avoid pollution in our streams and, of course, to protect the kids who were playing in what were very contaminated areas. The problem was that we had to have the garbage collected with trucks, but they couldn’t get into the favelas because the pathways were too narrow and the terrain was very hilly,” recalls Jaime Lerner, who was mayor at the time. The issue was further compounded because the city simply did not have the funds to deal with the crisis. Raising the necessary money through conventional methods, such as requesting funding from the federal government, was not an option. Something else had to be done. This dilemma facing governments at what ever level of authority is commonplace some three decades later. Even in better economic times, making the limited conventional currency stretch has always been troublesome. With tax revenues to fund programs and services dwindling today because of the harsher economic climate, everyone is feeling the pinch. National governments have had to slash programs, particularly in Europe, following a series of austerity measures to get spending under control. Lerner, however, took stock of the resources on hand. There was an abundance of food, given the region’s rich farmland, proximity to the sea, and subtropical climate. Additionally, there was an underutilized municipal bus system and people with a lot of time on their hands. Lerner, who was trained as an architect and consequently thought in terms of systems and their integration, had an idea! It was a strategy that developed over time. Large metallic bins were placed on the streets at the edge of the favela neighborhoods. Lerner recalls, “We separated the trash into three unique components: one third, such as paper, glass, and cartons, was commercially recyclable; one third was biowaste (available to produce organic compost); and the other third was trash for the landfill. Those who collected and sorted the trash were given tokens to ride the local bus system.” Thousands of children responded by picking the neighborhoods clean. The children have taught their parents how to do it. Lerner noticed that to earn bus tokens, some slum dwellers even collected and sorted garbage along the highways, making it easier to get the waste picked up by trucks. People made use of the tokens to travel downtown, often to find work. The bus tokens were soon accepted at local markets in exchange for food. The project expanded from there. In one three- year period, more than 100 schools traded 200 tons of garbage for 1.9 million note- books. The paper- recycling component alone saved the equivalent of 1,200 trees— each day! 1 Eventually, more than 70 percent of Curitiban house holds became involved in the various programs. The 62 poorer neighborhoods alone exchanged 11,000 tons of garbage for nearly a million bus tokens and 1,200 tons of food. Other programs were created to finance the restoration of historical buildings, create green areas, and provide housing, all by methods that didn’t create any financial burden on the municipality. Thanks to Lerner and his innovative methods, Curitiba has made major strides in other social sectors, providing the city with some of the best quality- of- life indices in the world. Sixty to 70 percent of Curitiba’s trash is recycled in situ, possibly the highest percentage in the world. The experience gained, along with the lessons learned as mayor of the city of Curitiba, served Lerner well when he later was elected governor of the state of Paraná. The ideas and their implementation served as a blueprint on a larger scale. Lerner adds, “When I was a governor, from 1994 to 1998 and again from 1998 to 2002, originally we wanted to avoid loans, as in the case of Argentina and the $800 million World Bank loan they took out to clean their bays. We decided that it’s not only a question of money but also a question of mentality. It’s not only a question of public works but also it’s how to successfully stimulate a learning process. So we didn’t have the money to clean our bays. So instead we made agreements with our fisherman. When they catch the fish, the fish belong to them. When the days weren’t good for fishing, they catch garbage, we pay for the garbage with our tokens. The more garbage they fished, the cleaner the bay became; the cleaner the bay became, the more fish they could catch. It’s a win- win solution.” Another major problem is street children. “These children were usually begging for money to feed their families. We tackled that problem by making an agreement with each family: We provided each of them with a monthly basket of food for as long as they kept their children in school.” The idea was to implement this program across all of the 399 municipalities of Paraná, which is home to over 10 million people. “When we realized the low cost of monthly baskets of food, and how they helped those living in poverty by freeing up their limited re- sources to pay for other things, everybody got very excited. Instead of having to use all their money to buy food, they could now use the money in different ways and at the same time be sure that their kids were going to school,” Lerner recalls.

 

 [Garbage that is money. When the fish aren’t biting, the fishermen clean the bay instead. Photo credit: Instituto Jaime Lerner.] 

 The many initiatives— environmental cleanup, city restoration, job creation, improved education, disease intervention, and hunger prevention— were each tackled with various cooperative currency systems. This all happened without having to raise taxes, redistribute wealth, issue bonds, rely on charity, or obtain loans from the federal government or organizations such as the World Bank and the International Monetary Fund (IMF). The improvements burdened no one. Everyone benefited. Curitiba, along with the state of Paraná, discovered a means by which to match unmet needs with unused resources. In 1990, Curitiba was honored with the United Nations Environmental Program’s (UNEP) highest environmental award. 2 Curitiba was awarded the Globe Sustainable City Award in 2010. 3 This award recognizes cities and municipalities around the world that excel in sustainable urban development. None of the exceptional features of what has happened in Curitiba would have been possible without the various cooperative currency systems implemented by Jaime Lerner. Curitiba is the first city to have systematically used a “monetary ecosystem.” It is therefore a practical demonstration of what becomes possible within less than one generation when one rethinks money. There have been several PhD studies dedicated to the innovations in city planning and public transport systems of Curitiba. What is surprising is that, not withstanding the availability of 25 years of data, no systemic economic study has been performed on Curitiba.

THE CIVIC: ECONOMIC STIMULUS WITHOUT DEBT

In the case of Curitiba, the results of using a cooperative currency in purely economic terms are worth noting. From 1975 to 1995, the GDP of the city increased by 75 percent more than the rest of the state of Paraná and by 48 percent more than Brazil’s as a whole. The average Curitibano earned more than three times the country’s minimum wage. If nontraditional monetary gains, such as the exchange of garbage for provisions, are taken into consideration, the real total income for residents was at least 30 percent higher still. The results in human terms— in the renewal of dignity and hope for a better future— are incalculable. 4 This was accomplished by rethinking money, moving from a model of scarcity that the conventional system inadvertently encourages to one of prosperity with the use of smartly designed cooperative currencies. Traditional economic stimulus is an effort by government to boost an ailing economy by pumping more money into it, usually by cutting taxes and by borrowing money. With these measures, it is hoped that liquidity in the system will increase, which in turn will lead to greater financial resilience, as there is now money for job creation and/or other programs. But this approach has serious negative repercussions: Both increase the national debt. Lately, the net effect has been a tightening of the proverbial belt with drastic austerity measures, such as slashing social programs. This has lead to massive civil unrest, particularly in Spain and Greece. Richard A. Epstein, a senior fellow at the Hoover Institute writes, “Grim is the right word to describe the latest economic news from both the Europe an Union and the United States. Throughout the European Union, austerity programs have failed both politically and economically. In Spain, unemployment rates have soared above 24 percent. The Dutch government is on the edge of collapse because of the popular and political unwillingness to accept the austerity program proposed by its conservative government. Romania is not far behind. Greece, Italy and Portugal remain in perilous condition. . . . On the American front, the decline of GDP growth to 2.2 percent rightly raises fears that our sputtering domestic recovery is just about over.” 5 There is a solution, as the events in Curitiba illustrate. Government, whether at a local, state, or regional level, can take its economic fate into its own hands and issue a cooperative currency. This cooperative medium of exchange, which can be customized to any given government’s needs, is a currency called the civic. The key component of such a solution is that it provides a financial Keynesian stimulus with a fundamental and critical difference: It doesn’t generate any additional debt. Indeed, a Keynesian stimulus means that government steps in and launches projects that it funds through deficit spending. The government then borrows from the banking sector, going further and further into debt. This is because the government cannot issue itself the currency. In contrast, if the government launches the same types of projects but issues cooperative currencies to fund them and requires taxpayers to make a contribution payable only in that same currency, no debt is generated. Furthermore, the process is more bottom- up than the usual top-down central government stimulus plans. It tends to be more successful since the cash injection can be very precisely applied. Residents and local government members clearly have a better insight into a community issue with all its nuances than does a central government bureaucracy. And since the currency’s governance needs to be more transparent and easier to manage because of its size, there is less opportunity for fraud and misappropriation. In Chapter 11 the importance of governance issues are addressed.

HOW IT WORKS

A yearly contribution in civics would be requested of all town or city house holds by their local government authority. Residents would earn civics, which would be issued by the city, by participating in activities that contribute to the city’s democratically agreed- upon goals and objectives. Agreement as to the nature of these tasks might be reached by canvassing neighborhoods door- to- door or by online voting. This unit of account could be one hour of time, valued at the same rate for every- body. So, for instance, if a city aspires to be greener and more eco-friendly, the activities could include growing food on terraces, rooftops, or vacant plots of land; taking responsibility for plants and trees in the neighborhood parks; or training people in city- based horticulture. From a purely economic angle, if an annual tax of $1,000 can be replaced with 10 hours of civic activity per house hold, anyone earning less than $100 per hour should be interested in joining the system. Additionally, the civics system has the added benefit of allowing people to earn an income from civil activities. Such an approach provides, in fact, a decentralized Keynesian stimulus at the city scale without creating new debt or incurring further costs to the government. Contrast this to what’s happening now, as governments try to keep up the social system with the euro, which clearly isn’t working. There is no obligation to personally perform any of the tasks rewarded in civics. To begin, families with children, infirm, or individuals with special needs would be exempt. There would be two other ways of opting out of participation. The first could be by paying an extra amount in dollars as part of one’s annual taxes (e.g., $1,000 for the example above). The second option for people not interested or without the time to personally perform any of the tasks would be to purchase civics via an online market, openly and transparently. People who earned more civics than they needed for their annual contribution could sell them in that market. The buyer of the civics could make the purchase in conventional money or as an exchange for any good or service acceptable to both parties. The government’s role should be to ensure that fake civics are not in circulation and that exchanges are transparent and fair. The government should not tie the value of the civic to the national currency. If the government wants the value of civics to rise relative to the national currency, the most effective way would be to require a bigger contribution payable only in civics and, accordingly, if it wanted the value to drop, it could require a smaller contribution to be paid in civics. Furthermore, the process can be targeted to specific population segments and should be counter-cyclically tuned to local conditions. For instance, specific programs that pay in civics could be implemented for young people when their unemployment level is abnormally high, as is the case now in parts of Michigan and California, for example, or in Portugal, Ireland, Greece, and Spain in Europe. The legitimacy of the civic completely depends on the legitimacy of the process by which the choices are made on the activities that can be awarded civics. Bottom-up democratic processes are critical to the genuine success of what is proposed here. This leads to the critical question of appropriate governance for such systems, as will be shown in Chapter 11.

NATIONAL CURRENCY CRISIS SOLUTION?

At the core of our current financial predicament is the issue that the banks aren’t lending, and it’s not because businesses in general aren’t viable. Cooperative currencies, however, can remedy this cash crunch. In terms of a national crisis, a C3 currency, as explored in Chapter 7, could be used to take care of some of the commercial business currently conducted in national currencies. In a case for the eurozone, for example, countries like Spain, Portugal, Greece, or whichever is in trouble could continue using the euro currency for everything having to do with international activities: tourism, shipping, importing, and exporting. Their respective governments could, in addition, create a new version of the peseta, escudo, or drachma to be used for internal social and environmental businesses. This neonational currency essentially could be spent into existence by the government itself, for specific purposes, without incurring debt in the financial system. Thomas Mayer, former chief economist for Deutsche Bank, made in July 2012 a proposal for Greece that is surprisingly radical for his background. It acknowledges that the great majority of Greeks don’t want to leave the euro and that they don’t agree with the extreme austerity program imposed in Greece. Mayer’s solution is called the geuro, a second currency that would circulate in Greece in parallel with the euro and, Mayer says, “solve all of Greece’s problems.” For the first time, a mainstream economist, working for a major bank, is endorsing the idea of a complementary currency! The geuro would be used immediately in most domestic transactions. For the purchase of essential imports, geuros would have to be exchanged for euros, “most likely at a hefty discount of 50 percent or more. Since an increasing number of domestic goods, services, and wages would be paid in devalued geuros, the export sector could reduce its prices in euros and regain competitiveness against foreign suppliers.” 6 The main difference between the geuro and the civic is that the geuro would be issued as a central government IOU and the civic would be issued by cities or regions without generating additional debt. But the civic would otherwise provide a mechanism to provide the same benefits as the geuro in terms of gradually rebuilding the competitiveness of Greek labor. Edgar Kampers, director of the Dutch Qoin, has been working in the domains of sustainable economic development and cooperative community currencies since 1998. He remarks, “Current legal tender currency systems are very strong in developing high profits and building a globalized society. They have proved less effective, however, in supporting regional economic development, stimulating ecological policy goals and behaviors, and encouraging an active civil society. The current economic and financial crisis faced by many regions in Europe calls for new arrangements for communities to remain or become resilient.” 7 In the province of Limburg in Belgium, for example, there was a waste cooperative between all the municipalities in the province, and this organization calculated the difference in price between new kinds of campaigns. “What they found was if they do a traditional awareness campaign, then they have a response of less than 2 percent. If they do the same thing with the same costs per person in that municipality, and they use a cooperative currency system, then they have a response of almost 40 percent. That’s 20 times better! It’s the only successful way of changing the behavior of the people on a limited municipal bud get. And coupled with the information society, which makes computing, smart phones, tablets, and this type of technology so cheap and easy, it is now available everywhere,” Kampers added. Lisa Conlan, CEO of TimeBanking USA, notes, “Given the current credit crunch that states and municipalities are experiencing, there is no reason why a wide variety of ser vices could not be paid for in a local currency, such as time dollars. There’s snow removal, garbage collection, even community gardening.” 8 A rich tapestry of initiatives comes to light with the understanding that unused resources can be linked with a whole host of unmet needs. Such exchanges provide solutions for cash- strapped charities and government bodies at different social levels, resulting in huge economic and social benefits.

TOREKES 

Rabot is an immigrant district in Ghent, the fourth- largest city in Belgium. Rabot is the poorest community in the entire region. Most of the population lives in low- income apartment buildings in one of the most densely populated localities in Eu rope. Well over 20 languages are spoken, with Turkish the most prominent. Rabot suffers from high unemployment and the usual symptoms of urban decay, which have profound effects, both physical and metaphysical. In 2009, one of the authors was asked what could be done to improve the area. The starting point was a survey to fi nd out what residents wanted for themselves. Many, particularly those living in high-rise apartment buildings, wanted to have access to a few square yards of land for gardening, growing vegetables, and flowers.

[Ghent, Belgium. Residents pay for their plots of land exclusively in the town’s local currency— torekes. Photo credit: Stefanie Overbeck.] 

The city owned land in the neighborhood, including a site where an old factory had been demolished and the land was left abandoned. Rather than leaving it derelict, the land was divided into plots measuring four square meters each, and these plots became available to rent on an annual basis, at the cost of 150 torekes, a newly introduced local cooperative currency. Torekes are available only in paper form for this pi lot project, on the request of the participants themselves. One of the reasons is simplicity. To earn torekes (Flemish for “little towers,” emblematic of the neighborhood), a long list of urban agricultural improvements and beautification activities could be done. Participants were rewarded for activities such as putting flower boxes on the windowsills facing the street, planting and maintaining sidewalk flower containers, placing “no advertising” labels on mailboxes to reduce junk mail, or helping to clean up a neighborhood sports field after a game. In all, 526 different activities were performed. Wouter Van Thillo, who has been managing the project since 2011, describes the series of events that ensued: “In addition to paying for the rent of the neighborhood gardens, arrangements were also made with the local shops to accept torekes for specific goods that the city wants to encourage, such as low- energy lamps and other green products, or fresh seasonal vegetables. Participating shops can either use the torekes for their own participation in local activities or simply get them reimbursed for euros at the city office. Torekes can also be exchanged for public transport tickets and seats for cultural events or movies. All activities with very low marginal costs for additional participation, such as buses and cinema, are ideal for this scheme. “We’ve also found, as this program has gained traction, that well-to-do residents from other parts of Ghent are now participating because it’s fun.” This simple paper currency with no demurrage is considered to be a major success. Not a week goes by without visitors from other towns and cities across Eu rope stopping by to learn from this example. What this experiment has proven is that it produces a much broader social impact with the same euro bud get, providing effective leverage in using conventional currency. Specifically, even at this very early pilot scale, conservatively three times more activities have been produced with the same amount of euros. If the implementation was fully scaled up, it has been estimated that this multiplier could potentially rise to a factor of 20. These two colorful models of municipal and state governments finding inventive ways to resolve issues in their respective communities stimulate questions on how these methods can be expanded and improved. For the foreseeable future, government at all levels will continue to grapple with serious bud get shortfalls, thus obliging cuts not only in discretionary programs but also to critical services and benefits. A city-issued currency such as torekes makes it possible to multiply the results achieved with a given bud get in conventional money.

EDUCATION

The cost of education is a burden usually carried at the federal level of government. The seed of a provocative response to bud get concerns was planted over a decade ago in Brazil, when the education fund had grown to more than $1 billion. Conventional solutions— such as the very successful GI Bill approach of the United States that funded education for veterans after World War II— would provide student loans directly to individuals for their own education. Another idea was crafted by one of the authors in cooperation with Gilson Schwartz, an economics professor at the University of São Paolo, Brazil. The framework of what has since matured into the Creative Currencies Project was to leverage educational funding by using a multiplier that would allow many more students to benefit from the same amount of money with some surprising results. The first model was the saber (meaning “to know” in Spanish and Portuguese), a specialized education paper currency allocated to primary and secondary schools, particularly in economically depressed areas. This currency is first given to the youngest students (7-year-olds), who transfer it to older students (for instance, 10-year-olds) in return for tutoring help with their schoolwork. The 10-year-olds can then do the same thing with 12- year- olds in compensation for the hours spent mentoring, and the latter with 15-year-olds and so on. At the end of this learning chain, the sabers would go to 17-year-olds, who could use them to pay for part or all of their university tuition. The saber offers a number of advantages. It circulates among students at different grade levels, the last of whom go to college; it promotes better education through learning by teaching; it offers a better chance for students to go to a university; and it allows educational funds to be used for many more students than if they were used for just one scholarship, thereby creating a learning multiplier. For instance, the university would be able to exchange sabers for conventional money through the education fund but at a discount of, say, 50 percent. This makes sense because most of the costs at a university are fixed and, similar to empty seats on an airplane, the marginal expense of an additional student has little impact on those costs. The total learning multiplier per dollar for the education bud get allocated to this project would, therefore, be a factor of 10 (five times for the exchanges among students of different ages, multiplied by two for the arrangement between the education fund and the university, which discounts the saber by 50 percent). This 10- fold learning multiplier was calculated in terms of the financial effect of $1 billion spent through the saber system, delivering a total of $10 billion worth of education. Another factor, learning retention rates, further increases this figure. Several decades of research have shown that learning retention depends less on the person or the topics involved than on the delivery system. What is striking is that our traditional educational system commonly uses the two least effective methods available: lecturing and reading, through which, respectively, only 5 and 10 percent of what is taught is retained. At the other end of the spectrum, an impressive 90 percent retention rate applies to what ever one teaches others! So when the learning retention rates increase from 5 to 10 percent (normal educational methods) to 90 percent (teaching others) is factored in, another 10- fold multiplier effect develops. In other words, spending $1 billion through the saber system could roughly be estimated to generate as much as $100 billion worth of retained learning, in comparison to the conventional scholarship grants approach. The saber program could also be expanded beyond the conventional classroom: eight- year- olds could teach their newly learned reading and writing skills to grandparents who are illiterate; students could help the elderly or handicapped by reading to them or recording their oral histories. These programs would encourage intergenerational relationships and further learning, not to mention creating extra assistance for the el der ly without burdening governmental bud gets. Demurrage can be used to control the balance each year between the number of students wanting university seats and the availability of seats. A demurrage fee would be applied to encourage students to use sabers for the year that is printed on the saber itself, for example, 2014. If the sabers were not used to pay for tuition before or during that year, they could be exchanged for sabers of the following year— the year 2015— but with a 25 percent penalty. This creates a strong incentive to use sabers on or before their deadline. “While the project hasn’t been adopted on a federal level in Brazil due to the vicissitudes of Brazilian politics, we have created instead two other currencies, talents for those involved in the practical application of knowledge, and alegres for activities that bring joy or make the world a more beautiful place,” adds Schwartz. Both use the same principles as the saber, in which young people teach other young pupils. He continues, “We are now working with the Department of Finance and the police. Goods that have been seized because of unpaid taxes or contraband will be available for purchase by our students using any of the three creative currencies.”

WISPOS

Back again in the city of Ghent, Belgium, the local educational authority has been challenged by a variety of issues associated with the education of a large immigrant population, many of whom are illegal. Teachers report students having serious deficits in the rudiments of several subjects, the worst being French and mathematics. Falling behind academically undoubtedly contributes to being further marginalized in the future. Something creative to break the cycle had to be found. Jeffrey Freed, author of Right- Brained Children in a Left- Brained World, a best seller and a classic in the field of education, has identified the general learning styles of the Millennials, children born since the turn of this century. “These kids have grown up in a world very different than previous generations. Just think about the impact of technology alone. Many tend to be more right- brained dominant in that they think in pictures. They process information in a nonlinear way. So in doing a math problem, for instance, they can get the right answer, but they can’t retrace their steps. They get bored and lethargic easily. The drill and kill method of teaching just won’t work. What succeeds is if they are taught in short time spurts. They need to understand the context of what is being taught, so learning in field trips and through other rich experiences is the way to go.” 9 With this insight, one of the authors and Igor Byttebier, a resident of Ghent and a consultant to the innovative program, worked with the teachers of the Wispelberg School, one of Ghent’s high schools, to design an hour- long program with a class of 12-year-olds that takes place every two weeks. Kids from the senior class participate, too, by assisting the teachers. They designed games around learning so it would be fun and provide novelty. To make it even more interesting, they divided the class into teams that would compete against each other for the entire academic year. Wispos, a token currency, was awarded for correct answers and debited for incorrect ones. Igor Byttebier explains, “French is a difficult language as the pronunciation is so subtle to the ear. So we devised a game called twister. There’s a large checkerboard on the floor in bright colors, five squares by five squares, 25 squares in all. The differently conjugated verb endings are placed in different squares. The teacher shouts out a phrase, and the team rep has to jump onto the right square. If correct, two wispos are given; if wrong, one is forfeited.” 10 On average, between 6 and 22 wispo tokens were won by each of the students, who could then purchase fruit and other healthy food items from the school store. The project has been running for two years now, and, given its success, a second high school, KTA, has adopted the program. “When tested, the students scored 20 percent better than before as a result of the games, and in mathematics, the improvement in test scores was, on average, 10 percent. 11 Just as important is the interaction between students of first and last years, combined with physical and intellectual activity. This is an enormous help to their social integration and self-esteem,” adds Byttebier. Although this project is in its very early stages, it does serve to illustrate that linking an unused resource with an unmet need and introducing a new currency can bring about profound changes. There are several key takeaways from all these examples. Besides cooperative money’s capacity to engender greater collaboration and mutual support while providing cash- strapped governmental agencies with a way to leverage their tight resources, there is an even more powerful motivator at work. Traditionally, efforts to bring about a change in behavior have focused on increasing taxation (for example, increasing taxes on tobacco products to discourage smoking) and regulation, which tries to outlaw certain behaviors (such as Prohibition tried to do to alcohol consumption during the 1920s in the United States). The incentive stimulated by cooperative currencies, however, uses a carrot rather than the proverbial stick. And perhaps more important, it demonstrates that it is possible to create economic stimulus without the negative effect of increasing debt.

NOTES

1. “Recycling is done at a plant (itself made from recycled materials) by previously unemployed people including the homeless and recovering alcoholics. Paper recycling alone saves the equivalent of 1,200 trees a day. Recovered materials are sold to local industries, and the proceeds used to fund social programs.” The Brazilian city of Curitiba may be most livable city in the world. See http://hopebuilding.pbworks.com/w/page/19222330/Brazilian%20city%20of%20Curitiba%20may%20be%20most%20livable%20city%20in%20the%20world

2. See www.sb05.com/plenary/Lerner.html

3. See www.globeaward.org/winner-city-2010

4. The 1993–1995 data is derived from Indústria, Comércio e Turismo Gestão Rafael Creca (December 1996). The respective growth rates are 8.6 percent per annum for Curitiba, 6 percent for the state of Paraná, and 5 percent for Brazil. The respective per capita growth rates between 1980 and 1995 are 277 percent for Curitiba, 190 percent for Paraná, and 192 percent for Brazil. Statistics from Informaciones Socioeconomicas, issued by the Prefeitura da Cidade Curitiba (1996) compared with the Brazilian databases of SACEN, IPARDES, and SICT/ICPI.

5. Richard A. Epstein, “Beyond Austerity,” Defining Ideas: A Hoover Institute Journal, May 1, 2012. https://ricochet.com/76005/archives/beyond-austerity/

6. Matthew Boesler, “Introducing the ‘Geuro’: A Radical New Currency Idea to Solve All of Greece’s Problems,” Business Insider, May 20, 2012. https://www.businessinsider.com/introducing-the-geuro-a-new-parallel-currency-to-solve-all-of-greeces-problems-2012-5?IR=T#ixzz1vbUNQjTC

7. Edgar Kampers, interview with Jacqui Dunne, June 3, 2012.

8. Lisa Conlan, interview with Jacqui Dunne, December 28, 2011.

9. Jeffrey Freed, interview with Jacqui Dunne, March 2, 2012.

10. Igor Byttebier, interview with Jacqui Dunne, May 25, 2012.

11. There was only one test so far.

Brazilian city of Curitiba may be most livable city in the world

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A small Brazilian city named Curitiba has become an international model for sustainable development because it puts its people first and plans in a strategic and integrated way. Curitiba is a “livable” city, say residents and visitors alike; American journalist Bill McKibben calls it a ”global model for development that respects the earth and delights its inhabitants.” Other local governments call it “a model ecological, people-centered city.”

Led in the 1970s and 1980s by charismatic mayor Jaime Lerner who ‘imagined the ideal and did what was possible today’, Curitiba is best known as a pioneer of sustainable urban transportation and waste recycling. But it has also created a city with more green space per citizen than the United Nations’  ideal standard, preserved cultural buildings at no cost to the city, and created a strong economy that benefits all of its citizens.

Strategic and integrated urban planning “is what underpins the individual projects system-wide that improve the environment, cut pollution and waste, and make the quality of life in the city better,” says a study by ICLEI-Local Governments for Sustainability, an international organization of more than 875 cities, towns and counties. “The result of the strategy--which put people at the center and emphasized integrated planning--is that the city has become a showcase of ecological and humane urbanism, with ongoing improvements over the past 38 years to social, economic and environmental conditions for its residents.”

Transportation: Curitiba’s Public Transportation Integrated Network maintains 2,100 buses that transport 2.04 million passengers each workday along 385 different lines that cover the city and surrounding regions. There are 5,000 bus stops, 351 tube-stations and 29 integrating terminals. While the population has doubled since 1974 and Curitiba has the most car owners per capita of any Brazilian city, auto traffic has declined by 30%, and Curitiba has Brazil’s lowest rates of ambient pollution and per capita gas consumption. Curitiba’s system has inspired Bogota’s TransMilenio, Mexico City’s Metrobus, Guatemala City’s Transmetro system, and Los Angeles’ Orange Line.

Waste Disposal: Since 1989, when Curitiba became the first city in Brazil to introduce wide-spread separation and recycling of domestic waste, its recyclers have separated 419,000 tons – enough to fill 1,200 20-storey buildings. Now 70% of the city's trash is recycled, with sorting into organic and inorganic waste done by residents at home and picked up from the curb by a fleet of brightly coloured trucks. Recycling is done at a plant (itself made from recycled materials) by previously unemployed people including the homeless and recovering alcoholics. Paper recycling alone saves the equivalent of 1,200 trees a day. Recovered materials are sold to local industries, and the proceeds used to fund social programs.

Green Exchange: Poor residents in 62 neighbourhoods unreachable by truck have been able to bring their waste to neighborhood centers, where they have exchanged 11,000 tons of garbage for nearly a million bus tokens and 1,200 tons of food since 1991; currently, 7,000 people benefit from about 44 tons of food annual, through 78 exchange points. In the past three years, more than 100 schools have traded 200 tons of garbage for 1.9 million notebooks. The program improves the diet of the poor and supports small local farmers.

Green Space: When the national government was distributing flood control funding in the 1970s, the city used the funds to buy up vacant land and create a network of 30 parks that include lakes created by damming rivers. Now the city has an astounding 51 square meters of green space per person as well as an effective flood control system. The city also has dozens of squares, playgrounds, and gardens; 200 kilometers of bike paths; and 1.5 million trees planted along streets by volunteers. Builders get tax breaks if their projects include green space. Land around the parks has increased in value, bringing the city higher tax revenues.

Cultural Heritage: Many of the city's buildings are "recycled" and retired buses are often used as mobile schools or offices. A flooded quarry was turned into the Wire Opera House inside two months, and another into the Free University of the Environment, which educates people on ecological issues. The refuse damp became a botanical garden with a duck pond, French parterres and a classic Victorian greenhouse; an old gunpowder storage facility was transformed into the cherished Teatro do Paiol; a glue plant became the children's center; and an old trolley on the first pedestrian mall in the region, Rua Quinze, became a free babysitting center for shoppers. The mayor called it “urban acupuncture” that energized the development process.

Downtown areas were transformed into pedestrian streets, including a 24-hour mall with shops, restaurants and cafes, and a street of flowers with gardens tended by street kids. The “sol criado” system finances restoration of historical buildings, creates green areas, and supports social housing. The city’s zoning plan sets two standards for the number of floors that can be built in each zone – normal, and maximum; building the maximum requires buying the difference in the “sol criado” market by providing funds to restore an historical building, create a nature park, or build social housing.

Housing: Since 1990, the Municipal Housing Fund has been providing financial support to housing for lower income populations. After national housing finance collapsed in 1985, just as people from the countryside poured into Curitiba, the city’s public housing program bought one of the few remaining large plots of land, Novo Bairro, as home for 50,000 families. While landowners built the houses themselves, each received a pair of trees and an hour’s consultation with an architect to help them develop their plan. COHAB also built Technology Street, an avenue of 24 homes in the centre of Novo Bairro, each built using different construction techniques.

Economy and Jobs: In the early 1970s, when Brazil was welcoming industry with open arms, Curitiba accepted only non-polluters and constructed an industrial district with so much green space that it was derided as a “golf course” until it filled up with major businesses while its counterparts in other Latin American cities flagged. The city's 30-year economic growth rate is 7.1%, higher than the national average of 4.2%, and per capita income is 66% higher than the Brazilian average. Between 1975 and 1995, Curitiba’s domestic product grew by some 75% more than the entire State of Paraná, and 48% more than Brazil as a whole. In 1994, tourism generated US$280 million, 4% of the city's net income.

Curitiba has municipal health, education and day care networks, neighbourhood libraries shared by schools and citizens, and Citizenship Streets, where buildings provide essential public services, sports and cultural facilities near mass transportation terminals. At the Open University, residents can take courses in subjects such as mechanics, hair styling and environmental protection for a small fee. Policies for job creation and income generation also became part of the city's strategic planning in the '90s, for the metropolitan region as well as the city.

Lerner, who went on to serve as Governor of the Parana Region, now is consulted by city governments around the world. In 2007, he was working on a project to revitalize the marine coast, solve the garbage management issues and transform the road system in Luanda, Angola. And he remained optimistic about cities, stating in the foreword to the State of the World 2007 - Our Urban Future:

“In terms of physical configuration, the cities of the future will not differ significantly from the ones of yesterday and today. What will differentiate the good city will be its capacity for reconciling its residents with nature. Socially just and environmentally sound cities—that is the quest! By having to deal directly with economic and environmental issues, this quest will foster an increasingly positive synergy between cities, regions, and countries. As a consequence, it will motivate new planetary pacts focused on human development.”

This story was prepared from a variety of sources, including Curitiba’s website; the IPPUC website; Curitiba: A Global Model for Development, Bill McKibben, Nov. 8, 2005 (excerpted from The Impossible Will Take a Little While: A Citizen's Guide to Hope in a Time of Fear, ed. by Paul Rogat Loeb); Orienting Urban Planning to Sustainability in Curitiba, Brazil, ICLEI; Foreword by Hon. Jaime Lerner, State of the World 2007: Our Urban Future, Worldwatch Institute, January 12, 2007; Curitiba: the Brazilian City which left the Third World, in Designing Bioregional Economies in Response to Globalization, by Bernard Lietaer and Art Warmoth, 1999 ; Maverick mayor: 'Eco-architecture not ego-architecture!', Zara Bilgrami, CNN June 6, 2008 ; City Solutions: A Healthy Urban Future - Garbage that’s not Garbage; Transportation Tuesday: Curitiba Public Transit, Emily Pilloton, Dec. 11, 2007; Jaime Lerner on Sustainability in Curitiba and “Urban Accupuncture”, Paula Alvarado, 11.12.07; Jaime Lerner’s website;  Curitiba - City with a Soul, Warren McLaren, 06.23.05;  and Recycle City: The Road to Curitiba City: The Road to Curitiba, Arthur Lubow, New York Times, May 20, 2007. The picture of Curitiba, and of the recycling truck, come from the website of the city of Curitiba; the picture of the transit system comes from Emily Pilloton's article entitled Transportation Tuesday.

You can listen to Jaime Lerner talk about his work in a TED talk that was posted on the TED site in February 2008.