Centrifugal Investment is a new economic theory and finance methodology describing “city outwards” interventions to fund rural projects. This counters the Centripetal Economy, the market’s systematic investment into city projects, drawing “inwards” labour and materials, as they produce significantly better returns than rural projects. This dynamic generates urbanization and the over-development of cities, and corresponding non-investment in rural infrastructure and subsequent rural flight. The result is that cities are victims of their own success, resulting in pollution, urban poverty and crime. As an example, the city of New York with 103 billionaires, has a population of 77 000 homeless people living on its streets.
Rural population stability encouraging de-urbanization is also the quickest method to reduce global warming, a societal rather than technological intervention. Cities are responsible for 80% of carbon emissions, so the simple act of de-urbanization immediately reduces the carbon footprint by a factor of four. No other single technological intervention can compare, and which often take years to implement. The scale of green infrastructure change required to transform existing cities is enormous. One example is that 97% of Europe’s roofs are energy inefficient, with interventions occurring at 1% per year. At this rate, it will take 100 years to transform Europe’s housing stock.
Therefore, only investment focused on rural stability can prevent a +1,5°C scenario within the 12 year time delay as predicted by the IPCC. According to this definition any rural project, including medical and mobile phone banking networks, can be redefined as climate initiatives.
Rural investment has an enormous potential as well as importance. Currently, cities comprise only 2.7% of the land mass, excluding Antarctica, with the complement 97.3% being rural and natural spaces.
Without an intervention, the required rural investment necessary to prevent climate change will not occur. Firstly, city public authorities are mandated by their voters to improve that city and not rural areas. Secondly, national public authorities focus on GDP, where cities often generate 85% of a country’s wealth. Thirdly, the private sector favors city investment as it produces better returns than rural investment. Relying on normal market logic, cities will continue to increase in value and population, while rural areas will continue to decline and de-populate moving to the cities.
This gap in public policy and private sector unwillingness invest in rural infrastructure is where Centrifugal Investment can play a role. It establishes an investment cycle where the profit from its city projects is redistributed equally across four domains: city, rural, nature, and water (75% non-city investment). This structured methodology uses the strength of city economies to drive rural investment, therefore rural population stability.
To achieve the required $2,5 trillion/year to finance climate initiatives, raising it from its current $530 billion/year level, requires inclusion of financial institutions and companies into a single purpose. A multi-actor governed platform for capital market project financing will be built, where they promote their own business interests and opportunities, often city based, and from which the platform will derive its benefits. The platform will be the base for numerous Fintech and banking systems to find new customers, as well as trade in shares of these projects.
The platforms own funds are then invested in projects in four domains, city (largest generator), rural, nature, and water, which serve to open the way for further private sector investment in new domains, where they might now have entered on their own.
To achieve transparency in every aspect of the platform’s functioning will be governed by a rotation of the participating private sector actors, using a cooperative game theory model to guarantee equality. This system generates altruism as the actors gain more from building the system from within, rather than separating themselves from it, and fighting it from the outside. The actors therefore act ethically and create equitable rules while they are in power, as they will have to live by them when the following rotation of leadership is installed. What is being established here is a "global good of system of governance" as a vehicle to share, open to all, and in this way galvanize humanity to a positive end through the global market.
The platform will implement many technological advances including: Cloud, Artificial Intelligence, FinTech, Behavioral Economics and Data Science. A digital twin of the ideal world will be created, from which the individual projects will be planned and systematically fulfilled.
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