Putting a price on carbon is one strategy to reduce emissions. Another is to use zero interest loans to construct emissions reducing infrastructure.

Let the Reserve Bank create some money called Energy Rewards that must be used to build renewable energy plants or reduce energy consumption through things like insulation. Let us give this money to people as Rewards in inverse proportion to the amount of energy they purchase so they have an incentive not to use energy. 

The money created would not increase inflation because the money will be used to produce a productive asset and that means that over time the loan will be paid off and return more money to society. Inflation occurs when we create money which is spent for consumption without gain in productive output from the expenditure. 

Rewards will encourage behavioural change to reduce energy consumption which in turn will increase the efficiency of our energy infrastructure which will reduce inflation because we will get the same value from a lower amount of energy consumed or put another way we get an increase in energy productivity.

Rewards must be spent in the infrastructure market place so it will be spent efficiently.

The price of energy can remain the same – or decrease if we want to cause fossil fuel power stations to close down because they will become uneconomic.

The running costs of renewable energy plants is 1 cent per kwh which is half or less than the cost of fossil burning plants. A renewable solar thermal or hot rock geothermal energy plant should have a life of at least 100 years and will produce enough energy within a few years to pay back the money loaned. We know that there are enough renewable energy sites to produce several thousand times current energy consumption and we know that no matter how much energy we produce it will always find a market if the running costs are low.

How fast we can do it depends on how quickly we can physically construct renewable energy plants. As most of the equipment and material can be purchased and manufactured overseas in China or India we can have the productive capacity to build the plants quickly. 

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