Please cite this page as:
Chen, D. B (2016). Global 4C – Monetary Policy for Climate Change Mitigation. www.global4c.org
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“No one desires evil”
Socrates (469–399 BC)
The intention of this project is not to spread pessimism and fear. Global 4C is a proposal for a systemic change to the global economy that is feasible and hopeful.
World on track to be 4°C warmer by 2100
We are in a serious and dangerous climate emergency that will impact civilisation and ecosystems. There is a significant chance of reaching about 4°C of global warming by 2100 if current pollution trends continue. Simply blaming the political system is not the answer because it avoids a deeper understanding of the problem.
Scientists expect that 4°C of warming will result in wide-spread species extinction and lost agricultural productivity. Planning to adapt to such impacts appears absurd. To avoid +4°C it will be necessary to avoid climate tipping points that could set off strong positive feedbacks, such as arctic methane release and forest fires. The risk of strong positive feedbacks implies that a very strong response to climate change is needed.
Also see Australian ABC Report: Business as usual’ will create the warmest Earth ever, warns IPCC lead author.
Political Delay Prevents Action
Strong action on the climate is politically delayed because the cost of mitigation conflicts with short-term (financial) self-interest. Some commercial enterprises influence the political system to cause political delay. Oxfam describes this as a “toxic triangle” of political inertia, financial short-termism and vested interests. Also, the total cost of mitigation to stay below 2°C of warming is substantial: about 4% of world GDP according to the UN. To put this into perspective, the total mitigation cost is more than the entire worldwide expenditure on military and the illicit drug trade combined. Climate change impacts, mitigation and adaptation will create price inflation in the global economy because of physical decay and declining productivity. There are other critical problems in the economy too, such as inequality and stretching ecological resources.
Global Prosperity and Climate Change: No Way Out?
The exchange of money represents the flow of energy in the economy. Garrett (2012) defines the longterm relationship for the global economy as 9.7±0.3 milliWatts per US dollar inflation adjusted to 1990.
1 US dollar (1990) = 9.7±0.3 milliwatts
We should be more aware of the link between economic activity and the energy supply. Fossil fuels, which comprise 84% of our primary energy supply, are the main feedstock that gives our money its purchasing power and its value. Decoupling the economy from greenhouse gases is an unprecedented challenge because our society is reliant on a certain amount of economic growth for political harmony.
“For atmospheric CO2 concentrations to remain below a “dangerous” level of 450 ppmv, model forecasts suggest that there will have to be some combination of an unrealistically rapid rate of energy decarbonization and nearly immediate reductions in global civilization wealth.”
Based on Garrett’s analysis, accumulative world GDP is strongly coupled to world energy consumption and CO2 emissions. Figure 1 shows how atmospheric CO2 has risen as a function of world GDP.
Figure 1. Rise in atmospheric CO2 (relative to 275 ppmv) versus global GDP (reproduced from Garrett, 2012).
“..there is no too late!”
Our economic system is causing a number of planetary impacts (i.e. greenhouse pollution, species extinction, deforestation and excess nutrients). Hence fixing climate change alone will not be enough. It is necessary to look beyond climate change and envision broader changes to the global economy that will serve humanity for hundreds of years. Monetary innovations can create this broader correction, because digital currencies have no theoretical limits in terms of monetary rules and architecture. What is missing in sustainable monetary design is the official recognition of world institutions. These institutions can be instrumental in triggering mobilisation for climate mitigation.
Global 4C Mitigation is based on these assumptions: (1) central bankers and political leaders who understand the climate emergency will consider a ‘World Monetary Union for Climate Change Mitigation’, and (2) society contains enormous untapped capacity for abating and sequestering greenhouse gas emissions.
Global 4C Team
Climate Change & Conflict
Climate change is a ‘risk-multiplier’ and an existential risk to nation states. Since 1945, some nations have possessed nuclear weapons. These weapons of mass destruction (WMD) pose unimaginable risks. A world currency system that offers a pathway to safety from dangerous/catastrophic climate change may also help avoid regional military conflicts and the use of WMDs.
Global 4C provides a new pathway without directly opposing the political hierarchy, banking system or markets.
Global 4C Team