The Global 4C project presents a new market hypothesis, and a powerful new public policy for climate mitigation, called the “Global 4C Risk Mitigation Policy” (Global 4C). The main objective of the policy is to manage climate systemic risk, and the operational goal is to influence the global rate of carbon mitigation with positive financial incentives. The acceptable levels of risk will be decided in an international forum, and these levels of risk will be defined as probabilities of exceeding certain temperature levels over a rolling 100-year time horizon (e.g. 33% chance of exceeding 2 degrees Celsius).
The operational objective of the policy is to offer ‘global carbon rewards’ as an ex-post payment for verified climate mitigation actions. The global reward will create a global carbon price, and the reward will be delivered as a parallel currency (with units of 100 kg of CO2 mitigated). The global carbon reward (the parallel currency) will be issued with private contracts that will impose service standards on market participants.
The parallel currency is given a generic name: “Complementary Currencies for Climate Change” (4C). The 4C currency is used to provide financial stimulus for climate mitigation work, and this stimulus is based on a currency exchange rate mechanism. The 4C currencies offer many advantages in terms of macro- and micro-scale management of the economy. We suggest that one of the 4C currencies be called the “Solar Dollar”, as a culturally appropriate name for an international currency. It is worth noting that 4C currencies do not have to be given legal tender status in national markets, because their main purpose is to enable trade with national currencies.
An important feature of the global carbon reward, is that the price of the reward/currency will mirror the Risk Cost of Carbon (RCC), which is the monetization of climate systemic risk. To better understand the the RCC and the concept of ‘climate systemic risk’, please read the sections on the Social Cost of Carbon (SCC) and the Risk Cost of Carbon (RCC), and the journal paper.
The Global 4C policy is designed such that the global carbon reward will be financed by central banks using monetary policy, and so there are no new direct taxes involved. For this reason the topic of green quantitative easing is relevant (see the video below). The policy will attract private wealth into the 4C currency mechanism through a managed long-term bull market in 4C trading.
Global 4C offers benefits to market actors who wish to be financially independent and seek self-determination, but who also want to contribute to the global ambition of avoiding dangerous climate change. The decision to participate in the Global 4C policy will be made locally (as a firm, community, or individual) because participation is voluntary.
This website is undergoing revisions to better explain the Global 4C policy, the RCC metric, and the concept of climate systemic risk. The underlying market hypothesis was published in 2017, and two new publications will be released in 2018 to further explain the hypothesis and the policy.
“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.
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Ferdinando Giugliano, who writes for Bloomberg, claims that central banks should be involved in monitoring the impact of climate change on financial stability, but that their scope of work should not extend too far into the responsibility of mitigating climate change. He describes such ideas as “dangerous”.
Giugliano comments on a meeting of central bankers held in Amsterdam in April 2018:
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