Walk into a bakery or bookstore in Bavaria’s Chiemgau region and you might find customers paying with colorful banknotes printed with grasshoppers, ladybugs and other insects, a type of play money.
“An estimated 10-15% of customers pay this way,” one bookseller told DW.
The locals call it “Chiemgauer” and it is a currency they themselves invented.
It may sound exotic, but it underpins a microfinance system that has been operating for more than 20 years and has recently evolved into a tool to reduce carbon emissions in this beautiful corner of southeastern Germany.
A classroom experiment that has gotten out of hand
Mr. Chiemgauer was born in 2003 at a local high school. There, economics teacher Christian Guerreri and a group of students were looking for a way to support local businesses that were losing customers to shopping malls and big chains.
Their solution was a new currency designed to keep money in circulation within the region. They printed it, handed it out, and locals started using Chiemgauer one by one, and stores started picking it up.
Local high school students developed the currency, which began circulating in January 2003 (File photo: 2002) Image: Chiemgauer eV
Slowly, the classroom idea turned into a financial system.
“Currently, 5 million Chiemgauer are used each year,” said Guerreri, who still heads the association that manages the Chiemgauer eV currency, where one euro is currently equal to one Chiemgauer.
At his office in the town of Traunstein at the foot of the Alps, Guerreri opened the group’s safe to reveal a thick pile of banknotes.
“This is more than 200,000 Chiemgauer, the same amount in euros,” Guerreri said proudly. These banknotes are now created by specialized companies and are watermarked and have anti-counterfeiting features.
Under German law, printing or using money other than euros can be a crime. But Germany’s central bank, the Bundesbank, tolerates it because the Chiemgauer River is confined to this area, used by only about 4,200 people and 300 companies. Anyone who wants to use this money must register with the Chiemgauer Association.
How to keep this money moving with a little trick
A stroll through Traunstein’s colorful facades shows how the system works. At organic food stores, customers pay for cheese and sausages with 50 Chiemgauer notes. “I run my own organic food store and use part of Chiemgauer’s profits for my own purchases,” he told DW.
The same goes for vendors selling Mediterranean food at market stalls. “We use the income we earn from Chiemgauer to pay our suppliers for fresh produce,” she explained. In this way, money is circulated either in cash or electronically using special cards linked to regular bank accounts.
The local currency can be used in around 300 stores across the region, including pubs Image: Florian Kroker/DW
To keep the banknotes valid and the Chiemgauer running, owners must purchase a small stamp every six months. For example, a stamp on a 10 Chiemgauer banknote costs approximately 0.30 euros ($0.35). After three years, the bill is fully due. Private users cannot exchange Chiemgauer currency into euros. Businesses can exchange funds but pay a 5% fee when doing so. The fees fund the currency’s operations and support local nonprofit organizations.
Get free chiemgauer when you buy balcony solar power
In recent years, the organizers of Guerreri and Chiemgauer have introduced an environmental dimension to the currency. Residents can now earn bonus Chiemgauer by making climate-friendly choices. That means getting your jeans repaired instead of buying new ones, using car-sharing platforms, and insulating your home with natural materials. These actions give bonuses ranging from 1 to 200 Chiemgauer.
“The owner of this set of solar panels got 100 Chiemgauers,” Guerelli said, pointing to two panels installed in Traunstein’s backyard. “This balcony power set will save 11 tons of carbon dioxide over 20 years.”
Guerreri and his students were looking for a way to support local businesses that had lost customers. Image: Florian Kroker/DW
Local residents and businesses will fund the rewards by contributing to a common pool to offset their emissions. This is a kind of mini emissions trading system. For every tonne of carbon offset through the Fund, nine tonnes are saved through the climate-friendly actions it encourages.
A similar climate bonus scheme has since spread from Bavaria to four further regions across Germany. According to independent auditor TÜV Nord, we have saved a total of 12,800 tonnes of CO2 over the past four years. This is equivalent to the emissions of approximately 2,000 German cars over the same period.
small global trends
Chiemgauer is by no means unique. There are approximately 300 types of “complementary currencies” around the world, named for the way they operate alongside a country’s official currency. Most of them are concentrated in Europe and Brazil, with an emphasis on promoting local economies and welfare. However, as a side effect, emissions during transportation are also reduced.
Traunstein in the Chiemgau region is just one of the cities that accepts local currency. Image: Florian Kroker/DW
“Currencies encourage shopping locally, and vendors buy locally produced goods, which shortens the supply chain,” said Esther Ballinaga, who studies complementary currencies at Lund University in Sweden. According to MIT and the International Energy Agency, freight transportation accounts for 8% of global greenhouse gas emissions.
Some of these currencies are specifically designed to encourage environmentally friendly behavior. For example, in the Spanish city of Viladecans, ‘Birawat’ rewards residents for energy conservation. In countries such as Indonesia and the Philippines, “plastic bank” tokens are given to people who collect and hand over plastic bottles for recycling.
However, all these currencies have their limitations, and the Chiemgauer currency is no exception. Clothing, electronics, and most industrial products are still produced overseas and imported. Less than 1% of people in the region participate in this system. And if it grows further, Germany’s central bank could step in to regulate it.
Still, for Barinaga, complementary currencies offer important lessons. No matter how small it may be in the grand scheme of things.
“You can design money,” she says. “If money is created to reward pro-environmental behavior, more people will behave pro-environmentally.”
Editor: Jennifer Collins
Inside a German town where people print their own money
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