Global 4C is a policy project that aims to incentivise climate mitigation at the global scale for attempting to stay below 2°C of global warming this century. The economic instrument of Global 4C is a proposed system of parallel world currencies that are called Complementary Currencies for Climate Change (4C). The Global 4C project is not presented as a niche policy, but rather it is justified with new and fundamentally important theory that describes the major relationships between money, markets, and networked systems. The theory reveals that there is another political pathway that is naturally available for attempting deep decarbonisation in the 21st century. The theory recognises that government institutions have centralised power and are naturally suited to applying pollution caps and tax-based policies, but government institutions are often ineffectual because of political delay. The new pathway of Global 4C can dissolve political delay by complementing the role of governments with a highly-decentralised and intelligent system of global rewards and social contracts for mitigation. The Global 4C roadmap will involve a global reward scheme for mitigation and ‘scientific’ public banking using digital currency technologies, decentralisation, data sharing, and anti-corruption measures. Global 4C will synergise with orthodox policies and will be fully-financed with internationally coordinated central bank monetary policy that spreads the mitigation costs as an inflation tax. The new pathway appears hopeful and feasible based on monetary theory, the history of money, and natural laws.
Article 6 of the 2015 Paris Agreement (UNFCCC, COP21) offers major new possibilities for market and non-market mechanisms to drive global mitigation of greenhouse emissions. Article 2 of the Paris Agreement defines a climate mitigation ambition for the world: to limit global warming to less than 1.5-2°C above pre-industrial conditions. It appears that a socio-economic transformation will be needed to decarbonise all major economies with clean energy and unprecedented levels of greenhouse gas abatement and sequestration.
The notional trading name for 4C is the Solar Dollar. The Solar Dollar will use digital technologies, similar to Bitcoin, however it will require a much more sophisticated administrative system, called the World Tree. The World Tree will support the Solar Dollar like the blockchain supports Bitcoin, however the World Tree will also be a decentralised auditing system for mitigation, a business model, and a public database over the Internet and mobile phones.
The price and supply of the Solar Dollar will be managed under a Carbon Monetary Standard (or Carbon Standard) that may be viewed as a new currency relationship reminiscent of the Gold Exchange Standard established at the Bretton Woods Conference in 1944. The context for the proposed Carbon Standard is the growing risk of climate related disruption, socio-economic dysfunction, and a possible collapse scenario. Unlike the Gold Exchange Standard, the Carbon Standard will have multi-dimensional relationships that span scientific, economic, technical, and social issues. Due to its originality and scope, the Carbon Standard needs a broader worldview to anticipate its features, functions, and benefits.
The Solar Dollar is the economic instrument of the Global 4C policy. It is a proposed parallel world currency that will become the focal point of a global social-and-environmental movement. It will be used to financially incentivise mitigation, and it will be implemented by private investors and citizens, however its long-term destiny is to be ‘price managed’ by central banks through a globally coordinated and transparent monetary protocol. This protocol will continuously revalue the Solar Dollar to ensure that the actual total greenhouse mitigation rate is sufficient to limit the risk of abrupt climate change. The supply of the Solar Dollar will be pegged to observed mitigation rates, and this pegging will be managed through a decentralised banking system that issues the Solar Dollar directly to enterprises for mitigating greenhouse emissions. The Solar Dollar reward scheme is, in theory, the principal complement to the carbon tax, and potentially it can be used to guide a social transformation for the deep decarbonisation of the world economy.
The World Tree of this proposal may be described as a public banking system, but more specifically it will be a digital administrative network for mitigation assessments, verifications, Solar Dollar issuance, and trading. The tree metaphor is used to describe the flow of information and currency through the network. The tree metaphor is also used to highlight the decentralised and diverse nature of the business model for mitigation. The World Tree will be designed intelligently so that the auditing of mitigation is trustworthy and scientific, and so that free-riding and collusion can be minimized. The World Tree will collate a public database for spatial data and all information that relates to effective mitigation. The operational ‘diversity’ and ‘creativity’ that will be generated by the World Tree will complement the ‘efficiency’ and ‘caps’ that are provided by orthodox regulations, taxes, and cap-and-trade markets. The World Tree will reform the economy with a business model for exponential patronage and ‘matriarchal’ social relationships.
The main agreement that underpins the Solar Dollar and the World Tree is the Carbon Monetary Standard, or simply the Carbon Standard. It regulates two markets simultaneously: (1) currency markets for upstream finance; and (2) mitigation markets for downstream finance. Existing carbon markets are designed to deter greenhouse pollution with negative price signals that equate with the ‘social cost of carbon’. Solar Dollar prices will, on the other hand, create positive price signals to overcome political delay and reduce the risk of abrupt climate change and probabilistic ‘black swan’ events.
Part 1. Upstream: Given that rising Solar Dollar prices will be guaranteed by Central Banks under the Carbon Standard, Central Banks will actually manage a multi-decade Solar Dollar bull market in foreign exchange currency markets. The Solar Dollar bull market will transfer wealth from the general economy into mitigation activity. This will favour green growth over dirty growth. Given that primary energy is ’embodied’ in the purchasing power of all currencies, the policy is thermodynamically rational. The policy actually addresses three challenges simultaneously: (1) man-made global warming, (2) dirty economic growth, and (3) debt-based economics.
Part 2. Downstream: Solar Dollars can seamlessly interface with carbon markets because Solar Dollars will be an official currency for general trade, and not a carbon certificate. Firms will be able to plan ahead for decades, because future Solar Dollar prices will be announced and ‘bankable’. The policy will finance green growth and green jobs. Overall, Solar Dollar trading will synergise with the ‘profit motive’ and will improve social cohesion by balancing financial penalties with rewards – both penalties and rewards are needed for their complementary benefits. Citizens and firms will be eager to use Solar Dollars throughout the 21st century, because Solar Dollars will be tradable as digital cash, will be secure like bonds, and will appreciate in value in response to the climate change risk. A critical benefit of the Solar Dollar under a Carbon Standard, is that it can create positive social feedbacks, whereas carbon taxes generally do not.
A social justification for the Carbon Standard is the Beneficiary Pays Principle (BPP) because the new approach will provide global rewards for climate mitigation services. The Carbon Standard creates finance for mitigation with monetary policy and a globalised inflation tax. The BPP is presented here as a complement to the Polluter Pays Principle (PPP) which is currently used (with estimates of the social cost of carbon) to justify carbon taxation. It is the combination of the two principles, the BPP and the PPP, that is recommended under the Global 4C Mitigation policy. With a Carbon Standard it is further assumed that the whole economy can pay for mitigation services on the basis of a collective but differentiated social responsibility to protect civilisation and the planetary ecosystem. A possible outcome of the Carbon Standard is a new worldview for enhanced economic intelligence through a combination of centralised and decentralised socio-economic networks.
Global 4C Mitigation is a new climate change mitigation policy. The Global 4C project was initiated because humanity is experiencing a crisis over the challenges of climate change, sustainability, and debt-based economics. Inspiration for Global 4C is based on the idea that parallel currencies can provide fundamental and systemic economic reforms for addressing climate change and evolving civilisation. To support the policy, new theories were derived to explain key relationships between a new world currency system and market-based environmental management. The Global 4C policy is therefore a new monetary-and-market policy, and it represents a significant departure from 20th century economics. Key advantages of Global 4C are that it can avoid political delay, it can synergise with orthodox climate mitigation policies, and it can bring about a social transformation that is commensurate with the challenges of climate change.
The economic instrument of the policy is a parallel world currency, and the notional trading name of this currency is the Solar Dollar. The economic mechanism of the policy is to issue the Solar Dollar as a global reward for mitigation and in proportion to the audited amounts of greenhouse gases that are either abated or sequestered. Assessment rules can be universally applied to include all sectors, such as forestry, renewable energy, industry, transport, agriculture, land management, education, etc. The policy breakthrough is based on a Carbon Monetary Standard and an expanded theoretical framework for market-based environmental policies, currencies, and systems. The policy will decentralise the management of mitigation work and auditing, so that firms and communities everywhere can respond to the Solar Dollar reward scheme in ways that suits their unique situation and preferences.
A new political roadmap is created for a social-and-environmental movement, and to establish direct negotiations with the political elite and central bankers. Strategic selling points for the approach include a rational economic system for deep decarbonisation, refocusing our attention on financial rewards, and a new economic model for Public Banking that issues currency for fair work. Under the Global 4C policy, world mitigation markets will be incentivised with Solar Dollar rewards, and long-term financing will be provided by Central Banks using a new monetary policy for Green Quantitative Easing (GQE). The policy will help finance the decarbonisation of all economic sectors, and it will simultaneously regulate economic growth (or de-growth) so that the mitigation objectives specified at COP21 can be attempted. Assessments will be undertaken over digital networks using science-based statistical rules, and agreements can be enforced using digital contracts. The digital network will be highly scalable for exponentially growing patronage. Additional ‘weighting’ rules may be introduced to favour mitigation methods that help protect biodiversity on land and sea, or help improve the productivity and sustainability of agriculture.
“The main proposal presents a detailed concept of the Solar dollar global currency for carbon pricing. It is well-developed and detailed, and contains concrete and actionable steps toward implementation.”
MIT Climate CoLab Judges (2015)
Michael Metcalfe’s TED talk is not an endorsement of Global 4C, however it does show that the current proposal for Green Quantitative Easing (GQE) is gaining support amongst independent thinkers. Global 4C takes the idea of GQE and further explores its benefits for macro-economic management and long run sustainability.
The Center for Regenerative Community Solutions (CRCS) is the official host for the Global 4C policy. CRCS is a 501c3 Non-Profit Organisation and is also involved in the New Jersey PACE program and complementary currency theory.
EconoVision is providing Global 4C with strategic project planning and advice. EconoVision is an economic research and consultancy company with offices in the Netherlands (Rotterdam, Utrecht) and Ethiopia (Addis Abeba).
FUZO (previously bitSIM*) is a mass adoption digital currency platform. Fuzo and bitSIM* provide technical advice and offer collaborative projects. bitSIM* has developed Little Green Tokens; a world first in carbon trading on the Bitcoin blockchain.
Institutional support is invited to help us advance the Global 4C project. We are aiming for publications in the peer review literature. At this time, Global 4C is seeking academic collaborations to expand on existing work and to publish papers on monetary theory and policy for managing the Solar Dollar exchange rate with an international monetary protocol designed to meet mitigation objectives. The new protocol could be managed with a computer algorithm that dictates central bank currency trading for the purpose of spreading costs evenly across the global economy as inflation.
Other key topics of policy development include the social and political sciences as they relate to the use of financial rewards and the political and legal roadmap. To achieve a rising stringency of mitigation during the 21st century, the Solar Dollar price will rise over many decades. This will likely create a currency ‘bull market’ and it is anticipated this bull market will attract an exponentially growing number of investors and traders into the currency system. This approach has major social and political implications and it could fundamentally alter the balance of political power with respect to the decarbonisation of the global economy.
Actions that can advance the Global 4C policy will include creative media projects to explain the economic instruments known as the Solar Dollar and the World Tree. Two creative projects are already proposed: a book, and an animated film docudrama. The film will communicate the economic policy and political pathway in an entertaining fictional story. The film concept may include interviews with experts in various fields to discuss global topics, such as monetary theory, climate change, economics, politics, and collapse theory.
Actions on Global 4C include policy research and creative media, however these activities require financial support and the entire policy will require major investment in order to develop the digital administrative system for the Solar Dollar. This system is called the ‘World Tree’. The World Tree will likely be developed through a corporate business structure, and possibly attracting both public and private investors.
A key advantage of the World Tree is that it will be designed as a profitable business enterprise. The recommended approach is to design-and-build the Solar Dollar administrative system with a specific business model for currency issuance. This may seem unusual at first, but only until we recognise that most of the fiat currency supply is created through a business model that is profitable for commercial banks. In the Solar Dollar system there is no need to charge interest on new Solar Dollars that are issued as rewards, and so the new business model will operate on a principle of percentage commissions and multi-level marketing. The World Tree can grow organically and can scale-up rapidly to service four classes of mitigation: (i) sequestration; (ii) clean energy; (iii) industry; and (iv) education.
Bitcoin donations to ‘Global 4C’ are very much appreciated, and will be used to finance conference presentations and media outreach. We are happy to provide details and receipts for expenses to verified donors. Tax exempt payments may also be made directly to Jonathan Cloud at the Centre for Regenerative Community Solutions and New Jersey PACE (501c3) a Non-Profit Organisation. Thank You.
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BY BILL MCKIBBEN
September 22, 2016