Green Coin for Sustainability and against Inequality: A Research Proposal

Abstract

Resource depletion and income inequality are major challenges for sustainable growth. We propose a study of the impact of a “green coin” on sustainable consumption and income inequality. “Green coin” is a currency based on the natural resources one can consume. Individuals are entitled to the same yearly “sustainability budget”. Once Green coin is introduced, individuals pay two prices for a good: its normal price, and its price in Green coins. In a world of high- and low-income individuals, those with high income require more “green coins” than they have. High-income individuals can trade part of their income for Green coins with low-income individuals or shift their consumption towards sustainable goods, with lower Green coins costs. We suggest testing changes in consumption and income distribution in laboratory experiments. This research can provide insights into a market-based solution that tackles environmental and social challenges. These insights form the basis for future development of theory and policy.

Keywords: Sustainable consumption, Currency, Income inequality, Environment, Experiments